Integrated Report 2015

Bringing Tomorrow Today

I ndex

Businesses Creating Value

Introduction
Our Ideal
Value Creation Process at the
Nomura Real Estate Group2
7

Presence of the Nomura Real
Estate Group8Growth Trajectory

9

Special Feature 2: Value Creation
with Next-generation Office
Properties
27
The Nomura Real EstateGroup at a Glance

31

Residential Development Business 33

Creating Value through
ChangeMessage from the President

Special Feature 1: Value Creation
through Urban Redevelopment 23

Leasing Business

10

35
Investment Management Business 37

Foundations That
Support Value Creation

Data
Financial Data

61

Our Foundation for Value
Creation as Viewed by the Chair 43

Group Company Profile

65

Investor Information

67

Website68

Workforce Management

47

Corporate Governance49

Corporate Officers

55

Messages from
External Directors

58

Property Brokerage & CRE Business 39

Director’s Insight into Development Sector Growth Strategies

17

Promotion of CSR-centricManagement

21

Property & Facility Management
Business

41

Editorial Policy

Forward-looking Statements

This report is published in order to foster understanding among shareholders, investors andother 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 this reportfollows 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 basedon information currently available to the Company and are subject to a number of risks and uncertainties,
which include economic trends, intensification of competition in the real estate industry, the legal andtaxation systems, and other regulations. As such, actual results may differ from those projected.

Nomura Real Estate Holdings, Inc.

1 Integrated Report 2015

Our Ideal
Utilizing what people and communities mutually respect to engage in urban
development that anticipates the future, and nurturing an affluent time to live in
together with communities while creating new value for society

Nomura Real Estate Holdings, Inc.

2 Integrated Report 2015

Introduction

We work to “create communities that anticipate the future”
Through the provision of products resulting from real estate development we create communities withextensive urban functions that offer safety, security, and comfort.
We work to create sustainable communities in which diverse generations and values can coexist andthat take harmonization with nature and the environment into consideration.

Nomura Real Estate Holdings, Inc.

3 Integrated Report 2015

Nomura Real Estate Holdings, Inc.

4 Integrated Report 2015

Introduction

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

Nomura Real Estate Holdings, Inc.

5 Integrated Report 2015

Nomura Real Estate Holdings, Inc.

6 Integrated Report 2015

* This artist’s impression was made by the Nomura Real Estate Group based on
the external appearance of a condominium and is not a real-life example.

Value Creation Process at the Nomura Real Estate Group

Creating Communities That Anticipate the Future and Nurturing an Affluent Time
•Formation of high quality, safe, and comfortable housing stock•Community building that creates connections•Sustainable societies considerate of the environment•Realization of a society where people can live healthy and comfortable lives

Sales and leasing

Input

Construction

Property and facility management(capital committed)
Financial Capital
Necessary capital for
conducting business activities(shareholders’ equity andborrowings)

Human Capital
Employees

Intellectual Capital
Trust and appraisal ofcustomers

Site acquisition

Investment
Management
Business

Residential
Development
Business

Social and Natural Capital
Local communities, corporate
customers, and natural
resources obtained from nature

Redevelopment
or reconstruction

Financial Capital
Generation of cash flow andreturns to investors

Human Capital
Development

Service & Management

Property
Brokerage &CRE BusinessLeasing
Business

Property &Facility
Management
Business

Manufacturing CapitalLand and buildings related to
the real estate development
business

Output(value created)

Development of a professionaland diverse workforce

Intellectual Capital
Improved customer satisfaction
through greater brand value

Manufacturing CapitalMarketadaptability

Development andoperation capabilities

Technology andbrand power

Group collaboration/
cooperation

Customer baseCollective strengths of the Group underpinning value creation

Nomura Real Estate Holdings, Inc.

7 Integrated Report 2015

Formation of high quality
communities

Social and Natural Capital
Revitalization of local
communities and comfortablebusiness environments

Presence of the Nomura Real Estate Group

Evidence of the Trust Gained from Customers for Continually Meeting Their Expectations

Residential Development BusinessCondominium units supplied(3rd in Japan for 2014)

4,818

units

Leasing Business

Brand image of PROUD
7 of 10 categories

Vacancy rate of leased properties

1

st

3.4

%

According to a survey conducted by Real Estate Economic Institute Co., Ltd., theNomura Real Estate Development ranked third in Japan in the number of condominium
units it supplied during 2014. As a frontrunner in the condominium sector, we will continue
to respond to the needs of customers and supply high quality products to the market.

In the Condominium Brand Survey 2015*1 conducted by Nikkei Inc. our core
condominium brand PROUD ranked first in seven of the ten categories, including
peace of mind, luxury, and topnotch quality. We will continue to maintain andfurther improve brand value going forward.

Investment Management Business

Property Brokerage & CRE Business

Property & Facility Management Business

Assets under management

Number of nomu.com members

Condominium property
management satisfaction

Approx.

The Nomura Real Estate Group has continually managed properties with a focus
on enhancing tenant satisfaction and worked hard to carry out sales activities
closely in tune with tenant needs. As a result, the vacancy rate for our portfolio ofleased properties is just 3.4%*2.

1.1 250,000 17

Approx.¥st years
for running

trillion*2

As a real estate investment firm with over one trillion yen in assets undermanagement, the Nomura Real Estate Group accommodates a broad mix ofinvestment needs through myriad products and services that include Japan’slargest listed integrated J-REIT, private placement J-REIT, private placement
investment funds, and private placement securities funds.

Our real estate brokerage site, nomu.com, was the first of its kind and boasts thelargest number of hits and users in the industry*3. Also, the number of nomu.com
members targeting potential buyers broke through the 250,000 mark (April 2015),
complementing the already large number of visitors to the site.

The Nomura Real Estate Group has ranked 1st for 7 years running, from 2009 to2015, in the property management satisfaction survey conducted by Style Act
called Sumai Surfin. We will continue to enhance customer satisfaction by
providing even more comfortable living environments, including Living Q Call forowner services.

*1: Condominium Brand Survey 2015 was tabulated using 1,000 (822 male, 178 female) of the 3,560 surveys completed online in response to the advertisement about the Condominium Brand Survey 2015 appearing in the morning edition of The Nikkei published on Friday,
May 22, 2015.
*2: As of September 30, 2015.
*3: As of January 2015 there were approximately 1.23 million Nielsen NetView users (access from home or work computers; excluding the app) and approximately 1.25 million Nielsen MobileNetView users (access from iOS or Android devices; including the app) (ranked firstin monthly users among real estate companies [brokerage services]). Although there is some overlap between computer and smartphone users, the Nomura Real Estate Group estimates are used for the total number since Nielsen does not release the number of uniquecomputer and smartphone users.

Nomura Real Estate Holdings, Inc.

8 Integrated Report 2015

Growth Trajectory

Looking Back on Value Creation at the Nomura Real Estate Group

1957
Spun off from Nomura
Securities Co., Ltd. andlaunches real estatebusiness focused on leasing
and management of officebuildings.

2015/03
Operating revenue

2008

1978

Completes construction of PMO
Nihonbashi Honcho, the first developmentin the PMO series.

Completes
construction of the
Shinjuku Nomura
Building and moves
the headquartersfrom Nihonbashi.

¥567.1billion

2006
Nomura Real
Estate Holdings,
Inc. listed on theFirst Section of
the Tokyo Stock
Exchange.

2003

1961
Launches residential
land development
business with development of Kajiwarayama
residential area in
Kamakura, Kanagawa.

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

1988

2010
Completes constructionof the Nihonbashi
Muromachi Nomura
Building.

Starts construction of
Yokohama Business Park
(YBP), the largest businessdevelopment conducted
solely by the private sector.

2002
1963

Unified brand name “PROUD” for residential
products and services established.

Launches condominium
development businesswith the constructionof Co-op Takenomaru
in Yokohama.

2011
Launches a condominium
brand “OHANA.”

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

1960

1970

1980

Nomura Real Estate Holdings, Inc.

1990

9 Integrated Report 2015

2000

2010

(year)

Message from the President

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Bringing Tomorrow Today
Creating Value through Change
The Nomura Real Estate Group predecessor Nomura Real Estate Development Co., Ltd,was founded in 1957 with a social mission—to contribute to society by putting our fullweight behind the construction of large-scale new towns to solve Japan’s housing shortage, and for more than 50 years since then we have striven to develop communities andto create affluence throughout society.
The role the Nomura Real Estate Group should fulfill and expectations from society
have greatly increased. Society is changing—demographics are changing due to thedeclining birthrate and aging population, regional communities are undergoing transformation, existing stock is aging, expectations are being placed on urban renaissance, globalizationis accelerating, and environmental issues abound. We need to assess such changes insociety and work hard to consider how to resolve these issues. The recently formulatedMid- to Long-term Business Plan summarizes our ideal, namely, our resolve to seriously
face these questions and issues, and to continue to create new values for society.
Our Ideal
Utilizing what people and communities mutually respect to engage in urban developmentthat anticipates the future, and nurturing an affluent time to live in together
with communities while creating new value for society.

Eiji Kutsukake
President
Nomura Real Estate Holdings, Inc.

Through the provision of a variety of products and services relating to real estate,
we are working on the creation of a sustainable community that offers safety, security,and comfort and, together with people who "live," "work," "gather," and "relax" in communities, we will nurture times of abundance. This is the unique way in which we create
value and we believe that uniting the strength of the Group and achieving this ideal not
only serves to improve sustainable corporate value but also ensures we contribute to therealization of a sustainable society.
We will continue to embrace change and the challenge of realizing a more enriching
tomorrow as we work to help people make their dreams come true.

Nomura Real Estate Holdings, Inc.

10 Integrated Report 2015

Message from the President

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationDatafiscal year sees us reaching the final year of phase 1 of the 10-year
plan. During phase 1 we aimed for steady earnings expansion while
focusing on improving our financial base, and we were able toproduce results that greatly exceeded our plans and initial goals
such as reaching our operating income goal two years ahead ofschedule.
Specifically, we believe that completely breaking away fromthe impact of the collapse of Lehman Brothers and developing
business foundations provided us with the opportunity to think
about our future. During phase 1, in order to pursue Group synergy, we strengthened the management structure of Holdings,
moved ahead with the reorganization of the Group and strengthened collaboration. In terms of financial aspects, we successfully
improved shareholders’ equity ratio by approximately 30%, astargeted, by accumulating periodic revenue. That is to say thatthrough our initiatives to-date we have reached a point at which
we can move from the “business foundations development stage”
to the “pursuit of active growth stage,” based on the foundations
we have prepared.
When investigating the new Mid- to Long-term Business
Plan we repeatedly discussed on countless occasions identifying“the kind of corporate group we should aim to be in the future,”“how we should respond to the expectations of each of our stakeholders, namely, society, customers, shareholders, and employees,” and “our strengths and our uniqueness that sets us aside
from our competitors.” We formulated the new plan that draws
the future vision of the Group for the next 10 years based on suchframes of reference.

Changes in Operating Income & Shareholders’ Equity Ratio

Changes in ROA

Mid- to Long-term Business Plan Target Period(Billions of yen)
80

(%)
6.0

Review So Far and the New Mid- to Longterm Business Plan
Moving from the “business foundations
development stage” to the“pursuit of active growth stage”
The preceding Mid- to Long-term Business Plan was prepared in2012, prior to the Abe administration coming to power, and thisOperating income
74.3

60

Shareholders’ Equity Ratio (%)
32
76.0
71.8
30

58.3

28.8

49.9
27.1

40
24.5

20
22.6
0
'12/03'13/03'14/03'15/03Preceding phase 1'16/03(Forecast)

Nomura Real Estate Holdings

5.0

26

4.5

24

4.0

22

3.5

0

0

Create new value for society using a uniquegrowth model driven by high asset efficiency
The key points that also form the basis for this plan are the ideal of
the Nomura Real Estate Group in the future and the growth model.
The theme of the new Mid- to Long-term Business Plan is“Creating Value through Change,” a theme also covered in theprevious plan. Going forward we aim to be a company that adapts
and keeps changing to accommodate the changing needs of society and our customers. It is not enough for us to merely follow
change. The creation of new value through our transformation

Average of 4 major industry peers
5.8

5.5

28

Basis for the Plan

5.4

Preceding phase 1

4.6
3.8

3.7
3.5

3.3

'12/03'13/03Preceding target period

5.2

New target period

3.6

New phase 1'14/03'15/03'16/03(Forecast)Preceding phase 1*ROA: (Operating income + Non-operating income) / Total assets at end of fiscal year
Nomura Real Estate Holdings, Inc.

11 Integrated Report 2015

'12/04End of'16/03

New phase 2

End of'19/03

New phase 3

End of'22/03End of'25/03

Message from the President

and the taking of initiatives to develop markets will remain the
Nomura Real Estate Group’s mission as we move into the future.
The ideal of the Group, announced at the same time as the
new plan, indicates the initiatives we will take to create lastingvalue.
Demands from society have changed greatly. Some of theinfrastructure and buildings we developed during the period ofhigh economic growth are now aging and inferior in terms ofearthquake resistance and the reconstruction of such infrastructure and buildings has become a social issue. We live in an age inwhich society demands the revitalizing of such buildings and communities and improvements to safety and convenience, as well as
enhancements to the value of the buildings and communities
themselves through renovation and community building. We seesocial contribution and business growth as compatible areas.
Moreover, lifestyles and work styles sought by customers
are diversifying amidst the declining population, decreasing birth-

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

rate and aging society, changes to the make-up of the family unit,
lifestyle changes, and the participation of women in society.
Recently, as the power of local communities is being reviewed,
enhancing soft infrastructure, such as the formation and revitalization of communities that support interaction between generations
and regions and the response to increasing health and nursing
care needs of senior citizens has become even more necessary. At
the Nomura Real Estate Group we intend to use the productdevelopment, management and operations capabilities we haveaccumulated to-date to acquire business opportunities while
responding to all these needs.
The other key point is our growth model. While we were
aware of this in the previous Mid- to Long-term Business Plan, thisconcept develops sustainable earnings while steadily investingin anticipation of the ownership and recovery balance and maintaining high asset efficiency. The Group is not simply aiming to
own a lot of leasing assets and expand our assets as seen among

our leading competitors in the industry that have ample assets. We
aim to develop our own unique strengths and to continue to provide products and services to the market. We would like to establish a unique position in the industry by maintaining revenue
growth that strengthens high asset efficiency while combining
earnings from development projects that focus on capital turnoverwith fee earnings from the provision of real estate services.

Business Environment Awareness when Establishing the Plan
Changes to the Socio-economic Environment

Responses to Needs by the Nomura Real Estate Group

Declining population, decreasing birthrate, and aging society
Progress of participation of women in society• Provide products and services that respond to changing and diversifying lifestyles and work styles• Promote the formation and revitalization of communities that support interaction between generations and regions• Respond to increasing health and nursing care needs of senior citizens

Progress of urban renaissance in metropolitan areas
Revitalizing the local economy• Promote multifunctional urban development aimed at urban renaissance and regional revival• Promote central Tokyo development projects with an eye to after the Olympics

Existing stock increase and aging• Support value improvements through real estate renovation and revitalize the secondary market• Provide management services that maintain and improve building functions and asset value• Promote reconstruction and redevelopment for enhancing urban functions• Response to public service outsourcing needs such as PPPs/PFIs

Expanding real estate investment market
Shifting from savings to investment• Provide a variety of real estate investment opportunities that respond to the diversification of investment and management needs• Respond to the borderless investment needs of domestic and overseas investors• Provide real estate solutions that respond to growing needs of inheritance and donation

Economic growth in Asia
Accelerated globalization• Promote real estate development projects in response to the urbanization of developing countries and respond to various real estate needs overseas• Provide real estate related services to foreigners who visit or live in Japan to enhance the international competitiveness of cities

Nomura Real Estate Holdings, Inc.

12 Integrated Report 2015

Message from the President

Key Strategies
Strengthen Group-wide collaboration while
expanding business in the Development andService & Management Sectors
Moving on, given the future vision for the Nomura Real EstateGroup I just mentioned, we have established three strategies on
which to focus.
The first strategy is the expansion of business volume andbusiness domains in the Development Sector. In the future we will
accelerate investment and work to further expand business inboth the residential development and leasing sectors, based on
the financial position we have developed thus far. We will strengthen such initiatives with a keen awareness of the urban-type Compact Town concept in this sector. This concept is indicative of multifunctionality and superior comfort urban development and since
we have experience in large-scale complex development that focuses on housing, this is an area in which we believe we can fully
demonstrate such strengths.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

The second key strategy is to demonstrate the differentiation and competitive edge of the Service & Management Sector
that focuses on Investment Management, Property Brokerage &CRE, and Property & Facility Management. To achieve the highasset efficiency we are aiming for, fee earnings from this businessthat do not assume asset holding will be extremely important.
Achieving differentiation in this sector is expected to have theknock-on effect of expanding development business opportunities
within the Group, and will have a particularly important role in thegrowth of the Group as a whole.
The third and final key strategy is to increase and reinforce
the customer base via Group-wide collaboration. This is an initiative to come together as a Group and gain customer trust amidst
the broadening of the scope of customers involved in the Nomura
Real Estate Group through business expansion thus far. This in itself is essential for us as we approach the next growth stage, andto this end we will work to further strengthen Group collaborationand demonstrate Group synergy.

Our Ideal, Growth Model, and Key Strategies

Our Ideal
Utilizing what people and communities mutuallyrespect to engage in urban development that
anticipates the future, and nurturing an affluent
time to live in together with communities while
creating new value for society.

Implementing a growth model that emphasizes
continuous expansion of revenue with ensured
high asset efficiency by appropriately responding
to changes in the social environment.

Add ROE to management indicators and aim to
maintain capital efficiency while doubling
operating income
The new plan sets new management goals.
There are two management goals, a financial and capitalmanagement policy that acts as a constant guide during the midto long-term target period, and a long-term revenue goal basedon this policy.
A shareholders’ equity ratio that indicates soundness has
been set in the financial and capital management policy. Even
though we have already cleared this 30% target, we will keep
30% as our benchmark so as to enable flexible growth and investment and in order to respond to risks arising from unexpectedchanges in the environment.
As another financial and capital management policy we set
a goal of greater than 5% ROA and 10% ROE. ROE has been

Management Indices

3 Key Strategies
Key Strategy 1

Key Strategy 2

Expand business volume andbusiness domains in theDevelopment Sector

Demonstrate differentiation
and a competitive edge in theService & Management
Sector*Key Strategy 3

Our Growth ModelManagement Targets

Increase and reinforce
customer base via
Group–wide collaboration*Service & Management: Investment Management, Property Brokerage & CRE,
Property & Facility Management

Nomura Real Estate Holdings, Inc.

13 Integrated Report 2015

Long-term Revenue Goal
(Fiscal Year Ending '25/3)
Operating income
Operating revenue¥150 billion level

Above

Asset efficiency
ROA

Capital efficiency
ROE at the

Above

5%

Financial soundness
Shareholders’ Equity Ratio at the

30% level¥1 trillion

10% level

Total payout ratio
Dividend payout ratio of

Approximately

30%

Message from the President

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationData

newly added as a management indicator. Maintaining high shareholders’ equity efficiency and continuing to respond to the expectations of shareholders and investors, our key stakeholders, areconsidered to be even more important in the future, hence thepositioning of ROE as a management indicator.
It is these ROA and ROE indicators that should be regarded
as indicating our growth model. Looking at the changes to these
two indicators at major players in the same industry over the last
few years, it is clear that we have top class levels of asset andcapital efficiency. This efficiency was created by combining profitability, especially capital turnover from the Residential Development Business in the Development Sector and fee earnings in theService & Management Sector. We will remain acutely aware that
ROA and ROE are the representative indicators of our uniqueness,while maintaining the balance with financial soundness men-

Revenue Growth Plan (Operating Income)(Billions of yen)
150

¥85 billion¥76 billion

500'16/03(Forecast)

Phase 1('19/03)

Phase 2('22/03)

ment. We are also aiming to expand operating revenue to exceed¥1 trillion. We will gradually work on revenue growth to achievethese long-term goals. Specifically, we have divided the time up
until the period ending March 2025 into three phases, and thebenchmarks we are aiming for are ¥85.0 billion in phase 1 and¥110.0 billion in phase 2. The goal for phase 1 is our commitment
to all stakeholders and we intend to achieve this goal. The Nomura
Real Estate Group maintains a long-term perspective and ismoving forward in achieving each of our current goals one at atime, taking into account these high level goals.

New Initiatives toward Growth
Acceleration
Engage in strategic investment for growth
acceleration and create business opportunities
in new areas

Operating Income by Segment
Unit: Billions of yen

Residential Development BusinessLeasing Business
Service & Management Sector¥150 billion level¥110 billion level
100

tioned earlier.
We will leverage investment funds to achieve an even higher
level of growth in the future while keeping these financial indicators in mind. Under the previous Mid- to Long-term Business Plan,for the past few years we have been preparing a financial base bycontinuing to take a cautious approach to expanding assets andby building up periodic income. Based on this financial position wedeveloped, we plan to invest aggressively, and to expand assets evenmore in the future. However, as mentioned above, we are notaiming to blindly expand assets. We will continue to retain recovery-to-investment ratios at a high level and to work to secure highasset efficiency.
We have established a long-term goal to double operating
income to the ¥150 billion level during the period ending March
2025, the final year of the plan, by actively expanding such invest-

Phase 3('25/03)'16/03
Forecast

Phase 1('19/03) Plan

Operating revenue

575.0

700.0

Operating income

76.0

85.0

Residential Development Business

31.5

30.0

Leasing Business

30.0

35.0

Service & Management Sector

19.5

23.5

Investment Management

7.0

6.5

Property Brokerage & CRE

8.0

10.5

Property & Facility Management

4.5

6.5

(5.0)

(3.5)

Adjustments

Nomura Real Estate Holdings, Inc.

14 Integrated Report 2015

In order to achieve even higher levels of growth, both the growthof existing businesses and the creation of new business opportunities in new areas is vital. The initiatives we will take to achieve suchgrowth are outlined below.
In this new plan we have established a number of themes as
new areas, and we will speed up initiatives in earnest to create aunique business model and to generate earnings at an early stage.
The themes we have established are overseas business, seniorcitizen and health-related services, public-private partnershipbusinesses, and energy management. With each theme we expect
to leverage existing business know-how and customer stock within the Group while also looking at new customers, new areas, andnew business sectors that we have not yet handled. Consequently,
we will tackle these themes maintaining a willingness to take onchallenges and vitality while demonstrating Group synergy to
the full.
As well as proceeding with these individual themes, we will
establish “strategic investment” as a new investment categorythat is not influenced by specific businesses or projects as a policy

Message from the President

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

for accelerating the growth of the Group. The estimated amountof strategic investment is ¥200 billion within the target period.
This figure for strategic investment will increase business opportunities focusing on the Service & Management Sector such as the
management of residences for seniors, and will be leveraged in
M&A for the development of business in new areas. We plan toproactively and flexibly respond to various opportunities that willlink to further accelerating the growth of the Group such as acquiring external know-how and new business opportunities.

Changes in Total Assets(Billions of yen)
3,000Foundations That Support Value Creation
Focus on development and leverage of humanresources with diverse values and on
strengthening governance
The Nomura Real Estate Group will pursue sustainable change by
ensuring the management team and employees work closer together.
Throughout the Group’s 60-year history we have continued
to challenge value creation. We have the power to generate newvalue from the challenges we take on, exemplified by the way inwhich we have been able to develop the PROUD brand in just 10
years. Human resources are the source that supports such value
creation. We will leverage the capabilities of our human resources

Investment Plan

Unit: Billions of yen

Leasing BusinessResidential Development Business
Service & Management Sector Others

Total(‘17/03-’25/03)
Residential Development Business

2,500

2,000

Investment

3,250

Recovery

3,000

Net investment*

250

Recovery-to-investment ratio

92%

Leasing Business

1,500

1,000

that hold diverse values so that we can continue to create value
through sustainable change.
In order to create an environment in which each and every
employee can use their skills to the full, during the target period
for the previous Mid- to Long-term Business Plan we focused ondiversity management and human resource cultivation, adopted various systems, and worked on changing employee awareness. The
new Mid- to Long-term Business Plan continues to promote
such activities. Furthermore, day-to-day work will link to customer
satisfaction through the strengthening of collaboration within theGroup and implementation of key strategies and we intend toincrease situations in which employees can truly sense theircontribution to the development of society. Employee satisfaction

Investment

1,800

Recovery850

Net investment*

950

Recovery-to-investment ratio

47%
200

Strategic Investment

Major Investment Targets for Strategic Investment
Housing for the elderly andnursing care services• Establish an integrated structurethat combines the processes fromdevelopment through operation• Enhance housing-related services

Real estate funds• Deploy globally• Expand business domains

Hotel business• Upgrade the value of complex
development• Establish an integrated structurethat combines the process fromdevelopment through operation

Health-related services• Expand business domains• Pursue Group-wide synergies

Property brokerage andconsulting• Respond to inbound and outboundneeds

Building management
and operation• Increase highly professional
management fields

Total
500

0
‘16/03(Forecast)

Phase 1(‘19/03)

Phase 2(‘22/03)

Phase 3(‘25/03)

Investment

5,250

Recovery

3,850

Energy management

Net investment*

1,400• Develop new business by leveraging
existing business base

Recovery-to-investment ratio73%* Net investment = Investment - Recovery

Nomura Real Estate Holdings, Inc.

15 Integrated Report 2015

Further IT utilization in realestate businesses• Deploy businesses in new domains• Improve efficiency of existing
businesses

Message from the President

increases customer satisfaction, and links to providing returnto shareholders and investors through the creation of valuer e s u l t ing from further changes and challenges. It is my
responsibility to create an environment that generates this kindof virtuous cycle.
We must incorporate multiple viewpoints into management
so that we can continue to respond to the ever-diversifying andincreasingly sophisticated needs of our customers and society. Up
until now we have engaged two outside directors to secure diversity
on the Board of Directors. From 2015 we made the transition to an
Audit & Supervisory Committee governance structure that shouldpave the way for an environment in which more magnanimous
discussions can take place. As a result, we will create a governancestructure that will lead to the enhancement of supervisory functions
and monitoring by the Board of Directors. We have engaged
five external directors, four of whom are independent external
directors. We expect new viewpoints to result from exhaustive
discussions leveraging the expertise and diverse values of each external director. We hope to continuously develop the governancestructure in the future.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationData

net income that was ¥13.0 billion has increased roughly threetimes to ¥40.0 billion, and total assets that were ¥690.0 billion
have increased almost two-fold to ¥1.4 trillion. Of course it is not
only financial and performance aspects that have grown. There
have been increases in terms of personnel too, with the number of
employees having doubled from 3,000 to over 6,000, and throughrepeated reorganization we have continued to change and expand
our businesses and activities.
The new Mid- to Long-term Business Plan sets new targets
for the next 10 years. In this plan, each Group company will collaborate with each other and all employees throughout the Groupwill come together and combine their strengths and realize future
growth. We have a business base and a financial base that we
fostered over the years and we have a human resource base thatis willing to take on new challenges. If we continue to makechanges and take on new challenges using these bases I am positive that we will be able to achieve our goals.
I hope that all our stakeholders, including our shareholders,have high expectations for the future of the Group.

Message to Stakeholders
New changes that unite the Group based on thebusiness foundations we have created
President

The new Mid- to Long-term Business Plan starts in 2016, the 10th
anniversary of the listing of Nomura Real Estate Holdings. 2017sees Nomura Real Estate Development reach an important turning
point, namely its 60th anniversary as a Group.
Looking back to 10 years ago when Nomura Real Estate
Holdings was first listed, and the changes since the year immediately prior to listing, fiscal year ended March 2006, while we experienced a decline as a result of the impact from the historic economic
shock referred to as the collapse of Lehman Brothers, overall theGroup has greatly expanded its businesses. Operating income thatwas ¥44.0 billion now stands at ¥76.0 billion, a 1.7 fold increase,
Nomura Real Estate Holdings, Inc.

16 Integrated Report 2015

Director’s Insight into Development Sector Growth Strategies

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

In Order to Continue to Fulfill the Mission—
Urban Development—We Have Kept since
Our Founding

Fulfilling Our Mission as a Developer and Contributing toSociety through“Urban Development That Anticipates the Future”
Seiichi Miyajima

Shortly after the Nomura Real Estate Group was founded we commenced business with the development of residential areas. Since
then we have built up our position as an integrated developer,
constantly listening to demands from society and the needs of ourcustomers, and taking on the challenge of new businesses throughflexible thinking.
Although the social climate and economic environment haveundergone significant change, our “urban development“ mission as
a developer remains the same to this day. We believe that the social
significance of the Group and our raison d’être lies in enhancing city
functions through appealing community development, providing
local residents with safety, security, and convenience, as well as
creating value through the development of communities and harmonization with the environment, and permanently raising the value ofthe community.
Keeping this sense of mission that the Group has maintained since its founding in mind, as director in charge of theGroup’s Development Sector, I will work to create an organizationand to formulate and implement strategies that contribute to urban development that anticipates the future.

Driving Growth by Expanding Product Categories,
Business Areas, and Business Methods
Over the years the Group has diversified our business in line withthe changing times and social changes, and I believe that theDevelopment Sector, made up of the Residential Development andLeasing Businesses, is still the source of our competitiveness, andthe origin of our Group synergy.
The newly formulated Mid- to Long-term Business Planstates the “expansion of business volume and business domains in
the Development Sector” as its first key strategy, and this strategy

Director & Executive Officer
Nomura Real Estate Holdings, Inc.
President
Nomura Real Estate Development Co., Ltd.

Nomura Real Estate Holdings, Inc.

17 Integrated Report 2015

Director’s Insight into Development Sector Growth Strategies

is expected to drive the Group’s growth.
The expansion of product categories, business areas, andbusiness methods will serve as a specific measure for propellingsuch strategy.
In terms of expanding product categories, in the Residential
Development Business we will expand and accelerate business bydeveloping existing products such as OHANA for suburban areas,
and PROUD SEASON for detached houses, in addition to ourestablished PROUD condominium brand. In the Leasing Business
we will take on the challenge of new sectors such as serviced
apartments and hotels in addition to existing sectors— offices,
commercial facilities, logistics facilities, and rental housing. Following the increase in the social need for nursing care and medical
services we have started to develop housing for the elderly. We willcontinue to develop business from leasing for the foreseeable
future whilst also investigating selling.
In terms of expanding business areas, it goes without sayingthat we will work to expand our market share and to enhance

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Dataearning power in existing areas that focus on central Tokyo.
However we will also grasp demographic changes and theincreasing need for regional vitalization and make inroads into
regional nucleated cities. Leveraging the brand power and knowhow we have built up domestically we will take on the challengeof overseas markets, beginning with Asia, a region in which
economic growth is pronounced. Specifically, we have decided toparticipate in the residential development business in Vietnam,
and are also investigating other projects.
In terms of expanding business methods, we will continue
with the development, sale, and disposal of new condominiums
and offices that has been our main focus to-date, while also
increasing our business volume by leveraging a wide range ofbusiness methods including responses to reconstruction needs
associated with the aging of facilities and changes in customers’
life stages, the acquisition of large-scale redevelopment and complex development projects, and participation in PPP/PFI businesses.

Development Sector Growth Strategies in the New Mid-to Long-term Business Plan

Expand Revenue from Property Sales

Expand ProductCategories
Accelerate
development ofexisting asset-types
Expand into new
asset-type domains

Expand Business
Areas

Expand Business
Methods

Implement area strategies
by seizing market changes(enhance central Tokyo
area, develop new markets
in Japan and overseas)

Utilize diverse businessmethods such as largescale redevelopment,complex development,
and rebuilding•Housing sales business: achieve stable growth as a core business•Leasing business: expand business by accelerating the mutual growth
circulation model (Leasing Value Chain) with the Group-affiliated REITs
Supply of properties
The
GroupNomura
affiliatedReal Estate
REITs
Group
Enhancement of brand power, value improvement

Expand Rental Revenue•Increase the number of excellent
properties for lease via development•Expand the long-term,
stable revenue base
Toranomon 1-Chome
Redevelopment

Nomura Real Estate Holdings, Inc.

Yokohama Nomura
Building

18 Integrated Report 2015

Achieve Stable Growth with a Business
Portfolio That Focuses on Balance
Optimizing the business portfolio is essential for expanding theDevelopment Sector. The strength of the Nomura Real EstateGroup’s Development Sector lies in having both a stock-based
business that generates rental revenue from owning the real estate
we develop and a rolling business that generates income by selling
the real estate we develop to customers and Group-affiliated REITs. By ensuring the balanced growth of both businesses we cansecure stable earnings while increasing asset efficiency, and this inturn allowed us to achieve our target shareholders’ equity ratio of
30% during the previous Mid- to Long-term Business Plan and tomaintain ROA at a level considered top-class in the industry.
As part of the new Mid- to Long-term Business Plan we will
engage in proactive investment based on our stable financial
position. When investing we will constantly consider the stockbased and rolling-based balance as well as the balance between the Residential Development and Leasing Businesses andthe balance between existing and new businesses. The Residential Development Business is the mainstay of the Group and wewill work on ensuring its sustainable growth going forward. We
are contemplating doubling the current business volume ofrolling-based property development for sale in the Leasing Businessin the near future. In terms of stock-based development, we will
select, acquire, and develop superior assets in the long-term,
focusing principally on the redevelopment of complexes. Throughsuch policy we will continue to maintain high asset efficiency,
unique to the Group, in the future.

Director’s Insight into Development Sector Growth Strategies

Strengthen Initiatives for Urban-type Compact
Towns to Develop the Ideal Community
When expanding business volume and business areas as part ofour development business we place great importance on largescale redevelopment and complex development projects.
The recent increasing need for redevelopment in Japan lies
behind this, and urban development and redevelopment is being
planned throughout the Tokyo metropolitan area in preparation
for the Tokyo Olympics that are due to take place in 2020. The
number of opportunities for new urban development, including
compact cities, not just in central Tokyo but also in suburban cities
has increased under the Government slogan “Vitalizing the
Local Economy.”
I believe that meeting such social needs and proactively
participating in urban development that leverages the characteristics of each region provides the Group with the opportunity todemonstrate the strengths we have built up and to grow, while
also fulfilling our social mission as a developer.
Above all, the Nomura Real Estate Group is proud that our
results put us in the top class in the industry in the residential redevelopment sector, and we are currently involved in numerous otherprojects such as the redevelopment of Musashi-Koganei Station
South Exit and the redevelopment of the area in front of Nishi-Nippori Station. Participating in such a large number ofredevelopment projects has enabled us to get close to local residents,
including land owners, and to build up a wealth of knowledge
and know-how necessary for urban development while also
gaining the trust of land owners.
In addition to such a base, expanding our business activities
in recent years has enabled us to improve our ability to respond tocomplex development projects that incorporate a variety offacilities, including offices and commercial facilities. The redevelopment of Toranomon 1-Chome marks the start of efforts toaccelerate our redevelopment business in central Tokyo. As part of
the Nishi-Azabu 3-Chome redevelopment project we will take on
new sectors such as hotels as well as existing business segments.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

We intend to focus our attention on such initiatives, leveraging our unique strengths to create urban-style compact towns
that offer multifunctionality and superior comfort and that are
adjacent to various facilities necessary for living such as transportation, medical institutions, and governmental and public facilities.
As I just mentioned, we are involved in a number of projects
including the redevelopment of areas in front of stations in themetropolitan area such as Musashi-Koganei. In the future I would

like the Group to contribute to “ideal urban development” that
responds to the wishes of residents across an even wider area encompassing regional nucleated cities.

Acquisition of Large-scale Redevelopment and Complex Development Projects by Strengthening Initiatives for Urban-type
Compact Towns
Demonstrating Our Strengths in Large-scale/Complex Developments Centering on Housing

OfficeFitness clubs

Urban Development via Area
Development
Funabashi Morino City

• Houses for sale
• Commercial facilities• General hospital• Community• Environment-friendliness• Housing for the elderly (plan)

Nomura Real Estate Holdings, Inc.

Housing forthe elderly

Housing

Commercial
facilities

Urban Redevelopment in front ofRailway Stations in Metropolitan
Areas and Regional Nucleated Cities
Musashi-Koganei Station South Exit
Redevelopment Project• Houses for sale
• Commercial facilities

19 Integrated Report 2015

HotelsServicedapartments

Urban Development in Central Tokyo
Nishi-Azabu 3-Chome Redevelopment
Project• Houses for sale
• Lease housing• Offices• Commercial facilities• HotelsDirector’s Insight into Development Sector Growth Strategies

Strengthen Group-wide Collaboration andAchieve Further Growth throughout the Group
Enhancing Group-wide collaboration is essential to achieve growthin the Development Sector.
We need to integrate the knowledge that each Group
company has accumulated, including both the Development Sector’s know-how relating to tangible aspects and the Service &Management Sector’s know-how relating to soft infrastructure, sothat we can respond to the kinds of large-scale redevelopment
and complex development projects I mentioned above. Withurban development both the quality of the tangible aspects suchas building and equipment, and raising the value of facilities
through management are extremely important.
Accumulating know-how that increases value in line with

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Datatangible aspects and the management thereof directly links todevelopment capabilities and this in turn links to the acquisition ofmany business opportunities.
It is also important to integrate each Group company’s pointof contact with customers so that we can expand business opportunities and broaden our customer base. We intend to strengthen
customer relations based on the “Nomura Real Estate Group
Customer Club” launched in 2015. Through this initiative we will
collaborate with Group companies to provide seamless services
ranging from maintenance, remodeling, and interior decorating to
the purchase of another home, according to the residential lifecycle.
I also believe that accumulating know-how from eachGroup company is the key to success in promoting Group brandstrategies, strengthening an integrated development, sales andmanagement structure, and to taking on new businesses such as

Increase and Reinforce Customer Base via Group-wide Collaboration

Enhancementof customer
base forindividuals

Understandingof customer
needs

Provision ofhigh-quality and safe
products and services
in harmony withcustomers’ lifestyles

Residential
Development
Business
Property &Facility
Management
Business

Creation ofGroup Synergies

Property
Brokerage& CRE
Business

Leasing
Business

Understandingof customer
needs
Provision of
optimal solutions
according to thecustomer segment

Investment
Management
Business

Enhancement ofcustomer base forcorporations(Including public sector)

Enhancement of Group-wide Collaboration• Reinforcement of an integrated development, sales and management structure• Group-wide collaboration toward multifunctional urban development• Enhancement of the Nomura Real Estate Group Customer Club*• Group-wide collaboration in the senior citizen and health-related business• Promotion of a Group-wide brand strategy* Housing-related membership of the Group

Nomura Real Estate Holdings, Inc.

20 Integrated Report 2015

senior citizen, health-related, and overseas businesses.
Luckily thorough customer orientation that puts customer
satisfaction first and foremost has taken root as DNA at the Group.
I am convinced that even if the company or organization an
employee is affiliated to and the products and services handled
differ, we can raise the value of the Group as a whole and maximize
the value we provide to society and customers just as long as
employees who share this attitude coordinate properly.

Promotion of CSR-centric Management

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

CSR Promotion System

Providing Solutions to Social Issues andGenerating New Value for Society throughOur Business by Promoting
CSR Activities Aligned with theMid- to Long-term Business Plan

Our Ideal
Utilizing what people and communities mutually respect to engage in urban developmentthat anticipates the future, and nurturing an affluent time to live in together
with communities while creating new value for society.

Yukoh Yoshida
Director and Executive Officer
Chair of the CSR Committee
Four Key Themes
As a group of companies engaged in real estate—a core component of people’s lives—the Nomura Real
Estate Group’s businesses place it in close proximity to local communities. We recognize that our mission
in society is to work closely with stakeholders to address social issues and help realize a sustainable andaffluent society through our products and services.
In conjunction with the start of the new Mid- to Long-term Business Plan, we have prepared the

Safety andSecurity

The Environment

Communities

Health andComfortideal of the Nomura Real Estate Group. Our approach to CSR is defined by this ideal. In other words, weseek to achieve sustainable urban development that is safe, secure and comfortable and that focuses on
harmony with the natural environment, while leveraging the diversity and values of people and the community. We will nurture an affluent time to live in together while supporting community building that

CSR Promotion Foundations

connects people and neighborhoods.
Furthermore, in order to carry out CSR activities aligned with the management strategy in the Midto Long-term Business Plan, we have modified key themes and the CSR promotion system including

Human resources

promotion foundations that support them, based on the socioeconomic environment and changing

Development of diverse workforce

customer needs.
In addition to achieving sustainable value creation under the four themes, we will also promote
CSR management that includes development of a diverse workforce using diversity management—an

Management structure

important promotion foundation, establishment of robust corporate governance system, and reinforce-

Corporate governance, compliance and risk management

ment of compliance and risk management practices. Going forward, we will continue to create new value
for society while finding solutions to social issues.

Nomura Real Estate Holdings, Inc.

21 Integrated Report 2015

Promotion of CSR-centric Management

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Four Key Themes

Safety and Security

The Environment

Communities

Health and Comfort

There is growing demand for safety and security,

Addressing environmental issues and energy short-

The erosion of personal and community connec-

Peoples’ interest in health and comfort contin-

including responding to natural disasters,

ages has become an important social issue and ations through changing demographics and theues to grow as society ages and the amount ofaddressing aging real estate stock, and expecta-

company will not be able to continue as a goingweakened functions of communities has become

leisure time increases. Needs surrounding

tions for urban revitalization.

concern without first addressing these issues.

a social issue in Japan.

health and comfort are also becoming more

The Nomura Real Estate Group is working

The Nomura Real Estate Group has dedi-

The Nomura Real Estate Group is working

to meet this demand by enhancing service quality

cated itself to reducing environmental impacts

to create vital communities together with thein both tangible and intangible forms. This

through its businesses, such as by introducing

people that live, work, gather and visit there

The Nomura Real Estate Group is helping

includes introducing advanced technologies,

advanced environmental technologies and ICT

while leveraging the diverse values of each com-people to live healthier and more comfortableensuring building quality through proprietary

solutions and through passive design and energy

munity through urban compact towns, mutual

lives through its sports promotion efforts, devel-

quality control standards, improving city func-

creating designs in harmony with the naturalaid, and mechanisms encouraging multi-genera-

opment of senior housing, universal design con-tions through urban development as well as

environment.

tional interactions.

cepts, and mechanisms encouraging community

preparing a disaster preparedness plan, drawing

We support community development

up a business continuity plan and providing a full

through events and town meetings, provide

range of after-sales services. Through theseongoing environmental education opportunities,

efforts we are working toward delivering safety

and are working with communities to achieve aand security to customers and communities.

sustainable society.

Nomura Real Estate Holdings, Inc.

sophisticated and diverse because of changing
values and lifestyles.

involvement.

22 Integrated Report 2015

Special Feature 1:
Value Creation through Urban Redevelopment

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Breathing New Life into a
Community through Urban
Redevelopment Next to the
Railway Station
Oizumi-gakuen Station North Exit Type 1
Urban Redevelopment Project
One area of Nomura Real Estate Development’s focus isurban redevelopment projects next to railway stations. We
have been involved in the Oizumi-gakuen Station North Exit
Type 1 Urban Redevelopment Project from the concept
stage and, harnessing the wealth of expertise offered by the
Nomura Real Estate Group, we are helping to build a safe
and comfortable living environment and to realize urban
development that reinvigorates the community.

Nomura Real Estate Holdings, Inc.

23 Integrated Report 2015

Special Feature 1:
Value Creation through Urban Redevelopment

Community Issues

Chapter

Important Transportation Hub of Nerima Ward
Requiring Better Land Use and Improved
Transportation Functions
Oizumi-gakuen Station can be reached in as little as 15 minutes
from Ikebukuro on the Seibu Ikebukuro Line and the station is also
located close to major roads including Mejiro-dori Street and the
Kanetsu Expressway, making it a transportation hub serving alarge number of bus routes. As a result, the area immediatelyaround the station quickly developed into a core commercial
district that is now considered an important community hub in
Nerima Ward’s master plan on urban planning.
However, the north exit of the station was in dire need of
improvement in terms of safety and comfort, given the narrowpedestrian spaces, the separate locations of the bus stop and taxi
stand, and dangers posed to the local community from abandoned
bicycles and other issues. There were also many old buildings anda large amount of unused or underutilized land, indicating landand spaces were not being used effectively. This led to greater

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationData

expectations for improved transportation functions, the greater
concentration of commercial and public facilities, and community
revitalization, through urban redevelopment.

Goals of Urban Redevelopment

Initiation of Urban Redevelopment Plan Chapter(2) R evitalization of community’s commercial
facilities

Involved in the Urban Redevelopment Projectfrom the Concept Stage as One of the Real
Estate Rightsholders(3) S upply of high quality urban housing

To address the community’s issues, the North Exit Urban Development Roundtable was established in 2005 marking the startof the concept stage of the actual urban redevelopment project. In 2008, the Urban Redevelopment Preparation Union wasestablished and began working on a specific proposal. In 2011,
these efforts culminated in the finalization and announcementof the official urban plan.
Nomura Real Estate Development acquired property within
the redevelopment zone in 2007, and at the request of Nerima
Ward the company has been involved in the urban redevelopment
project since the basic concept stage as one of the real estate

Issues Prior to Urban Redevelopment(1) Provision of safe and comfortable transportation
functions(4) Construction of highly convenient public interest
facilities

rightsholders. In 2011, Nomura Real Estate Development was
selected as an official project participant, leading it to be involved
with other rightsholders and the local government in not only thedrafting of the plan, but also the selection of consulting, designand construction firms. The company worked on the interior andexterior designs and landscape designs for the construction plan.
It also worked with other experts from various fields, such as thelighting, on planning and developing new buildings and residential
developments as one of the business stakeholders.
10-year History of Public-private Urban Redevelopment

2
3

1

1 Lack of separation between cars and pedestrians

2 Roads lacking adequate width

4

Urban Development Roundtable

3 Aging buildings

4 Underutilized land

Nomura Real Estate Holdings, Inc.

24 Integrated Report 2015

2005: North Exit Urban Development Roundtable established2011: Nomura Real Estate Development was selected as an
official project participant
2013: Construction began on buildings and public facilities
2015: Construction on buildings and public facilities completed

Special Feature 1:
Value Creation through Urban Redevelopment

Project Implementation Aimed at
Chapter
Improving Safety and Convenience

Fulfilling the Expectations of Community
Members with the Expertise of the Nomura
Real Estate GroupIn addition to the building containing Grand Emio Oizumi-gakuen,
a mixed use commercial facility directly linked to the station, and
PROUD TOWER Oizumi-gakuen, a 27-story high-rise condominium, this project benefited the public in many ways through thedevelopment of various infrastructures. This included the creationof a station-front open area, pedestrian overpasses, taxi pool, bus
terminal, east-west through road, city residents’ office, municipal
bicycle parking lot, and rooftop garden that also serves as acommunity hub in case of a disaster.
One particular feature of the project was the bus terminalthat operates some 300 buses daily from the first floor of the jointly

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationData

owned building containing PROUD TOWER Oizumi-gakuen andGrand Emio Oizumi-gakuen. This marked the first time that public
transportation was located within a jointly owned building inJapan (according to research by Nomura Real Estate Development). Jointly owned buildings have complicated rights relationships involving land owners and residential unit buyers, but Nomura
Real Estate Development leveraged its expertise and track recordin redevelopment projects to carefully balance and reflect theinterests of stakeholders.
In addition, roads were widened and a pedestrian overpass
installed linking the station to separate cars from people andensure pedestrian safety. The south and north sides of the station
were joined with an overpass to make it easier for people to getaround and a pedestrian walkway and pass through was constructed to connect the east and west sides of the station, greatly
improving convenience.

Measures for Improving Safety and Convenience

Completion and the Future

ChapterManaging the Entire Facility and Contributing to
Comfortable and Affluent Urban Development
Construction in the urban redevelopment area, which was named
Lizmo Oizumi-gakuen, moved forward under a short timeline forsuch a major urban redevelopment project, with work completed
in March 2015, almost exactly three years from when the Urban
Redevelopment Preparation Union was established in March 2012.
In early April Grand Emio Oizumi-gakuen opened for business. By
early May 2012 all facilities were up and running including the city
residents’ office. Each facility features innovative designs for it to
be used as a place of gathering or leisure so that the area will
become a new hub for the broader community. This includes therooftop garden and pedestrian overpasses.
PROUD TOWER Oizumi-gakuen, the residential componentof this project, offers one of the best surrounding communities

Mechanisms for Comfortable and Affluent Urban Development
Rooftop garden as a place ofleisureThe rooftop garden is intended
to serve as the living room of thecommunity, contributing to its
development as well as serving
as a hub in case of a disaster.

Widened roads

Bus terminal on the first floor of the building

Narrow roads were widened making two-way
traffic possible (including buses) and enhancing pedestrian spaces.

A new bus terminal was constructed on thefirst floor of the building with dedicated bus
access road. The terminal provides space forbuses and provides riders with covered protection from the elements.

Pedestrian overpasses directly linking thestation
New pedestrian overpasses with a roof were
installed in the area where little space wasavailable between cars and people. These
overpasses directly link the station with thebuilding ensuring pedestrian safety andmaking it easier for people to get around thestation area.

Nomura Real Estate Holdings, Inc.

25 Integrated Report 2015

“Birthplace of JapaneseAnime”
Visitors are welcomed at theanime gate pedestrian overpassby statues of anime charactersinstalled at the entrance by Nerima Ward.

Special Feature 1:
Value Creation through Urban Redevelopment

among the entire PROUD series, including convenient access totransportation options, a high concentration of commercial facilities, a verdant natural environment, and great overall livability.
These features were extremely well received by customers, leading
the property to quickly sell out.
Nomura Real Estate Partners is responsible for managing
these new facilities. The scope of its work includes not only theresidential portion, but also the commercial facility and even public
facilities such as the bus terminal. This means the company plays
an important role in supporting the development of the community’s safe and comfortable social infrastructure.
This project, which has become a community landmark, isalso considered one of Nomura Real Estate Development’s flagshipproperties. Going forward, we will leverage the Group’s collective
strengths in other redevelopment projects and contribute to vigorous urban development.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Stakeholder’s Voice
President of the North Exit Urban Redevelopment Union

Pursuing Even More Comfortable and Affluent Urban
Development with Lizmo Oizumi-gakuen as aLandmark Model
Oizumi-gakuen is a cultural epicenter surrounded by a verdant natural environment as well as educational institutions and filming locations for movies
and TV. The North Exit Type 1 Urban Redevelopment Union was establishedbased on the desire to reinvigorate Oizumi-gakuen and make it a more attractive community.
Thanks to the dedication and hard work of our members including
Nomura Real Estate Development as well as the local government, related
institutions, and consulting, design and construction firms, the north exit of
the station has been utterly transformed into a new community called Lizmo
Oizumi-gakuen. With Lizmo Oizumi-gakuen as a new symbol, I hope to pursue even more comfortable and affluent urban development in the future.

Comfortable living
environment
PROUD TOWER Oizumi-gakuen
delivers comfortable living spaces
with the resident in mind. These
condominiums have achieved
the highest score for all of thecondominium environmental
performance labels used by the
Tokyo Metropolitan Government.

President
Urban Redevelopment Union
Oizumi-gakuen North Exit

Person in Charge from Nomura Real Estate Development

Government services for city
residents
The building’s fourth floor provides a host of gover nments e r vices, including the city
re s i dents’ office, community
activity support desk, and librarypick-up desk.

Mr. Tadahiro Kato

Carrying on the Commitment of All Stakeholders toContinually Improve the Community
This project involved discussions by landowners, Nerima Ward, designers,
construction companies, as well as all other stakeholders including Nomura
Real Estate Development, about how to remake the community under thesame common direction. This commitment represents the driving force
behind the solutions to many issues and creating a building that truly
contributes to the community.
Our involvement spans beyond just the building to include future
property and facility management services and working closely to manage
the project with the Redevelopment Union. I hope to carry on everyone’s
Masatoshi Kiyota
Project Management Department (at the time) commitment to urban development to continually improve the community.
Development Planning Division
Nomura Real Estate Development

Nomura Real Estate Holdings, Inc.

26 Integrated Report 2015

Special Feature 2:
Value Creation with Next-generation Office Properties

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

New Office Buildings
Supporting the Next
Generation of Growth
Companies
The Dynamic Growth of Premium
Midsize Offices (PMO)

Premium Midsize Offices, or PMO, contain both tangible andintangible features that are closely in tune with the needs ofcommercial tenants, including design, functionality, security andservices, all based on the phrase “don’t settle for second best.”
PMOs deliver unprecedented value in their asset class and willplay an important role in supporting growth companies thatwill drive the future of Japan’s economy.

Nomura Real Estate Holdings, Inc.

27 Integrated Report 2015

Special Feature 2:
Value Creation with Next-generation Office Properties

The Concept Behind PMO

Chapter

Offering the Same Functions and Grade as Larger
Office Buildings Despite a Compact Size
Growth companies that want to maximize corporate value andenhance employee satisfaction and productivity have faced thereality that there are very few high quality midsize office buildingsin the major urban centers of Japan.
These companies are made to feel small and insignificant
because they cannot use up an entire floor of a large building withhigher grade features and higher specifications. On the other
hand, midsize office buildings may have lower rents, but they typically lack the grade and security a company may desire. Very few
office buildings in the market can meet these needs, so most companies have had to settle for leasing office space in buildings thatcannot meet their needs.
To respond to these needs of growth companies, theNomura Real Estate Group is developing Premium Midsize Offices(PMO) that offer the same functions and design standards foundin much larger office buildings, in addition to excellent aseismic
performance.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

The concept behind PMO series buildings is embodied by
the phrase “don’t settle for second best.” These buildings are constructed to satisfy the needs of commercial tenants both tangibly
and intangibly with not only advanced functions and grades, butalso thorough building management and various other services aswell as access to finely tuned support. This represents a new formof value in office buildings that only the Nomura Real Estate Groupcan deliver because of its wealth of expertise in building management and its deeply engrained commitment to the customer.

Tangible Quality

One example is large glass windows. While on one handlarge glass windows provide comfort and openness, but on theother tenants have said bright sunlight was problematic dependingon the direction and floor of the building. As a result we modified
the design, adopting light-blocking blinds or reducing the gap
between windows and blinds. Additionally, keeping an eye on theconvenience of medical cabinet users, we made it so that a
toothbrush can be placed upright inside and changed its installation height for the men’s and women’s restrooms.

Chapter

Premium Office Spaces That Are Comfortable andSatisfying for the People Who Work There
Weekly meetings are held at PMO series buildings to ensure thesatisfaction of commercial tenants is being met. During eachmeeting around 20 to 30 employees from different departments
discuss their ideas and views about what makes PMO series
buildings unique. Meetings also share feedback received from
actual building users that is in turn used to further evolve the
PMO concept.

Position and Features of PMO
Grade
Safety and+ security

High

services

Large
office buildings
Midsize
office buildings
Smalloffice buildings

The History of PMO

Low

2008

2010

June: Completed PMO Nihonbashi Honcho

January: Completed PMO Akihabara
February: Held the first PMO Premium event
March: Completed PMO Nihonbashi Odenmacho
June: Completed PMO Hatchobori II

2009

Tenants

2013

Small

Area
Large

ReachedJanuary: Completed PMO
Nihonbashi Muromachi
March: Held the fourth PMO Premium event
companies
April: Disaster preparedness hub opened at
PMO Nihonbashi Muromachi
May: Completed PMO Yaesu-dori
September: Completed PMO Kanda Tsukasamachi

100

2011

2014

May: Completed PMO Iwamotocho
January: Completed PMO Akihabara II
May: Completed PMO Hatchobori
July: Completed PMO Nihonbashi 2-chome
October: Completed PMO Higashi Nihonbashi
December: Received Good Design Award

February: Completed PMO Tamachi
April: Completed PMO Ginza 8-chome
July: Completed PMO Shiba Koen
August: Complemented PMO Nihonbashi Kayabacho
September: Completed PMO Shibadaimon

Nomura Real Estate Holdings, Inc.

28 Integrated Report 2015

Offices that have more natural lightand feel more open because of large
glass windows.
The same exterior design is used forevery PMO property

Special Feature 2:
Value Creation with Next-generation Office Properties

Intangible Quality

Chapter

Holding Various Events for Human
Development and Creating Communities
In terms of intangible aspects, we provide finely tuned support tocommercial tenants through the various services we provide andevents that we host.
Growing companies, the primary tenants of PMO series
buildings, share the same challenge of not having enough resources to go around for hiring and human development. They also
have small staffs, which make it hard to develop and broaden acommunity both inside and outside the company.
Given these challenges, PMO series buildings provide meeting spaces free of charge where companies can hold briefings orhiring interviews and also offer a broad range of correspondence
training courses for every type of employee from new hires tomanagers.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Commercial tenants are also invited to attend parties withfood and videos and their employees can take part in building-organized futsal matches, running or other sporting events.
These activities improve employee satisfaction and serve asa venue to communicate and exchange information, helping toform human networks through internal and external engagementthat transcends company lines.
PMO buildings also organize rice planting events and otheractivities for the tenant company employees and their families.
These activities are used as a form of leisure, to foster friendships
between employees of different companies, and to serve as an
educational opportunity for children. Activities have earned a very
positive reputation because they provide small companies with thechance to carry out citizenship activities that they otherwise could
not have carried out on their own.

Multifaceted Services Supporting Commercial Tenants

Training programs for human development
Selections include communication skill seminars, compliance seminars,
and various employee training programs.

PMO Nihonbashi Muromachi – Serving as a Disaster Preparedness Hub during Emergencies
To support the disaster preparedness and business continuity plans of commercial tenants, PMO Nihonbashi Muromachi now serves as a disaster preparedness
hub in case a disaster were to strike. What this means is that the building will
become a control center for collecting and disseminating information and serveas an evacuation and rescue site with food (three meals), water, blankets andother supplies for one day for
2,000 office workers.
PMO Nihonbashi Muromachi is located roughly in the
middle of other PMO series
buildings in Chuo and Chiyoda
wards, which makes it possible
for people to reach it on foot incase public transportation is not
Disaster preparedness storehouse
operating following a disaster.

Akihabara
3-11-6 Iwamotocho, Chiyoda-ku

PMO Akihabara II
2-3-10 Higashi Kanda, Chiyoda-ku

PMO Iwamotocho
3-9-2 Iwamotocho, Chiyoda-ku

Kanda Tsukasamachi
2-8-1 Kanda Tsukasamachi, Chiyoda-ku

Nihonbashi Honcho
4-12-20 Nihonbashi Honcho, Chuo-ku

Higashi Nihonbashi
2-15-4 Higashi Nihonbashi, Chuo-ku

Nihonbashi Odenmacho
6-8 Nihonbashi Odenmacho, Chuo-ku
PMO Nihonbashi Muromachi
1-13-7 Nihonbashi Muromachi, Chuo-ku

Nihonbashi 2-chome
2-15-5 Nihonbashi, Chuo-ku
Yaesu-dori
1-6-1 Hatchobori, Chuo-ku
Hatchobori II
2-24-3 Hatchobori, Chuo-ku

Nihonbashi Kayabacho
3-11-10 Nihonbashi Kayabacho, Chuo-ku
Hatchobori
3-22-13 Hatchobori, Chuo-ku

Exclusive events for commercial tenants
Ginza 8-chome

PMO Night is held as a way to say thanks to commercial tenants. Employees of commercial tenants are invited to a networking session
where beer fresh from the brewery is served.

8-12-8 Ginza, Chuo-ku

Nomura Real Estate Holdings, Inc.

29 Integrated Report 2015

Special Feature 2:
Value Creation with Next-generation Office Properties

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Stakeholder’s Voice
Tenant Company - Mr. Jun Kadoya, Server-Free Corporation

Employee-friendly offices result in
improved productivity
Since moving into the PMO series building we have seen an increase in directtransactions with large customers. Many customers who visit always saywhat a nice office we have and they are also impressed with the level of security provided. Our company develops software, so employee productivity isvital and it is important that employees can work in a comfortable and employee-friendly office space. In this sense, I believe a PMO series building isan essential and effective investment for tenants.

Tenant Company - Mr. Koji Ando, Vector Japan Inc.
Rice planting events
Employees of commercial tenants and their families are invited to attend rice planting events at the foot of Mt. Tsukuba to learn about
farming and the environment. The rice harvested from the field is sent
to Fukushima, which enables commercial tenants to give back throughcitizenship activities.

Mr. Koji AndoMr. Jun Kadoya

Representative
Director
Vector Japan Inc.

Representative
Director
Server-Free
Corporation

Word is getting out about PMO series buildings

Everything about this office is hotel-like, including the restrooms and pantry. We have made the pantry into a cafe-style breakroom, which has become quite popular among our employees. The various seminars and events organized by the building
also enhances employee satisfaction. There are very few established brands when it comes to office buildings, but I believe
word is getting out about PMO series buildings as recently business partners and customers have seemed a bit jealous whenever I say we are located in a PMO series building.

Nomura Real Estate Development – Person in Charge of PMO Leasing

Committed to making daily improvements to see the smiles on
tenant faces

Running events
PMO Running enables employees of commercial tenants to get together for a run after work. They run around the Imperial Palace torefocus their mind and energy on an enjoyable event featuring beautiful nightscapes.

For PMO series buildings, everyone who is part of the team shares their knowledge in an effort tomake daily improvements to infrastructure and services to enhance the overall tenant experience.
This attention to detail and continual improvement has earned us a strong reputation amongleasing customers.
Whenever we show prospective tenants a PMO series building they are always surprised atwhat they find and tenants have also said their goal is to grow the company and move into alarger PMO property. This motivates us even further to find the next way to improve the tenant
experience. Going forward, I will continue to look for ways to improve during our daily sales activities in order to see the smiles on tenant faces.

Nomura Real Estate Holdings, Inc.

30 Integrated Report 2015

Emii Kojima
Office Building
Management Department
Commercial Property
Development andManagement Division
Nomura Real Estate
Development

The
Real
A t Nomura
a Gl anc e Estate Group at a Glance

Composition of operating revenue*
Property & Facility Management Business

14.8%
Property Brokerage& CRE Business

5.2%

Other Business

Total¥567.1billionGroup companies engaged in this business• Nomura Real Estate Development Co., Ltd.

• Nomura Real Estate Development Co., Ltd.

• Nomura Real Estate Reform Co., Ltd.

• NREG TOSHIBA BUILDING Co., Ltd.

• PRIME X. Co., Ltd.

• Yokohama Business Park Heating and Cooling Supply Co., Ltd.

61.9%
16.0%

Property & Facility Management Business

Other Business• Geo-Akamatsu Co., Ltd.

(0.1)%

7.5%

6.2%

Group companies engaged in this businessResidential
Development
Business

Composition of operating income*Investment
Management
Business

Leasing BusinessLeasing Business

1.6%

11.0%

Residential Development Business

0.5%

Investment
Management
Business

Property
Brokerage &CRE Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Total

¥71.8
billionResidential
Development
Business• NREG TOSHIBA BUILDING FACILITIES Co., Ltd.

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

400

40

120

30

43.8%
Leasing Business359.3 343.0

31.1

307.6

200

33.8

99.8

31.5

110.0

26.8

92.8

60

20

30.0

24.4

15

31.7%

*Consolidated operating revenue and income shown at the center of the pie chart
includes “eliminations or corporate” within segment information. As a result,data differs when totaling consolidated operating revenue and income from eachsegment. The percentage breakdown is calculated based on the simple total
amount of each segment.

0

0

0

’14/03 ’15/03 ’16/03 (Forecast)’14/03 ’15/03 ’16/03 (Forecast)0’14/03 ’15/03 ’16/03 (Forecast)’14/03 ’15/03 ’16/03 (Forecast)

Note:
The method of allocating part of the company-wide expenses from the adjustment amount to each segment was changed in the fiscal year ended March 2015. In conjunction with this change, the house leasing business that had been part of the Residential Development
Business segment is now included in the Leasing Business segment. As a result, data appearing for the fiscal year ended March 2015 and the fiscal year ended March 2014 reflects this change.
Nomura Real Estate Holdings, Inc.

31 Integrated Report 2015

TheaNomura
At
GlanceReal Estate Group at a Glance

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Investment Management Business

Property Brokerage & CRE Business

Property & Facility Management BusinessGroup companies engaged in this businessGroup companies engaged in this businessGroup companies engaged in this business• Nomura Real Estate Development Co., Ltd.

• Nomura Real Estate Development Co., Ltd.

• Nomura Real Estate Partners Co., Ltd.

• Nomura Real Estate Asset Management Co., Ltd.

• Nomura Real Estate Urban Net Co., Ltd.

• MEGALOS CO., LTD.
• Nomura Real Estate Wellness Co., Ltd.
• Nomura Amenity Service Co., Ltd.

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)

20

10

40

12

100

6

18.3

7.9

29.1

7.0
10

9.1

11.0

0

5

4.8

30.2 32.0’14/03 ’15/03 ’16/03 (Forecast)

8.1

8.4 8.0

6

20

0

0

’14/03 ’15/03 ’16/03 (Forecast)

85.8

5.7

4.5

3

0

’14/03 ’15/03 ’16/03 (Forecast)

5.1

72.1
50

0

’14/03 ’15/03 ’16/03 (Forecast)

91.0

0

’14/03 ’15/03 ’16/03 (Forecast)’14/03 ’15/03 ’16/03 (Forecast)

Note:
MEGALOS CO., LTD., which was included in the Other Business segment, will now be included in the Property & Facility Management Business segment starting with the fiscal year ending March 2016. As a result, data appearing for the fiscal year ended March
2015 and the fiscal year ending March 2016 reflects this change.
Nomura Real Estate Holdings, Inc.

32 Integrated Report 2015

Residential Development Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Creating New Business Opportunities That Capture
the Needs of Our Customers Leveraging the Brand
Power and Stock We Have Built Up.

Achievements of Previous
Mid- to Long-term
Business Plan

Strategies for New Midto Long-term
Business Plan

• Achieved sales of 7,000
housing units annually• Expand market share forexisting businesses andenhance earnings power• Operating income reached
new record levels

Shigeyuki Yamamoto
Executive Officer
In charge of Residential Development Business• Increase business volume byshowing a presence in new
business areas• Increased redevelopment
project business volume• Enhance stock-based businessby promoting customer
relations• Increased housing productbusiness volume other than
PROUD such as OHANA anddetached houses

Review of Results of Previous Mid- toLong-term Business Plan

Achieved Sales of 7,000 Units
Annually
Operating Income Results and Targets(Billions of yen)

44.048.0

50

40

32.7
30

31.1

33.8

31.5

30.0

20

10

0

'13/03'14/03'15/03

Previous Mid- to Long-term Business Plan

'16/03(Forecast)'19/03Phase 1
(Targets)'25/03Phase 3
(Targets)

During the preceding target period we worked on
expanding our business volume, with the goal ofestablishing a system for selling 7,000 units annually in the housing sales, in order to achieve stable
growth by responding to a wide range of housingneeds. In addition to our key brand PROUD, we
promoted sales of a new suburban brand, OHANA,and detached houses, and proactively participatedin redevelopment projects. We strengthened ourrange of services aimed at customers who havetaken up residence such as enhancing ourafter-service guarantee via a new service, Next
Pass 10, as well as launching a relocation service
and an interior business.
As a result, we enjoyed a record level ofprofits in the fiscal year ended March 2015 andachieved our goal of 7,000 housing units one
year ahead of schedule.
At the same time, a number of issues re-

New Mid- to Long-term
Business Plan

Nomura Real Estate Holdings, Inc.

33 Integrated Report 2015

lating to growth emerged, and in response
we have positioned the fiscal year ending March
2016, the final year of the previous plan (phase1), as a year for making preparations, and we will
work toward further growth by re-examining
our brand strategies and creating a solid
business base.

Changes in Housing Sales and Gross
Margin Ratio(Units)Number of housing units sold

Gross margin ratio (%)

8,000

40
7,021
5,749

4,000

22.5

6,209

21.7

6,150

20

21.1

0

0
'13/03'14/03'15/03'16/03(Forecast)Residential Development Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Outlook for New Mid- to Long-term
Business Plan

and be even more aware of providing customers
with quality products with even higher added
value.

Aspiring for Sustainable Growthin Both Development andStock-based Business

Growth of domestic and overseas
housing sales businessSwitch away from the pursuit ofscaleJapan is experiencing a period of population
decline in which “whatever is produced will sell”
no longer applies and the need for better quality
housing has stabilized. Under such circumstances, oligopolization by major corporations is
expected to continue and providing added value,
including both tangible and soft infrastructure
will be essential for beating other major competitors and market share expansion.
Given this we will shift our Key Performance Indicators (KPI) from “number of housing
units” to “operating revenue” and “profitability,”In the domestic housing sales business we will
differentiate ourselves even more, expand ourmarket share, and enhance our earnings powerby further increasing the PROUD brand power. In
this concept not only advertising but also development and sales will cooperate, and we will
work to raise customer satisfaction by implementing initiatives that provide consistent brandvalue, including products and services.
We will focus our efforts on changes tothe urban structure and make inroads into nucleated cities in Japan. There are moves to accelerate the creation of urban-type compact towns
with multi-functionality and superior comfort
both in regional nucleated cities and in the Tokyo
metropolitan area. We will capture this flow andDevelopment Business Expansion

develop business based on the know-how accumulated through PROUD.
By contrast, overseas we need to plan thefurther growth of the housing sales business andwe will develop our business focusing on the
Asian market, where the demand for high quality housing is increasing. Taking such environmental awareness into account, our policy is tobuild alliances with local partners while leveraging the know-how we have accumulated inJapan, and to provide the products sought after
by customers in each area.

Provide diverse services forexisting stock
To date the Group has produced approximately
184 thousand housing units and approximately
156 thousand houses under management. New
needs resulting from changes in customers’ life
stages and the aging of facilities are expected toemerge in relation to such housing stock roughly
10 years after construction. We will work to im-

Provide Diverse Services to a Wealth of Customer Segments
Stock of housing
for sale

Expand market share for existing
businesses and enhance earning power

Increase business volume by showing
a presence in new business areas•Ensure business volume by using
various business methods•Deepen integrated development
and sales structure•Implement brand strategies•Expand business in nucleated cities inJapan•Move into influential cities overseas,
focusing on Asia

Operating income plan

Operating income plan

¥34.0 billion to ¥38.0 billion

approximately ¥6.0 billion('25/03)

Nomura Real Estate Holdings, Inc.

Nomura Real EstateGroup Services

184 thousand units

RemodelingInterior

Housing undermanagement stock

156 thousand units
Property brokeragebusiness(Retail sector)('25/03)

prove customer satisfaction and to acquire business opportunities by responding to such needs.
To this end we need to interact andstrengthen relations with customers even moreso than in the past. During fiscal 2015, ending
March 2016, we amalgamated existing membership organizations to establish the Nomura Real
Estate Group Customer Club. We have started
comprehensive business tie-up discussions with
Isetan Mitsukoshi Holdings and are working to
improve customer convenience and to expand
services. By increasing contact with customers
we expect to be able to grasp specific needs in atimely manner, and we will increase service provision opportunities such as remodeling, interior
decorating, renovations and brokerage services.
Moreover, in areas that are expected to grow wewill examine expansion potential, including M&A
and alliances, applying these initiatives to ourexisting housing stock nationwide.

Operating income plan:

34 Integrated Report 2015

Maintenance
The Nomura Real
Estate Group
Customer Club

Relocation
Renovation
Brokerage

approximately ¥4.0 billion ('25/03)

Expand toexisting housing
stock outside
the Group

58 million units

Leasing Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Contributing to the Creation of a Sustainable Urban
Environment while Improving Profitability and Asset Efficiency
by Acquiring and Developing Superior Properties for Lease.

Achievements of Previous
Mid- to Long-term
Business Plan

Strategies for New Midto Long-term
Business Plan

• Diversification of development
capabilities of properties for sale
(Office buildings, logistics
facilities, commercial facilities,
rental housing)• Strengthen complex
redevelopment including
new areas• Promotion of large-scale
redevelopment & complex
development projects• Strengthen Leasing Value
Chain through coordination
with Group-affiliated REITs• Accelerate development ofcommercial property
business as a new focus
sector• Expect to greatly exceed
operating income targets

Tadashi Nakajima
Executive Officer
In charge of Leasing Business

Review of Results of Previous Mid- toLong-term Business Plan

Increased Properties for Lease
and Developed Properties forSale, Leading to Stable Growth
Operating Income Results and Targets(Billions of yen)

52.056.0

60

30

23.3

26.8

24.4

30.0

35.0

The Leasing Business balanced its business, inwhich we own properties developed by the
Nomura Real Estate Group and obtain rental revenue, and its property development business,
which obtains earnings by selling real estate toGroup-affiliated REITs.
During the preceding target period the leasing business completed our flagship properties,
LAZONA Kawasaki Toshiba Building and bono
Sagamiono, and contributed to improving income.
Rentable Floor Area at End of Fiscal Year

Number of Properties for Sale Acquired(m2)(Buildings)

1,000,000
835,115'14/03'15/03

Previous Mid- to Long-term Business Plan

'16/03(Forecast)'19/03Phase1(Targets)'25/03500,000

Phase 3
(Targets)

New Mid- to Long-term
Business Plan

Nomura Real Estate Holdings, Inc.

928,628

11%
increase0'13/03In the property development business, in addition
to developing our PMO midsize office brand, we
accelerated the development of Landport brandlogistics facilities, GEMS brand commercial facilities, and PROUD FLAT brand rental housing, andexpanded our business volume. As a result, we accumulated know-how relating to a multitude of
properties and strengthened our competitivenessin preparation for acquiring large-scale redevelopment and complex development projects.
By moving ahead with measures to increase
our business volume we expect to greatly exceed
our operating income targets in the fiscal year ending March 2016.

15
1056% increase

14
PROUD FLAT

9

Landport

5

0

GEMS
PMO

0
'13/0335 Integrated Report 2015

'15/03'13/03'15/03

Leasing Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Outlook for New Mid- to Long-term
Business Plan

Leverage Development Resultsfrom Various Facilities
Accumulated as an Integrated
Developer and Create Higher
Value Added Assets
Focus on large-scale
redevelopment & complex projects
Large-scale complex redevelopment opportunities concentrated in central Tokyo are on theincrease as urban development due to the aging
of real estate stock and preparations for the To-

kyo Olympics and Paralympics, and the presenceof foreign-affiliated companies accelerate. Given
this trend, we will leverage the know-how accumulated through the development of a variety offacilities, including office buildings, commercial
facilities, and rental housing, and contribute to
making cities throughout Japan, including Tokyo,
more attractive. We will also strengthen largescale redevelopment and complex development
projects with high added value that function “asa community,” organically collaborating with
communities as-a-whole by stepping up expansion into new sectors such as hotels andserviced apartments.
The Group has already had the opportunity to be involved in redevelopment projects in

Main Large-scale Redevelopment & Complex Development Projects

Yokohama Nomura Building

OfficeArea and Units
Scheduled for
Acquisition
81,656 m2

Toranomon 1-Chome Redevelopment

OfficeApprox. 15,000 m2

Project(National strategic special zone authorized project)

Main Use(total floor area)

OfficeApprox. 32,000 m2
OfficeApprox. 20,000 m2
Iidabashi Station Central Redevelopment
Residential Approx. 170 units
Approx. 100 rooms
Nishi-Azabu 3-Chome Redevelopment * Hotel(National strategic special zone proposal project)
Residential Approx. 370 units
Commercial Approx. 21,000 m2
Nishi-Shinjuku 3-Chome Redevelopment *Residential Approx. 650 units
OfficeShibaura 1-Chome Rebuilding*
TBD(National strategic special zone designated project) Commercial

Phase 1

'17/03-'19/03

Commercial Approx. 14,000 m2
Residential Approx. 440 units

Nihonbashi 1-Chome Central District
Redevelopment*
Shinbashi Station West Exit District
Redevelopment*
Nomura Fudosan Ginza Building
Rebuilding (Ginza MTR Building)*

OfficeCommence
construction

Completion
Commence
construction

Completion

Commence
construction

Completion

Commence
construction

ration and secure profits, and to contribute to
the expansion of Group-affiliated REITs’ assets
under management and to reciprocal growth. In
the property development business we will
actively plan further aggressive expansion,increasing the asset balance target for properties
from the previous ¥130 billion to ¥200 billion.

Aiming for reciprocal growth in a
“Leasing Value Chain“ throughGroup collaboration

Accelerating development ofcommercial property business,
a focus sector

The Group Leasing Value Chain aims, to draw
sales profits for the Group and to provide properties with diverse and high added value toGroup-affiliated REITs by selling properties to the
REITs, and to strengthen brand power and improve the value of assets by sharing know-how
and cooperating with management. The Groupwill construct a circulation model that revitalizes
properties as a prime asset by reacquiring andredeveloping the property after a number ofyears have passed since the construction of properties managed by Group-affiliated REITs.
In the new plan we aim to increase asset
efficiency by strengthening such Group collabo-

Of the various facilities the Group is developing,commercial facilities are the sector that wewould like to concentrate more on in the future.
The development and management of commercial facilities requires the provision of elaborate
services to attract customers. Our uniquestrength lies in our experience working on GEMS
and bono Sagamiono, and our B to C knowhow accumulated from the Residential Development Business, as well as our customer-orientatedspirit, that we consider to be our DNA. Using
these strengths as our weapon, we plan on
investing approximately ¥300 billion in the commercial property business over the next 10 years.

Completion
Phase 1completion

Commence
construction

Phase 1completion

Commence
construction

Commence
construction

TBD

TBD

OfficeTBD
Commercial

TBD

OfficeTBD

TBD

Phase 3'23/03-'25/03

Completion

Soto-Kanda 1-Chome Redevelopment

Nishi-Nippori Station Front
Redevelopment*

Phase 2'20/03-'22/03

central Tokyo, including projects in Toranomon,
Nishi-Azabu, and Hamamatsucho. We plan on
creating appealing communities that bring inpeople through development that fully exploits
the quality of each site, fusing together the multitude of know-how we have accumulated as anintegrated developer.

Reciprocal Growth from Leasing Value Chain
Leasing Business
Property development for sale

Investment Management BusinessStable supply of superior
properties

Completion

Reciprocal growthfrom virtuous cycle* JV Project Note: details may change due to each project (including name) currently being in the planning stage

Nomura Real Estate Holdings, Inc.

Asset balance target: ¥200 billion

36 Integrated Report 2015

Strengthen brand power
and improve asset value

Group-affiliated REITs

Investment Management Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Planning Conversion to a Comprehensive REIT Following theMerger of Three Listed REITs and Aiming for Stable
Management and Growth by Developing New Products forPrivately-placed Funds and FORF (Fund of REIT Funds).

Achievements of Previous
Mid- to Long-term
Business Plan

Strategies for New Midto Long-term
Business Plan

• Creation of the largest domestic
comprehensive model REIT thatboasts an asset level of ¥900 billion
as a result of integrating three
REITs• Stabilize and expand REIT
business as an earnings base

• Entered the health care sector witha privately-placed fund• Accumulate management
experience in FORF businessand develop globally• Commercialized FORF (Fund of
REIT Funds)

Norio Ambe

• Expand earnings with new
privately-placed fund businessproducts

Executive Officer
In charge of Investment Management Business

Review of Results of Previous Mid- toLong-term Business Plan

Creation of a Comprehensive
REIT That Boasts the Largest
Domestic Asset Level
Operating Income Results and Targets(Billions of yen)

12.013.0

15

10

7.9
4.8

5

7.0*

Changes to Assets Under Management at
End of Year

6.5

(Billions of yen)

REIT (listed / unlisted)

Privately-placed funds, etc.

1,500
1,126.6 1,153.8 1,127.4 1,132.2 1,123.1

0(5)

In recent years the domestic REIT market has
expanded rapidly against a backdrop of heightened willingness to invest and expectations inmeasures to overcome deflation. In order to
respond to investor expectations that require

1,000

(2.7)
'13/03'14/03'15/03

Previous Mid- to Long-term Business Plan

'16/03(Forecast)'19/03Phase 1
(Targets)'25/03500

Phase 3
(Targets)

New Mid- to Long-term
Business Plan

* Includes compensation from merger of three listed REITs
Nomura Real Estate Holdings, Inc.

0
'11/03'12/0337 Integrated Report 2015

'13/03'14/03'15/03more attractive investments, in October 2015
the REIT business merged three listed REITs thatinvested in logistics and commercial properties,
offices, and residential buildings, to form the
Nomura Real Estate Master Fund Inc. We worked
to be the product chosen by investors by achieving the largest domestic asset level of over ¥900
billion, and stabilized earnings by creating amore dispersed portfolio.
While enhancing the product lineup in theprivately-placed fund business we also successfully entered the health care sector, a new area.
We also achieved the commercialization of FORF
(Fund for REIT Funds) that invest by combining
multiple real estate funds.
During the preceding target period we acquired stable earnings through the growth of the
key REIT business, while also enhancing productline ups, and strengthening management andstructuring capabilities. The results of these
initiatives saw the balance of assets undermanagement surpass ¥1.12 trillion, enabling us
to build the foundation for future activities.

Investment Management Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Dataof investment management companies. Nomura
Real Estate Holdings intends to leverage ourunique strength, namely the handling a fullrange of products including listed REITs, private
REITs, privately-placed funds, and FORF, tocontribute to the activation of the investment
market by proposing a wide range of high performing investment products.

Outlook for New Mid- to Long-term
Business Plan

Aim for Top-class Performance
Domestically as a Real Estate
Asset Management Company
Ways to heighten willingness toinvest throughout society

Expand stable revenue baseprimarily focusing on REITs

Personal assets in Japan are more skewed
toward savings than in the United States and Europe, and as interest rates continue to decline
there are fears that assets value will decrease due
to inflation.
The question of how to accelerate theflow of money from savings to investment inorder to revitalize the economy is a long-standing issue and the government has come up withmeasures to promote investment, including NISA.
Under such circumstances, widely raising
the willingness to invest throughout society by
developing and proposing more attractive investment products is thought to be the social mission

While market expansion is anticipated in the REIT
business, we expect that it will become harderand harder to steadily secure superior properties
due to the intensification of competition among
peers. Because of this we will work to improve
our performance by steadily acquiring superior
properties and strengthening brand power, using
the Leasing Value Chain through collaboration
within the Group.
As a result, during phase 1 of the newplan, the listed REIT business will continue toacquire properties at a pace of ¥70 to ¥80 billion
per annum focusing on properties sponsored by

REIT and Real Estate Privately-placed Fund Market Size

Nomura Real Estate Master Fund. We aim to establish our position as the largest domestic J-REIT
by simultaneously pursuing stability and growthacross a range of investment target sectors.
We believe that during phase 1 of the newplan the privately-placed REIT business will expand
to an asset scale of ¥200 billion. As the private REIT
market continues to expand we will capture demand from potential investors, and aim to establish
a pioneering position as the first Japanese productoriginator of such arrangement.

other sectors such as hotels.
We will tackle product development
based on flexible ideas such as originating funds
that meet the needs of individual investors andthose that work together with foreign-affiliatedasset management companies.

Full-scale development of FORF
business
The FORF business is a sector that has high potential as a market and one in which we can leverage
our strength as a real estate asset managementcompany, namely our “assessment ability.”In this business we will steadily accumulate management results for FORF, which wascommoditized in June 2015, aiming to gain thetrust of investors. Although this FORF targets
investment in J-REIT, before that we anticipate
incorporating a “Fund of Global REITs” thattargets foreign REITs. We are already sharing
know-how with an investment company basedin Chicago and aim to put together this fund in
the near future.

Taking on the challenge of new
sectors using privately-placed
funds
While the market for J-REITs is expanding, investment targets are still limited compared to foreign
REITs. This is an area in which we would like totake on the challenge of new investment target
sectors, leveraging privately-placed funds so we
can flexibly compose according to our clients’needs. We have already ensured the continued
growth of the health-care sector, our first project, and our policy is to accelerate initiatives in
FORF Business Structure(Trillions of yen)

25

Goal of the Association for Real
Estate Securitization (ARES)*

13.7(investment trust)Tokyo’s hosting of the Olympic andParalympic Games in 2020 presents an
ideal opportunity to expand assets heldby J-REITs, private REITs, and equivalent

9.6

5

infrastructure funds to ¥30 trillion'09/03'12/03

Nomura Real Estate
Asset Management'15/03(NREAM)* Prepared based on data published by the Association for Real Estate Securitization (ARES) and research by Nomura Real
Estate Holdings
Nomura Real Estate Holdings, Inc.

REIT
REIT

REIT

Underlying assets

Real estate

Provision of investment decisions basedon value analysis of real estate0'06/03

FORF

Investment
Destination

Investment

15

19.8

Funds that target
REIT investment

Investment

18.4 18.2 18.7

18.6

Investors

23.3

Financing

20.7

20

10

22.0

38 Integrated Report 2015

Value analysis of real estate owned by REITs

Property Brokerage & CRE Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Accelerating Growth through the Expansion and Enhancementof the Business Base and Aggressive Deployment of Services
Compatible with Customer Attributes and Needs.

Achievements of Previous
Mid- to Long-term
Business Plan

Strategies for New Midto Long-term
Business Plan

• Aggressively expanded retailbranch network• Strengthen retail sector’s
face-to-face sales capabilities
and utilize ICT• Penetration of two brands,
Nomura no Chukai (Brokerage by
Nomura) + (Plus) and nomu.com• Strengthened personnel andorganizational structure inwholesale sector• Established brokerage bases at
representative office in Hong
Kong and local subsidiary in
Singapore• Collaborate with Nomura
Securities and strengthen
collaboration within theGroup• Strengthen cross-bordertransactions

Operating Income Results and Targets(Billions of yen)20

16.018.0

15

10

6.1

8.1

8.4

10.5
8.0

5

0

'13/03'14/03'15/03

Previous Mid- to Long-term Business Plan

Seishi Miyajima• Expand wholesale sector
customer base and strengthen
proposal capabilities'16/03(Forecast)'19/03Phase 1
(Targets)'25/03Phase 3
(Targets)

New Mid- to Long-term
Business Plan

Nomura Real Estate Holdings, Inc.

Executive Officer
In charge of Property Brokerage & CRE Business

Review of Results of Previous Mid- toLong-term Business Plan

Expanded Retail Sector Branch
Network and Strengthened
Organizational Structure ofWholesale Sector
In recent years movements to continue to use outstanding stock for long periods of time have taken
off in society as a whole. We want to raise andcirculate the value of stock according to the needsof customers, ranging from general consumers tocompanies and investors, so as to encourage
succession of such stock to the next generation,leveraging our uniqueness—the development of awide range of businesses from both the retail andwholesale side. Based on such concept, our goal
during the preceding target period was to ensure
growth while improving the structure of both theretail and wholesale sectors.
In the retail sector we focused on expanding contact with branch and Internet customers.
We launched a new branch brand, Nomura no
Chukai (Brokerage by Nomura) + (Plus), established a structure consisting of 100 branches and
1,000 employees, and worked on improving the

39 Integrated Report 2015

nomu.com website. We promoted diversity fromthe perspective of human resource development
and utilization, the foundation of face-to-facesales capabilities. In the wholesale sector weestablished Nagoya office and Financial Institutions and Public Sector Institutions Department
so that we can more powerfully support corporate
CRE (corporate real estate) strategies, and worked
on improving our human resource/organizational
structure and on strengthening proposals. We also
set up offices in Hong Kong and Singapore inpreparation for strengthening our response to
cross-border transactions in the future.
As a result, each sector steadily boosted
its performance and achieved operating incometargets.
Changes in Total Transaction Values andNumber of Transactions
Total transaction value (Billions of yen)

800
600
400

No. transactions (Transactions)

7,437 7,174
6,494
710.9
5,774 5,762
672.7 4Q
540.6
425.2 452.9
3Q

8,000
6,000
4,000

200

2Q

2,000

0

1Q

0

'11/03 '12/03 '13/03 '14/03 '15/03

Property Brokerage & CRE Business

Outlook for New Mid- to Long-term
Business Plan

Strengthen Customer Base andMaximize Customers’ Asset
Value through Proposals Basedon Environmental Changes
Improve retail sector structure andstrengthen sales capabilities
We will work to establish two service brands inthe retail sectors, Nomura no Chukai + (Plus) andnomu.com and to enhance contact with customers and improve customer satisfaction.
Here the main topic is strengthening faceto-face sales capabilities in branches and we will
focus on asset and inheritance measures. There
has been an increase in inheritance tax and concern among customers has risen. Given this, wewill not merely make tax-saving strategy propos-

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationData

als but also provide multifaceted consulting
services in response to asset related concerns.
As use of the Internet penetrates throughout the real estate industry, we will proactively
use ICT, focusing on nomu.com, reinforce content such as transmitting buyer-participationstyle information, and work to enhance services.
We aim to provide services that accurately
capture housing related needs, making full useof the Nomura Real Estate Group Customer
Club’s (established in 2015) customer base.

Strengthen wholesale sector’s
proposal capabilities
Further asset utilization efficiency is being demanded of company owners, symbolized byheightened interest in ROE/ROA, and the effective use of the real estate they own is an urgent
issue. Against this background, the wholesale
sector will leverage the knowledge built up as adeveloper and real estate utilization choices that

Retail and Wholesale Sectors Business Strategies
Retail Sector

Reinforce face-to-faceservices

Further utilize ICTWholesale Sector

Thorough customer
orientation

Offer sophisticated
CRE proposals

take advantage of our Group strengths and propose optimum CRE strategies for diversified customer needs and contribute to maximizing theircorporate value. In addition to large enterprises
we will strengthen customer acquisition in themedium-sized enterprise market that we are currently unable to handle and make proposals to awide range of companies.
To this end, we will reorganize the sales
sector by customer segment and provide a highlevel of consulting by endeavoring to gain adeeper understanding of customer needs.

Strengthen customer base throughcollaboration with Nomura
Securities
We believe that collaboration with Nomura
Securities is important for expanding our customer base.
The customer referral system with Nomura Securities that started during the fiscal year

Changes in the Annual Number ofTransactions in Customer Referral System at
Nomura Securities (contract based)(Transactions)
400

Maximize customer satisfaction throughthe provision of increased and improved
service menus

Contribute to maximizing the corporate
value of every customer

Expand market share

Expand customer base

1.7 fold increase

In light of the heightened investment needs ofoverseas investors in Japanese real estate we will
provide flexible support mainly from our bases inHong Kong and Singapore.
Meanwhile, in response to the increase in
the needs of domestic companies and investors
for overseas real estate, we will prepare a structure that will allow us to respond to cross-bordertransactions such as functioning as a base forgathering local information.

Improve Bases to Strengthen Crossborder Transactions

China
Hong Kong

200

The Nomura Real
Estate Group

Nomura Real Estate Urban

ASEAN Net Co., Ltd.
Singapore

100

Hong Kong
Representative OfficeOpened: October, 2014

NOMURA REAL ESTATE ASIA PTE. LTD.
Established: March, 2015

0Nomura Real Estate Holdings, Inc.

Strengthen cross-bordertransactions

Compared to '12/03

300

Use the Nomura Real Estate Group Customer Club
Strengthen collaboration with Nomura Securities and enhance cross-border transactions

ended March 2006 and other cooperative projects with Nomura Securities have increased
greatly, about 1.7 times the number of transactions of three years ago. Going forward we will
strengthen collaboration with Nomura Securities and make CRE proposals leveraging theGroup’s collective strengths.

'12/03'13/0340 Integrated Report 2015

'14/03'15/03

Property & Facility Management Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Working to Increase Customer Satisfaction and Expand
Management Stock Anticipating Changes in the Social Environment
Such as Decline in Population and Stock-based Housing, andExpanding Business Opportunities by Taking on New Sectors.
Achievements of Previous
Mid- to Long-term
Business Plan

Strategies for New Midto Long-term
Business Plan

• Combined building
management technical prowess
and housing management
operation prowess by merging
two Group companies• Acquire customer
satisfaction by diversifying
services and creating highadded value• Established a new company inpreparation for moving into thebusiness for senior citizens• Moved into the PPP/PFI*
business, was awarded a largescale project

Toshiaki Seki

• Expand management stock
through Group
collaboration• Expand business domains
including sports and healthand business for seniorcitizens• Moved into the energy
management sector

Director and Executive Officer
In charge of Property & Facility Management

Review of Results of Previous Mid- toLong-term Business Plan

Pursue Merger Effects andPrepare Foundations for New
GrowthOperating Income Results and Targets

The biggest topic for the Property & Facility Management Business during the preceding target
period was the merger of our building management and housing management companies in
April 2014 to form Nomura Real Estate Partners.

(Billions of yen)20

12.013.0

Number of Buildings and Houses
Under Management(Units)

10

800

4.4

5.1

5.7

4.5

6.5

(Thousand units)

Buildings under management
Houses under management

750
127
700
684

130

137
723

200

147

155 150
729

703

696

100

0

'13/03'14/03'15/03

Previous Mid- to Long-term Business Plan

'16/03(Forecast)'19/03Phase 1
(Targets)'25/03650

50Phase 3
(Targets)

New Mid- to Long-term
Business Plan

Nomura Real Estate Holdings, Inc.

00
'11/03'12/0341 Integrated Report 2015

'13/03'14/03'15/03The merger aimed to mutually supplement thetechnical prowess accumulated in the building
management business with the operation prowess accumulated in the housing managementbusiness to achieve synergy, and this effect was
to clearly visible. Through this merger we havecreated the know-how to operate and manage
complex facilities and have prepared the foundations for branching out into new sectors, such asincreasing socially necessary PPPs /PFIs and energy management. In light of the increasing senior and health-care needs we established
Nomura Real Estate Wellness in April 2015 andmade MEGALOS into a wholly owned subsidiary.
Amidst moves to use existing real estate
stock for longer accelerate, we successfully
created a business structure in preparation for
the further expansion of stock under management and the expansion of services as a company
involved in town planning.
*PPP/PFI: A Public-Private Partnership (PPP) is a scheme inwhich the public and private sector work together toprovide a public service.
A Private Finance Initiative (PFI) is a scheme by which
capital, management expertise and technologies in theprivate-sector are utilized to construct, maintain andmanage public facilities.

Property & Facility Management Business

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationDatacapabilities and operation abilities we have accumulated at various properties, including housing,offices, and commercial facilities, and develop a
range of services for end-users that focus on
fitness/health and energy. Customer needs are
increasing in energy services in particular following the recent deregulation of the sale ofelectricity and gas. By combining the different
electricity consumption peaks at offices, condominiums, and education facilities managed by
the Group and using the advanced demand predicting know-how we have accumulated, we will
be able to increase satisfaction by delivering
cheaper electricity to customers.
We will not stop at the management of
individual buildings but work to raise customer
satisfaction throughout communities, and build
frameworks that operate and manage multiple
sectors, including highly specialized medical

Outlook for New Mid- to Long-term
Business Plan

Provide a Wide Range of Value
While Closing in on Customer’sLife and Social Issues
Expand revenue base by improving
customer satisfaction
To ensure the growth of the Property & Facility
Management Business we must consider how
we can satisfy customers and become their company of choice. Although Nomura Real Estate
Partners has been selected as No.1* for customer satisfaction by residents for seven consecutive
years, we need to continue to raise customer
satisfaction in the long-term to ensure we maintain this position.
To this end, we will leverage the technical
Expand Business Base and Evolve Service Lineup

facilities, sports facilities, and facilities for theelderly, so that we become a town management
leader which operates PPP/PFI businesses thatenhance public services through collaboration
between complex developments and the public
and private sectors, an area in which we excel.
By the last fiscal year of the Plan, throughsuch initiatives, we intend to expand the scale ofour business to 220 thousand housing units and
1,000 commercial building units.
*Research by Sumai Surfin, a price information site for
condominiums

Respond to increasing senior andhealth-care needs
One of the topics we should give top priority towhen anticipating the needs of our customers
and society is responding to the needs of seniorcitizens and health-care needs. The idea ofMeet Senior Citizens and Health Needs Taking Advantage of the Group’s Strengths

Expansion of Business Base (Stock of Properties under Management)

Provisions of Senior Citizen and
Health-related Services

Datacenters

OfficesCommercial
facilities

Logistics
facilities

Fitness clubs

Educational
facilities

Publicfacilities

Seniorfacilities

Medicalfacilities

Hotels

Evolution of Service Lineup

Services mainly for owners

Services mainly for users• PM business• Building management business• Services for the elderly• Fitness, health-related, etc…

Customer satisfaction improvements

Diversification and sophistication of needs

Housing: 160 thousand units
220 thousand units
Commercial buildings: 730 units
1,000 units
Housing“health life expectancy” has spread as society
ages and there is a greater need for senior citizens to live a healthy lifestyle. We also anticipate
that the Tokyo Olympics and Paralympics will act
as the catalyst for a major health and sportsboom.
Given this, Nomura Real Estate Wellness
will take a leading role and create a structurethat promotes the maintenance and improvement of bodily functions through our MEGALOS
fitness business. We will build up, throughout
the Group, unique operation services with theaim to “remain healthy,” providing housing andservices for the elderly, including housing withhealth and welfare services for the elderly. As afirst step we are developing housing for theelderly adjacent to PROUD Funabashi. Over the
next 10 years we aim to develop 40 buildings
containing 5,000 housing units for the elderly.

Nomura Real Estate Holdings, Inc.

Repairs/renovation of
housing for the elderly
Nomura Real
Estate Reform

Relocation Support
Nomura Real Estate
Urban Net

42 Integrated Report 2015

Operation of housing
for the elderly
Nomura Real
Estate Wellness

Rehabilitation/fitness
MEGALOSCreate communities
inter-generational
exchanges
Nomura Real
Estate Development

Facility management/
private space services
Nomura Real
Estate Partners

Our Foundation for Value Creation as Viewed by the Chair

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Transforming Our Workforce and Governance
Aimed at Building a Management Foundation for
the Future

Eyeing Medium- to Long-term Growth by Improving
Our Workforce and GovernanceKamezo Nakai
Chair
Nomura Real Estate Holdings, Inc.

Nomura Real Estate Holdings, Inc.

43 Integrated Report 2015

The Nomura Real Estate Group is focusing on a growth strategy witha medium- to long-term outlook under its new leadership team established in June 2015. The name given to the new Mid- to Longterm Business Plan is Creating Value through Change, which is thesame as the previous plan. As this title indicates, we ourselves need tochange and continually create new value in order to adapt to themajor changes we face in our business environment and to realize
sustainable growth in the future. With this in mind, our workforce
and governance represent two aspects of our management foundation that we need to improve further going forward.
Diversity represents an important key word when it comesto strengthening and invigorating our workforce. When I became
President of Nomura Real Estate Holdings in 2011, I found that,
despite our large and talented workforce, everyone thought andacted rather uniformly. I believe this was the result of a corporate
culture that emphasized harmony to establish complete solidarity
given the very challenging business environment we faced.
I cannot deny, however, that this culture could stand as abarrier preventing us from realizing synergies and achieving new
growth in the future. That is, the power of a workforce that hasvarious traits, perspectives and values is absolutely essential in order for us to create the innovative products and services of tomorrow that fulfill changing customer needs.
At the same time, a corporate culture where a diverse workforce can leverage its skills and expertise while openly accepting
each other’s values is needed to not only grow existing businesses
but successfully engage in new business ventures, carry out M&A
and expand internationally.

Our Foundation for Value Creation as Viewed by the Chair

Diversity Promotion Committee Launched toCreate a Culture Where Distinct Personalities
and Diverse Values Co-exist
Given this awareness, in 2013 Nomura Real Estate Development
established the Diversity Promotion Committee, which I chair. We
have made progress with changing various systems aimed at invigorating our workforce and organization, as well as encouraging
diversity at each of our Group companies as well.
In Japan, we tend to think of diversity as the more active
utilization of women in the workplace, the hiring of senior citizens
or the hiring of foreign nationals, but these form only one aspectof the diversity we seek to achieve. While forming an organization
where a diverse pool of human resources can coexist, regardless ofnationality, age or gender, represents one of our aims, it is doubly
important to provide a workplace environment where every employee can contribute their distinct personality, skills and expertise,
which in turn will draw out the talent of the entire workforce.
This is why we are now working to create a corporate culture where each and every employee can actively contribute theirviews and where constructive discussion and unfettered dialogue
can take place in the workplace. Specifically, at Nomura Real Estate Development, I hold small lunch meetings with employees
together with the Human Resources Department to share management’s approach to and vision for diversity and to listen to theviews of individual employees.
To further augment this environment, the Diversity Promotion Committee created a three-year plan. During the first year
specific challenges were identified through a satisfaction survey
and other means. In the second year a number of specific measures were rolled out to address these challenges.
These initiatives have helped us to realize the need for employees to share their views and the importance of being tolerantof diverse views and values. To ensure this takes root in the way
each individual employee thinks and acts, in addition to changes
to our personnel evaluation system, moving forward we will createa workplace where diverse personalities coexist, while at the sametime working to fully leverage the uniqueness and inherent abilities of each and every employee.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Nomura Real Estate Development has consolidated its conventional two career track system for regular employees into one
and made changes so that contract employees can conclude indefinite employment contracts. The aim is to create a structure
where employees will be able to advance their careers to more
important positions based on their ambition and skills and not theformat of their initial employment contract. Once this new personnel evaluation system and other changes are refined into a highquality finished system at Nomura Real Estate Development they
will be rolled out to our other operating companies to further promote diversity and the invigoration of human resources across theentire Nomura Real Estate Group.

Changing Decision-making Mechanisms in
Committees to Strengthen Corporate Governance
The other important issue in which we have focused our efforts isstrengthening corporate governance. Since I became President,
the Nomura Real Estate Group has transitioned into a full-fledged
holding company. To ensure correct functioning as a holding company, we need to build up a robust corporate governance system,
which includes the Management Committee and Board of Directors as well as clarifying decision-making systems. By further
strengthening governance, we will create systems and a workplace where various values and viewpoints lead to unfettered discussions, which in turn will make it possible to carry out higher
quality and more accurate corporate management.
Since becoming President in 2011, I have continually
worked on reforming the Company’s meeting committee structure, which is charged with making decisions about the operationsof Group companies. I have always kept my eye on how to foster
meetings that produce unfettered discussions. We will not be able
to produce anything new without open discussions and thoughts
about our vision for the future.
This is why I proactively utilize meetings as a venue for not
only decision making but also for broadening discussion on resolutions. Now members in agreement and opposed to resolutions
share their views which will be recorded in the meeting minutes.
Nomura Real Estate Holdings, Inc.

44 Integrated Report 2015

Ultimately, resolutions will be passed based on a majority. Naturally, as management, we will be responsible for the details of resolutions.
As a result, more active discussions now take place witheach meeting and the nature of these discussions has become
quite enriching and beneficial to management. External directors
on occasion have provided constructive criticism at Board of Directors’ meetings which has helped to elevate the quality of proposals
and resolutions. By building up these serious discussions and responsible decisions, I feel that members have further heightened
their sense as corporate executives and refined their decision making skills.

Our Foundation for Value Creation as Viewed by the Chair

Going forward, I hope to make further improvements to theCompany’s meeting committee structure while also focusing attention on developing the next generation of leadership that will
guide the Nomura Real Estate Group into the future.

Transition to a Company with an Audit &Supervisory Committee for Greater Transparency
in Business Management
Running parallel to these changes in decision-making systems, in2012 Nomura Real Estate Holdings introduced the executive officer system. Since then, we have focused on building a governancesystem for realizing more efficient management, which has included reorganizing business segments and clarifying the line of accountability for each. To fully leverage our functions as a holding
company, we equally position each operating company under theholding company in an effort to optimize our entire operations.
For the Nomura Real Estate Group to realize sustainablegrowth through this holding company structure, we must strive tomanage our operations in a more transparent manner while giving

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationData

due consideration to our stakeholders including shareholders, customers, local communities, business partners, and employees.
Therefore, to strengthen management oversight functions, in2013 we appointed an external director and added another in2014 to ensure that discussions within the Board of Directors are
not overly inward-focused.
Moreover, in June 2015 we transitioned to a company with
an Audit & Supervisory Committee in order to further strengthen
governance and monitoring. Following this change, we increased

the number of external directors to five, from two, establishing a
structure that ensures greater transparency in management.
Our five external directors (comprising four independent
external directors) include professionals from various fields, including a business administration expert, architect, attorney, and Certified Public Accountant. These directors take part in meetings of
the Audit & Supervisory Committee and Board of Directors where
they share their important views, recommendations and advice
based on their specialization and wealth of expertise.

Looking Back on Strengthening Governance in Phase 1 of the Previous Mid- to Long-term Business Plan
•Introduced executive officer system at the holding
companyAchieved business execution with a Group-wide andlong-term perspective

2012•Changed business segments
Established management structure for each businesssegment and increased the speed of business execution for each business•Revised details of subscription rights to shares used as
stock options
Revised the details of subscription rights to sharesused as share compensation stock options to shareinterests with shareholders

2013•Appointed external director (0 1)2014•Appointed additional external director (1 2)2015•Added decision-making function to the Management
Committee to accelerate the transfer of authority•Became a company with an Audit & Supervisory Committee•Appointed additional external directors (2 5)

Nomura Real Estate Holdings, Inc.

45 Integrated Report 2015

2012

2015

Structure

Company with
Audit & Supervisory
Board

Company with Audit& Supervisory
Committee

Directors

5

13

Director and Executive
Officer55Female Directors

0

1

0

5

0

4

External Directors
Independent Officers

Our Foundation for Value Creation as Viewed by the Chair

Aiming to Further Strengthen Our Corporate
Governance System through Compliance with
the Corporate Governance CodeThe Tokyo Stock Exchange’s Corporate Governance Code took effect in June 2015 and listed companies in Japan have been working vigorously to strengthen corporate governance. Society is also
showing greater interest in the efforts of companies to heighten
management transparency and engage investors.
Our series of initiatives to strengthen governance were initiated at our own discretion before the beginning of discussions on
the introduction of the Corporate Governance Code. Following
the launch of the Corporate Governance Code we created the
Basic Corporate Governance Policy. Going forward, we will work

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationData

to create a more robust governance system ideally suited for ouroperations. Of course, our efforts extend beyond just simply building a governance system. We are working on validating and improving our governance system so that the oversight of the Audit& Supervisory Committee and management decision-making
mechanism function robustly and correctly.
I stepped down as President of Nomura Real Estate Holdings in June 2015 and now as Chair and Chairman of the Board of
Directors I will focus on strengthening governance, our workforce
and other aspects of our management foundation to support thesustainable growth of the Nomura Real Estate Group. Throughmaximizing corporate value, we will fulfill the trust and expectations of stakeholders. Toward that end, I ask for your continued
support and guidance as we move forward.

Transition to a Company with an Audit & Supervisory Committee (Before and After)

BeforeAfter
General Meeting of Shareholders

Appointment/dismissal

Appointment/dismissal

Board of Directors (8)Directors (6)External director (non-independent) (1)External director (independent) (1)General Meeting of Shareholders
Appointment/dismissal

Appointment/dismissal

Board of Directors (13)Audit & Supervisory Committee (5)Directors (2)External director (independent) (3)Voting rights: yes

Audit

Audit & Supervisory Board (5)Audit & Supervisory Board Members (2)External Audit & Supervisory Board Member (1)Independent External Audit & Supervisory
Board Members (2)Voting rights: none
External directors: 2
Term:
Audit & Supervisory Board Members: 4 years
Directors: 2 years

Directors (6)External director(non-independent) (1)External director(independent) (1)Audit/supervisory

External directors: 5
Term:
Directors who are also members of the Audit &Supervisory Committee: 2 years
Other directors: 1 year

Nomura Real Estate Holdings, Inc.

46 Integrated Report 2015

Workforce Management

Basic Approach

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Diversity

The ability for a diverse pool of human resources
to fully leverage their individual skill sets is absolutely essential for our goal of constantly creating
valuable products and services with new thinking
to accommodate our changing business environment and the changing needs of customers in atimely manner.
It is based on this recognition that the
Nomura Real Estate Group considers its people
to be a major driving force behind its growth andis focused on developing its human resourcesand on promoting diversity-oriented management that fosters a corporate culture of acceptance and sharing of myriad viewpoints andvalues, regardless of gender, age, or job title.

As part of its diversity initiatives, in June 2013
Nomura Real Estate Development establishedthe Diversity Promotion Committee, chaired by
the president and comprising members of various
departments and positions as well as both genders. The committee carries out wide ranging
reviews on work-life balance, improving management’s capabilities, and mid- to long-term
career development, among other topics, withthe goal of maximizing the skills of our workforce,
which features myriad values and backgrounds.
Under a three-year plan, the committee is now
working on recommending and executing specificmeasures and ensuring these measures gain afoothold at the company.

2014

Start of activities/
sharing ofchallenges

Raise awarenessthrough specificmeasures• Clarify diversity
promotion system• Specific solutions forthe company’s
challenges• Organize thecompany’s challenges• Initiate specificactivities• Make activities
known to all• Make solutions
known to all to:• Change workplace/

employee mindsets• Permeate the needfor diversity

about the current state of satisfaction among
employees and use this information as a means
to improvement. The survey contained a total of
109 questions about all aspects of the employee
experience, from overall satisfaction to work, supervisors, workplace, the company today andfuture career. The response rate was 95.1%,
with 1,516 of 1,594 employees taking part in
the survey.

Employee Satisfaction Survey
In September 2014, Nomura Real Estate Development conducted an employee satisfaction survey for the second consecutive year to find out

Main Personnel System Changes up to the Fiscal Year Ended March 2015
Nomura Real Estate Development has made the following changes to its personnel system based onrecommendations issued by the Diversity Promotion Committee.
• Contract workers•Contract workers can now conclude indefinite employment contracts•The system used for promotions based on skill improvement was made clearer

The Diversity Promotion Committee’s Three-year Plan

2013

To foster greater understanding of diversity,
Nomura Real Estate Development focuses on
employee engagement through the establishment of a dedicated person in charge, exclusive
website, and blog, among other efforts.
Nomura Real Estate Urban Net is also
working on raising awareness about diversity
through the same activities.

2015

Achieve results
and establish
foundation for
new promotion
system• Establish foothold fornew mindset atworkplaces• Examine voluntary
promotion system

2016

Continue topromotediversity
according tothe optimal
formatbased onthree yearsof activities
and thecompany’s
challenges

Nomura Real Estate Holdings, Inc.

• Nursing care
•Introduced a reduced working hours program•Extended the duration of nursing care leave•Introduced a program where employees can take nursing care leave in separate installments• Re-employment•Made changes to treatment at the time an employee selects re-employment•Introduced a career seminar and job matching interviews for employees in their 50s

Selection of Ongoing Challenges• Create a new culture where diversity promotion gains a foothold (change employees’ mindsets
and aim for proper understanding, utilization and administration of systems)• Improve management’s capabilities• Assist mid- to long-term career development• Make changes in the nursing care system known to all (nursing care seminars, etc.)• Offer employees opportunities to work from home
• Improve work styles

47 Integrated Report 2015

Workforce Management

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Supporting Childcare and Nursing Care
The Nomura Real Estate Group offers a workplace where employees do not have to give up
on work because they have a baby or because ofchildcare or nursing care obligations. Our parental leave, reduced working hours for childcare,and nursing care leave programs help ensurethat each and every employee can contribute
their skills while selecting the work style mostsuitable to their current needs. We also ensurethat these programs are accessible to all employees in need through information provided via our
intranet system. In the fiscal year ended March
2015, a total of 109 employees (including twomen) took advantage of our parental leave
program, and 96.3% of these employees returned
to work after their leave was over.
Based on the belief that childcare andnursing care presents an opportunity to acquire
Number of Employees Taking Parental Leave

new view points and skills, Nomura Real Estate
Development has established an assistanceprogram for holiday daycare, a childbirth leave
program for male employees, and a program
where employees can work reduced hours due
to a nursing care obligation. These programs
ensure that all employees, regardless of gender,
can achieve a work-life balance when it comes totheir childcare or nursing care needs.

Skills Development Assistance
Dynamo CampThe Nomura Real Estate Group holds the DynamoCamp, a program for all employees promoting
networking and interaction. The word dynamo
was chosen because it means a workforce thatcan usher in change by its own efforts. This event
serves as a venue for thinking and talking about
the Nomura Real Estate Group’s future based on

dress the changing structure of society caused by
globalization and demographics as well as adapt
to a more complex and sophisticated real estatebusiness. For this reason, we have prepared the
Basic Plan for Human Resources Development.

Employee Health
The Dynamo Camp in progress

topics such as new business ventures. We alsoplan on setting up a community lounge thatprovides greater opportunities for all employees
to network and interact with one another.
Basic Plan for Human Resources Development
Nomura Real Estate Development and othergroup companies recognize the importance ofdeveloping a workforce that is capable to acting
based on a broad outlook using advanced professional expertise and faculties in order to ad-(Employees)

120
109

Nomura Real Estate Development Basic Human Development Policies• Proactive medium-to-long-term human development that provides a focus on careers• Human development that responds to change over time, fosters innovation, and supports
future management

99
90

83
72

60

30

0
’12/03’13/03’14/03’15/03

Number of Employees Taking Nursing
Care Leave’12/03’13/03’14/03’15/031

4

2

1The Qualities and Skills Nomura Real Estate Development Looks For• Professionalism: The ability to perform duties professionally in any field• Determination: The willingness and ability to work proactively based on personal conviction andto continue working until results are achieved• Judgment: Strategic thinking and decision making that exhibit an awareness of conditions in theworkplace and that lead to specific plans that produce results• Emotional intelligence: The understanding of personality characteristics and feelings, and communication ability that maximizes potential within an organization• Adaptability: A flexible outlook with the ability to think outside the box, and the energy to create
new value• Versatility: A range of skills such as analytical management and the ability to discern changes insociety

Nomura Real Estate Holdings, Inc.

48 Integrated Report 2015

Preventing Overwork
The Nomura Real Estate Group has a variety of
initiatives in place to prevent or limit overwork by
employees.
Specifically, Nomura Real Estate Development has introduced birthday leave and “refresh”
leave as a means to encouraging employees totake paid leave. In addition, to shorten hours
worked, the company has designated “no overtime”
days and placed restrictions on computer usage
times.
Employees whose work hours exceed apreset limit in a given month must complete an
overwork self-assessment checklist to provide
feedback to their general manager. When necessary, measures are implemented to ensure thehealth of the individual employee.
Reinforcing Health Management
The Nomura Real Estate Group Code of Action
states that the Group will “strive to maintain andenhance sound and pleasant workplace conditions.” Accordingly, we endeavor to prevent
work-related accidents, facilitate appropriate management of physical and mental health, and ensure
pleasant, employee-friendly workplaces. Group
companies offer health checkups and examinations, and have set up mental and physical healthhotlines and health consultation desks as part ofproactive efforts to address mental health issues.

Corporate Governance

Basic Viewpoint
Nomura Real Estate Holdings believes that acompany must be governed in a way that continuously maximizes corporate value over the longterm, while consideration is given to the interestof shareholders and all other stakeholders. It isbased on this belief that we act as a holding
company in managing and supervising the business activities of our subsidiaries and strive tobuild a highly transparent management organization, which in turn will enhance the earning
power of the entire Group.

http://www.nomura-re-hd.co.jp/english/company/pdf/cgpolicy.pdf

Basic Corporate Governance Policy
Chapter 1 General Provisions
Chapter 2 Shareholder Rights and Securing Impartiality
Chapter 3 Proper Cooperation with Stakeholders
Chapter 4	Ensuring Appropriate Information Disclosure and Transparency
Chapter 5 Accountability of the Board of Directors
Chapter 6 Dialogue with Shareholders

Transition to a Company with an Audit &Supervisory Committee
Nomura Real Estate Holdings until now had chosen to be a company with an Audit & Supervisory
Board, but with the resolution passed at the ordinary general meeting of shareholders held on
June 26, 2015 we have transitioned to become acompany with an Audit & Supervisory Committee, a format which was newly introduced byrecent amendments to Japan’s Companies Act. A
company with an Audit & Supervisory Committee is believed to offer enhanced audit and supervisory functions because the Board of Direc-

Board of Directors
The Board of Directors comprises eight directors(excluding directors who serve as Audit & Supervisory Committee members), of which two areexternal directors, and five directors who also

serve on the Audit & Supervisory Committee, of
which three are external directors. The Board of
Directors decides important corporate matters,such as basic management policies, and supervises the execution of duties by directors andbusiness operations by executive officers. Nomura Real Estate Holdings appoints external directors in order to strengthen the supervisory function of the Board of Directors and realize highly
fair and transparent management. Furthermore,evaluations on the effectiveness of the Board of
Directors are carried out regularly in order to improve the functions of the Board of Directors.

Corporate Governance System
General Meeting of Shareholders
Appointment/dismissal

Appointment
Appointment/dismissal

Board of Directors
8 directors

Audit/supervisory(excluding Audit & Supervisory Committee members)

5 directors (Audit & Supervisory Committee members)
Appointment/dismissal

Audit & Supervisory Committee
Audit & Supervisory Committee Dept.

Representative Director
Management Committee
CSR Committee
Risk Management Committee
Various departments

Group Internal Audit Dept.

Guidance and support

Operating companies

Nomura Real Estate Holdings, Inc.

49 Integrated Report 2015

Monitoring

Audit

Basic Corporate Governance Policy:

tors can be supervised by audits of directors’
duties and the exercising of voting rights at
Board of Directors’ meetings, by directors who
serve on the Audit & Supervisory Committee.
This change has resulted in the appointment offive external directors including four independent external directors, compared to before
when the Board of Directors had two external
directors including one independent external director.

Corporate Governance System

Nomura Real Estate Holdings

Establishment of Basic Corporate
Governance Policy
Nomura Real Estate Holdings considers the continual improvement of its corporate governancesystem to be an important task of management
and it has made proactive efforts in this regard.
We newly established the Basic Corporate Governance Policy after the Tokyo Stock Exchangebegan enforcing its Corporate Governance Codein June 2015. Going forward, we will strive tocontinually build and improve upon our proprietary corporate governance system through continual reviews, while also following the principlesof the Corporate Governance Code.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Accounting auditor(auditing firm)Corporate Governance

Audit & Supervisory Committee
Nomura Real Estate Holdings is a company with
an Audit & Supervisory Committee. A majority of
the committee members are external directors.
The committee supervises management functions. The Audit & Supervisory Committee conducts audits using the internal control system
and receives regular reports from internal audit
departments on the implementation and resultsof internal audits. When necessary, the Audit &Supervisory Committee can also request reports
be made from directors, executive officers, orbusiness execution departments of Nomura Real
Estate Holdings or Group companies.
Executive Officers System
Nomura Real Estate Holdings has introduced asystem of executive officers with an aim tostrengthen Group management, to separate andenhance the business execution function fromthe decision-making and supervisory functions of
the Board of Directors. Each executive officer appointed by the Board of Directors is delegatedmanagement authority based on Nomura Real
Estate Holdings’ internal rules and other stipulations to execute business under the direction of
the president & CEO and policies approved by
the Board of Directors of the Company.
Management Committee
Nomura Real Estate Holdings’ Management
Committee is comprised of the Chair, the Chief
Executive and executive officers. It decides oncertain matters pertaining to the business operations of the entire Nomura Real Estate Group.
Directors who are Audit & Supervisory Committee members attend the Management Committee meetings as needed to contribute their opinion and expertise.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Internal Audits and Audit & Supervisory
Committee 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 an additional office in a business operations division,
which allows the department to maintain organizational independence.
In addition, we have established theGroup Internal Audit Department in the holding
company that, in collaboration with the auditing
firm, supervises the internal audit functions of
the entire Group and performs monitoring andevaluation as well as audits each division within
the Company. Also, the results of audits are reported at meetings of the Board of Directors andthe Audit & Supervisory Committee.
Audit & Supervisory Committee Audit System
The Audit & Supervisory Committee receives regular reports from internal audit departments on
the implementation and results of internal audits. When necessary, it can recommend or instruct additional audits or necessary investigations to be carried out. The Audit & Supervisory
Committee also audits and supervises the execution of duties by directors and business operations by executive officers while cooperatingwith the auditing firm as needed.
Audit & Supervisory Committee members
attend Board of Directors’ and other importantcompany meetings and can request reports frombusiness execution departments as necessary to
Nomura Real Estate Holdings, Inc.

collect information on Nomura Real Estate Holdings’ execution of business operations. Nomura
Real Estate Holdings has established Audit & Supervisory Committee Dept. in order to aid theduties of Audit & Supervisory Committee members. This office has its own dedicated staff thatwork to implement measures for increasing theeffectiveness of audit operations.
Audit & Supervisory Committee member
Takao Orihara has prolonged experience in finance and accounting, Audit & Supervisory
Committee member Shigeki Fujitani has experience in finance and audit work over many years
and Audit & Supervisory Committee 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
Nomura Real Estate Holdings has concluded an
auditing contract with Ernst & Young ShinNihon
LLC (the auditing firm). In addition to regular accounting audits by the auditing firm, the Company discusses and verifies accounting issues withthe auditing firm as needed and strives to follow
appropriate accounting procedures.

Certified Public Accountants involved in
auditing are listed below.

Determination Criteria for the Independenceof Independent External Directors
Nomura Real Estate Holdings has prepared ourown determination criteria for the independence
of independent external directors and also use theconditions of independent officers stipulated by the
Tokyo Stock Exchange. Candidates for independent external director are selected after confirmingthat they do not fulfill any of these criteria.

Compensation of Directors and Audit &Supervisory Committee Members andCompensation of Accounting Auditors
Policy and Decision-making Method
Regarding the Amount and Calculation ofCompensation and Other Remuneration for
Directors and Audit & Supervisory
Committee Members
A resolution was passed at the ordinary general
meeting of shareholders held on June 26, 2015 set-

Auditing Firm and Certified Public Accountants
Auditing Firm

Names of Certified Public Accountants
Designated and Engagement Partner

Tadayuki Matsushige

Ernst & Young ShinNihon
Designated and Engagement Partner
LLC

Kazunori Takenouchi

Designated and Engagement Partner

Toru Nakagiri* Length of auditing service of each of the above-mentioned Auditors is seven years or less; therefore, the number of years is omitted.
* Ernst & Young ShinNihon LLC takes measures to ensure that individual Engagement Partners do not continue their involvement in
our accounting audits over an extended period of time. Assistants involved in auditing are listed below.
Certified Public Accountants 7/ Assistant Certified Public Accountants 3/ Other 4

50 Integrated Report 2015

Corporate Governance

Creating Value through Change
Businesses Creating Value
Foundations That Support Value CreationDatating the annual compensation of directors (excluding those who serve on the Audit & Supervisory
Committee) at no more than ¥650 million and thatof directors who serve on the Audit & Supervisor
Committee at no more than ¥150 million.
Nomura Real Estate Holdings’ compensation of directors consists of fixed monthly compensation and variable compensation, comprisingbonuses and stock-related compensation. Bonuses
are determined according to the Company’s business performance during the relevant fiscal year.
Stock-related compensation, in the form of stock
options, is designed to align executives’ interests
with those of the Company’s shareholders, and tofurther enhance corporate value. Stock options areeither market-value stock options, on which theexercise price (the amount payable when the rightis exercised) is determined on the basis of market
prices, or share compensation stock options, whichhave exercise prices of ¥1 per share.
Stock-related compensation is not provid-

Policy for Deciding the Compensation of
Accounting Auditors
Nomura Real Estate Holdings takes factors such as
the details of audit operations, allocation plan foraudit staff, days spent performing accounting au-

dits, and the scale and business characteristics of
the Company comprehensively into considerationin reaching an appropriate decision regarding thecompensation of the auditing firm and its certified
public accountants and other accounting audit personnel. Additionally, the approval of the Audit &Supervisory Committee is obtained in determining
the compensation of accounting auditors.

Compensation of Certified Public Accountants
and Other Accounting Audit Personnel in
Detail (Fiscal Year Ended March 2015)

Policy on Cross-shareholdings and Criteria
for Exercising Voting Rights

ed for external directors and directors that serveon the Audit & Supervisory Committee.

Compensation Compensation
paid for audit
paid forcertification
non-audit
activities
activities(¥ million)(¥ million)
Nomura Real Estate
Holdings

64

3

Consolidated
subsidiaries

113

21

Total

177

25

Directors (excluding
external directors)

385

177

79

Specific Investment Sharesb. Stocks, categories, number of shares, amount on the balance sheet and purpose for investment shares held for
purposes other than pure investment

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

Nomura Real Estate Holdings has a policy concerning strategic shareholdings that acknowledges contributing to improving the Company’s
corporate value from a comprehensive perspectiveof strengthening transaction relations withcounterparties and strategic business tie-ups,

a. Investment shares held for purposes other than pure investment and the total amount on the balance sheet:
15 stocks / ¥1,409 million

Total Compensation of Directors and Audit & Supervisory Board Members by Type ofRemuneration (fiscal year ended March 2015)
Total
compensation(¥ million)

etc. When holding strategic shares the Company
regularly grasps the state of transactions with
the Group and the state of management at theinvestee company, and we continuously examine
the rationality of the holdings from the perspectiveof contributing to improving the Company’s corporate value. The Company makes appropriate decisions when exercising voting rights relating to strategic shareholdings based on whether holdings
contribute to improving the Company’s corporate
value through improving the investee companies’
corporate value.
The following presents the stock ownershipof Nomura Real Estate Development, which is thecompany with the largest amount of investment
shares on the balance sheet including among
Nomura Real Estate Holdings and its consolidated
subsidiaries. This category does not apply to Nomura Real Estate Holdings.

Bonus

Retirement
benefits

Headcount

128

—

6

Stock
Onward Holdings Co., Ltd.

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

75

56

—

19

—

3

External directors andAudit & Supervisory
Board Members

77

68

—

9

—

5

Total

538

302

79

156

—

14

*The number of Audit & Supervisory Board members at the end of the fiscal year ended March 2015 was five, including threewho served as External Audit & Supervisory Board Member. The reason for the discrepancy in the number of Audit & Supervisory
Board members above is because it includes one member who retired effective June 27, 2014.

Nomura Real Estate Holdings, Inc.

Number ofsharesAmount onbalance sheet(¥ million)

Purpose500,000419

To enhance corporate value by
strengthening business tiesc. The total amount recorded on the balance sheet, dividends received, gains/losses on sale, and gains/losses on
valuation of investment shares held for the purpose of pure investment in the fiscal year ended March 2015

Category
Non-listed shares
Other shares

51 Integrated Report 2015

Total amount on
the balance sheet(¥ million)

Total amount ofgains/losses on
valuation(¥ million)

Total amount ofdividends received(¥ million)

Total amount ofgains/losses on sale(¥ million)

—

—

—

—

1,460

25

—

835

Corporate GovernanceRisk Management
Risk Management System
Nomura Real Estate Holdings has established a
Risk Management Committee comprising executive
officers in charge of administrative departmentsof the Company and Group companies as members,
for the purpose of promoting risk management
within the Group. The Risk Management Committee deliberates on matters pertaining to risk
management, compliance, and information
security as they relate to the entire Group, and it
also discusses ways to respond to risks that
do emerge.
Flow of Communication

Nomura Real Estate Holdings
Chairman, Risk Management Committee

Group Compliance Dept.

The Nomura Real EstateGroup Companies
Communication Manager•Communication at Group companies
and formulation of guidelines, etc.
•Establishment of emergency
communication networks at
Group companies
Employees of Group companies

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Risk Management Regulations
The Nomura Real Estate Group believes that
ensuring sound management by properly
addressing risks to business operations is fundamental to corporate governance. Accordingly,
the Group has established Risk Management
Regulations as its fundamental risk management
guidelines. The Group has thus established timely
and proper reporting rules, including prompt
escalation of situational reports to management
after unforeseen incidents have occurred, in
addition to regularly monitoring risks, as a predication of risk management.
Risk Management Committee Meetings
In accordance with its Risk Management Regulations, Nomura Real Estate Holdings has established the Risk Management Committee
comprising executive officers in charge of general administrative departments of Group companies
as part of its risk management efforts. The Risk
Management Committee meets, in principle,
monthly to deliberate on matters concerning therisk management, compliance and information
security within the entire Group. It also discusses
response measures when risks do occur. Detailsof 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 of regular inspections on legal compliance being one such example.
Compliance with relevant laws is ensured throughcompliance inspections for laws that relate to every
Group company, such as the Building Lots andBuildings Transaction Business Act and Financial Instruments and Exchange Act, in which issues that
require remedy are pointed out.

Nomura Real Estate Holdings, Inc.

Compliance
Compliance Systems
The Nomura Real Estate Group regards compliance with laws and corporate ethics as one of
the most important management issues. As a setof relevant guidelines, it has formulated the
Nomura Real Estate Group Code of Action. Additionally, the Risk Management Committee andGroup Compliance Department have been
established at Nomura Real Estate Holdings topromote continuous educational and awarenessactivities for executives and employees of the entire Group. These organizations also provide advice, guidance and support to Group companies.

The Nomura Real Estate Group Risk Hotline
The Nomura Real Estate Group Risk Hotline wasestablished as a point of contact for whistle-blowing by Group employees from the standpoint ofgathering information on risks. The hotline forreporting and consultation has two channels:
one internally (chair of the Risk Management
Committee) and one externally at a law firm. The
Group protects the confidentiality of reports andprohibits whistleblowers from being exposed tonegative treatment because of their report.
Compliance Program
The Nomura Real Estate Group has established acompliance program under which it carries out
training throughout the year. In addition, Com-

The Nomura Real Estate Group Compliance Promotion Framework

Nomura Real Estate Holdings
Board of Directors
Chair and PresidentGroup Compliance Officer
Group Compliance Dept.

Chairman

Risk Management
Committee

Secretariat

The Nomura Real Estate Group Companies
Compliance Officers(Directors in charge of administrative operations at Group
companies, etc.)

Risk Management
Committee, etc.

Compliance Leaders(General managers of general administrative operations at Group companies)
Compliance Promoters, etc.
(Appointed at each company)

52 Integrated Report 2015

Corporate Governancepliance Hour is a program streamed to all officers
and employees of Group companies over theInternet on a monthly basis in order to raiseawareness about compliance.
Basic Approach and System for the Exclusionof Anti-social Forces
The Nomura Real Estate Group Code of Action, a
set of rules that all executive officers andemployees must abide by, contains a provisionon the exclusion of anti-social forces that states
the Group’s basic policy is to reject all relationships with anti-social forces.

The Nomura Real Estate Group Code of
Action Article 29(Exclusion of Anti-social Forces)
The Nomura Real Estate Group rejects all relationships
with anti-social forces, groups or individuals that posea threat to social order and security, or impede faireconomic activities. In addition, the Nomura Real Estate Group rejects all business transactions with suchforces or groups and will take a resolute stanceagainst any of their illegitimate demands.

In terms of specific action in accordancewith this basic policy, we have prepared a manualand established internal structures including an
administrative department to promote organizedresponses together with appointing managers
for preventing illegitimate demands by collecting,compiling, and managing information related toanti-social forces. We also engage in specificresponses to prevent anti-social forces frombecoming involved with management activities
and to prevent any damage from being causedby these forces, working appropriately in consultation with specialized external agencies such as
lawyers and the police, and forming links withthem.

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Disclosure System Concerning Timely Disclosure
Corporate Information Collection
Corporate information of Nomura Real Estate
Holdings is aggregated by the person responsiblefor 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 department within the
Company. Regarding the Nomura Real EstateGroup companies, corporate information is aggregated by the person responsible for information handling (the corporate officer in charge of
the Corporate Communications & Investor Relations Department) through the department
responsible for information collection (Corporate Planning Department) from responsible
individuals in each Group company. Furthermore, information on incidents with significant
urgency is aggregated by the person responsiblefor information handling (the corporate officer incharge of the Corporate Communications & 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 isrequired on whether or not to disclose corporate
information aggregated by the aforementioned
Nomura Real Estate Holdings, Inc.

system. This team looks at the necessity for timely
disclosure, the disclosure details and other matters, and at the same time reports the results tothe president.

tor Relations Department) prepares the materials
for disclosure and makes them public after receiving the approval of the person responsiblefor information handling (the corporate officer incharge of the Corporate Communications & Investor
Relations Department).

Timely Disclosure
Corporate information that must be disclosed inaccordance with the timely disclosure rules of theTokyo Stock Exchange and corporate information that Nomura Real Estate Holdings decides
needs to be disclosed in a timely manner is disclosed by 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 & Inves-

Timely Disclosure System

Information Disclosure
Screening Team

President
Formed asneeded(Made up of general managers,
corporate officers and others
responsible for related departments)
Risk Management
Committee Chairman

Monitoring of Timely Disclosure System
Nomura Real Estate Holdings established theGroup Internal Audit Department to conduct internal audit work. This department also carries
out monitoring of operations under the timely
disclosure system described above. Audit &Supervisory Committee members take turns in
attending Board of Directors’ and other important company meetings as well as receive reports
from directors and view relevant documents toinvestigate whether the timely disclosure system
is functioning properly.

ReportReportTimelyPerson responsible fordisclosure
information handling(Corporate officer incharge of the Corporate
Department responsible forCommunications &timely disclosure
Investor Relations Dept.) Direction (Corporate Communications &Investor Relations Dept.)
ReportIncidents
withsignificant Reporturgency

Department responsible for information collection(Corporate Planning Dept.)
ReportDepartments

53 Integrated Report 2015

Tokyo Stock ExchangeGroup companies

Corporate Governance

Investor Relations Activities
Policy on Constructive Engagement with
Shareholders
Nomura Real Estate Holdings conducts proactive
and constructive engagement with shareholders
based on its established systems and policy on
initiatives to promote greater engagement. The
president and director in charge of investor relations take the lead in engaging shareholders,
while the department in charge of investor relations supports these efforts. The department incharge of investor relations meets with internal
departments and shares information on a daily
basis to gather information and promote engagement with shareholders. A silent period has
also been established to prevent leakages of
information that affect our stock price and toensure the fairness of information disclosures.
Building Relationships with Analysts andInstitutional Investors
Nomura Real Estate Holdings regularly holds
earnings briefings at the time of announcing annual and semi-annual results delivered by thepresident as an opportunity to engage analysts
and institutional investors. 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 callon the days when quarterly earnings results areannounced, briefing sessions for business activities and property tours to help foster better
understanding of the Company.
Given the increasing shareholdings of foreign investors, we regularly provide financial
closing information and streaming of earnings

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

briefings in English. In addition, Company president
or directors visit one on one with institutional investors in the United States, Europe, Asia and otherparts of the world to explain business and financial
strategies and build relationships.
In addition to the above, we are actively increasing engagement with institutional investors
with regards to corporate governance. This includes
discussions held between our executive officers
and major institutional investor shareholders on
resolutions of the general meeting of shareholders,
our approach to corporate governance, and capitalefficiency, among other topics.
Based on this engagement with analysts
and institutional investors, the corporate officer incharge of the Corporate Communications & Investor Relations Department reports semi-annually to
the Board of Directors about investor trends (composition of shareholders and stance toward voting
rights, etc.) understood through engagement andabout the views expressed by analysts covering
Nomura Real Estate Holdings. This information isused to provide appropriate and effective feedback
to the executive management team.
Communication with Individual Investors
Given the increase in the number of individual
investors following the rollout of the Nippon

Earnings briefing

Investment Savings Account (NISA) program,
Nomura Real Estate Holdings regularly holds information sessions for individual investors using
various venues including investor relations events
sponsored by the Tokyo Stock Exchange andcompany briefings held at the branches of securities companies. During the fiscal year ended
March 2015, President Nakai (currently Chair)personally led a briefing for individual investors
where he spoke about the Company and strived
to foster greater understanding among individual investors.
In addition, we have expanded our corporate website as part of our efforts to broaden
understanding about the Group among individual investors and the investment community. For
the fiscal year ended March 2015, Nomura Real
Estate Holdings ranked 41 out of 3,586 listedcompanies in a ranking of the website of listedcompanies conducted by Nikko Investor Relations Co., Ltd., which also recognized Nomura Real Estate Holdings with an Excellence Award.
This demonstrates
our corporate website has establisheda strong reputation
2014
externally.

TSE IR Festa 2015

Nomura Real Estate Holdings, Inc.

54 Integrated Report 2015

Main IR Activities (April 2014 to March 2015)
IR activities for institutional
investors

Number oftimes held

Earnings briefings

2 times

Teleconferences on earnings
briefing days

4 times

Meetings with investors andanalysts (This number includes thefollowing meetings)

Cumulatively
297 meetings

Overseas IR (Europe, U.S., Asia)

3 times

Conference organized by securities
companies

7 times

Property tours

1 timeSR meetings

6 timesIR activities for individual
investors
Securities company branch briefings

4 times

IR fairs

3 times

Briefing for individual investors led by President Nakai(currently Chair)Corporate Officers

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data(Front row from left) Hiroyuki Kimura, Seiichi Miyajima, Kamezo Nakai, Eiji Kutsukake, Toshiaki Seki, Yukoh Yoshida(Back row from left) Akira Yamate, Shigeki Fujitani, Satoko Shinohara, Shigeru Matsushima, Takao Orihara, Satoshi Ogishi, Akira Ono
Nomura Real Estate Holdings, Inc.

55 Integrated Report 2015

Corporate Officers (as of October 1, 2015)

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Directors
Kamezo Nakai

Eiji Kutsukake

Seiichi Miyajima

Toshiaki Seki

Chair (Representative Director)

President (Representative Director) and
Chief Executive Officer

Director (Representative Director) and
Executive Officer

Director (Representative Director) and
Executive Officer

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.
Jun. 2015: President (Representative Director) and Chief Executive Officer 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 Residential Development Division of
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.
Jun. 2014: Director (Representative Director) and Executive
Officer of Nomura Real Estate Holdings, Inc. (Topresent)
Apr. 2015: President (Representative Director) and Chief Executive Officer of Nomura Real Estate Development
Co., Ltd. (To present)

Head of the Property & Facility Management
Business and Senior Business Management Dept.

Hiroyuki Kimura

Yukoh Yoshida

Shigeru Matsushima

Satoko Shinohara

Director (Representative Director) and
Executive Officer

Director and Executive Officer

Director (External)

Director (External)

Supervisor of Administration Dept. and Head ofManagement of Affiliated Companies

Apr. 1973: Joined Ministry of International Trade and Industry(currently, Ministry of Economy, Trade and Industry)
Jun. 1998: Deputy Director-General for Agency of Industrial
Science and Technology of Ministry of International Trade and Industry
Sep. 1999:Director-General of Chubu Bureau of International
Trade and Industry of Ministry of International
Trade and Industry
Apr. 2001: Professor, Faculty of Business Administration, Hosei University
Mar. 2007: External Director of CAC Corporation (currently,
CAC Holdings Corporation) (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. (Topresent)

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 and Associates (To present)
Feb. 2010: Representative Partner of Satoko Shinohara Living
Design Institute LLC (To present)
Apr. 2010: Professor of Japan Women’s University (To present)
Jun. 2014: Director of Nomura Real Estate Holdings, Inc. (Topresent)

Apr. 1974: Joined Nomura Securities Co., Ltd.
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 Asset Management 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.
May 2012: President (Representative Director) and Chief Executive Officer of Nomura Real Estate Holdings, Inc.
Apr. 2015: Chair (Representative Director) of Nomura Real Estate Development Co., Ltd. (To present)
Jun. 2015: Chair (Representative Director) of Nomura Real Estate Holdings, Inc. (To present)

CFO and Head of Investor Relations
Apr. 1984: Joined Nomura Real Estate Development Co., Ltd.
Feb. 2006: General Manager of Finance & Accounting Dept.
of Nomura Real Estate Holdings, Inc.
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.
May 2012: Executive Officer of Nomura Real Estate Holdings,
Inc.
Jun. 2012: Director and Executive Officer of Nomura Real Estate Holdings, Inc.
Apr. 2013: Director and Managing Executive Officer of Nomura Real Estate Development Co., Ltd.
Jun. 2013: Executive Officer of Nomura Real Estate Holdings,
Inc.
Jun. 2014: Director (Representative Director) and Executive
Officer of Nomura Real Estate Holdings, Inc. (Topresent)

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.
May 2012: Director and Executive Officer of Nomura Real Estate Holdings, Inc. (To present)
Apr. 2015: Director and Senior Managing Executive Officer of
Nomura Real Estate Development Co., Ltd. (Topresent)

Nomura Real Estate Holdings, Inc.

56 Integrated Report 2015

Apr. 1980: Joined Nomura Real Estate Development Co., Ltd.
Apr. 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. 2014: President (Representative Director) and Chief Executive Officer of Nomura Real Estate Partners Co.,
Ltd.
Jun. 2014: Director (Representative Director) and Executive
Officer of Nomura Real Estate Holdings, Inc. (Topresent)
Apr. 2015: Chair (Representative Director) of Nomura Real Estate Partners Co., Ltd. (To present)
Apr. 2015: President (Representative Director) of Nomura Real
Estate Wellness Co., Ltd. (To present)Corporate Officers

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Executive Officers
Takao Orihara

Shigeki Fujitani

Satoshi Ogishi

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

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.
Jun. 2015: Director (Audit & Supervisory Committee Member)of Nomura Real Estate Holdings, Inc. (To present)

Apr. 1981: Joined Nomura Securities Co., Ltd.
Apr. 2008: Executive Managing Director of Nomura AssetManagement 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.
Jun. 2015: Director (Audit & Supervisory Committee Member)of Nomura Real Estate Holdings, Inc. (To present)

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 (Topresent)
Jun. 2012: Audit & Supervisory Board Member of Nomura
Real Estate Development Co., Ltd.
Jun. 2012: Audit & Supervisory Board Member of Nomura
Real Estate Holdings, Inc.
Jun. 2015: Director (Audit & Supervisory Committee Member)of Nomura Real Estate Holdings, Inc. (To present)

Akira Yamate

Akira Ono

Director (Audit & Supervisory Committee
Member) (External)

Director (Audit & Supervisory Committee
Member) (External)

Minoru Hatada

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 Aarata
Jun. 2013: Audit & Supervisory Board Member of Nomura
Real Estate Development Co., Ltd.
Jun. 2013: Audit & Supervisory Board Member of Nomura
Real Estate Holdings, Inc.
Jun. 2015: Outside Director of Mitsubishi UFJ Financial Group,
Inc. (To present)
Jun. 2015: Auditor of Prudential Holdings of Japan, Inc. (Topresent)
Jun. 2015: Director (Audit & Supervisory Committee Member)of Nomura Real Estate Holdings, Inc. (To present)

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

Makoto Haga 

Seishi Miyajima 
Executive Officer in charge of Property Brokerage& CRE BusinessTakashi Kaku 
Executive Officer in charge of Quality
Management and Architectural Design

Tadashi NakajimaE xecutive Officer in charge of Leasing Business andSupervisor of Development Planning

Norio Ambe 
Executive Officer in charge of Investment
Management Business

Juntaro Kimura 
Executive Officer in charge of Corporate Real Estate

Shigeyuki Yamamoto 
Executive Officer in charge of Residential
Development BusinessExecutive Officer in charge of Development Planning

Executive Officer in charge of Corporate Planning
Dept., Corporate Social Responsibility
Management Dept., and Corporate
Communications & Investor Relations Dept.

Haruki Nakamura 
Executive Officer in charge of Finance &Accounting Dept. and Finance Dept.

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

Yukio Ichihara 
Executive Officer in charge of Secretariat, GroupIT Planning & Implementation Dept., Group
Corporate Administration Dept., and Internal
Audit and Compliance

Nomura Real Estate Holdings, Inc.

57 Integrated Report 2015

Messages from External Directors

Actively Involved in
Discussions about Our CSR
Vision and in Interactions
with Employees to Clarify
the Value We Provide toSociety

Shigeru Matsushima

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Nomura Real Estate Holdings recently prepared a
CSR vision for the first time. We have spread ourwings and now engage in a truly broad range ofbusinesses including not only tangible infrastructuresuch as the development of housing and offices, butalso intangible fields such as operation and management of commercial facilities, fitness centers, andsenior housing.
Needless to say, this type of business expansion is important for our company to achieve medium- to long-term growth. At the same time, though,we also need to clarify the type of value we can contribute to society collectively as a group of companies.
In my role as an External Director, I have been
actively involved in discussions on our CSR vision
while also interacting not only with senior management but also mid-level employees of each Group
company. Going forward, I intend to help the Company realize sound growth in conjunction with theMid- to Long-term Business Plan prepared at thesame time as our CSR vision.

Expectations for a New
Approach to Living Basedon the Fact That Japan Is
Now Tackling the
Challenges Other Countries
Will Face Later

Satoko Shinohara

I believe the future of Japan is shaped differently
based on how you view the country today. From mytravels with students on research trips to various
countries, especially East Asia and Southeast Asia, I
have gained further insight into the fact that Japan is
now tackling many of the issues that other countries
will face in the future, such as a super-aged society
and the erosion of communities and family networks
that should be supporting this society. At the sametime, I have witnessed several budding solutions tothese issues, including attempts to create multi-generational communities involving seniors and youth
and the utilization of dead stock, among others. I
have also been able to grasp a sense of the potential
offered by Japan’s uniquely mature society. First andforemost, I feel the need to think about the future
while learning more about these budding examples
of solutions.
I expect that a new approach to living will
emerge from the Nomura Real Estate Group, which
has worked diligently in the field of living, and also
from Japan’s unique experience with living, and I
hope to play a role in finding the right approach.

ProfileProfileProfessor, Tokyo University of Science Graduate Schoolof Innovation Studies
As an expert in business administration, Mr. Matsushima
has a wealth of knowledge and wide ranging experiencein corporate innovation processes, industrial policy, corporate management and organizational theory. He hasserved as an Audit & Supervisory Board Member for
Nomura Real Estate Holdings since 2008 and as a Director since 2013.

Professor, Department of Housing and Architecture, Faculty of Human Sciences and Design, Japan Women’s
University
Representative Director of Spatial Design Studio
Ms. Shinohara has worked for many years as anarchitect and has gained a wealth of knowledge andexperience as a researcher of approaches to shared spatial design in condominiums. She was appointed as a
Director of Nomura Real Estate Holdings in 2014.

Nomura Real Estate Holdings, Inc.

58 Integrated Report 2015

Messages from External Directors

Leveraging My Experience
as an External Audit &Supervisory Board Member
to Add My Perspective on
Management to More
Actively Enhance
Corporate Value

Satoshi Ogishi

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

I was appointed as a Director (External Director / Audit & Supervisory Committee Member) at the sametime as Nomura Real Estate Holdings became a company with an Audit & Supervisory Committee. As an
External Audit & Supervisory Board Member, I had
provided my views as an outside third person to theBoard of Directors and the Audit & Supervisory
Board, such as whether the Company’s business activities were in compliance with laws and regulations
and whether conflicts of interest were being managed properly as potential problems.
As a member of the Board of Directors, I will
now more actively contribute my perspective on
management and ideas for enhancing corporate value. Although I will not be directly involved in business operations, but I will be authorized to assist
with the selection of directors and determination of
their compensation. I am deeply aware of the importance of this responsibility.
Our business environment is very favorable atthe moment and as a Japanese real estate firm thatwill now look to new business ventures to address
aging society and changing demographics, I hope tocontribute, even in a small way, to creating a Nomura
Real Estate Group that can fulfill the expectations ofcustomers, communities, business partners, employees, and shareholders.

Contributing to Enhanced
Corporate Value Using My
Objective View Point to
Encourage Management toThink about What Is Right

Akira Yamate

I was newly appointed as a Director and Audit & Supervisory Committee Member in this fiscal year.
Based on my many years of professional experience
as a Certified Public Accountant, I recognize that oneof my most important roles is to provide my objective
viewpoint for the Company’s financial activities, external reports, and audits carried out by the external
auditors.
Corporate management has both aggressive
and defensive postures. It also faces the reality of decisions made between the lines of true intentions
and public position. Given this, executive management needs to achieve management targets while
also being constantly aware of the right actions totake. I believe my job is to encourage management
to think about what is right.
In my role as an External Director, I hope to
examine management from my objective viewpoint
and share my observations in an effort to contributeto the enhancement of corporate value.

ProfileProfileAttorney-at-law and Partner at Nishimura & Asahi
As an attorney-at-law, Mr. Ogishi maintains a wealth ofbusiness experience and advanced expertise in general
corporate law, M&A and business revitalization. He hasserved as an Audit & Supervisory Board Member for
Nomura Real Estate Holdings since 2012 and Director(Audit & Supervisory Committee Member) since 2015.

Certified Public Accountant
Mr. Yamate is a certified public accountant and former
Representative Partner and Head of Operations with
PricewaterhouseCoopers Aarata. He has established awealth of business experience and advanced expertise inaudits and advisory work for many Japanese and multinational corporations, with an emphasis on financial institutions. Mr. Yamate has served as an Audit & Supervisory Board Member for Nomura Real Estate Holdings
since 2013 and Director (Audit & Supervisory Committee
Member) since 2015.

Nomura Real Estate Holdings, Inc.

59 Integrated Report 2015

Messages from External Directors

Contributing to Balanced
Governance Given theConstantly Changing
Environment Facing theCompany

Akira Ono

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

After serving as an External Audit & Supervisory
Board Member at the Company’s subsidiary MEGALOS for three years, I was appointed as a Audit &Supervisory Committee Member of Nomura Real Estate Holdings in June 2015. I will now become more
involved in the management of the Nomura Real Estate Group from a broader perspective, and I am wellaware of this important responsibility.
The Tokyo Stock Exchange’s Corporate Governance Code cites the goal of achieving “proactive
governance” in which risk is taken in a sound manner based on the fulfillment of accountability. For thisreason, it is essential that risk be properly understoodand that passive elements not be overlooked. Given
the constantly changing environment facing theCompany, I will utilize my expertise and experience
gained as an attorney-at-law to help realize proactive
governance and fulfill my duties to meet the expectations placed in me by stakeholders.

List of External Directors
NameAudit &
Supervisory
Committee
MemberShigeru
Matsushima—

SatokoShinohara—

Independent Supplemental ExplanaOfficer
tion of Compliance Item

Nomura Real Estate Holdings, Inc.

Attendance Record

Mr. Matsushima is a professor at the Tokyo University of Science Graduate School of Innovation
Studies.

Mr. Matsushima has a wealth ofknowledge and wide ranging experience through his many years as anexpert in business administration.
He was appointed as an External
Director to strengthen oversightfunctions covering the Board of Directors and achieve fair and highly
transparent management.

Attended 13 of the 15
Board of Directors’
meetings held during
the fiscal year ended
March 2015.

Ms. Shinohara is a professor at the Departmentof Housing and Architecture, Faculty of Human
Sciences and Design, Japan Women’s University.

Ms. Shinohara was appointed as anExternal Director because she has
worked for many years as an architect and has gained a wealth ofknowledge and experience in her
field.

Attended 11 of the 12
Board of Directors’
meeting since being
appointed on June 27,
2014.

SatoshiOgishiMr. Ogishi is a Partner at
Nishimura & Asahi.

Mr. Ogishi has established a wealthof expertise and wide ranging experience as an attorney-at-law. He
was appointed as an External Director and Audit & Supervisory Committee Member to reinforce thecorporate governance system andfurther enhance the audit system.

Attended 14 of the 15
Board of Directors’
meetings and 13 of the
13 Audit & Supervisory
Board meetings held
during the fiscal year
ended March 2015.

Akira
YamateMr. Yamate is an Outside
Director of Mitsubishi
UFJ Financial Group.

Mr. Yamate has been a Certified
Public Accountant for many years
and he has established a wealth ofexpertise and wide ranging experience in his field. He was appointed
as an External Director and Audit &Supervisory Committee Member toreinforce the corporate governancesystem and further enhance the audit system.

Attended 15 of the 15
Board of Directors’
meetings and 13 of
the 13 Audit &Supervisory Board
meetings held during
the fiscal year ended
March 2015.

Akira
Ono

Mr. Ono is a Partner at
Spring Partners.

Mr. Ono possesses a wealth of expertise and wide ranging experience
as an attorney-at-law with many
years of professional experience. He
was appointed as an External Director and Audit & Supervisory Committee Member to reinforce thecorporate governance system andfurther enhance the audit system.

——

ProfileAttorney-at-law and Partner at Spring Partners
As an attorney-at-law with many years of experience,
Mr. Ono possesses a wealth of experience and advanced
expertise in corporate law. He had served as an External
Audit & Supervisory Board Member for our subsidiary
MEGALOS since 2012 and was appointed as a Director(Audit & Supervisory Committee Member) of Nomura
Real Estate Holdings in 2015.

Reason for Appointing This
External Director

60 Integrated Report 2015

Financial Data

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

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

‘11/03‘12/03‘13/03‘14/03‘15/03‘15/03’16/03 (Forecast)

Operating revenue¥  480,983¥  450,807¥  517,740¥  532,016¥  567,159$ 4,719,639¥  575,000

Operating gross profit   107,222   114,910   134,571   159,335   162,051  1,348,520       —

Operating income    42,083    49,939    58,308    74,307    71,894    598,273    76,000

Ordinary income    26,149    34,173    45,806    64,058    63,681    529,930    67,000

Net income     5,471    17,591    19,357    26,844    38,441    319,893    40,000

Cash flows from operating activities    33,947    43,876    89,295    83,535    23,837    198,362       —Cash flows from investing activities    (33,730)

     7,809     (2,588)    (20,191)    (32,476)    (270,253)       —Cash flows from financing activities     (7,485)    (63,296)    (94,666)    (57,858)     (8,983)

     (74,758)       —

Capital investment*1    37,570    14,098    18,963    21,938    38,871    323,471       —

Depreciation*2 and amortization    12,835    13,534    13,513    14,333    15,258    126,977       —Net income¥    28.74¥    92.38¥   101.61¥   140.70¥   201.28$      1.67¥

Cash dividends     25.00

     25.00

     30.00     35.00     45.00

      0.37     55.00

Per Share Data:
208.92

Balance Sheet Data (as of March 31):
¥1,474,331¥1,402,624¥1,369,949¥1,313,887¥1,369,226$ 11,394,081       —

Current assets   636,925   585,332   535,103   496,978   549,300    4,571,025       —

Inventories   433,386   396,857   369,667   349,167   429,764   3,576,303       —

Equity investment    60,948    41,895    29,578     7,128     6,316      52,564       —   837,406   817,292   834,845   816,909   819,926   7,557,591       —

Total net assets   357,365   376,486   398,276   418,697   461,031    3,836,490       —

Interest-bearing debt   816,910   758,562   669,268   617,583   616,700   5,131,896       —

ROA*3

       2.9       3.7       4.6       5.8       5.4       5.4       —

ROE*4       1.8       5.7       5.9       7.8      10.3      10.3       —

Operating margin       8.7      11.1

      11.3

      14.0      12.7      12.7       13.2

Dividend payout ratio (consolidated)      87.0      27.1      29.5      24.9      22.4      22.4      26.3

Shareholders’ equity ratio      20.7      22.6      24.5      27.1      28.8      28.8       —

D/E ratio (times)       2.7       2.4       2.0       1.7       1.6       1.6       —

Number of employees (people)     5,300     5,399     5,581     5,747     6,029     6,029       —

Total assets

Non-current assets

Ratios (%):

*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 andamortization” 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, 2015, which was ¥120.17 = U.S.$1.

Key Points ofOperating Results

Business performance summary: Operating revenue for the fiscal year ended March
2015 increased year on year thanks to a rise in the total number of units sold in housing
sales and an increase in commission fees in the Property Brokerage & CRE Business. Additionally, operating revenue and net income were both record highs.

Nomura Real Estate Holdings, Inc.

Dividend: Based on the future management environment and business performance outlook, the annual dividend per share for the fiscal year ended March 2015 was ¥45, marking a year-over-year increase of ¥10. For the fiscal year ending March 2016, we plan onoffering a annual dividend of ¥55 per share, a further year-over-year increase of ¥10.

61 Integrated Report 2015

Financial Data

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Main Financial Indicators
Operating Revenue and Operating Margin(Millions of yen)

450,807

12.7

14.0

16

80,00012

60,0008

8.7’11/03’12/03’13/03’14/0349,93942,08371,894(Millions of yen)8

40,000

630,0004

20,00019,357
5.9

17,5915.7

210,0000’11/03

ROE (%)

38,4413.7

0’15/03

Net income

5.4

5.8

4.6

2.9

20,00000

ROA (%)

58,30840,0004

150,000

Net Income and ROE

Operating income

74,30711.3

11.1

300,000

567,159

532,016

517,740

480,983(Millions of yen)

Operating margin (%)

600,000
450,000

Operating Income and ROA

Operating revenue’12/03’13/03’14/03

10.3

26,844
7.8

6
3

1.8
’11/030’12/03’13/03’14/03’15/03

Total Assets, Net Assets and Shareholders’ Equity Ratio

Interest-bearing Debt

Cash Dividends and Consolidated Dividend Payout Ratio(Millions of yen)

(Millions of yen)

(Yen)

1,000,000

50

Total assets

Net assets

Shareholders’ equity ratio (%)

40

2,000,000
1,500,000 1,474,331

1,402,624

1,000,000
20.7
500,000

461,031418,697398,276

376,486

357,365

28.8

27.1

24.5

22.6

1,369,226

1,313,887

1,369,949

0’11/03’12/03’13/03’14/0330

750,000

20

500,000

10

250,000

00816,910669,268

616,700

617,583

Consolidated dividend payout ratio (%)

100
45.00

87.0

30
20

25.00

30.00

25.00

35.00

80
60
40

29.5

27.1

10

24.9

22.4

20

0
’11/03’15/03

Cash dividends per share40

758,562

9

5,471

0

’15/0312’12/03’13/03’14/03’15/030’11/03’12/03’13/03’14/03’15/03

Non-financial Data
Oil Converted Energy Usage and Intensity*1

CO2 Emissions and Intensity*2(1,000kl/year)(1,000t-CO2/year)

Energy usage

Energy use intensity (kl/m2/year)

0.08

100
75

0.058

0.057

0.053

65
0.044

50
25

0.06

31

31

29

’12/03’13/03’14/030’15/03

200

0.088

0.086

150

0.04

100

0.02

50

0

0

No. of Childcare Leave Takers
Emissions intensity (t-CO2/m2/year)

CO2 emissions

0.081

0.089
131

(Number of people)

0.100

120

0.075

90

0.050

60

0.025

30

0

0

99
72

109

83

47
47

47

44

’12/03’13/03’14/03’15/03’11/03’12/03’13/03’14/03’15/03*1 Up until the fiscal year ended March 2014, calculated for the 7 buildings (buildings with a primary use as office space) applicable to the Tokyo Metropolitan Ordinance on Environmental Preservation in which the Nomura Real Estate Group retains an interestof more than 50,000m2. For the fiscal year ended March 2015, calculated for 143 facilities (some waterworks/sewerage and wastes applicable) applicable to reporting requirements under the Energy Saving Act excluding lease housing.
*2 CO2 emissions are calculated using the emissions coefficient designated in the Tokyo Metropolitan Ordinance on Environmental Preservation.

Nomura Real Estate Holdings, Inc.

62 Integrated Report 2015

Financial Data

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Operating Revenue of Each Segment(Millions of yen)

’12/03
Residential Development Business’13/03*1’14/03*2, 4’15/03*

4’15/03*5’16/03 (Forecast)*5

217,578

308,467

307,625

359,397359,397

343,000

Housing sales

193,376

281,876295,923

332,999     —

     —

Other  24,201  26,591  11,702  26,397     —

     —

123,417106,665  99,866  92,878  92,878

110,000

Leasing BusinessLeasing (offices)  48,009  47,834  48,131  46,563     —

     —

Leasing (retail facilities)   8,210   8,883  10,544  10,323     —

     —

Leasing (other)   5,495   5,429   5,151   5,552     —

     —

Property development  48,234  27,336  25,608  16,026     —

     —

Other  13,469  17,181  10,429  14,413     —

     —

Investment Management Business  12,963  11,133  18,326   9,166   9,166  11,000

Property Brokerage & CRE Business  34,303  26,093  29,168  30,232  30,232  32,000

Property brokerage  16,376  19,217  24,520  25,833     —

     —

Other  17,926   6,876   4,647   4,399     —

     —  67,371  66,376  72,150  71,635  85,837  91,000

Property & Facility Management Business*3
Property & facility management  46,323  48,149  48,743  49,794     —

     —

Construction ordered  21,047  18,226  23,406  21,841     —

     —

Other Business  14,592  14,962  18,640  17,753   3,008   1,000

Adjustments (eliminations or corporate)  (19,418)  (15,958)  (13,761)  (13,905)  (13,362)  (13,000)

450,807517,740

532,016

567,159

567,159

575,000

Total

Operating Income of Each Segment
Residential Development Business  20,939  32,790  31,177  33,811  33,811  31,500

Leasing Business  19,690  23,335  26,818  24,447  24,447  30,000

Investment Management Business   6,551   (2,724)   7,902   4,813   4,813   7,000

Property Brokerage & CRE Business   1,925   6,176   8,101   8,477   8,477   8,000

Property & Facility Management Business   4,487   4,455   5,107   5,477   5,758   4,500

Other Business     417     447     508     167     (113)       0Adjustments (eliminations or corporate)   (4,073)   (6,172)   (5,307)   (5,300)   (5,300)   (5,000)

Total  49,939  58,308  74,307  71,894  71,894  76,000*1 The results of each business segment for the fiscal year ended March 2013 are changed to figures after the change of the segmentation of Nomura Real Estate Reform Co., Ltd. *2 The classification of Nomura Real Estate Reform Co., Ltd. has been changed to
the Residential Development Business segment from the Property & Facility Management Business segment from the fiscal year ended March 2014. *3 The breakdown of operating revenue for the Property & Facility Management Business segment has beenchanged from "Building management" and "Housing management" to "Property & facility management" and "Construction ordered" since the first quarter of the fiscal year ended March 2015. According to this change, the figures for the fiscal year ended
March 2012 and after are classified under the new classification. *4 From the second quarter of the fiscal year ended March 2015, a partially revised method of allocating company-wide costs among adjustments to each segment was incorporated. In addition,
the house leasing business was transferred from the Residential Development Business segment to the Leasing Business segment. The full year results for the fiscal year ended March 2014 as well as results for the full year of the fiscal year ended March 2015 arereflected in the published figures. *5 From April 1, 2015, the classification of MEGALOS CO., LTD. has been changed to the Property & Facility Management Business segment from the Other Business segment. In line with this change, the full year results for the
fiscal year ended March 2015 and forecasts for the fiscal year ending March 2016 are classified under the new classification.

Nomura Real Estate Holdings, Inc.

63 Integrated Report 2015

Financial Data

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Assets of Each Segment(Millions of yen)

’12/03
Residential
Development BusinessLeasing Business
Investment
Management Business
Property Brokerage &CRE Business
Property & Facility
Management Business
Other Business
Adjustments(eliminations or corporate)
Total’13/03*1’14/03*2, 4’15/03*

4’15/03*5’16/03 (Forecast)*  315,428  337,120  331,779  382,585   382,585—  813,964  790,735  776,097  849,885   849,885—  114,499   91,853   67,346   40,555     40,555—   19,786   26,903   21,142   22,606     22,606—   28,007   30,468   32,891   32,375     49,696—   37,769   37,168   34,133   19,833     2,485—   73,168   55,699   50,496   21,383  21,411—

1,402,624

1,369,949

1,313,887

1,369,226

1,369,226—

Adjustments(eliminations or corporate)
Total  272,319  296,715  281,698  338,530  338,530—  110,727   61,274   62,918   88,446  88,446—    4,483    4,572

      —

      —

     ——    3,107     1,291    1,162    1,184   1,184—       36       47       92       49       168—    6,182    5,906    3,380    1,638   1,519—      —

     (140)      (84)      (84)       (84)—  396,857  369,667  349,167  429,764

429,764—

Return on Assets (ROA) of Each Segment
Residential
Development BusinessLeasing Business
Investment
Management Business
Property Brokerage &CRE Business
Property & Facility
Management Business
Other BusinessTotal’12/03’13/03’14/03’15/03’16/03 (Forecast)    3,397    5,111    5,491    6,162

5,450      631      638      718      859

700

Gross margin
ratio of housingsales   23.3%   22.5%   21.7%   21.1%    —Completedhousinginventories (unit)      114       42       31       89    —    2.3%    2.2%    2.9%    4.5%    —

1,153,898

1,127,495

1,132,246

1,123,188    —

Brokerage:
Number oftransactions    5,762    6,494    7,437    7,174    —

Brokerage: Totaltransaction value(millions of yen)  452,950  540,698  672,774  710,980    —

      696      723      703      729    —  130,987  137,745  147,516  155,706    —  133,033  132,196  141,564  140,395    —

Residential
Development
Business
Condominiums
sales (unit)
Detached
housing sales(unit)

Leasing Business

Inventories of Each Segment
Residential
Development BusinessLeasing Business
Investment
Management Business
Property Brokerage &CRE Business
Property & Facility
Management Business
Other Business

Segment Operating Results5    6.6%    9.7%    9.4%    8.8%   8.8%—    2.4%    3.0%    3.5%    2.9%   2.9%—    5.7%      —   11.7%   11.9%  11.9%—    9.7%   23.0%   38.3%   37.5%

37.5%—   16.0%   14.6%   15.5%   16.9%  11.6%—    1.1%   1.2%    1.5%    0.8%       ——    3.7%    4.6%    5.8%    5.4%     5.4%—  

ROA of each segment = Segment operating income/Segment assets at end-FY
Total ROA = (Operating income + Non-operating income)/Total assets at end-FY

Vacancy rate*
Investment
Management
Business
Outstanding
assets undermanagement(millions of yen)
Property
Brokerage & CRE
Business

Property &Facility
Management
Business
Buildings undermanagement
Condominiums
undermanagement(unit)
Members of
MEGALOS* In accordance with changes in segmentation, some of relevant properties have been subject tomodification since the second quarter of the fiscal year ended March 2012.
Nomura Real Estate Holdings, Inc.

64 Integrated Report 2015

Group Company Profile

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

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/english/

Nomura Real Estate Development conducts a range of businesses. The Residential Development Business provides
quality residential properties under the
PROUD and OHANA brands. Meanwhile, the Leasing Business plans, develops and manages office buildings suchas PMO, commercial facilities such as
GEMS, and logistics and other facilities.
In addition, the Corporate Real Estate(CRE) Strategic Support and Corporate
Brokerage Business helps maximize thevalue of real estate held by companies.

In October 2011, three investment management companies in the Nomura Real
Estate Group merged and became oneof 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 of realestate investment needs, including privately placed real estate funds, to listed
real estate investment trusts (REIT), privately placed REIT, and overseas real estate fund of funds.

Nomura Real Estate Urban Net provides
solutions for satisfying customers in thereal estate services and consulting fields.
These include residential real estate brokerage for helping customers in changing
their place of residence, and commercial
real estate brokerage, which addresses
the real estate needs of companies andinvestors. Nomura Real Estate Urban Net
also operates a consignment sales business where it sells condominium units
and detached housing as a sales agent.

Nomura Real Estate Partners Co., Ltd.

NREG TOSHIBA BUILDING Co., Ltd.

MEGALOS CO., LTD.

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

http://www.nreg-tbc.co.jp/

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

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

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

Under the philosophy of “transforming
customer satisfaction into happiness,”
MEGALOS plans, develops and manages
fitness facilities offering top-of-the-line
service and equipment that are housedin the best facilities in each area.

Nomura Real Estate Holdings, Inc.

65 Integrated Report 2015

Group Company Profile

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Yokohama Business Park Heating andCooling Supply Co., Ltd.

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)

Yokohama Business Park Heating andCooling Supply is responsible for the
supply of heating and cooling services to
Yokohama Business Park, a largescalebusiness facility, through its district heating and cooling system. Capitalizing on
a “best-mix” system that combines gas
and electricity, Yokohama Business Park
Heating and Cooling Supply uses energy
efficiently to curtail costs and minimize
environmental impact.

Geo-Akamatsu provides a full range ofproperty consulting and other services
leveraging its 40 years of accumulated
expertise and experiences. These services include surveys of commercial facilities, leasing, commercial space design
and property management.

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

Nomura Real Estate Wellness Co., Ltd.

Nomura Amenity Service Co., Ltd.

NREG TOSHIBA BUILDING FACILITIES Co., Ltd.

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

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

Nomura Real Estate Wellness designs
and operates high-quality housing forthe elderly that incorporates secure andreliable life-long management services.

Nomura Amenity Service provides cleaning services of office buildings, schools,
and condominiums to maintain scenic
beauty of properties as a cleaning company of the Property & Facility Management Business of the Nomura Real Estate Group.

NREG TOSHIBA BUILDING FACILITIES offers services to maintain or improve theproperty value through facility management, inspection, cleaning, security andconstruction, while provides safe andcomfortable environment to all customers.

PRIME X. Co., Ltd.

NOMURA REAL ESTATE ASIA PTE. LTD.

Nomura Real Estate Consulting (Beijing) Co., Ltd.

NOMURA REAL ESTATE ASIA promotes
the Nomura Real Estate Group’s businesses including pursuing business opportunities in real estate development
and supporting the investor’s demand inJapanese real estate.

Nomura Real Estate Consulting (Beijing)supports the Nomura Real Estate Group’sbusiness in China by researching real estate market, building a relationship with
our partners, exploring the possibilities
of real estate development business including office buildings and residential
properties in China.

http://www.prime-x.co.jp/ (Japanese only)
Based on the accumulated expertise
jointly developed with Nomura Real Estate Development, PRIME X. provides
Internet advertising businesses that specialize in the real estate and housing industries. Prime X. delivers proposals thatmaximize customer benefits, ranging
from the creation of corporate websites
and project homepages to creating andmanaging membership organizations,and handling project sales promotions.

Nomura Real Estate Holdings, Inc.

66 Integrated Report 2015

Investor Information (as of March 31, 2015)

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data

Corporate Data

Stock Information

Ten Largest Shareholders

Corporate Name: Nomura Real Estate Holdings, Inc.

Common Stock¥116,188,764,550

Representative: Eiji Kutsukake, President(appointed June 26, 2015)

Number of Authorized Shares

450,000,000

Number of Shares Issued

191,119,700

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

Market ListingFirst Section of Tokyo
Stock Exchange

Minimum Trading Unit

100 shares

Date of Establishment: June 1, 2004

Number of Shareholders

43,287

Number of Employees: 6,029 (on a consolidated basis)
Fiscal Year: From April 1 to March 31

Name of Shareholders

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
JAPAN RE FIDELITYState Street Bank-West Pension Fund Clients - Exempt 505233
CBNY - GOVERNMENT OF NORWAYSTATE STREET BANK WEST CLIENT - TREATY 505234
The Bank of New York Mellon 140030

64,777,500
7,314,300
6,097,900
5,663,500
2,973,082
2,641,300
2,508,933
2,103,900
2,020,877
1,963,462

Shareholding
(%)
33.89
3.82
3.19
2.96
1.55
1.38
1.31
1.10
1.05
1.02

General Meeting of Shareholders: June

12.14

17.93

Stock Price and Trading Volume on the Tokyo Stock Exchange

Stock Price
(Yen)

2,500

1.21

34.21

2,000

Composition
by Number of
Shareholdings
(%)

1,500
1,000
500

34.51

0

Trading Volume(Thousands of Shares)

Composition by Number of Shareholdings (%)
Financial Institutions

17.93

Financial Instruments Firms

1.21

Other Japanese Firms

34.51

Other Foreign Investors

34.21

Individuals and Others

12.14

80,00060,00040,00020,0000

9 10 11 12 1 2
2012
2013

3

4

5

Nomura Real Estate Holdings, Inc.

6

7

8

9 10 11 12 1 2
2014

67 Integrated Report 2015

3

4

5

6

7

8

9 10 11 12 1 2
2015

3

4

5

6

7

8

9

Website

Creating Value through Change
Businesses Creating Value
Foundations That Support Value Creation
Data• 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/
Nomura Real Estate Holdings Website

Learn more about the Nomura Real Estate Group’s

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

four key CSR themes, social contribution activities,
and CSR implementation base.

Nomura Real Estate Holdings, Inc.

68 Integrated Report 2015

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