2017

Nomura Real Estate Holdings, Inc.
Integrated Report 2017

Nomura Real Estate Holdings, Inc.
Shinjuku Nomura Building, 1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-0566, Japan
URL: http://www.nomura-re-hd.co.jp/english

Printed in Japan

New Value, Real Value

Integrated Report 2017

To respond to customer needs and social
challenges, the Nomura Real Estate Groupis radically enhancing its technology andknow-how as a corporate group thatuses business to offer value to society
while remaining committed to quality.
The mission on which the Company was founded was to develop new towns to mitigate the housing shortage in 1957. Not limiting ourselves to only residential development, we have since established a broad range of businesses, including leasing,investment management, property brokerage, property and facility management, andreal estate development. Our history has been one of continuously creating value
through business while remaining committed to quality and always responding to customer needs and social challenges with honesty. In order to meet the expectations ofsociety, we are radically enhancing our technology and know-how. We will take thewillingness to start from scratch and tackle unprecedented and highly difficult challenges, which we have inherited, and turn it into the source of our competitive strength.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

1

The Nomura Real Estate Group strives for:Developmental Strength
Technological Strength
Management Strength
By combining these three strengths,
we will continue to pursue value beyond
expectations for our customers andsociety using both tangible andintangible approaches.

By encouraging collaboration between highly competitive businesses, we will be able
to create value that would not have been possible for them working alone. At present,
real estate is something that loses value over time. That is why we are currently working on creating urban development projects that will gain value over time. Real estateis about more than just buildings. What we strive to offer is a high level of value
demonstrative of the power of the Group as a whole to enable people living, working,gathering, and resting to spend their time in a satisfying manner. Our brand of realestate provides a rich array of services that connect people with people and people
with their cities.

Our Group Vision

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

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Contents

Editorial Policy

6 Message from the CEO
12 OUR VALUE MODEL	 12 The Nomura Real Estate Group’s Path	 16 Value Creation Model	 18	The Nomura Real Estate Group’s
Distinctive Qualities	 20 Management Strategy
Additional information can be found on our website.

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

	 23 Message from the CFO

Eiji Kutsukake
President and Representative Director, Group CEO

	 26 Financial and Non-Financial Data	 28 10-Year Summary

Integrated report
Financial and non-financial information,
value creation models, business unit overviews, etc.

www.nomura-re-hd.co.jp/english/ir/ir_library/
annualreport.html
Company information
Company profile and history, list of corporate officers and organizational chart, corporate governance, list of Group companies, etc.

www.nomura-re-hd.co.jp/english/company/
Investor information
Management policies, IR library, information
for individual investors, FAQs, etc.

www.nomura-re-hd.co.jp/english/ir/
CSR reportSocial and environmental initiatives,
activities that contribute to society, etc.

www.nomura-re-hd.co.jp/english/csr/
Nomura Real Estate Holdings, Inc. has been selected in
MSCI ESG indexes.

30	Message from the COO & CSR Officer
34 Overview by Business Unit	 34 At a Glance	 36 Residential Development Business Unit	 40 Leasing Business Unit

Seiichi Miyajima
Executive Vice President and Representative Director, Group COO

	 44 Investment Management Business Unit	 48 Property Brokerage & CRE Business Unit
	 52	Property & Facility Management
Business Unit

56 Feature:	The Nomura Real Estate Group’s
Urban Development
66 Human Resource Management
70 Structure of Business Management	 70	Interview with the Chairman and
an External Director	 74 Corporate Governance

Printing this logo does not imply any MSCI endorsement or approval of Nomura
Real Estate Group products and services. Neither is this an advertisement nor
promotion for MSCI.

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

	 82 Corporate Officers
85	Corporate andFinancial Information

Period covered by the report
This report mainly covers the period from April 1, 2016 to March 31, 2017. Parts
may discuss information from times prior to this period or activities or outlooks fortimes following this period.
Guidelines concerning the disclosure of non-financial information• Global Reporting Initiative’s G4 Sustainability Reporting Standards• ISO 26000 Guidance on Social Responsibility
Scope of this report
Nomura Real Estate Holdings, Inc. and Nomura Real Estate Group companies (19)4

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Forward-looking statements
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 nothistorical facts. Rather, they are estimates, forecasts, and projections based on information currently available to the Company andare subject to a number of risks and uncertainties, which include economic trends, intensification of competition in the real estateindustry, the legal and taxation systems, and other regulations. As such, actual results may differ from those projected.

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Message from the CEO

An Ambitious 60 Years andan Ambitious Future   This year, 2017, marks the 60th anniversary of
the founding of the company that originated theGroup, Nomura Real Estate Development, in
1957. Looking back, although we cannot claim
sufficient management resources, we haveachieved value creation in a cutting-edge andoriginal fashion while daring to transform ourselves from whenever the times required. We
also pride ourselves on always considering theneeds of the customer and confronting the
problems facing society head on. Whenever wewere overwhelmed by the economic climate andunable to conduct management in the ways we
had expected, we showed absolute perseverance and our executives and regular employees
came together to rise above those circumstances. I believe that overcoming such difficulties strengthened the Company.
Fortunately, the Group’s business has
expanded with the development of society overthese past 60 years, and these expanded business areas have become indispensable pillars ofGroup earnings. Furthermore, such businessexpansion has led to an increase in options forresource allocation as well as to a broadening in

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Integrated Report 2017

the scope of management. However, even as
our business expands, we can never neglect our
dedication to quality and to meeting our customers’ needs. For a Group established without
abundant resources that was in competition withcompanies with more comprehensive management resources, this dedication to quality and tomeeting our customers’ needs was our way in.
Our predecessors were particularly dedicatedto providing high-quality products and services
to meet the needs of both customers and society, and this is something that we have carriedon as part of our identity. This is a difficult pathto walk; however, by challenging ourselves, wehave raised the bar. As a result, these inheritedstrengths cannot be easily duplicated. We are
currently working to consolidate these strengths,
beginning with urban-type compact towns, tocreate new value by achieving successful functionality and building cities that are loved forgenerations.
Our promise is to build cities that connect
today with tomorrow’s possibilities according to
our Group Vision—New Value, Real Value. Thatis how we will continue to innovate and persevere with the goal of enriching the lives of ourcustomers.

MESSAGE FROM THE CEO

By Building Cities That Connect
Today with Tomorrow’s Possibilities,
We Will Continue to Innovate
and Persevere with the Goal ofEnriching the Lives of
Our Customers.

Eiji Kutsukake
President and Representative Director,
Group CEO
Nomura Real Estate Holdings, Inc.

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Integrated Report 20177

Message from the CEO

Message from the CEO

Coming Change andBusiness Opportunities

Seizing change and acting instantly

Seizing Change and Transforming It
into Growth   Real estate is an industry subject to importantsocial responsibilities. To continue to be of value
as times change, we must reconcile our role insociety with a changing world. That is why I
describe real estate, both internally and externally, as a forward-looking and change-oriented
industry. Because real estate has a long-termbusiness cycle, we must take a five- to ten-year
view, anticipating gradual changes in the environment. At the same time, planning for the next

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Nomura Real Estate Holdings, Inc.

Integrated Report 201710 years does not guarantee growth. Moreover,overlooking significant changes on the horizon
can lead to missed opportunities for growth,leaving behind unexpected losses for the people
yet to come.
With the long business cycles in the realestate industry, it is easy to become insensitive
to changes occurring right in front of you.
Neglecting those changes could lead to judgment failures when it comes to making investment decisions. However, it is our on-site
employees who carry the business and mustremain sensitive to such changes while working
all out to create new value in their respective
positions. I believe that we should work toward
overall optimization by seizing the particulars ofeach change we are confronted with to makethe most optimal decisions at the time. Thosechanges can reveal business challenges andopportunities, leaving the Company free fromthe restrictions posed by precedence and offering insight into how to approach decisions on   Development Sector
The multifunctional and highly convenient urbantype compact towns that have become our
focus fulfill the needs of not only the families
who comprise our main customer base but also
those of senior citizens, a demographic that isincreasing rapidly as a percentage of the population amid a declining birthrate and the aging ofsociety. These compact towns condense residences, offices, hospitals, and commercial andpublic facilities into a consolidated area, as thename suggests, with the combined knowledgeof each business unit indispensable to theirconstruction. For this reason, I have focused on
encouraging cooperation within the organization
since I began my work as CEO. As a result, ourideal definition of an urban-type compact town
has been gradually solidifying as opportunities
for cooperation between business units
increase.
While competition is heating up in the mixeduse development industry, I believe our focus
should be on displaying our superior ability interms of urban development, which we havecultivated through our residential development

Taking on the creation of high-added-valueurban-type compact towns

MESSAGE FROM THE CEO

management resource allocation, regardless ofdepartment. This represents the work of themost comprehensive position in the Group—the
job of CEO.
I have gained a great deal of experience overroughly 30 years of work in capital markets,
which can change in an instant. I believe that theability to seize change that I attained from thatexperience has aided me in making management decisions for the Group. By marshaling theopportunities that seem most optimal at thetime, according to approaching changes, as partof a forward-looking strategy, I am confident inour power to achieve growth into the future.
Management to me entails feeling out
changes, both right in front of us and on thehorizon, while being prepared for fluctuations inshort-term results caused by changes in external environments and executing all duties withdetermination and a commitment to results.

business. Our dedication to leading the industry
in terms of performance and design is a given,and in order to further improve our abilities, weare pursuing community-centered development,
starting with Funabashi Morino City. Specifically,
we are actively working toward building after-sale
relationships with residents to create cities centered on their residents with the ultimate goal ofusing what we learn in future urban development
projects (for details, see the Feature section on
page 56). Because we have been involved inresidential development for many years, we havean increasing number of aging condominiums
and detached residences. Accordingly, we areaccelerating initiatives to provide large-scale andemergency repair services.
Meanwhile, we are pursuing large-scale
redevelopment initiatives in regions that are
expected to see demand over the medium tolong term, such as the area from Tokyo to
Shinagawa and Toranomon. These regions do
not simply require office buildings, but are seeing
an increasing need for development that includes
commercial facilities, hotels, and residences. Our
focus is on mixed-use development, including
the redevelopment of Shibaura 1-Chome.
With a high risk of disaster and buildings
representing roughly 5 million m2 of outdated
earthquake proofing built to specifications formulated before 1981 in the 23 wards of Tokyo,
reconstruction is becoming a pressing issue.
Using our development know-how gained
through medium-sized projects such as PMO,
we are stepping up initiatives to address thisissue, ensuring sufficient business opportunities
moving forward.

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Integrated Report 20179

Message from the CEO

Message from the CEO

Passion for Development andServices and Optimal Creationof Added Value Based on
Customer Feedback   For the past decade or so, the Group has beenstrengthening both creation and service brands,
including PROUD in the Development Sector
and Nomura Chukai + in the Service &Management Sector. Our brands form the foundation of our growth strategy, which calls forcreating inimitable products and services and

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Reflecting development needs
through customer dialogues andattention to markets

overwhelming passion, without which success
is impossible.
The Group has shown a tenacious ability tostart from nothing and persevere. In addition tobuilding a distinctive business model, I strongly
believe that it is vital to not falter, even given
significant difficulties, but to persevere with
passion.
Balance, however, is necessary. Being too
consumed with creation and losing sight ofcustomer needs defeat the purpose. Customer
support is vital when it comes to desired product value. In terms of performance, this support
determines not only intangibles, such as brandpower and administrative abilities, but the valueof condominiums, detached residences, andoffices. Moreover, added value is created where
processes for using dialogues with customers
and attention to markets to reflect needs indevelopment overlap. In other words, researchtrumps marketing.
Moving forward, we need to pursue a balance between passion for creation and thorough research based on dialogues withcustomers and attention to markets.

which has asset-based profit creation as its
foundation, in proportion to growth in theService & Management Sector, which pursues
earnings without the use of assets. This strategy
is unique in the real estate industry and it is how
we will raise both corporate value for the Groupand value for our shareholders and investors.
While I believe that the brand we have built
and our performance in the Residential
Development Business Unit, for one, as well as
our competitive advantage in various markets todate, are evidence of how we are trusted, thiswas achieved through the hard work of those
who came before us, and not only thanks to theefforts of current executives and employees. To
preserve our formidable presence in the industry,
we need to maintain a level of perseverance

similar to that achieved at the Company’s founding. As the work of those who came before
contributed to our current competitive advantage, we must also strive to create a favorable
position for the Company in the future. The
Group grows when all employees persevere, andI want to ensure our continuation as a strong
corporate group.
I appreciate and ask for the continued support of all of our shareholders, investors, andother stakeholders.

MESSAGE FROM THE CEO

Service & Management Sector
In the Investment Management Business Unit,
the real estate securitization market, including
listed REITs in particular, is showing signs of
expansion in the medium to long term due to arise in asset high expectations for growth ofassets of the REITs and funds we manage,
including Group REITs, which represent some of
the largest assets in Japan.
In the Property Brokerage & CRE Business
Unit, we anticipate steady expansion over the
medium to long term as demand for existing
properties shows signs of rising in the domestic
real estate market. In response, we are working
to expand our strengths and use our solid
branding and sales capabilities to drive an
increase in shares in the midst of such an environment. We also plan to prepare systems forbuying and reselling PROUD properties to stayin line with the lifestyle changes that come withaging.
In the Property & Facility Management
Business Unit, we predict that services for theelderly will be an important part of future, largescale mixed-use developments and haverecently invested and become involved in theelderly housing business. As this business
requires the procurement and cultivation ofhuman resources, and their correspondingknowledge and energy, to support the highquality services we insist on, expanding thisbusiness will not fall to the Group alone, but will
be conducted together with our exceptional
partners.

Eiji Kutsukake
President and Representative Director, Group CEO
Nomura Real Estate Holdings, Inc.

The Group Grows WhenAll Employees Persevere   
The Group has often been seen as a corporategroup centered on residential development.
Now, however, growth achieved by leveraging
the balance between the Development Sector,
which represents a source for added value
creation, and the Service & Management Sector,
which has a high level of asset efficiency,
embodies a strength for the Group. Our strategy
is to strive to expand the Development Sector,

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The Nomura Real Estate Group’s Path

Value Creation Model

The Nomura Real Estate Group’s
Distinctive Qualities

OUR VALUE MODEL

01

About Nomura Real Estate Holdings, Inc.

Management Strategy

The Nomura Real EstateGroup’s Path

The Nomura Real Estate Group’s Path of Creation and Ambition
In the 60 years since the Group’s establishment, we have confronted the challenges facing our customers andsociety with honesty and used business to continuously meet their expectations. Moving forward, we will keep
innovating and striving to create a sustainable society.

Operating revenue for the fiscal year ended
March 31, 2017

1978

1988

1994

2002

2011

2017

2017

Completes constructionof the Shinjuku Nomura
Building and moves theheadquarters from
Nihonbashi

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

Starts selling units at A. CITY
Hills and Towers in Hiroshima
Seibu Kyuryo City, Hiroshima

Establishes unified brandname “PROUD” forresidential products andservices

Launches a condominium
brand “OHANA.” OHANA
Yasaka-hagiyama cho

Completes construction of the
Yokohama Nomura Building

Launches a senior service
brand “OKASU.”
OKASU Funabashi

Operating revenue forthe fiscal year ended
March 31, 2005

Breaks throughOperating revenue during the
fiscal year ended September 30, 1982

Breaks through

1957

1961

1963

Spins off from Nomura Securities
Co., Ltd. and launches real estatebusiness focused on leasing andmanagement of office buildings

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

Launches condominium
development business withthe construction of Co-op
Takenomaru in Yokohama* Non-consolidated data for Nomura Real Estate Development until
the fiscal year ended March 2004

1960

1970

1980

¥300 billion¥100 billion

Operating revenue (Billions of yen)

1957

OUR VALUE MODEL¥569.6 billion

1990

Foundation and establishment of management base

2003

2006

Lists Nomura Real Estate
Office Fund, Inc. on theTokyo Stock Exchange

Lists Nomura Real Estate
Holdings, Inc. on the First Sectionof the Tokyo Stock Exchange

2000

2010

2008

2008

2010

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

NREG Toshiba Building
Co., Ltd. joins the Nomura
We’ve achieved steady
growth by delivering various
real Real Estate Group

Completes construction of
the Nihonbashi Muromachi
Nomura Building

2017

Revenue expansion: Establishment of a system to supply condominiums and development of each business
Establishment of Nomura Real Estate Holdings, Inc.

Business expansion and development into a comprehensive real estate business
Improved performance under a stable growth economy

Post economic bubble–
Focus on condominium businessand financing reform

Progress since being listed and response to the global financial crisis
Overcoming of a harsh economic environment and proceeding to the next stage of growth
Value creation through continuous change
Improvements to management systems and tackling of a new stage ofbusiness: Establishment of new Mid- to Long-term Business Plan

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The Nomura Real Estate Group’s Path

Value Creation Model

The Nomura Real Estate Group’s
Distinctive Qualities

OUR VALUE MODEL

01

About Nomura Real Estate Holdings, Inc.

Management Strategy

The Nomura Real EstateGroup’s Path

The New Value Created through Our Cultivated Strengths

The Source of Our Competitive Advantage III
Thorough Commitment to Quality

Since the time of its inception, and all throughout its history, the sources of the Nomura Real Estate Group’s
competitive advantage have been what makes it different from other companies.

Creating Value by Finding Ways to Satisfy
Market Needs
It has been necessary for the Group, which had not always
found it easy to procure funds, to make its own growth investments through sales of the properties it develops. In order toachieve consistent sales of the products we produce, we haveto put the customer first and foremost and meet their expectations. To avoid the danger of falling short of these expectations,
we have prioritized sensitivity to customer needs as the base of
our value creation strategy. This has given rise to a corporate
culture that values incorporating information on client andmarket needs that we obtain directly from customers into the
feedback process for our products. In product development
and design, too, we are determining how to meet expectations
and adding our wits and enthusiasm to our technical strengthin addition to improving our ability to perform in terms of business promotion. As a result, our products and services boast
a brand power that is at the top of the industry, such as the
products and services of our housing brand PROUD.

From Cooperation to Integration

PROUD CITY Asagaya

Operating as a Cooperative Organization

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Integrated Report 2017

Regular, continuous support for
comfortable living

The New Value Created

The Source of Our Competitive Advantage II
Nomura Real Estate Development, the Group’s originating company, began its history as owner and manager of the Nomura
Securities Company’s new building—starting from scratch,essentially. Nevertheless, in order to compete on the same level
as large, established developers, each and every employee
took on a variety of roles, going beyond the boundaries of theirrespective departments in a unified effort to capitalize on
opportunities when they arose. Organizations in the development industry are generally divided by function. But because
Nomura Real Estate Development had limited resources, it
operated as a cooperative organization to create new value
through original ideas, which has led to the current processintegrating development, sales, and management. We haveextended this cooperative spirit to include business partners
and have taken on numerous forms of added value creation
under a shared mission.

Quality management manuals consolidating
60 years of expertiseOUR VALUE MODELThe Source of Our Competitive Advantage I

Commitment to quality has been an important part of the
Nomura Real Estate Group since its inception, earning it theabsolute trust of both customers and society. One of ourstrengths is the high rate of first-class licensed architects
among our employees. Our commitment to quality takes many
forms, including the preparation of quality management manuals that consolidate the know-how we have cultivated throughhandling roughly 180,000 residences as well as a regular afterservice following completion and transfer of the property, performed on the basis of quality checks. But however much
expertise we accumulate, commitment to quality is a neverending undertaking. And however much we meet customer
needs, offering quality services and acquiring knowledge andskills, an act which includes cultivating human resources, endless determination remains vital, not only in real estate development but also in brokerage and property and facility
management in the service management field.

Business discussion

Buildings and urban infrastructure constructed during periods ofhigh economic growth are not only deteriorating but also areless resistant to earthquakes. Replacing these structures is
becoming a larger social issue. Restoring buildings and communities, improving safety and accessibility, and raising the valueof structures and neighborhoods through community-building
are requirements of the era. Furthermore, population decline andan aging population coupled with a falling birth rate, changes in
the family structure and lifestyles, and social progress for women
have led to diversification of desired living and working situations.
It has become even more necessary to address the non-physicalside of re-establishing the power of local communities, such assupporting multigenerational and local interaction, working
toward community-building and revitalization, and responding to
the increasing healthcare and nursing care needs of the elderly,
in particular. Given the current situation, the Group’s goal is toboth be a cooperative organization and achieve urban
development with an eye to the future—development that goes

Offices

Fitness

Seniors

beyond the mere construction of buildings and integrates thetechnological, management, and developmental capabilities wehave cultivated over the years. Giving careful consideration towhat it is people want and with attention to growing together
with society, we will strive to stay one step ahead of the industry.

ZUTTOCITY(Redevelopment project in frontof JR Tsukaguchi Station)

Residences

Funabashi Morino City

Retailfacilities

HotelsServicedapartments

Integrate know-how cultivated in residence-centric fields to create large-scale mixed-use developmentscharacteristic of the Nomura Real Estate Group

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The Nomura Real Estate Group’s Path

Value Creation Model

The Nomura Real Estate Group’s
Distinctive Qualities

OUR VALUE MODEL

02

About Nomura Real Estate Holdings, Inc.

Management Strategy

Value Creation Model

Our Group Vision

Building a Better Tomorrow through Business and Services

Mid- to Long-term Business Plan

New Value, Real Value

Social Changes andShifts in Customer Needs

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

Declining birth rate and aging population
Urban renewal and local revitalization• Deterioration of existing stocks• Shift from savings to investment• Acceleration in globalization••

OUR VALUE MODEL

As our business has grown, so too has our number of employees and Group companies. But our priorities, handed
down since the Company began, remain unchanged. Moving forward, we will continue to offer new value toour clients and society through innovative business and services while fully demonstrating our strengths
in anticipation of social changes and diversifying customer needs.

Implementing a growth model that emphasizes continuous expansion of revenue with ensured highasset efficiency by appropriately responding to changes in the social environment
Key strategy (1)Expand business volume and business domains in the Development Sector

Key strategy (2)Demonstrate differentiation and a competitive edge in the Service & Management Sector

Key strategy (3)Increase and reinforce customer base via Group-wide collaboration

Business Activities
Demonstrated Strengths
Creating value by finding ways tosatisfy market needs
Operating as a cooperative
organization
Thorough commitment to quality

Our Priorities Handed Down
Since Our Establishment
The customer comes first• New value creation through original ideas• Endless determination• Growing together with society•

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We offer products andservices with high added
value in a broad range offields, from the Development
Sector to the Service &Management Sector.

Development Sector
Residential Development
Business Unit

Leasing Business Unit

For information on growth strategies,
please see Business Unit Overviewson page 34.

Service & Management Sector
Investment Management
Business Unit

Property Brokerage & CRE
Business Unit

Property & Facility
Management Business Unit

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The Nomura Real Estate Group’s Path

The Nomura Real Estate Group’s
Distinctive Qualities

Value Creation Model

OUR VALUE MODEL

03

About Nomura Real Estate Holdings, Inc.

Management Strategy

The Nomura Real EstateGroup’s Distinctive Qualities

High-Efficiency Management

Earnings Foundation Resilient to Environmental Changes
We work to balance our three businesses: the stock business (long term), the property sales business (short term),
and the non-asset business, in accordance with the risks inherent to each. As a result, we are able to produce
stable earnings while controlling risks, such as market fluctuations, to the extent it is possible.

Sustainable Revenue Growth through High Asset Efficiency

Well-Balanced Business Portfolio
Top-class asset efficiency in the industry

Stock BusinessLeasing

Non-Asset Business

ROE

4.9%

10.1%

4.5%
3.7%
3.9%
3.6%
3.1%
3.5%

6.7%
6.6%
10.9%
7.3%
6.4%
8.0%

Profit Growth Chart

Company-wide profit

ReturnThe Group
Company A
Company B
Company C
Company D
Company E
Company F

ROA

Stock business
Property sales business

Non-asset business(Investment Management /Property Brokerage & CRE /Property & Facility Management)(Preliminary calculations basedon FY17/3 results)

Property Sales Business

OUR VALUE MODEL

By combining the stock business which acquires rent, the property sales business which secures sales revenue
and the non-asset business, we are able to achieve top-class, high asset efficiency among major competitors inthese industries.

Residential Development
Property Development

Investment Management /Property Brokerage & CRE /Property & Facility
Management

Sustainable Cash Flow Creation

Time

Progress from Residence-Centered to Well-Balanced Profit Structure
The first year of the former
Mid- to Long-term Business Plan

The first year of the current
Mid- to Long-term Business Plan

Cash Flows (Revenue) and Investment Flowchart
Rental income (stock)
Investment of acquired /procured funds

Sales income(property sales)

Buildings

27%

34%

12%

FY17/03
operating profit

51%
FY13/03
operating profit

Condominiums
Commissions

36%

77.2 billion¥

58.3 billion¥

40%
Development

Stock

Sell off

Sell

Development
Residential Development Business Unit

Leasing Business Unit

Non-asset business (Investment Management / Property Brokerage & CRE / Property & Facility Management)

Non-asset business(Investment Management / Property Brokerage & CRE / Property & Facility Management)

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19

The Nomura Real Estate Group’s Path

Value Creation Model

The Nomura Real Estate Group’s
Distinctive Qualities

OUR VALUE MODELManagement Strategy

04

About Nomura Real Estate Holdings, Inc.

Management Strategy

Mid- to Long-term Business Plan (–2025.3)—Creating Value through Change
To achieve our Group Vision and growth model, we will work to realize sustainable growth and to continually create
new value for society by implementing three strategies.

Investment Plan
Investment and asset expansion

Total Assets
Billions of yenPhase 33,000

OUR VALUE MODEL

Phase 2Phase 11,500

Our Group Vision

Key Strategy (1)Integrating all that is precious to people and communities, we build cities–dynamic stages that connect todaywith tomorrow’s possibilities–and embrace every
moment of life’s pursuits. We create new value, social
value, and, above all, real value.

Expand business volume and business domains
in the Development Sector’16/03

Key Strategy (2)Demonstrate differentiation and a competitive edgein the Service & Management Sector

Our Growth Model

Increase and reinforce customer base via
Group-wide collaboration

Residential
Development
Business Unit

Leasing
Business Unit

Long-Term Profit Goals
Realize sustainable revenue growth while
maintaining a stable financial foundationand high asset efficiency

Billions of yen
180

Phase 2Phase 1

120

Total

Phase 3¥150 billion level

Services Management Sector

Phase 1

Phase 2Phase 3

Total

Investment

950.0

1,100.0

1,200.0

3,250.0

Recovery

900.0

1,000.0

1,100.0

3,000.0

Net investment

50.0

100.0

100.0

250.0

Recovery-to-investment ratio

95%

91%

92%

92%

Investment

400.0

600.0

800.0

1,800.0

Recovery

150.0

300.0

400.0

850.0

Net investment

250.0

300.0

400.0

950.0

Recovery-to-investment ratio

38%

50%

50%

47%

50.0–100.0

50.0–100.0

50.0–100.0

200.0

Investment

1,425.0

1,775.0

2,050.0

5,250.0

Recovery

1,050.0

1,300.0

1,500.03,850.0

Net investment

375.0

475.0

550.0

1,400.0

Recovery-to-investment ratio

74%

73%

73%

73%

Financial and Capital Policies
Asset Efficiency

60’17/03

Residential Development Business Unit

Leasing Business Unit

’18/03(forecast)’19/03(plan)’22/03(plan)•	Top-class asset efficiency
among major competitors
in the industry’25/03(plan)

Billions of yen’17/3

Phase 1

Phase 2Phase 3

Residential Development Business Unit

27.7

30.0

40.0

44.0–48.0

Leasing Business Unit

32.5

35.0

40.0

52.0–56.0

Service & Management Sector

22.0

23.5

35.0

40.0–44.0

Integrated Report 2017

Capital Efficiency

ROA

Above

Service & Management Sector

Profit Plan by Business Unit (Operating Income)

Nomura Real Estate Holdings, Inc.

’25/03(plan)¥110 billion level¥85.0 billion’16/03’22/03(plan)

Billions of yen

Strategic investment

Operating Profit

20

Leasing Business Unit

’19/03(plan)

Investment PlanKey Strategy (3)Implementing a growth model that emphasizes continuous expansion of revenue with ensured high asset efficiency by appropriately responding to changes in thesocial environment.

Residential Development Business Unit

’17/03

5%

Financial Soundness

30

ROE

10

%
level

Shareholder Returns•	Financial foundation that enables Shareholders’ equity ratio
flexible growth investment•	A level that enables sustainablebusiness investment amid
sudden environmental changes•	Capital efficiency in linewith shareholder
expectations

%

level

•	Shareholder returns are
made in consideration ofstability and sustainability
in terms of continuous
profit growth

Dividend payout ratio

30%

Approx.

Nomura Real Estate Holdings, Inc.

Integrated Report 201721

The Nomura Real Estate Group’s Path

Value Creation Model

The Nomura Real Estate Group’s
Distinctive Qualities

Management Strategy

Message from the CFO
OUR VALUE MODEL
About Nomura Real Estate Holdings, Inc.

04

Management Strategy

Progress in the Development Sector• Aiming for medium- to long-term growth, we are steadily expanding existing businesses and sowing seeds of growth for new businesses.
• In Residential Development, we will secure business volume for FY20/3 onward while recovering our business speed.
StatusFuture issues / strategies

Existing areas•	Lower profitability due to high market fluctuation.
•	No. 1 results in ongoing residential redevelopment
projects.

•	Recover business speed. Boost marketing research skills.
•	Expand redevelopment stock/plans for future growth.

New areas•	Secured business opportunities in 4 cities(Regional core cities) (Toyama, Niigata, Shizuoka, Okayama).
Residential
Development New areas•	New acquisition in China / Southeast Asia.
(overseas)•	Satisfactory sale of project in HCMC, Vietnam.
•	Launch of renovation business.
Business for owners•	Entry into home / living assistance business.
of condos we sold*(Established First Living Assistance)

Leasing•	Expand business area and build business promotion
strategy through alliance.
•	Build alliances with local, high-quality partners.
•	Expand targeted countries and business enhancing
investment ratio.
•	Early contribution to revenues.
•	Contribution to Group revenues by strengthening ofcustomer relations.

Growth of leasing
revenues•	Focus on the Tokyo metropolitan area (large-scale
mixed-use redevelopment, etc.).
•	600 billion yen in funds to invest by Phase 3.

•	Promote acquisition targeting investment plan of
900 billion yen.

Growth of sales
revenues•	Utilizing Group synergy to provide leasing value chain,etc., property stock for sale expanded to approx.
250 billion yen.

•	Maintain acquisition and sales of 100 billion yen for eachfiscal year.

New areas(overseas)•	Considering specifically on new properties inSoutheast Asia.

•	Focus on cities with higher priority.
•	Look to expand acquirable assets.

Entry into new
sectors•	Secured projects in the hotel business.

•	Develop products and brand aimed at continuous
business expansion.

* Business deriving from condos and houses sold in the past.

Progress in the Service & Management Sector•	Each business unit achieved business growth with faster speed than our expectations.
•	We aim to accelerate expansion of market share and new business initiatives as pillars to support the Group’s growth,and achieve earnings that exceed forecasts.
Items

StatusFuture issues / strategies

Listed REIT (NMF)• One of Japan’s largest REITs with 1 trillion yen in assets
due to merger with Top REIT.

• Grow assets to 1.5 trillion yen in 5-6 years’ time byachieving external growth based on leasing value chain.

Investment
Private REIT (NPR)
Management• Ongoing capital increase backed by strong demand forfunds. Asset growth to 180 billion yen.

• Steady growth to gain 200 billion yen in assets.
• Accept more long-term stable investors.

Private funds
Stock funds• Promoted healthcare funds.
• Built steady track record in J-REITs.

• Develop new private fund products aimed at making it the
3rd core revenue stream and expand J-REIT AUM.

Retail business• Expanded to 73 sites as doubling revenue over 5 years
through development of diverse services.

• Build structure with 100 sites and 1,000 sales staff by
FY22/3 to expand market share.

• Restructured Corporate Real Estate Service Divisionof Nomura Real Estate Development andNomura Real Estate Urban Net.
• Launched new branches in Fukuoka and Kyoto• Improve productivity through effects of restructuring.

Expansion of stockof properties undermanagement• Growth due to increase in properties supplied by
the Company.

• Secure personnel with the aim of expanding operations.
• Improve productivity through workstyle reform.

Business base
expansion
Evolution of service
menus• Growth due to expansion of orders for large-scalecondominium repair work.

• Expand PPP/PFI businesses.
• Expand energy management business.

• Reduced withdrawal rate through enhanced customer
satisfaction and improved profitability.

• Expand member numbers steadily.
• Boost new club openings.

• Announced OUKAS elderly housing brand.
• Planning to open first project, OUKAS Funabashi, in
October 2017.
• Business and capital tie-ups with nursing care providers.

• Establish business model which plays an important role of“Urban-type Compact Town.”• Supply elderly housing of 5,000 units in 40 buildings in
10 years.

Property
Brokerage &CREWholesale business

Property &Facility
Management Fitness clubbusiness

Senior business

22

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

OUR VALUE MODEL

Items

Hiroyuki Kimura
Director, Executive Officer
Group CFO

Raising Group Valuein Capital Markets throughActive Dialogues
Mid- to Long-term Business Plan Progress

Our Business Portfolio Approach

We began our new Mid- to Long-term Business Plan in thefiscal year ended March 31, 2017, with each business unit
steadily pursuing the goals established within. As a result,while earnings declined in the Residential Development
Business Unit amid recent market fluctuations, operating
profit reached ¥77.2 billion due to steady growth in the
Leasing Business Unit and Service & Management Sector.
Medium- to long-term initiatives are also proceedingsmoothly in each business unit. In the Development Sector,
we are steadily implementing initiatives to expand existing
business areas and pursue new businesses, including overseas businesses. In the Service & Management Sector,
business growth has outpaced expectations in every business unit.
Our challenge moving forward is to execute course
corrections appropriate to conditions in each business unit
while striving for the targets of each phase laid out in theMid- to Long-term Business Plan.

In terms of the Group’s business portfolio, I believe the way
we combine the stock business (long term) with the property
sales business (short term) and the fee business is a crucial
point. By balancing these three businesses, we can diversify
risks in the portfolio as a whole.
Projects in the disposition business (short term) spanroughly three years from planning to sales, with profits andlosses fluctuating in response to short-term market
changes. When a new project starts three years after theprevious one, it is implemented in accordance with market
conditions at the time.
On the other hand, earnings in the stock business (longterm) are stable in the short term, but long-term market
fluctuation risks representing capital loss that can persist forlong periods of time are also present, depending on when
the property is readied. When markets are performing
well, this is not a problem. However, because long-term

Nomura Real Estate Holdings, Inc.

Integrated Report 201723

Message from the CFO

Message from the CFO

ROE / ROAInterest-Bearing Debt and Interest Paid%

Billions of yen
12

Billions of yen

1,000

10.1

16
810.1

9

750

12

7.5

500

3

250

13

14

15

16

17

13

ROA

14

15

16

17
As of March 31

Interest-bearing debt

Shareholders’ Equity and Shareholders’ Equity Ratio

8

4Years ended March 31
ROEInterest paid (right scale)

Annual Cash Dividends and Dividend Payout Ratio

Billions of yen

%

600

40

80

Yen%

30

60

300

20

40

20

150

10

20

10

70

40

481.3
30.2

450

13

14

15

16

17

30.5

14

As of March 31
Shareholders’ equity

Shareholders’ equity ratio (right scale)worsening of market conditions and damage to asset value
could adversely influence ratings, there is substantial risk tobalance sheets in this business.
In the fiscal year ended March 31, 2017, earnings
decreased in the housing business, which is a part of theproperty sales business, with short-term market fluctuations.
Meanwhile, earnings held stable in the leasing business,
which is a part of the stock business, with the fee businessalso achieving steady growth. This enabled the Company as
a whole to secure stable earnings. This conclusion hasreconfirmed the importance of maintaining the balance
between these three businesses, and we will continue topursue business development in line with this policy
moving forward.
In terms of the management benchmarks for ROE and
ROA established in the Mid- to Long-term Business Plan,
ROE was at 10.1% and ROA at 4.9% last fiscal year, a highlevel for a developer to sustain. This was accomplished by

24

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

OUR VALUE MODEL

4.9

6

my intention to conduct management that is consistent withthe expectations of all of our investors while complying withstewardship and corporate governance codes.
Our goal is to conduct even more dialogues with ourinvestors in the future. I ask for your continued understanding and support moving forward.

Annual cash dividends

15

16

30

17

18
(forecast)Years ended March 31
Dividend payout ratio (right scale)maintaining awareness of the balance between the property
sales, stock, and fee businesses, demonstrating the Group’s
uniqueness in this industry.

the shareholders’ equity ratio rose to 30.2% as the resultof a buildup of periodic income. In other words, financial
discipline was maintained.
On the other hand, financing from capital markets isoffered to corporations expected to grow and not for thoseshowing no growth. Accordingly, I have been taking steps tospeak with many of our investors and have our growth strategies evaluated. I have gathered that the Company is known
for its unique ability to balance the three aforementioned
businesses and maintain a high level of efficiency therein.
In terms of returns to investors, we have continued toincrease dividends for five consecutive years along withrealizing profit growth every fiscal year for a number of years.
In the fiscal year ending March 31, 2018, we expect a yearon-year decrease in earnings. However, in order to maintainstable dividend payments and achieve our target dividend
payout ratio of 30%, we plan to increase annual dividends¥5.0 over the previous fiscal year, to ¥70.0. Our remaining
income, which will become retained earnings, will be used
to finance investment in growth moving forward as part ofour efforts to increase corporate value.

Financial Discipline and Capital Policy Approach

For Investors

It may sound extreme, but financing from financial institutions
such as banks is necessary for business continuation, as isfinancing from capital markets necessary for future growth.
Because real estate is a business that requires a large
amount of financing, I have come to realize the importanceof building relationships of trust with financial institutions.
Our self-imposed standard is to maintain the shareholders’equity ratio at roughly 30%, which represents an important
index when it comes to such relationships. Due to expansions of the balance sheet in the fiscal year ended March
31, 2017, interest-bearing debt increased ¥88.2 billion while

The stock market is pervaded by deep-rooted concern forJapan’s long-term economic growth. With domestic markets
as its main focus, the outlook for the Group does not seemencouraging. However, to have our ability to produce stable
and continuous earnings evaluated even in the midst ofsuch an environment, we must explain our processes
more precisely.
While we have already received diverse feedback frominvestors, we at the Company will strive to use our own
knowledge and experience to incorporate a number of business opportunities into the management process. It is also

Column: Investor Engagement
The Company is working to deepen understandingof its long-term growth strategy by actively taking
advantage of opportunities for dialogue between
management and investors. In the fiscal year
ended March 31, 2017, a total of 427 IR meetings
were held with investors. Of these meetings, 199,
or 47%, included members of top management,such as the CEO or CFO. Furthermore, bothdiverse feedback from our investors and shareholder trends are reported to the Board of
Directors for use in forming and communicating
management strategy.

IR meeting with anoverseas investor

IR Meetings with Investors
Times

Overseas: 133

In Japan: 294
IR meetings
attended by the
CEO or CFO in thefiscal year ended
March 31, 201747%

Nomura Real Estate Holdings, Inc.

Integrated Report 201725

Financial and Non-Financial Data

Financial and Non-Financial Data

Main Financial Indicators

Annual Cash Dividends and Dividend Payout Ratio
Yen%

97.3

80

Operating Revenue
Millions of yen
600,000

448,655

411,493434,226

480,983

532,016

569,545

65.00
57.50

569,680

60

40

30.00
43.4

75

45.00

40.00

450,807

25.00

25.00

20

300,000

25.00

30.00

27.1

29.5

12

13

35.00

50

24.9

22.4

23.3

14

15

16

26.5

09

08

10

11



09

10

11

12

13

14

15

16



17
(Years ended March 31)

Annual cash dividends

08

Dividend payout ratio (right scale)

17(Years ended March 31)

Interest-bearing Debt and Interest Paid
Billions of yenMillions of yen

778.0

%

7.9
74,307

69,82158,30850,00034,0122.5

25,00039,27442,0832.8

2.9

49,9395.8

80,912
71,894
5.4

5.6

4.6

14.9

77,271

500

6

408.0

09

3.7

2

10

11

12

13

14

15

16

47,18250,00015.8
35,254

10.0

17,591

08

09

5,471

1.7
10

1.8
11

08

09

10

11

12

47,0051,000 kl / year

20

80

15

60

19,357

5.7

5.9

12

13

10.3

11.2

10.1

10

40

14

15

5

20

16

17

1,200

1,402.6

26.1
891.7
21.4

800

20.7

232.7

235.9

08

09

22.6

1,369.9

24.5

1,313.8

27.1

Interest paid (right scale)

65
0.069

1,369.2
28.8

1,485.4

29.9%

1,593.0

0.067

304.5

317.0

336.2

355.6

10

11

12

13

14

Shareholders’ equity ratio (right scale)*1. ROA = (Operating income + Non-operating income) / Total assets at end of the fiscal year
*2. ROE = Profit attributable to owners of parent / Equity (as average over the fiscal year)

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

34

35

0.058

0.057

31

31

69

74

kl / m2 / year
0.100

0.075

0.053
0.044

0.047

0.045

29

0.050

0.025

10

11

12

13

14

15

16

17
(Years ended March 31)

Energy use intensity (right scale)

30.2

1,000 t-CO2 / year

40

160

30

120

394.0

444.8

80

481.3
10

15

16

t-CO2 / m2 / year

131
0.115
57

130

133

0.200

0.150

0.107

0.102

53

52

0.088

0.086

0.081

47

47

44

0.089

0.089

0.081

40

0.100

0.050

09

17
(As of March 31)

Shareholders’ equity

36

09

20

301.4


Total assets

17

CO2 Emissions and Intensity*4

17.0
400

16


Energy use

Billions of yen

1,405.4

15

7.8

Total Assets, Shareholders’ Equity, and Shareholders’ Equity, Ratio
1,385.5

14

Main Non-Financial Data

ROE (right scale)

1,474.3

13(As of March 31)%(Years ended March 31)

1,600

7.5



0.072


Profit attributable to owners of parent

10

7.8

5

26,844

4,660

8.8

250

38,441

5.9

15

616.7

Oil Converted Energy Use and Intensity*3

Millions of yen

12,500

721.9
617.5

17

Profit Attributable to Owners of Parent and ROE*2

13,770669.2

9.6

ROA (right scale)

25,000

14.3

12.5(Years ended March 31)
Operating income

20

810.1

758.5

7.2

4.9

Interest-bearing debt

08

816.9

13.5

4



759.6

750

8

100,000

75,000Billions of yen

1,000

Operating Profit and ROA*1

26

25

12.7

150,000

37,500100

OUR VALUE MODEL

450,000

517,740

567,159

87.0

10

11

12

13

14

15

16



17
(As of March 31)

CO2 emissions

Emissions intensity (right scale)*3. Up until the fiscal year ended March 31, 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 interest of more than 50,000 m2. Data for the fiscal year ended March 31, 2015 was calculated for 143
facilities, data for the fiscal year ended March 31, 2016 was calculated for 142 facilities, and data for the fiscal year ended March 31, 2017 was calculated for 181 facilities, subject toreporting requirements under the Energy Conservation Act, excluding condominium sales centers.
*4. CO2 emissions are calculated using the emissions coefficient designated in the Tokyo Metropolitan Ordinance on Environmental Preservation.
Nomura Real Estate Holdings, Inc.

Integrated Report 201727

10-Year Summary

10-Year Summary(Millions of yen)
’09/3

’10/3

’11/3

’12/3

’13/3

’14/3

’15/3

’16/3

’17/3

’18/3 (forecast)

Operating revenue

411,493448,655434,226

480,983

450,807517,740

532,016

567,159

569,545569,680

646,000

Operating gross profit

130,391

100,763

105,576

107,222

114,910

134,571

159,335

162,051

177,973

177,241—

Operating profit

69,82134,012

39,27442,08349,93958,30874,307

71,89480,912

77,271

76,000Ordinary profit

60,291

23,702

23,967

26,14934,17345,80664,05863,681

72,67968,95267,000

Profit attributable to owners of parent

35,254

13,770

4,660

5,471

17,591

19,357

26,84438,44147,18247,00544,000Cash flows from operating activities

7,639(108,030)

19,26633,94743,87689,29583,53523,837

13,258(31,889)—

Cash flows from investing activities(13,347)(141,788)(24,571)(33,730)

7,809(2,588)(20,191)(32,476)(59,714)(54,558)—

Cash flows from financing activities

8,790

295,507

13,098(7,485)(63,296)(94,666)(57,858)(8,983)53,63776,575—

Capital investment*

18,17456,662

26,79637,57014,09818,963

21,93838,87150,36761,300—Depreciation and amortization*2

4,892

7,148

10,758

12,835

13,534

13,513

14,333

15,25816,026

16,877—

1

Per Share Data (Yen):
Profit attributable to owners of parent

236.09

92.21

25.69

28.74

92.38

101.61140.70201.28246.42245.10229.31

Cash dividends

30.00

40.00

25.00

25.00

25.00

30.00

35.00

45.00

57.50

65.00

70.00

Total assets

891,700

1,385,531

1,405,424

1,474,331

1,402,624

1,369,949

1,313,887

1,369,226

1,485,449

1,593,093—

Current assets

630,916

740,266

709,618

636,925585,332

535,103496,978

549,300

608,779

684,306—

Inventories

454,621481,489

458,921433,386

396,857

369,667

349,167

429,764

496,910570,888—

Equity investment

92,873109,076

94,88960,94841,89529,578

7,128

6,316

819

2,567

—

Non-current assets

260,783645,265

695,805

837,406

817,292

834,845816,909819,926

876,670

908,786—

Total net assets

235,551

281,375

349,437

357,365

376,486

398,276

418,697

461,031456,408

493,813—Interest-bearing debt

408,016

778,073759,636

816,910758,562

669,268

617,583

616,700

721,900

810,100—

Composition of Operating Revenue*5

FY17/3¥569.6 billion(Millions of yen)

OUR VALUE MODEL

’08/3

15/3

16/3

17/3

Residential Development Business Unit

359,397334,514

329,787

Leasing Business Unit

92,878110,226

115,009

Investment Management Business Unit

9,166

10,973

9,662

Property Brokerage & CRE Business Unit

30,23235,37334,820Property & Facility Management Business Unit

85,83791,552

95,764

Other Business Unit

3,008

1,353

106

Balance Sheet Data (As of March 31):

ROA*3

7.9

2.5

2.8

2.9

3.7

4.6

5.8

5.4

5.6

4.9

—

ROE*4

15.8

5.9

1.7

1.8

5.7

5.9

7.8

10.3

11.2

10.1

—

Operating margin

17.0

7.6

9.0

8.7

11.1

11.3

14.0

12.7

14.2

13.6

11.8

Dividend payout ratio

12.7

43.4

97.3

87.0

27.1

29.5

24.9

22.4

23.3

26.5

30.5

Shareholders’ equity ratio

26.1

17.0

21.4

20.7

22.6

24.5

27.1

28.8

29.9

30.2

Number of employees (people)

4,347

4,998

5,195

5,300

5,399

5,581

5,747

6,029

6,233

6,457

*1. Capital investment represents the amount shown for “Purchase of property, plant and equipment and intangible assets” in the consolidated statements of cash flows.
*2.	Depreciation and amortization represents the amount shown for “Depreciation and amortization” in the consolidated statements of cash flows.
*3. ROA = (Operating income + Non-operating income) / Total assets at end of the fiscal year
*4. ROE = Profit attributable to owners of parent / Equity (as average over the fiscal year)*5.	From the fiscal year ended March 31, 2017, the classification of Yokohama Business Park Heating and Cooling Supply Co., Ltd.
(now: Nomura Real Estate Heating and Cooling Supply Co., Ltd.) has been changed from the Leasing Business Unit to the Property & Facility Management Business Unit.
Due to this change, the full-year results for the fiscal year ended March 31, 2016 are classified under the new classification.

Nomura Real Estate Holdings, Inc.

(Billions of yen)
80.9

(4.1)
+0.8

(1.3)

(0.7)

+1.2

+0.4

+0.1

16/3

Management Benchmarks (%):

28

Operating Profit Factor Analysis

Integrated Report 2017

77.2

17/3

Main Factors
R esidential Development
Business Unit

Decrease in units sold in housing sales—

Leasing Business Unit

Increase in rents due to improved
vacancy rates, etc.

—Investment Management
Business Unit

In response to asset acquisition fees frommerging three REITs in fiscal 2015P roperty Brokerage & CRE
Business Unit

In response to inventory sales infiscal 2015P roperty & Facility Management
Business Unit

Increase in income fromconstruction ordered

Nomura Real Estate Holdings, Inc.

Integrated Report 201729

Message from the COO & CSR Officer

A commitment to social andenvironmental issues has contributed tosustainable growth for the Group.
   Executive Vice PresidentGroup COO

CSR and Earnings Growth on
Equivalent Vectors   
On April 1, 2017, I became the Group COO, taking
on corporate management for not only theDevelopment Sector, which I previously headed,
but the Group as a whole. The role of COO is ofvital importance in further demonstrating our capabilities as a general real estate group and in pursuing mixed-use redevelopment projects, particularly
urban-type compact towns, for which, as a main
focus of the Group, enhancing a wide array ofassets and services is indispensable. I have alsochaired the CSR Committee since April 2016, a job
which has, most notably, involved spreading theword on the CSR aspects of each and every Groupproject, both within the Company and externally. In
terms of real estate development, consideration for
CSR is present from the planning stage onward sothat our products and services can contribute toaddressing the challenges facing society.
With “building cities that connect today withtomorrow’s possibilities” and “embracing every
moment of life’s pursuits” as corporate philosophies, the Group has established safety/security,
the environment, community, and health/comfort
as its four key CSR themes. These philosophiesand key themes support Group CSR activities andare fundamental to our medium- to long-term
growth strategy. In actuality, executive management

has embedded these philosophies in its guidelines
for conduct and decision-making from the beginning as a tool for tackling all types of issues that
may arise. When I became the chair of the CSR
Committee in April 2016, my first duty was to instilla stronger awareness of the importance of CSR in
our employees. Real estate is an industry withstrong connections to the establishment of social
infrastructure and the laying of foundations on
which people build their lives. I believe that thisperspective will enable us to achieve sustainablegrowth for generations to come.
Concern for profits is natural for any company,
but for me, I would rather develop properties that
hold on to their value years down the line, evengiven the up-front costs. For instance, commitment to environmental performance may increase
costs and affect profitability, but only temporarily.
In my experience, each improvement strengthens
our brand power as well as our image as a company deserving of trust and leads to sustainableprofits in the medium to long term. Urban development takes many years to accomplish. For theGroup, with urban development as its corporate
mission, adding richness to the lives of the people
living, working, gathering, and relaxing in our communities is of key importance. We intend to continue providing new value while pursuing this goal.
If we do not keep moving forward, we will fallbehind and lose the approval of society. In this

MESSAGE FROM THE COO & CSR OFFICER

Seiichi Miyajima

Message from the COO & CSR Officer

CSR Promotion Structure
Our Group Vision

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

Four Key Themes for CSR
Safety/Security

Environment

Community

Health/Comfort

CSR Promotion Foundation
Labor: Training diverse human resources
Management structure: Corporate governance, compliance and risk management30

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201731

Message from the COO & CSR Officer

sense, I believe that pursuing CSR with a strong
focus on “building cities that connect today withtomorrow’s possibilities” and “embracing every
moment of life’s pursuits” is indispensable to our
growth strategy.

Tackling Environmental Issues to
Expand Growth Opportunities   

32

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

overseas business has just begun, we hope toattract demand for the expertise we have cultivated in Japan to be used in development projects
overseas in accordance with local requests.

Achieving Growth in Line withSocial Changes   
As a result of population decline due to a low birthrate and aging society, social needs and customer
values are becoming more diverse in Japan. We
must, of course, change with them. The real estateindustry, the Nomura Real Estate Group included,
experienced heavy losses when the economic
bubble burst in the 1990s. Consequently, we lostthe ability to invest our resources freely. In the
midst of those harsh circumstances, we established our PROUD brand. Over the past 15 years,
our customers have been driving the elevation of
the brand, which they have commended. This
success, however, could box us in. There is concern that it will lead to homogeneous responses tochanges at hand. “Diversity” has recently becomea key word among corporations in reference to theuse of human resources. Our approach to diversity
avoids homogeneity and seeks to respond tochanging times and a changing society.
Revising our systems that support child-rearing,
caregiving, and reemployment is a given, but inkeeping with the coming times, we have also
revised our system for evaluating personnel for the
first time in 20 years. The revised system stresses

the cultivation of human resources and fair evaluation of job performance in terms of allowing
employees to fully demonstrate their abilities. The
emphasis of our human resource cultivation strategy is to entrust our employees with their own
development. This concept is part of the Nomura
Real Estate Group’s DNA, and I believe it is thebest way to avoid homogeneity. This does notmean, however, that they are neglected. Advice
offered at the appropriate time is an indispensable
part of development. But when employees aremicromanaged, it can lead to a homogeneous
workforce. Communication is key to respecting
individuality and ideas and entrusting employeeswith their own development. I do not only mean
vertical communication between superiors andsubordinates. I also mean communication thatfacilitates the cooperation between diverse
business units necessary to conduct urban
development in the midst of the social changes I
mentioned earlier from a perspective that is openminded when it comes to real estate. We must
proceed with human resource cultivation and value
creation that pursue overall optimization andcollaboration between departments and units.
In this sense, vertical, horizontal, and diagonal
communication are all of equal importance.
One way we have worked to achieve such
communication is to change the organizational
structure of the Residential Development Business
Unit from one divided by function into landacquisition, development, and management to one
grouped by development area and project. Our
sales representatives are in direct contact withcustomers and have many natural examples athand to use in developing proper responses todiverse customer needs and requests. I feelpositive about our team.

Linking Diversity to Growth   
By being fastidious about superior quality, we havestrived to achieve differentiation while creating newvalue and realized steady earnings growth. I myself
come from a technical field and am quite fastidious. But perfectionism takes a lot of time. Japan is

now in the midst of workstyle reform. Increasing
productivity and decreasing working hours are partof that reform. Reducing time spent on tasks may
require being prepared to sacrifice a bit of ourperfectionism. However, by spending time on
fastidiousness, we will have experience to draw on
the next time we face similar challenges, which will
doubtless increase the speed with which we arrive
at a solution. While this represents another style ofworking, we must first reform inefficient practices
and work to increase productivity. Streamlining will
increase free time, allowing employees to establish
a work-life balance and find increased fulfillment infamily, hobbies, self-improvement, and more. My
hope is that this will result in an evolution of ideas,
creating as yet unforeseen ways of generating
added value. Increasing competitiveness by meansof new value creation achieved through employee
growth and the development of rich ideas and the
production of new cycles for earnings growth are
two concerns moving forward.

MESSAGE FROM THE COO & CSR OFFICER

In 2009, the Group established its Environmental
Statement to promote environmental initiatives,
such as the Residential Development Business
Unit’s PROUD Environmental Evaluation Sheets. In
addition, the Leasing Business Unit instituted apolicy to secure DBJ Green Building Certification
and BELS Certification for properties acquired from
April 2017 and thereafter, including offices, commercial and logistics facilities, and lease housing.
For tenants moved into residences, offices, andcommercial buildings, high environmental performance brings comfort and lower running costs,
including utilities expenses. You could say thatusing office buildings with high environmental
performance levels is in itself part of the tenantcompany’s CSR activities. In addition, while we
profit from selling developed real estate to Group
REITs, those with properties earning above a certain level of environmental certification have been
gaining in approval from capital markets.
External evaluations assess more than just environmental performance. Funabashi Morino City has
earned the ÉcoQuartier quality label and a World
Smart City Award, two examples of acknowledgments for urban development and communitybuilding. Moreover, we are able to use theexperience and know-how gained by taking on
particularly cutting-edge initiatives in the development of other projects.
Evaluations from external sources are easily
recognizable indicators of achievement. We need
to use those evaluations to our benefit in order togain renown for our dedication to performance andgenerate business opportunities. Increased opportunities to build smart cities overseas, should theypresent themselves, will provide further chances touse our extensive know-how. Although our

Message from the COO & CSR Officer

In Closing      
Our strong relationship with the stakeholders mostclosely connected to our business activities is ofextreme importance. In the housing business, forinstance, it is important that our relationship withbuyers does not end with the sale, but continues
after move in. Customers have different needs
corresponding to different life events, from after
move in to management, repair, property brokerage, remodeling, relocation to assisted living facilities, and more. The Group strives to offer services
that meet these needs. The understanding andcooperation of our business associates and partners are indispensable to accurately providing themost ideal products and services. In order to raise
our corporate value for our shareholders andinvestors, we have to go after sustainable growth.
As a corporate group with appeal and inimitable
individuality, we will work determinedly on eachchallenge we face to earn the trust and faith of our
stakeholders moving forward.

Nomura Real Estate Holdings, Inc.

Integrated Report 201733

At a Glance

At a Glance

Composition of Operating Revenue*
Property & Facility
Management
Business Unit

16.4%
Property
Brokerage &CRE Business
Unit

6.0%

Residential Development Business Unit
Other
Business Unit•	Nomura Real Estate Development Co., Ltd.

0.0%

•	Nomura Real Estate Reform Co., Ltd.

Operating Revenue

Operating Profit(Billions of yen)(Billions of yen)

359.3

33.8

31.9
27.7

•	PRIME X. Co., Ltd.
•	First Living Assistance Co., Ltd.

Total

¥569.6 billion

56.4%

15/ 3

16/ 3

17/ 3

15/ 3

16/ 3

17/ 3

Leasing Business Unit•	Nomura Real Estate Development Co., Ltd.

Leasing
Business Unit•	NREG TOSHIBA BUILDING Co., Ltd.

110.2

115.0

92.8

19.7%

32.5

16/ 3

17/ 3

•	NREG TOSHIBA BUILDING FACILITIESCo., Ltd.

15/ 3

Composition of Operating Profit*

8.5%

16/ 3

17/ 3

15/ 3

Investment Management Business Unit
Other
Business Unit•	Nomura Real Estate Development Co., Ltd.

(0.0%)•	Nomura Real Estate Asset Management
Co., Ltd.

10.9

7.3

9.6

9.1

6.0
4.8

FY17/3

Total¥77.2 billion

Residential
Development
Business Unit

33.7%

Investment
Management
Business Unit

15/ 3

16/ 3

17/ 3

35.3

34.8

15/ 3

16/ 3

•	Nomura Real Estate Development Co., Ltd.

Leasing
Business Unit

• In the fiscal year ended March 31, 2017, operating revenue fell ¥1.3
billion, or 11.9%, to ¥9.6 billion, and operating profit fell ¥1.3 billion, or
18.4%, to ¥6.0 billion, due largely to negative repercussions of asset
acquisition fees related to the merger of the three listed REITs the Groupmanages (Nomura Real Estate Office Fund, Inc., Nomura Real Estate
Residential Fund, Inc., and Nomura Real Estate Master Fund, Inc.) in thefiscal year ended March 31, 2016.

17/ 3

Property Brokerage & CRE Business Unit

7.3%

• In the fiscal year ended March 31, 2017, operating revenue rose ¥4.7
billion, or 4.3%, to ¥115.0 billion, and operating profit rose ¥800.0
million, or 2.7%, to ¥32.5 billion, due largely to an increase in rental
income thanks to improvements in vacancy rates in the Leasing
Business Unit and an increase in income from property sales in theproperty development business.

OVERVIEW BY BUSINESS UNIT

31.7
24.4

•	Geo-Akamatsu Co., Ltd.

Property & Facility
Management
Business Unit•	In the fiscal year ended March 31, 2017, operating revenue fell ¥4.7
billion, or 1.4%, to ¥329.7 billion, and operating profit fell ¥4.1 billion, or
12.9%, to ¥27.7 billion, largely due to a decrease in the total number ofunits in the Housing Sales Business. Condominium units solddecreased 478 year on year to 4,885, with the number of detachedhouses sold rising 39 to 682.

Residential
Development
Business Unit

1.7%

11.1%

329.7

FY17/3

Investment
Management
Business Unit

Property
Brokerage &CRE Business
Unit

334.5

Performance Overview• In the fiscal year ended March 31, 2017, operating revenue fell ¥500.0
30.2

9.9
8.4

•	Nomura Real Estate Urban Net Co., Ltd.

million, or 1.6%, to ¥34.8 billion, and operating profit fell ¥700.0 million,
9.1

or 7.8%, to ¥9.1 billion, due largely to negative repercussions ofrecorded income from properties sold in the fiscal year ended March 31,

39.5%

2016, despite an increase in brokerage transaction volume and value in
the Property Brokerage & CRE Business Unit.

15/ 3* The total shown at the center of the pie chart includes “eliminations or
corporate” within segment information. As a result, data differs whentotaling consolidated operating revenue and income from each business
unit. The percentage breakdown is calculated based on the simple total
amount of each segment. The resulting number is rounded to the firstdecimal place, which in some cases may mean the total does not add up
to 100.0%.
Note: Yokohama Business Park Heating and Cooling Supply Co., Ltd.,
which had been classified under the Leasing Business Unit, wastransferred to the Property & Facility Management Business Unit in
the fiscal ended March 31, 2017. In line with this change, the financial results from the fiscal year ended March 31, 2016 have been
calculated under the new classification.

34

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

16/ 3

17/ 3

15/ 3

16/ 3

17/ 3

Property & Facility Management Business Unit•	Nomura Real Estate Development Co., Ltd.

85.8

91.5

95.7

•	Nomura Real Estate Partners Co., Ltd.

6.9
5.7

5.6

15/ 3

16/ 3

•	Nomura Real Estate Life & Sports Co., Ltd.
•	Nomura Real Estate Heating and Cooling
Supply Co., Ltd.

• In the fiscal year ended March 31, 2017, operating revenue rose ¥4.2
billion, or 4.6%, to ¥95.7 billion, and operating profit rose ¥1.2 billion, or
21.9%, to ¥6.9 billion, due largely to increases in work orders, such aslarge-scale repairs of condominiums, and in income from membershipfees in the fitness club business.

•	Nomura Real Estate Wellness Co., Ltd.
•	Nomura Real Estate Amenity Service Co., Ltd.
•	NF Power Service Co., Ltd.
15/ 3

16/ 3

17/ 3

17/ 3

Nomura Real Estate Holdings, Inc.

Integrated Report 201735

Residential Development
Business Unit
To achieve future growth, we are not only pursuing multifunctional andhighly convenient urban development, starting with urban-typecompact towns. We are also accelerating expansion into new areas,
including core regional cities and locations overseas.

PROUD CITY Tsukaguchi Mark Forest

PROUD SEASON Sengawa Ryokukei no Machi

Business Environment
Shigeyuki Yamamoto

Due to increased land prices and construction costs, theselling price for homes has been rising since 2012. However,fiscal 2016 saw a letup, with prices remaining at largely thesame level compared with the previous year. In addition torising selling prices, completed housing inventories have been
increasing, with both currently in the midst of a period ofadjustment (Graph 1). Furthermore, due to increased selling
prices, the number of contracts for newly built condominiums
in the Tokyo metropolitan area has fallen to around 35,000

Executive Officer, in Charge of Residential Development Business Unit

Business Model
Main
Stakeholders

Landowners
Sellers (suppliers)
Brokerage firms

Localcommunities

Clients

Administrative
agencies

Construction
companies

Clients
Local communities

Architectural firms

Construction
and inspection

Millions of yen

10,00054.90

Customer service

Number of
condominium sales

7,500

5,000

Roughly

Operation andmanagement

6,000units

Newly Built and Used Condominium Contracts(Tokyo Metropolitan Area)

45.35

45.40

4,796 Price difference

8.11

36.83

37.29

10.16

60

50

Units
100,000

93,16586,92976,671
77,81874,09170,813 72,597

75,00058,43144.74

41,41442,06940

50,00030

25,000 28,498

31,18328,744

Strengths andSpecial Characteristics

Residential
redevelopment

Number of first-class licensed
architects

No.1

305*

2

*1

Urban-typecompact towns“SMART & GROWING”*3
PROUD Smart Design

PROUD brand reputation

No.1

*4

Nomura Real Estate Group
Customer ClubNEXT PASS10*6

Supply record

LIVING Q CALL*7

180,000units*

5

External Environments

Growthopportunities• Diversifying residential needs due to changes in social environments

09

10

11

12

13

14

15

16

56,733

46,421

72,23240,06043,96135,04307

08

28,871

30,34709

1036,432

31,39711

12

34,77637,18933,798
13

14

15

16

(CY)
Completed housing inventories (left scale)
Newly built condominium prices (right scale)
Used condominium prices (right scale)Price difference between newly built and used condominiums(CY)
Newly built condominiums

Source: C reated by the Company with information from Real Estate Economic InstituteCo., Ltd, for newly built condominium prices and completed housing inventories,
and the public interest incorporated foundation Real Estate Information Network
for East Japan (REINS), for used condominium prices

Used condominiums

Source: Created by the Company with information from Real Estate Economic InstituteCo., Ltd, for the number of newly built condominium contracts, and the public
interest incorporated foundation REINS, for the number of used condominium
contracts

Overview of Mid- to Long-term Business Plan Progress• Continuing trend toward more compact towns driven by the flow of people into urban areas
StatusBusiness risks

45,22046,32477,759 74,836

2,907

2,500

Process integrating development, sales, and management

OVERVIEW BY BUSINESS UNIT

Business Model

Land acquisition

Graph 2

Units

Completion and transfer
After-sales services

Planning anddesignGraph 1

Completed Housing Inventories and Housing Prices of
Newly Built and Used Condominiums(Constructed within the last 10 years)
Sales activities

condominiums. On the other hand, the difference in pricebetween newly built and used condominiums is rising, leading
to an increase in contracts for used units, which surpassed
those for newly built condominiums in 2016.
If we regard the total number of contracts for new and usedcondominiums as aggregate demand for condominiums in theTokyo metropolitan area, actual demand is remaining stable atover 70,000 contracts per year (Graph 2).

• Shrinking market for homes due to Japan’s population decline• Rising home prices due to higher land prices and construction costs*1 According to Company research*2 License holders throughout the Group as of November 30, 2016
*3 The Group’s original vision for next-generation condominiums can be found at: www.proud-web.jp/will/psd/ (Japanese only)*4 According to Internet data applied to the 2016 Condominium Brand Survey published by Nikkei Inc. on May 23, 2016
*5 As of March 31, 2017
*6 Details on the industry’s first maintenance support system can be found at: www.nomura-re-cc.jp/nextpass/ (Japanese only)*7 Details on residence assistance services can be found at: www.nomura-pt.co.jp/qcall/ (Japanese only)

Policy on initiatives moving forward

Existing areas•	Lower profitability due to high market fluctuation.
•	No. 1 results in ongoing residential redevelopment projects.

•	Recover business speed. Boost marketing research skills.
•	Expand redevelopment stock/plans for future growth.

New areas(Regional core cities)•	Secured business opportunities at 4 cities(Toyama, Niigata, Shizuoka, Okayama).

•	Expand business area and build business promotion strategy
through alliance.

New areas (overseas)•	New acquisition in China/Southeast Asia.
•	Satisfactory sale of project in HCMC, Vietnam.

•	Build alliances with local high-quality partners.
•	Expand targeted countries and business enhancing
investment ratio.

Business for ownersof condos we sold*•	Launch of renovation business.
•	Entry into home / living assistance business.
(Established First Living Assistance)•	Early contribution to revenues.
•	Contribution to group revenues by strengthening ofcustomer relations.

* Business deriving from condos and houses sold in the past.

36

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201737

Residential Development Business Unit

Residential Development Business Unit

Expanding the Overseas Business Built on Group Know-How 

Business Policy and Mid- to Long-term Business Plan Progress
Recovering Business Speed in the Housing Sales Business 
In terms of land acquisition, because we will have alreadysecured the roughly 6,000 condominium units in our land bankthat the plan calls for by the fiscal year ending March 31, 2018and 2019, we will concentrate on making careful selections orpurchases for the purpose of ensuring project volume from thefiscal year ending March 31, 2020 and onward (Graph 3).
In terms of business promotion, we are working to bothenhance product appeal and reduce costs. All construction
work on properties for the fiscal year ending March 31, 2018has been ordered. However, in order to further improve productappeal and reduce costs before construction begins in thefiscal year ending March 31, 2019 and thereafter, we will work
to strengthen our process integrating development, sales, andmanagement (Graph 4).
Graph 3In residential sales, we are working to recover businessspeed and secure contracts for 6,000 units per year (Graph 5).
Specifically, along with taking steps to improve market researchcapabilities into such factors as movements in the market
trends for newly built and used housing units and condominiums and demand forecasts, we are partnering with Nomura
Real Estate Urban Net to enhance our sales structure. When it
comes to property sales moving forward, what is most important is to be mindful of customers and the local community
when setting prices. Other matters of importance include
establishing new management styles and pursuing cost optimization in such areas as business expenses by, for instance,
reexamining business activity processes basedon customer needs.

Graph 4

Status of Construction Orders

Trend of Our Condominium Sales

Units

%

Units

4,000

8,000

50

18

19

20

21

Figure 2

Overseas Business Initiatives
Ho Chi Minh City, Vietnam
Total number of units:
Approx. 2,300
Our share: 12.25%
Term to be posted:
FY2021/3

Shenyang, China
Total number of units:
Approx. 4,100
Our share: 11.25%
Term to be posted:
FY2020/3

6,999
5,599

Manila, the Philippines
Total number of units:
Approx. 1,400
Our share: 20.00%
Term to be posted:around FY2022/3

6,000
4,732 4,853

4,000

18

(Years ended / ending March 31)

19

20

14

15

(Years ended / ending March 31)

16

17

18

(Plan)(Years ended / ending March 31)

Creating Environmental and Social Value through Business Activities

Strengthening Our Competitive Edge in Existing Areas of Operation in Japan 
Our policy for securing project volume is to utilize various businesstechniques—including mixed-use development, redevelopment,
and housing renovation—in areas, particularly the Tokyo
metropolitan area, where we already conduct business.
Of the roughly 100 residential redevelopment projects thatare ongoing in the Tokyo metropolitan area, our share isapproximately 30%, which puts us at the top of the industry.
We aim to commercialize the 4,600 properties we will haveaccumulated by Phase 3 as well as the 7,000 properties still in
the planning stage (Graph 6). Moving forward, we will work
together with landowners, local communities, and all of our
stakeholders to attain a strong position in terms of meeting
Graph 6customer needs in reconstruction and redevelopment projects,
such as work in areas surrounding stations.
In addition, urban-type compact towns, the focus of theGroup, are currently being developed in the Tsunashima andHiyoshi districts of Yokohama, Kanagawa. On top ofmultifunctional and highly convenient mixed-use urban
development that utilizes smart infrastructure, we arepromoting positive urban development—such as planning
mixed-use redevelopment, including the elderly housing, of the
Mitaka Shimorenjaku Project (tentative name) in Mitaka,
Tokyo—together with Nomura Real Estate Wellness (Figure 1).

Figure 1

Total Units in the Residence Redevelopment Business

OVERVIEW BY BUSINESS UNIT

Constructions not yet ordered
100

Promote acquisition

In order to utilize the skills and experience acquired by theCompany, we are targeting rapidly growing ASEAN countries
where the focus has shifted from quantity to quality. Specifically,
we are involved in housing projects in Ho Chi Minh City and
Shenyang, China, and mixed-use housing and commercial
projects in Manila (Figure 2).

Graph 5

Our Land Bank
8,000

In the Overseas Business, we plan to invest ¥300.0 billion inboth the Residential Development Business Unit and theLeasing Business Unit by Phase 3 (March 31, 2025), as
mentioned in the M­ id- to Long-term Business Plan.
We are pursuing policy based on alliances with exceptional
local partners for thorough risk management and higher profits.

Certification for Sustainable Coexistence of
Humans and NatureWith the goal of achieving sustainable coexistence between
humans and nature, PROUD CITY Musashino Mitaka, a property extending over 1,600 m2 with a large park and a total of
334 units, has acquired ABINC*1 Certification for biodiversity
as well as an AA rating from JHEP.*2 Such double certification
is a first in the for-sale housing industry in Japan. This property
received ABINC Certification because it was evaluated ashaving over 20% of the building site preserved for biodiversity
contributions. JHEP Certification compares biodiversity value
before and after a project. The PROUD CITY property’s highrating is due to its showing higher value after project completion
than before it commenced, as well as other factors.

By promoting urban development that is appealing to bothresidents and those in the surrounding community, the Groupis working to increase corporate value in a sustainable manner.
Remodeling Proposals to Prepare Multigenerational Homes
to Facilitate Future Nursing Care
The Remodeling Business, which is part of the business forowners of condos we sold, strives to not only meet the needsof individual clients but also contribute to the efficient use ofsocial resources and energy in terms of property use. We arealso taking on social needs, particularly through Nomura Real
Estate Reform, including
proposing remodels to prepare
multigenerational homes tofacilitate nursing care.

Effort to Spread Urban-Type Compact Towns

Units
8,000

Sharp Smart Town Concept (tentative name)

5,100

4,000

1,200

Funabashi Morino City

1,900
1,700

1,700
0

Phase 1
(17–19)Phase 2
(20–22)Phase 3
(23–25)(Years ended / ending March 31)

Housing land bank*1
Project under planning*2*1. Project schedules determined*2. Project schedules not yet determined

38

Nomura Real Estate Holdings, Inc.

ZUTTOCITY

Integrated Report 2017

Mitaka Shimorenjaku Project(tentative name)

Tsunashima
Sustainable Smart Town

PROUD CITY Musashino Mitaka*1	Certified by Association for Business Innovation in harmony with Nature andCommunity (general incorporated association)*2	Certified by Japan Habitat Evaluation and Certification Program(public interest incorporated foundation)

Wheelchair-accessible toilet

Steps removed and benches andhandrails equipped in entryways

Hiyoshi-Minowacho Project(tentative name)
Nomura Real Estate Holdings, Inc.

Integrated Report 201739

Leasing Business Unit
We are promoting property development and conducting
large-scale mixed-use redevelopment, particularly in urban areas
where reconstruction and redevelopment are ongoing.

Yokohama Nomura Building

Nihonbashi Muromachi Nomura Building

Business Environment
Minoru Hatada
Executive Officer, in Charge of Leasing Business Unit

Business Model
Main
Stakeholders

Localcommunities

Landowners
Sellers (suppliers)

Prospective
tenants

Administrative
agencies
Architectural firms

Tenants

Construction
companies

Both vacancy rates and rent levels for office buildings in the fivewards of central Tokyo are gradually improving (Graph 1). This isdue to tenant needs for more office space and over 300,000 m2
in stable new demand per year since the start of Abenomics.
In terms of the outlook for all 23 wards of Tokyo, on the other
hand, there is concern that markets will weaken as supply
diminishes from 2018 onward, but supply levels from 2018
to 2020 are expected to remain consistent with past levels.
Moreover, even if the impact of decreased floor space resulting
from the destruction of older office buildings is temporary, theLocal communities
Graph 1Graph 2%(yen / tsubo*)
24,00010.0Completion

Building Age Distribution in 23 Wards of Tokyo
70
65

Business Model

60

Sales to Group REITs

55

18,730 20,000

7.5

50

Rebuildingin the futureLand
acquisition

Planning anddesignBusiness
promotion

OVERVIEW BY BUSINESS UNIT

Vacancy Rate and Average Rent in Tokyo Central Five Wards
Tenantrecruitment
activities

possibility of rapidly rising vacancy rates may still prove restrictive. Given the possibility of rent levels of S-class buildings
influencing the market as a whole, it will be necessary to monitor shifts in those levels. In addition, small and medium-sizedbuildings built 35 years ago, or more, to outdated earthquake
resistance standards account for roughly 5 million m2 of leasable floor space. Such buildings will need to be rebuilt in the
future, presenting us with a new business opportunity that weare keeping an eye on (Graph 2).

Large-scale mixed-use
redevelopment

Long-term ownership

30
25

3.6

20

12,0002.5

40
35

16,000

5.0

45

15
10
5
0

07 08

Strengths andSpecial Characteristics

Developmentknow-how inmany sectors

Number of first-classlicensed architects

305

*1

156

properties
DBJ Green Building
Certification*3

09

10

11

12

13

14

15

16

17

(Years ended March 31)

Original brand development

Vacancy rate (left scale)Leasing value chain

Average rent (right scale)

Source: Created by the Company with information from Miki Shoji Co. Ltd.
* 1 tsubo = 3.3 m2External Environments

Growthopportunities• Acceleration in urban development in central Tokyo• Increasingly diverse and sophisticated needs from each facility type

• Fall in demand for large-scale office buildings, etc., due to oversupply
Business risks• Cutbacks in offices due to worsening corporate performance• Lack of suitable land for development• Reductions in sales opportunities due to worsening REIT markets

50

Overview of Mid- to Long-term Business Plan Progress
Status• Increase in demand for redevelopment and reconstruction projects given a rising number of aging buildings

40

Source: C reated by the Company with information from the Xymax Real Estate Institute’s
23 Wards of Tokyo New Office Supply 2017, Office Stock Pyramid 2017 report

Stable rent revenue

BELS Certification*4

50
40
30
20
10
0
10
20
30
Vertical axis: Building’s effective age (year)
Horizontal axis: Rentable area (10,000 tsubo)
Small and medium-sized offices (Total floor area of 300—5,000 tsubo)
Large-scale offices (Total floor area of more than 5,000 tsubo)

Policy on initiatives moving forward

Growth of leasing
revenues•	Focus on the Tokyo metropolitan area (large-scale mixed-use
redevelopment etc.).
•	600 billion yen in funds to invest up by phase 3.

•	Promote acquisition targeting for investment plan of
900 billion yen.

Growth of sales
revenues•	Utilizing group synergy to provide leasing value chain, etc.,
property stock for sale expanded to approx. 250 billion yen.

•	Maintain acquisition and sales of 100 billion yen for eachfiscal year.

New areas (overseas)•	Considering specifically on new properties inSoutheast Asia.

•	Focus on cities with higher priority.
•	Look to expand acquirable assets.

Entry into new sectors •	Secured projects in the hotel business.

•	Develop product and brand aimed at continual businessexpansion.

*1 License holders throughout the Group as of November 30, 2016
*2 Results for the period ended March 31, 2017 (including projects under construction)*3 The Development Bank of Japan Inc.’s certification system to support real estate that is considerate of the environment and society*4	Association for Housing Performance Evaluation & Labeling’s (general incorporated association) certification system to provide third-party evaluation of energy saving performancebased on Ministry of Land, Infrastructure and Transport guidelines

40

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201741

Leasing Business Unit

Leasing Business Unit

Expanding Property Development 

Business Policy and Mid- to Long-term Business Plan Progress
Investment Policy 
The Mid- to Long-term Business Plan calls for ¥1.8 trillion in
investment in such activities as large-scale mixed-use redevelopment and property development in pursuit of successful
lease asset acquisition and development. Of that, roughly 50%(¥900.0 billion) will be retained, with the remainder going toGroup REITs (Figure 1). Along with pursuing large-scale mixeduse redevelopment of properties with outdated earthquake
resistance measures requiring reconstruction and redevelopment, we are moving ahead with medium-scale property development of properties such as PMO, GEMS, PROUD FLAT, andLandport. The Group does more than conduct large-scale
development. It also carries out distributed development,
including medium-scale development.

Figure 1

Investment Plan
Billions of yenPhase 1

Phase 2Phase 3

Total

Investment

400

600

800

1,800

Recovery

150

300

400

850

Net investment

250

300

400

950

Return on investment

38%

50%

50%

47%

Leasing Business

Based on project expenses, we acquire roughly ¥100.0 billion
in property development projects that support development
and sales activities centered on the PMO series of office buildings, GEMS series of commercial facilities, PROUD FLAT seriesof lease condominiums, and Landport series of logistics facilities every period. Our policy is to sell the properties wedevelop, and so achieve a steady sales income. Based on thispolicy, we acquired 19 properties valued at ¥92.3 billion andsold nine properties valued at ¥35.3 billion in the fiscal year
ended March 31, 2017 (Figure 3).
Figure 3

Promoting Large-Scale Mixed-Use Redevelopment 

Condominiums(PROUD FLAT, etc.)

Major Redevelopment

Acquisition(Planned aggregate investment)

3 projects(About ¥27.5 billion*)

Sale (Sale value)

1 project (¥5.1 billion)

Acquisition(Planned aggregate investment)

7 projects(About ¥13.5 billion)

Sale (Sale value)

5 projects (¥4.9 billion)

Acquisition(Planned aggregate investment)

4 projects(About ¥6.5 billion)

Sale (Sale value)

1 project (¥5.1 billion)

Acquisition(Planned aggregate investment)

5 projects(About ¥44.0 billion*)

Sale (Sale value)

2 projects (¥20.2 billion)

Billions of yen
70

35

14
Retail facilities(GEMS, etc.)

Logistics facilities(Landport, etc.)

Figure 2

Property Balance Stock (Classified by Completion period)

15

16

17

18

19

20

21

(Years ended / ending March 31)* As of March 31, 2017

Note: O ffices, logistics facilities, and total investment planned for projects include­additional acquisitions made in the fiscal year ended March 31, 2016.

Main use

Area planned to(except forresidential)

Yokohama Nomura Building

Office56,017 m2

Complete

Toranomon Station-Front Redevelopment(Certified as National Strategic Special Zone)

OfficeRetailApprox. 12,000 m2

Start

Complete

Musashi-Koganei Station
2nd District Redevelopment

RetailResidential

Approx. 12,000 m2

Start

Complete

Minamikoiwa 6-chome Redevelopment*

RetailResidential

Approx. 4,500 m2

Soto-Kanda 1-chome Redevelopment

OfficeApprox. 43,000 m2

Iidabashi Station Central Redevelopment

OfficeResidential

Approx. 20,000 m2

Nishi-Azabu 3-chome Redevelopment*

Hotel
Residential

TBD

Nishi-Shinjuku 3-chomeWest Redevelopment*

RetailResidential

Approx. 21,000 m2

Shibaura 1-chome Rebuilding*(Designated as National Strategic Special Zone)

Complex

Approx. 550,000 m2(Total floor area)

Start

Nihonbashi 1-chome Central District Redevelopment*(Proposed as a National Strategic Special Zone)

OfficeTBD

Start

Nishi-Nippori Station-Front Redevelopment*

RetailResidential

Approx. 17,000 m2

Shinbashi Station West Exit Redevelopment*

OfficeRetail

TBD

Nomura Fudosan Ginza Building Rebuilding(Ginza MTR Building)*

OfficeTBD

Phase 1(2017–2019)

Phase 2(2020–2022)

Phase 3(2023–2025)

OVERVIEW BY BUSINESS UNIT

We are looking into replacing a pedestrian walkway and threebridges as well as revitalizing travel by boat and hope to reacha city planning decision within the year. For the as yet unallocated ¥300.0 billion, we are actively examining individual
projects for the purpose of new investment.

By Phase 3, we hope to invest ¥600.0 billion in large-scale
mixed-use redevelopment projects, mainly in central Tokyo(Figure 2). As part of that aspiration, the Shibaura 1-Chome
Redevelopment Project is slated to be the Company’s largest
development project, with floor space covering 550,000 m2.

Project name

Graph 3Acquisition and Sales in FY17/3
Offices(PMO, etc.)

As a result, current property development stock expanded
to roughly ¥250.0 billion as of March 13, 2017 (Graph 3). We are
pursuing more such projects, as well as aim of not only
creating high-value-added products but also carefully selecting
new projects to surpass our performance in the previous fiscal
year and secure steady sales income each period with theultimate goal of contributing to the growth of Group REITs.

Creating Environmental and Social Value through Business Activities

Start

Complete

Complete

Start

Complete

Yokohama Nomura Building
We achieve high business continuity planning (BCP) performance by adopting natural ventilation fins with a vertical external design in consideration of the cityscape of the Minato-mirai
area, mid-story seismic isolation structures, dual fuel generatorsthat use medium-pressure gas, and cogeneration systems. We
have also secured high energy-saving performance throughwater harvesting, energy use visualization, and other systems.
Furthermore, we have passed all types of environmental performance evaluations.
• LEED CS GOLD Certification• SEGES Certification• CASBEE S rank

Raising Value and Customer Satisfaction in Regard to
Bono Sagamiono
Geo-Akamatsu, which is responsible for the commercial facilities field within the Group, conducts in-store training for
employees working in commercial facilities—the point of contact for customers. Bono Sagamiono, which manages theoperations entrusted to it, carries out training on facility management policy, specific customer satisfaction targets,
employee guidelines, and more. By sharing these operational
elements, we are able to offer
high-quality services andstrive to raise both customer
satisfaction and the value ofthe facility as a whole.

Disaster preparedness center

Start

Training

TBD*JV projects
All projects are in the planning stage and are subject to change.
Yokohama Nomura Building

42

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Dual fuel generator

Nomura Real Estate Holdings, Inc.

Integrated Report 201743

Investment Management
Business Unit
REIT markets are expected to grow moving forward.
We will pursue stable fee income, with further growth hinging
on Nomura Real Estate Master Fund, Inc. (NMF),
Japan’s largest diversified REIT in terms of assets, andNomura Real Estate Private REIT, Inc. (NPR),
Japan’s first private placement REIT.

Landport Kashiwa-Shonan I

PMO Shibakoen

Business Environment

Norio Ambe

Current CAP rates have been updated to their lowest-everlevels for each asset type. While there are differences according to asset type, we are currently seeing CAP rates lower than
pre-global financial crisis levels (Graph 1). This downward trendof CAP rates and sales transactions for property development
is taking place amid an environment of increasing prices. On
the other hand, investment demand for real estate remains
steady, with listed REITs, in particular, expected to expand over

Executive Officer, in Charge of Investment Management Business Unit

Business Modelthe medium to long term as a result of such factors as the
Ministry of Land, Infrastructure, Transport and Tourism’s setting
a target of roughly ¥30 trillion for REIT market expansion by
2020. The listed REIT market currently consists of 58 stocks,
with a total market value of ¥12 trillion and nearly ¥16 trillion in
total assets. Private placement REITs are also growing, with 22
stocks and roughly ¥2 trillion in total assets (Graph 2).

Main
Stakeholders

Investors, securities companies, and financial institutions
Graph 1
Brokers
Sellers (suppliers)

Tenants and property management(PM) companies

CAP Rate by Sector

REIT Market in Japan%

Trillions of yen

5

18

5.2

Business Model• Property management

Payouts to investors• Property replacement

4
3.5

2.0
1.4

5.0
0.5

4.3

4.5

Management

3.8

4.1

0.02
6

3.5

3

0.3 0.7 1.3 2.1

2.7
09

10

11

12

13

14

15

1.0

12

2.9

Property acquisition

3.4

5.4

6.8 7.4

0.06

7.6 7.8 8.3

0.2

9.0

11.2

12.7

14.0

15.5

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

16
(CY)

Logistics (Tokyo Bay area)
Retail (Urban retail properties)

Diverse Product Lineup
Strengths andSpecial Characteristics
External Environments

44

Residences (Azabu, Aoyama, Akasaka)
Offices (Marunouchi, Otemachi)

Source: C reated by the Company based on changes in the general incorporated foundation Japan Real Estate Institute’s benchmarks

Japan’s largest diversified REIT: Nomura Real Estate Master Fund, Inc.

OVERVIEW BY BUSINESS UNIT

5.5

Fund procurement

Graph 2(CY)
Listed REITs

Private REITs

Source: C reated by the Company with information from the general incorporated association Association for Real Estate Securitization

Japan’s first private placement REIT: Nomura Real Estate Private REIT, Inc.
Others: Private placement funds (healthcare, etc.) and securities funds (J-REIT, etc.)

Overview of Mid- to Long-term Business Plan Progress
Nomura Real Estate Group’s Strengths

Performance

Use of the leasing value chain (property acquisition and management pipelines)• Stable dividend payouts

Growth support over the medium to long term via strategic property
replacement (SPR)• Extensive track record

Growthopportunities

Business risks

Nomura Real Estate Holdings, Inc.

•	Expanding asset management business with the rise in borderless capital and demand for
asset management

Status

Policy on initiatives moving forward

Listed REIT (NMF)• One of Japan’s largest REITs with 1 trillion yen in assets due tomerger with Top REIT.

• Grow assets to 1.5 trillion yen in 5-6 years’ time by achieving
external growth based on leasing value chain.

Private REIT (NPR)• Ongoing capital increase backed by strong demand for funds.
Asset growth to 180 billion yen.

• Steady growth to gain 200 billion yen in assets.
• Accepting more long-term stable investors.

Private funds
Securities funds• Promoted health care funds.
• Built steady track record in J-REITs.

• Develop new private fund products aiming at making it the 3rdcore revenue stream and expand J-REIT AUM.

• Increasing demand for real estate investment given the low interest rate environment• Worsening fund procurement environment resulting from irregularities in Japanese and global economies• Review of low interest rate policy

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201745

Investment Management Business Unit

Investment Management Business Unit

Private Placement REITs 

Business Policy and Mid- to Long-term Business Plan Progress
Listed REITs 
Not only have CAP rates hit low levels, particularly in central
Tokyo, leasing markets are also continuing to see gradualincreases in rent. In the midst of this environment, Nomura
Real Estate Master Fund (NMF) is implementing strategic property replacement (SPR), with its (and the Group’s) leasing value
chain as a driving force. In the fiscal year ended March 31,
2017, NMF used the leasing value chain to acquire five properties, valued at ¥27.6 billion, from its sponsor, Nomura Real
Estate Development, and sold to it six buildings in desirable
locations, valued at ¥31.3 billion, that were deemed lesscompetitive due to aging as a part of SPR. After Nomura
Real Estate Development reconstructed these properties,
NMF received preferential negotiating rights in the sale ofthese properties, representing a major support in pursuing
medium- to long-term growth.
Beyond working to improve the quality of our portfolio
through SPR, we plan to expand our assets to ¥1.5 trillion in
the next five to six years by such means as using the leasing
value chain to acquire properties (Figure 1).

Figure 1

Nomura Real Estate Master Fund’s Strategic Property Replacement

Nomura Real Estate Private REIT, Inc. (NPR) started Japan’s
first private placement REIT. The private placement REIT
market is steadily expanding given rising asset management
needs for domestic pension funds and financial institutions.
The market has currently expanded to 22 investment management companies and roughly ¥2.0 trillion in total assets, andthis trend is expected to continue moving forward (Graph 3).
In the midst of this environment, NPR, as a private placement REIT pioneer, is establishing a stable track record. It has
Graph 3Graph 4

Balance of Private Placement REIT Assets andInvestment Corporations

Property Acquisition Costs for
Nomura Real Estate Private REIT, Inc.

Billions of yenBillions of yenNo. of investment corporations
20

2,000

Quality
Establish robust fund brandGrowthGrow while maintaining top quality

MasterBecome a highly recognized J-REIT

Established within 3 years: Expand our assets to ¥1 trillion

5-6 years: Expand our assets to ¥1.5 trillion

10 years

been lauded by investors and entrusted with the mediumto long-term funds of a diverse range of investors, including
pension funds and central and regional financial institutions.
As a result, total assets managed by NPR have expanded to¥180.0 billion, with the total cost of property acquisitions at¥162.5 billion. We hope to use careful investment to growassets to around ¥200.0 billion (Graph 4).

200

1,000

10

100

19.4
11

12

13

14

15

16

17*

• Strategic Property Replacement (SPR):
Enhance quality of portfolio• External growth: Focus investments toward
sponsor’s development projects• Assets: Maintain highly stable investment
indicators, including size of assets• Internal growth: Increase rents mainly
in sectors with upside potential• Internal growth: Reinforce property brandby maximizing the management pipeline• Fund brand: Strong reputation based on
quality and growth* Source: C reated by the Company with information from the generalincorporated association Association for Real Estate Securitization• Initial public offering: Improve reputation
among unit holders• Finance: Public offerings based on demand
from equity markets

Acquirement

Acquired from party
outside the Group

Office(As of December 31)

11

38.9
12

54.0

13

16

17*

77.7

14

15

* Cumulative total as of the end of February 2017 (first half)

(As of August 31)

Private Placement Funds Strategic Property Replacement
Maximizing potential value by
redeveloping buildings to be used
for other purposes

162.5

In the private placement fund business, we are taking on new
approaches to structuring products with the hope of attracting
investors that differ from the traditional REIT investor. Private
placement funds are characterized by a degree of freedom,which we use to create products tailored to the needs ofinvestors. In that vein, we are pursuing funds in fields that do
not compete with REITs. We have already developed healthcare funds and are also working to establish investment funds
in new sectors, including low-return properties in central Tokyoand renewable energy.

OVERVIEW BY BUSINESS UNIT

10

* Cumulative total as of March 31
Balance of private placement REIT assets (left scale)
Investment corporations (right scale)Sustainability

153.6
117.5

Condominium

Securities Funds 
Develop

Other Sectors
Redeveloping
buildings to be
used for otherpurposes

SPR
Logistics

Sell

Sell

Properties deemed less competitive, due to such factors as age,that are in desirable locations

Able to be
redeveloped
Sold to party outside
the Group46

We are working to further expand our pool of investors andincrease assets through improvements in management performance in regard to the J-REIT Value Fund, set up in June
2015, and the Overseas Open-End Fund FORF, set up in July
2016. In addition, we established a pilot US-REIT Investment

InvestNomura Real Estate Holdings, Inc.

Integrated Report 2017ManageTrust fund for listed REITs in the United States in May 2016 toachieve quick commodification. To that end, we have partneredwith the U.S. real estate investment management firm Harrison
Street Real Estate Capital LLC to meet the strong need foroverseas investment among Japanese investors.

RetailCreating Environmental and Social Value through Business Activities
Receipt of the Highest Global Real Estate Sustainability
Benchmark Rating for Environmental Performance
Nomura Real Estate Master Fund and Nomura Real Estate
Private REIT have both earned a Green Star, the highest ratingfrom the Global Real Estate Sustainability Benchmark (GRESB),a global ESG performance evaluation. GRESB does not apply
to individual real estate, but is specially designed to evaluate thesustainability initiatives of real estate firms, REITs, and private
placement funds for real estate. GRESB is referenced byroughly 60 investors in investment selection and conversations
with investees, and it manages over ¥700.0 trillion in investment
assets. The Green Star was earned for such initiatives as

Nomura Real Estate Asset Management,
which was consigned to asset management for these funds, establishing a
Sustainability Policy in December 2015.
Furthermore, we have also received
DBJ Green Building Certification, createdby the Development Bank of Japan Inc.,
to support real estate that is considerateof the environment and society.

GRESB

DBJ Green Building
Certification
Nomura Real Estate Holdings, Inc.

Integrated Report 201747

Property Brokerage & CRE
Business Unit
We are boosting our ability to deliver the Nomura Real Estate Group’s
unique solutions that accurately address increasing and diversifying
real estate needs using a customer-oriented approach.

Nomura Chukai + store

Meeting at the Corporate Real Estate Service Division

Business Environment
Juntaro Kimura

Amid rising prices and a declining supply of newly built­condominiums, the market for used condominiums continues
to perform favorably, with both the number of contracts andcontract prices increasing (Graph 1). In 2016, the number ofcontracts for used condominiums in the Tokyo metropolitan
area surpassed the number for newly built condominiums forthe first time. Due to increases in exceptional housing stock,

Executive Officer, in Charge of Property Brokerage & CRE Business Unit

Business Model
Main
Stakeholders

Generalcompanies

Individuals

Fundmanagementcompanies

Real estateagencies

Regional
financial
institutions

Publicinstitutions andpublic interest
corporations

Graph 1
Overseas
investors

Graph 2

Units

Millions of yen

Business Model

Sourcing activities

31,183 30,347
30,000

Negotiation•	Purchasing needs

Wholesale business• Utilization needs

28,871

31,39733,798 34,776

37,189Trillions of yen
6

60

1.4
5
45
4

Sales promotion• Sales needs

36,432terms

Contracts
Transfer

20,00026.03

After-service

Property listings

24.91

25.66

25.30

25.00

25.89

27.27 28.92

1.0

1.0
1.0

4.5
0.3

2

2.5
1

CRE proposals
10

11

12

13

14

15

0.9

0.8

3

30

15

10,000

09

1.2
07

16

08

0.4

0.6

1.7

1.4

1.3

10

11

12

0.3

09

3.0

13

3.2

14

2.6

15

2.1

16

(CY)
Contracts (left scale)Strengths and Special Characteristics

Business Unit

Multifaceted solutions through cooperation between the retail and wholesale businesses
Business collaboration with Nomura Securities

OVERVIEW BY BUSINESS UNIT

40,000Property listings

Trading in Real Estate

Contracts and Prices for Used Condominiums(Tokyo Metropolitan Area)

Retail businesssales of used condominiums are expected to continue toperform steadily in the medium to long term.
In the real estate investment market, rising prices caused byfalling CAP rates have led to a decline in overall sales (Graph 2).
Meanwhile, the need to efficiently utilize CRE is increasing with
the introduction of corporate governance codes, a trend that
seems likely to continue moving forward.

Prices (right scale)(CY)
Tokyo area

Source: C reated by the Company with information from the public interest incorporated
foundation REINS

Regional area

Source: C reated by the Company with information from the February 2017
Nikkei Real Estate Market Report

Reinforcement of face-to-face services: Nomura Chukai +RetailBusiness

ICT utilization: nomu.com and Sumai-no AI Answer
Expanded services: Home Staging, Repair Work Guarantee, and Replacement Guarantee

Overview of Mid- to Long-term Business Plan Progress
StatusOrganizational structures responsive to customers throughout Japan
Rich customer base and more than 20 years of experience

Wholesale
Business

Policy on initiatives moving forward

Retail business• Expanded to 73 sites as doubling revenue over 5 years
through development of diverse services.

• Build structure with 100 sites and 1,000 sales staff by FY22/3
to expand market share.

Wholesale business• Restructed and Corporate Real Estate Service Division of
Nomura Real Estate Development and Nomura Real Estate
Urban Net.
• Launched new branches in Fukuoka and Kyoto• Improve productivity through effects of restructuring.

Comprehensive corporate real estate (CRE) proposals through cooperation with the Group
Cooperation with overseas locations in Hong Kong and Singapore

External Environments•	Increases in the stock of exceptional housing and the need to relocate that accompanies social andlifestyle changes
Growthopportunities•	Growing needs related to business succession and real estate inheritance given Japan’s aging society andamendments to the Inheritance Tax Act• Growing demand for CRE strategy that focuses on improving capital efficiency• Rise in the level of inbound investment from overseas investors• Decrease in consumer demand due to increasing interest rates and economic downturn

Business risks• Decline in property development amid drop in consumer spending due to increased property prices• Intensified competition for human resources

48

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201749

Property Brokerage & CRE Business Unit

Property Brokerage & CRE Business Unit

Wholesale Business Business Policy and Mid- to Long-term Business Plan Progress
Retail Business 
In the housing distribution business, which is the heart of theretail business, we have nearly doubled commissions since thefiscal year ended March 31, 2012, amid a continuously expanding market for used condominiums, by enhancing customer
services, expanding our network of branch offices, andincreasing sales personnel.
The Mid- to Long-term Business Plan lays out the management strategy of uniting face-to-face services and ICT utilization.
We have looked into initiatives to produce synergistic effects
with face-to-face services while striving to further utilize ICT,
improve customer communication methods, and introduce
new business models in the retail business. One result of the
project team we established in April 2016 was the release of thefirst Q&A chatbot, Sumai-no AI Answer, in the real estate
brokerage industry in December 2016 (Figure 1). By offering
advanced services, we can deliver real estate transactions thatleave both buyers and sellers even more satisfied.

Graph 3Business Area Expansion

Track Record of Handling Inbound Investments
Compensation (millions of yen)

Kansai Regional Office
Corporate Service
Department (increase ofhead count)

Face-to-Face Service Expansion

Kansai Regional Office
Corporate Service Department
Kyoto Sales Office (new)12,230350
300

Billions of yenNo. of branches

25

100

20

15

24-hour
AI service

43

50

56

62

73

68

10,000
8,000

200
150

60

40

5

20

13

14

15

16

17
(Years ended March 31)

Retail commissions (left scale)
Property brokerage branches at end of the fiscal year (right scale)Service expansion

Introduction of 3D walk-through videos

50

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Corporate Real Estate
Service Division
Nagoya Branch Corporate Service
Department (increasing of head count)

5,484

123

6,000
4,000

2,996

2,000

50

15

16

17*
(Years ended March 31)

Overseas-related compensation (left scale)Transaction value (right scale)* As of February 16, 2017

80

10

12

12,000226

100Retail Commissions and Property Brokerage Branches
at End of Fiscal Year

14,000364

250

Fukuoka Branch
Corporate Service
Department (new)Expansion of Nomura Chukai + stores

From smartphones and PCs

Transaction value (millions of yen)

400

Figure 2

Further ICT Utilization

Figure 3

In the overseas business, we are taking steps to expand
inbound investments, particularly from other parts of Asia,with locations in Hong Kong and Singapore, and more thandoubled transactions in the fiscal year ended March 31, 2017
compared with the previous year. For the fiscal year ending
March 31, 2018, we are working to increase the number ofoverseas representatives in order to expand initiatives forincreasing inbound investments (Graph 3).
On top of these initiatives, we are striving to strengthen ourbusiness collaboration with Nomura Securities and firm up
earnings bases.

OVERVIEW BY BUSINESS UNIT

Figure 1

To improve face-to-face services, we have expanded thenumber of Nomura Chukai + locations to 73 as of March 31,
2017, and are actively working to raise that number to 100 inorder to increase opportunities for customer contact. We arealso enhancing our range of services through Home Staging,where we create model rooms of our available properties topromote sales, and through our Repair Work Guarantee
service, which guarantees inspection and repair of faulty buildings and facilities to add a sense of security to transactions forboth buyers and sellers (Figure 2). Through these services, wehave increased customer satisfaction and contributed to ournumber one overall ranking in the 2016 Oricon Customer
Satisfaction Report for real estate brokerages in both thecondominium (purchases) and detached homes (sales)
categories.

Until recently, the wholesale business was handled by
Nomura Real Estate Development’s Corporate Real Estate
Service Division and Nomura Real Estate Urban Net’s Asset
Sales Division. However, in October 2016 their locations,employees, and functions were restructured and integrated into
Nomura Real Estate Development’s Corporate Real Estate
Service Division. Due to this restructuring, the Corporate Real
Estate Service Division has increased its employees to 270,with the head count growing in the Nagoya Branch Corporate
Service Department and Kansai Regional Office Corporate
Service Department. New locations have also been opened in
Kyoto and Fukuoka as part of our efforts to build a system thatcan respond more quickly to our customers’ real estate needs
Japan-wide (Figure 3).

Home Staging

Repair Work Guarantee

This service involves sales activities conducted through the useof model rooms of available
properties. These model rooms
are arranged with home furnishings and decorations for the
purpose of facilitating sales.

Depending on the type of property for sale, this service guarantees inspections and repairs.
Furthermore, it adds a sense ofsafety and security to transactions through checks conductedby experts.

Creating Environmental and Social Value through Business Activities
Area Branding Measures through CSR Activities
Nomura Real Estate Urban Net handles the retail business. Its
Nomura Chukai + is responsible for community-based sales
activities in the Tokyo and Kansai metropolitan areas. To attract
people living in communities surrounding Nomura Chukai +stores as customers, we have been expanding our services ofall kinds and engaging in community-based CSR promotion
activities. Through these initiatives, we hope to improve brandrecognition and create connections with local residents who
have no day-to-day contact with real estate businesses.
Nomura Chukai + is rooted in community. Our goal isfor it to be a brand that is familiar to locals. We believe that daily
business activities create opportunities to contribute to local
communities. Putting that belief into action, we joined the
Shinagawa CSR Promotion Committee in April 2017. Moving
forward, we will be participating in activities to assist seniorresidents in Shinagawa based on an agreement to establish
a neighborhood network to help and support the elderly.

The conclusion of this agreement was the first of its kind
for a real estate firm in
Shinagawa.

Conclusion of the agreement with the
Shinagawa Ward Office

Real estate informationsite nomu.com’s
neighborhood guide:
Machikara

Nomura Real Estate Holdings, Inc.

Integrated Report 201751

Property & Facility Management
Business Unit
We do more than manage condominiums and office buildings;
we offer services to bring them value and earn the trust of
ever more clients.

Meeting at Nomura Real Estate Partners Co., Ltd.

MEGALOS_Reflet Ebisu

Business Environment
Toshiaki Seki
Representative Director and Executive Officer, in Charge of Property & Facility Management Business Unit

Business Model
Main
Stakeholders

Tenants, condominium residents, and condominium associations

Large-Scale Repair Work

Senior Business, Fitness BusinessOver 13 years have passed since the completion of the first
PROUD property in November 2003. Management stock has
increased by an average of 6,000 units per year since 2000
with a rise in projects in the housing sales business, whichhandles the PROUD brand. Furthermore, a number of management properties are reaching the age when they will needlarge-scale repair work, and we hope to increase these undertakings going forward (Graph 1).

While the overall population is declining, the number of people
aged 65 and older is expected to rise.* Moreover, it is anticipated that over 90% of senior citizens will be capable of living
independently (from totally independent to semi-independent).
As such, enhancing preventive and other medical care andnursing care services as well as maintaining and improving
health are becoming major social issues (Graph 2).

Entrepreneurs
Subcontracting companies

Graph 1Graph 2

Units
10,000Care dependent(levels 3 to 5): 6%

PROUD completed

Business Model

Transfer

Operation

Moving inManagement

Period of large-scale
repair work for housings

Repair work

Totally independent:
82%

Semi-independent(needing some care tolevel 2): 12%

7,500

Project
completion

Ratio of Senior Citizens Living Independently to Those in
Nursing Care (FY2015)

5,000

OVERVIEW BY BUSINESS UNIT

The Number of Residences under Management Completed

Drafting ofmanagementplans* From the National Institute of Population and Social Security Research’s Population
Projections for Japan (2017) based on medium fertility and medium mortality

2,500

75

Strengths andSpecial Characteristics

Residences

170,337

No.1for eight years running*

2

Buildings

First ISO 20000 certification in the building
management industry*3

1

Licensed first-classbuilding operation andmanagement engineers

Public and educational facilities, data centers, etc.
Diverse management know-how

New properties forGroup development

External Environments• Increase in demand for large-scale repairs due to aging buildings
Growthopportunities• Acceleration of public-private collaboration in the management of public facilities• Rising healthcare needs underpinned by the upcoming Tokyo 2020 Olympics• Rising awareness of energy use

Business risks

85

90

95

00

05

10

15

Source: C reated by the Company with information from the Ministry of Health,Labour and Welfare’s Insured Long-Term Care Report 2015

Management satisfaction among
condominium residents

*1

720*

80

• Human resource acquisition given worker shortages• Competitive discounting of management fees

126*

Overview of Mid- to Long-term Business Plan Progress

4

Status

Policy on initiatives moving forward

Expansion of stockof properties undermanagement• Growth due to increase in properties supplied by
the Company.

• Secure personnel with aim of expanding operations.
• Improve productivity through work-style reform.

Business base
expansion
Evolution of service
menus• Growth due to expansion of orders for large-scalecondominium repair work.

• Expand PPP/PFI businesses.
• Expand energy management business.

Fitness clubbusiness• Reduced withdrawal rate through enhanced customer
satisfaction and improved profitability.

• Expand member numbers steadily.
• Boost new club openings.

Senior business• Announced OUKAS elderly housing brand.
• Planning to open our first project, OUKAS Funabashi, in
October 2017.
• Business and capital tie-ups with nursing care providers.

• Establish business model which plays an important role of“Urban-type Compact Town.”• Supply elderly housings of 5,000 units in 40 buildings in
10 years.

*1. As of June 30, 2017
*2. Management satisfaction survey conducted by Sumai Surfin (as of September 2016)*3. Certification for IT service management pertaining to business administration (equipment and cleaning) services for data centers*4. License holders at Nomura Real Estate Partners Co., Ltd. (as of June 30, 2017)52

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201753

Property & Facility Management Business Unit

Property & Facility Management Business Unit

Large-scale Condominium Repair Work 

Business Policy and Mid- to Long-term Business Plan Progress
Senior Business Meanwhile, even seniors who are able to live independently
have concerns over a future need for care. Establishing a caresystem to address those concerns is indispensable to OUKAS’s
success. Consequently, we concluded a business partnershipcontract with Sousei Jigyoudan Co., Ltd., which specializes in
the private assisted living facility business and manages carehomes with a capacity for 5,000 residents, in March 2017 andsubsequently invested in JAPAN LIFEDESIGN Inc., a wholly
owned subsidiary of Good Time Alliance that manages private
assisted living facilities.
Within the next 10 years, we plan to offer 40 elderly housing
properties with 5,000 units. However, an important element of
mixed-use housing development projects is to raise the valueof the project as a whole. Accordingly, our second elderly
housing project—the Hiyoshi-Minowacho Project—will contribute to urban development that integrates for-sale housing withcommercial facilities (Figure 1).

Senior Business Expansion

Sales Projections for Large-Scale Condominium Repairs
Billions of yen
5.0

2.5

Elderly housing with supportive services

17

18

19

20

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

Figure 2

Comparative Life Cycle Costs
4. Large-scale repair work:
one-time payment

Repair costs for standard
specifications•

3. Water supply anddrainage pipe restoration:
one-time payment

One-time payment

Repair costs for premium
specifications•

2. Large-scale repair work:
one-time payment•

Limitations on one-time payments
Decreases in total repair costs

Large-scale repair work to premium specifications decreases costs over the life cycle of thebuilding and limits one-time payments bylengthening the construction cycle.

1. Large-scale
repair work

Housing sales

16

Nursing homes
Build relationships
with nursing care companies

The Nomura Real Estate Group’s elderly housing

Business tie-ups with nursing care providers• In elderly housing, we aim to supply 5,000 units
in 40 buildings in 10 years’ time.

“Town planning”
that enables any
generation to walkand be active“Health maintenance and promotion” to deliver
physical and mental
healthSousei Jigyoudan Co., Ltd.
Capital: ¥90 million
Number of employees: 845 (as of March 1, 2017)
Number of beds: approx. 5,000 beds
(including Group companies)

Joint investment
JAPAN LIFE DESIGN CORPORATION
Operating elderly housing with nursing care (3 facilities)

Location: Funabashishi, Chiba
Access: 15-minute walk from Funabashi
Station (JR Sobu Line)
5-minute walk from Shin-Funabashi
Station (Tobu Urban Park Line)
Open: October 2017 (plan)
Total units: 125 units

Integrated Report 2017

36

44

48

60

Creating Environmental and Social Value through Business Activities
Regular Vegetable Picking Experiences at Rental Farms
Nomura Real Estate Partners, which handles facility management for condominiums and offices, holds Partners Farm
events at rental farms in Chiba Prefecture every summer andfall for residents of the condominiums it manages to experience
vegetable picking.

Good time home
Chofu

Ongoing Clothed Swimming Classes
at Elementary Schools
In May 2017, Nomura Real Estate Life & Sports Co., Ltd. heldclothed swimming classes with the Kanagawa Children andFamilies Support Section and the Kanagawa fire department
at MEGALOS Kanagawa in the hopes of preventing waterrelated accidents. In the future, we plan to hold clothed swimming lessons from July to September at elementary schools
all across Tokyo. We are expecting 14 schools and 1,600 students to participate, making
it the largest event to date.

Good time home
FudomaeGood time home
Tamagawa

Nomura Real Estate Holdings, Inc.

28 30

	Total repair costs for standard
specifications
	Total repair costs for premium
specifications

Property age

1st Project (OUKAS Funabashi)

54

24• Implement operational and capital tie-ups with
providers with know-how in the nursing carebusiness to strengthen elderly housing businessFeatures of OUKAS

A Home for
Celebrating Life “Tomorrow
Healthier than Today”

12

OVERVIEW BY BUSINESS UNIT

Figure 1

Graph 315

Total repair costs

Business activities for OUKAS Funabashi, our first project ofelderly housing with supportive services, began in August
2017. We are in the final stages of preparation and hope tobegin move in by October 2017.
Supportive measures for the increasing number of thoserequiring long-term nursing care have become a focal point in
the housing market for the elderly, which depends on the longterm care insurance system. There is, however, a dearth of
products and companies that promote true health to preventthe need for long-term care before it arises. The Nomura Real
Estate Group is working to boost and maintain the health of themore than 90% of the older population who is capable of living
independently. To that end, we are striving to be pioneers in a
new type of elderly housing in pursuit of a rich society whereseniors can live active lives. In order to become the number
one brand in independent living for seniors, we are developinga variety of plans and working on the first OUKAS project—
OUKAS Funabashi.

The number of the Group’s management properties reachingan age when they will need large-scale repair work is growing.
Using technical strengths gained through the merger between
the two operational management companies, we are increasing orders for large-scale condominium repair work (Graph 3).
Our policy is to propose large-scale repairs of a high quality(premium specifications) in order to decrease costs over abuilding’s life cycle and with the goal of raising asset value(Figure 2).

November 2016 event

Clothed swimming lessons

Nomura Real Estate Holdings, Inc.

Integrated Report 201755

Feature:

The Nomura Real Estate Gro

up’s Urban Development

The Group’s formula for ideal urban development is (location + facility + design + environmental awareness +services + community) x employee enthusiasm. Following is an explanation of how the Group performs
urban development, with a focus on environmental awareness and community.

FEATURE

Evolving urban development:
Our path to environmental and community awareness
2009

2011

• Establishes the Nomura Real Estate Group
Environmental Philosophy*• Establishes PROUD ECO Vision of “Reduce,
Create, and Utilize”• Holds Housewarming parties at all properties• Construction of Funabashi Morino City begins• 100 Design Techniques for Condominium
Communities wins the Good Design Award• Introduces PROUD Environmental Assessment
Sheet as an internal standard to visually show
environmental initiatives

The Group details the challenges we
faced and the value that was createdthroughout the trial-and-error process
in the interview with the representative
responsible for guiding resident-led
community-building at Funabashi
Morino City contained in the Featuresection of this report.

Business Overview of Funabashi Morino City
Name:

Funabashi Morino City

Location:

Kita-Honcho 1-chome, Funabashi City,
Chiba Prefecture

Development area:

Roughly 17.6 ha

Facilities:

1,497 condominium units (five blocks total),
42 detached houses, commercial facilities,
hospital, and childcare support facility

Project owners:

Nomura Real Estate Development Co., Ltd.
and Mitsubishi Corporation

Project period:

Started in 2011, completed in 2014

2010

2012

2013

2015

2018

• Introduces LIVING Q CALL
• Establishes PROUD Owners’ Club• enecoQ: Smart Energy System for
Condominiums wins the Good Design Award• Establishes PROUD SMART & GROWING as
an improvement to PROUD ECO Vision• Establishes Nomura Real Estate Group Customer
Club to boost PROUD Owners’ Club• Scheduled completion of ZUTTOCITY
and Tsunashima Sustainable Smart
Town, the next generation of urbantype compact towns following in thefootsteps of Funabashi Morino City

* Our mission is to use the power and blessings of nature to build a space between the natural environmentand our harmonious cities in order to ensure a future for our beautiful planet. We are highly resolved toincrease responsiveness to the environment and achieve optimal environmental quality.

56

The Nomura Real Estate Group’s Goal of Providing
Self-Sustaining Compact Towns

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Note: enecoQ is a system that draws electricity
collectively, consolidates the Internet and solar
power, shows power consumption visually, andworks to limit peak use. It was co-developedby FAMILYNET JAPAN CORPORATION.

Note: N omura Real Estate Group Customer Club isa membership organization offering a variety ofservices for Group (four companies, with one
excluded) customers.

Nomura Real Estate Holdings, Inc.

Integrated Report 201757

Feature: the Nomura Real Estate Group’s Urban Development

The Nomura Real Estate Group’s Goal ofProviding Self-Sustaining Compact Towns
In light of changes in the structure of society, such as a declining birth rate and aging population,
the Nomura Real Estate Group is working toward timely advancement of its urban-type compact
town strategy, which combines multifunctionality with a high level of convenience.
Urban-type compact towns are neighborhoods that consolidate facilities with a variety of functions,such as residences, offices, commercial facilities, public facilities, hospitals, and elderly housing.
But the city-building we have in mind goes beyond the mere physical aspects of urban development.
We aim to build urban areas that impart a sense of purpose and fulfillment to the people who live,
work, and visit there. Our intention is to build cities where progress is self-sustainedby the people who live in them.
   Tomoe Soda
Nomura Real Estate Development Co., Ltd.
Residential Development Division, Residential Product Planning & Marketing Department
ManagerMs. Soda joined the Company in 1999. After gaining experience in the Condominium Sales Business, she spent roughly 10 years
in product planning, including interior design for model rooms. She has been involved in the Funabashi Morino City project since 2012.

Feature: the Nomura Real Estate Group’s Urban Development

Toward Creating the Ideal Community   
Q. What were project expectations at the planning stage?

I joined this project before sales began. My mission was toapproach residents after moving in and make communitybuilding among them a reality. However, not a few of mycoworkers were concerned about coming up against discontentment regarding the residences we had developed throughdirect contact with clients and about whether they could operate a city that satisfies its residents. Moreover, I was personallyapprehensive about pressing for cooperation between theresidents and the local community, as I find it inherently difficult
to force social relationships. Despite these doubts, I changed
my perspective when I began to reflect seriously on the disaster-stricken areas and the expansion of opportunities to takeconcrete action to assist in recovery efforts in the aftermath of
the Great East Japan Earthquake. I did not want to let eventhat modest feeling of consideration for others fade away andcame to realize that consideration for others is something thatshould be deeply connected to the Company’s city-building
goals. I have come to believe that it is exactly because I findsocial relationships demanding that I was able to find the shortest route to ideal community-building.

FEATURE

Soda: The Funabashi Morino City Project (hereafter “this project”) began in 2011 and reached completion in 2014. The city,which is located on the 17-hectare site of a former factory,
consists of roughly 1,500 residences, commercial facilities,
medical facilities, and childcare facilities, as well as five parks
and green spaces. As a local contributor, the city has been
admired throughout the three-year construction process by
many, including those who live there, of course, as well as
residents of the surrounding areas.
Aims for this project included expanding our experience asa real estate developer by taking on new challenges andachieving city-building that emphasizes a sense of community
to enrich the lives of residents for generations to come. This issomething we had hoped to accomplish by means of consultations with Funabashi City from the planning stage onward. The
Great East Japan Earthquake, which struck during the planningstage in 2011, made the need for stable energy infrastructure
and coordination within communities stark. In addition, resultsof a residence “fondness survey” (Figure 1) conducted in 2007
indicated to the Company that beyond conditions at the time ofpurchase, interactions with residents after moving in and community-building efforts are key elements to creating a greater
sense of fondness for one’s living situation.
In light of this information, project work began with thebuilding of “smart city” foundations for urban development by
utilizing the most advanced environmental technology and IT
networks at the time while formulating the “Smart & ShareTown Concept,” which offers a space for residents to cultivate
the bonds between them (sharing spirit).
Figure 1

Fondness Survey (Nomura Real Estate Development Survey: 2007)
Convenience

Interaction andcommunity

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Conditions to be considered when purchasing a condominium

More fondness for one’s residence

58

Residents’association
activities

Key points for conducting next-generation urban development

Comfortable living

Status / Luxury

Residents andcommunity

Trust / Security

Resident’s
qualityHome owners’
association

Services

Smile Supporter

Ease of cleaning

Maintenance andmanagement

Managementcompany

Shared equipment

Shared facilities

Courtyard andgreen space

Exterior and green
space

Security

Barrier-free house

Bathroom

Private equipment

Location(convenience,
environment)All-electric home

Surrounding
environment

Naturalenvironment

Largeness

Specification andquality

Property size

Nomura Real Estate Holdings, Inc.

Brand

Integrated Report 201759

Feature: the Nomura Real Estate Group’s Urban Development

Feature: the Nomura Real Estate Group’s Urban Development

Building Cities That Sustain Themselves afterCommunity-Building Support Ends   
Q. What did you care about with respect tocommunity-building?
Soda: To many, “community-building” implies events. But
participating in events alone is not enough to create a community. What is necessary for residents is to maintain daily
communication. It is our hope that community-building activities continue, even after our support for them ends.
Our first task was to establish the Morino City Community
Building Association—currently the Morino City Residents’
Association (Message 1). The Company intended to support theactivities of this association for three years following its establishment, and then have residents and local businesses takeover leadership from the fourth year onward. 2017 marked thatfourth year and, despite the end of Company support, residents
and local businesses continued association activities, such as
the summer festival and cleanup activities.
During the three years of Company support, the most challenging task was instilling a greater sense of autonomy in our
residents. The Company was aware that taking too heavy ahand in operational leadership could rob the residents of their
independence. At the same time, it is difficult to convince customers after they move into their newly purchased residencesthat it is Morino City residents who should run the association.

Raising Awareness and Producing Results beyond
the Introduction of Technology   
Q. How did you pursue becoming environmentallyfriendly?
Soda: Cultivating autonomy in residents has produced significant results, even for the environment. No matter how many
advances in environmental technology are introduced, experience suggests that energy saving efforts based on a sense of
duty are generally unsustainable. This is another arena wherea system is necessary so residents themselves can maintain asense of environmental awareness and a shared vision for thecity that includes cultivating green spaces, restoring the powerof nature, and saving energy. Discoveries gained through environmental programs based on these ideals are proving effective as a source of motivation for residents. For instance, 240
households, roughly half, participated in growing “green curtains” on their balconies in the summer of 2013, prompting theestablishment of a gardening group. This is a perfect example
of self-sustaining community expansion.
Funabashi Morino City has done more than just introduce
advanced environmental technology. It is also characterized byinitiatives to raise awareness regarding energy conservation
among residents and confirmation of participation in energy
reduction by residents (Message 2). In fact, when we examined
the results of reduced electricity use and limits on maximum
power consumption covering 500 households, we found theenergy savings we had achieved were higher than we had
hoped. Measures such as the installation of monitors that visually display electricity use in private areas, the restriction of peakenergy use by residents within their households, the introduction of billing systems for reduced utility costs, and the provisionof advice tailored to each household have resulted in a change
in both resident awareness and behavior (Figure 2).
Recently, observations from countries promoting the “smartcity” concept have been on the rise. During observations, theforemost concern is energy management. In addition to thephysical supply side and devices designed to reduce energyuse, considerable changes in resident awareness and behavior
have inspired a particularly significant response. The sameobstacles to a rich life exist in all countries. We would like tomake use of our knowledge to work together with people ofdiffering values to find their solution.
Figure 2

Results of Energy Reduction Efforts over the Summer:
Decline in Energy Consumption (kWh)Normal use

4.9%

Smart plan+ viewing screen

FEATUREThat was a communication challenge for the Company. WhenI encountered this obstacle, I shared the desires behind theconstruction of the city with the association. The Company
hoped to make this city a better place. I asked the association
how they wanted to use such a place and what they could dowith it. This approach inspired great change in the residents,and members began to take more autonomous action thanthey had before. Now, management of the residents’ association is carried out independently by residents and local businesses. However, the importance of daily communication in
returning leadership to residents was the major breakthrough.
As part of ongoing trial and error, we have worked to actively
incorporate the opinions of outside parties. In particular, we
received input from the office running the association and advice
from a representative knowledgeable about self-governancefrom an external partner, which was especially useful. We held
meetings in which we addressed, one by one, doubts that I
myself may have had if I were a resident. As a result, we wereable to smoothly communicate to residents our vision for the
future, including the type of city-building we hope to achieve andour financial plans. It is precisely because no precedent for thisexisted, even within the Company, that we were able to find ourway to the most ideal solutions for our residents, by always trying
to see things from their perspective. This contributed to thedevelopment of my ability to provide convincing explanations.
We are also devising methods for the operation of the association itself. In order to guarantee the continuation of community-building activities, the system for operating costs must be

adjusted. As the organizer, the Company has taken on costs forboth itself and the establishment of the association, such as
personnel costs and the costs of holding early socializing events.
However, while support for community-building activities waslimited to three years, activities in the public interest, including
disaster preparedness, tree planting, and beautification of theenvironment, are being covered by membership fees from residents and local businesses and have continued even after theCompany’s support ended. Moving forward, the residents themselves will assume responsibility for personnel costs and will fundmaintenance of the mechanism for activity agendas and administrative work through area management. I believe that a major
factor in guaranteeing the continuation of community-building
activities is securing both continuity and management that does
not place inordinate strain on residents and local businesses.

6.9%

Viewing screen + advice
on energy reduction

Energy reductions beyond expectations
thanks to the introduction of environmentallyfriendly technology made possible by changes
in resident awareness and behavior

Clean Green activity in 2003

Message 1

60

Message 2

A Comment from Masaki Kobayashi:
Chair of the Morino City Residents’ Association

A Comment from Mr. and Mrs. Michinaka:
Residents of PROUD Funabashi

In fiscal 2016, I became the chair of the Morino City Residents’ Association for thesecond term. Over the past three years, the Nomura Real Estate Group has occasionally conducted joint community development activities with us. When it comes to community development, the goal is not to hand over responsibility to the residents but toachieve sustainable development. For that reason, it is necessary for management
organizations and residents’ associations to work together to foster activity leaders.
I believe it is important for everyone to participate in community development. It would
be excellent if residents could build the hometown of the future with their own hands
and grow with their communities.

The enecoQ system at Funabashi Morino City has a setup and functions
that were designed with the user in mind. It has become a part of our lives.
Because the energy consumption for each unit is displayed on monitors inreal time, we have started to do housework in an order that mitigates
wasteful concurrent use of power. It is surprising how much using enecoQ
has changed our daily behavior. Another helpful element is that we can use
the Internet to see the volume of energy we consume, making it easy tokeep a record. Moving forward, we will do our best to stay motivated tocontinue building a better life here.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201761

Feature: the Nomura Real Estate Group’s Urban Development

The ÉcoQuartier Quality Label and the Future of
Funabashi Morino City

20 ÉcoQuartier Certification Assessment Criteria
Approach and process

Territorial development

1-	Carrying out projects that meet
everyone’s needs.
2-	Management for the entire
project period.
3-	Incorporating the life-cycle-cost
approach.
4-	Taking account of users’
practices and managers’
constraints.
5-	Implementing continuous
assessment and improvement
practices.

11-	Balanced local economic
development.
12-	Providing a wide range offunctions in the community.
13-	Optimizing the consumption of
resources and developing local
sectors and short circuits.
14-	Favoring walking/bicycling andpublic transport.
15-	Deploying innovative services
and networks.

Living environment6-	Working with the existing cityand proposing an appropriate
density.
7-	Implementing conditions ofmutual help.
8-	Providing a safe and healthyliving environment.
9-	Taking account of landscapeand architectural qualities.
10-	Promoting the local heritage,
history, and identity of theneighborhood.

Smart design

Shared spaces

District planning, landscape guidelines, and maintenance of roadsidegreen belts
Introduction of CO2 reduction models and a highly acclaimed energy
management system (first use of enecoQ) including not only
green technology but also methods to verify how energy is used, and energy
management verification
Established a clubhouse for community activities and as a center for disaster
preparedness and crime prevention activities

Creation of a place to foster bonds between residents
Urban Development Committee: to promote urban development via residents
and local businesses and support management of other committees
Housing Complex Residents’ Association: to promote interaction acrossgenerations through community clubs
Various programs: big band (ongoing for 3 years), green curtain(ongoing for 1.5 years), disaster preparedness manual(ongoing for 6 months), etc.

62

Third-Party Evaluation

Establishment of medical, commercial, and childcare facilities as well as parks
and green spaces

Common facility for each block and car, bicycle, and equipment sharing

Community
support16-	Taking initiatives to anticipate
and adapt to climate changes
and risks.
17-	Conserving energy andpromoting the use of renewableenergy resources and recovery.
18-	Reducing, recovering, andrecycling waste.
19-	Preserving and managing
water resources.
20-	Preserving and promoting
biodiversity, soils and naturalenvironments.

commercial facilities as well, will bring us closer to solving thesocial issues we face both in Japan and abroad. It is our belief
that our competitive edge as a company occupies the same
vector as the creation of social value through urban
development.

Summary: Outcomes Gained from Building Funabashi Morino City

Mixed-use urban
development

Preservation of resources andadaption to climate change

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

ÉcoQuartier Quality Label(eco-district certification)
The first non-French project to be awarded
the ÉcoQuartier quality label quality label forenvironmentally friendly communities by the
Ministry of Housing and Sustainable Homeof France
World Smart City Award
Presented a World Smart City Award in
the Project category by the Smart City
Expo World Congress 2013 for its highly
acclaimed initiatives to create sustainableeconomic value in line with the “Smart &Share Town” concept

Effort to Spread Urban-Type Compact Towns
Tsunashima Sustainable Smart Town
Location

Yokohama, Kanagawa Prefecture

Specialcharacteristics

Numerical targets, such as those for CO2 emissions, havebeen set and objectives urban-type smart cities should meetestablished in pursuit of creating a sustainable city.
Unified operation under regulations and smart services toachieve sustainable and comfortable living through landscape and design.

ZUTTOCITY

Sharp Smart Town Concept(tentative name)
MitakaShimorenjaku
Project (tentative name)

Funabashi
Morino City

ZUTTOCITY
Location

Amagasaki, Hyogo Prefecture

Specialcharacteristics

We are taking part in initiatives to create a “smart community” certified by Amagasaki City, constructing a variety offacilities on an expansive site with roughly 8.4 ha of total landfor development.
A private childcare facility opened on the ZUTTOCITY site in
April 2017.

Hiyoshi-Minowacho Project(tentative name)Sharp Smart Town (Tentative) Concept
Location

Osaka, Osaka Prefecture

Specialcharacteristics

We are planning to build cutting-edge “smart condominiums,” in collaboration with Sharp Corporation, that incorporate the strengths of both companies.
With the goal of conducting business to make the IoT a partof people’s lives and creating a smart society where people
can live more richly, we are combining smart homes thatbring humans and machines together with smart offices
where people can work energetically.

Tsunashima Sustainable Smart Town

FEATURE   
Soda: Such environmental initiatives have been highly
acclaimed, with Funabashi Morino City becoming the first
non-French project to be awarded the ÉcoQuartier quality label
for environmentally friendly communities by the Ministry of
Housing and Sustainable Home of France in 2016. In pursuit ofsustainable urban development, the ÉcoQuartier quality label
system focuses mostly on self-governing bodies. Since its
establishment in 2012, over 800 French cities have earned
approval and of 353 projects submitted, 51 gained certification,
making this a highly successful system for promoting urban
development in France.
The ÉcoQuartier quality label charter contains 20 criteriathat illustrate the principles of sustainable urban development.
These commitments are not specific numerical targets. They
require that the contents be understood, measures taken to
implement them, and the results analyzed. These administration-centered evaluation indicators are very diverse and, fordevelopers, can function as a comprehensive form of evaluation for urban development.
We also plan to open OUKAS Funabashi—our first elderly
housing project—in October 2017 on land adjacent toFunabashi Morino City. As a vital element of urban development, we are aiming to operate elderly housing that the local
community can feel secure using.
As the results of our honest work on this project indicate,
we tackle each challenge with enthusiasm and sincerity fromthe perspective of a developer and of a customer. I am
confident that this approach, which we apply to offices andFeature: the Nomura Real Estate Group’s Urban Development

Tackling Services for Elderly Residents
The Nomura Real Estate Group has launched the new elderly
housing brand—OUKAS—as an indispensable part of its aim
to “build cities that connect today with tomorrow’s possibilities.” The concept behind OUKAS is residences that support
life and facilitate “a healthier tomorrow.” The aim of the facility
is to try to extend healthy life expectancies through attention
to both body and soul by such means as the exercise program
we co-developed with Nomura Real Estate Life & Sports. We
are working to incorporate this as an important function ofurban development moving forward.
OUKAS Funabashi is scheduled to open in October 2017,as the first project with a total of 125 units located next to
Funabashi Morino City. Within the next 10 years, we hope tooffer 5,000 units at 40 buildings.

The Nomura Real Estate Group’s elderly housing

A Home for
Celebrating Life “Tomorrow
Healthier than Today”

First OUKAS project:
OUKAS Funabashi(Opening scheduled for October 2017)
Units: 125 Floor space per unit: 19—50 m2

Nomura Real Estate Holdings, Inc.

Integrated Report 201763

Feature: the Nomura Real Estate Group’s Urban Development

Feature: the Nomura Real Estate Group’s Urban Development

On the Nomura Real Estate Group’s Town Management

I would like to see the Company create legendary places
that encompass more than just space, but also time,and are synonymous with “community.”

Satoko Shinohara
External Director
Professor at the Department of Housing andArchitecture, Faculty of Human Sciences
and Design, Japan Women’s University
Satoko Shinohara Living Design Institute LLC
Ms. Shinohara has abundant knowledge, experience, and extensive insight regarding methods tocreate common spaces in apartment buildings
gained not only from her many years working as
an architect but also from her perspective as a
researcher. She has been working as a director
for the Company since 2014.

The Importance of a Climate of
Cooperation between Residents   In addition to my job as an external director,
I design buildings and work as a university professor. What I have been working on, in particular, in recent years, is studying the lives ofresidents of housing complexes and towns
within Japan and the rest of Asia. When conducting my research, I have encountered anumber of ideal communities. For instance, theGroup’s Co-op Nomura Sonnou in Inage, Chiba,
does not have an elevator. When the residents’association examined possible improvements
and repairs, they decided that if they could notinstall an elevator and make the building structurally barrier-free, younger residents would carry
their elderly down from top floors, in the case of
emergency. I admire the willingness to lookbeyond simple physical solutions. Many people

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in this condominium become very attached totheir residence and continue to live there for along time because they have established an
inclusive communication environment. Moreover,while the building itself is not at all in a good
location, the majority of residents are so fond of
their home, believing it to have a charm andvalue that transcend its location, people sign up
for them immediately when units would sell
immediately as soon as there are put on thesecondary market. On the other hand, there
were also examples of housing complexes thatare easy for families with children to live in but
dissatisfied the elder residents. There were also
cases where high resident turnover led to a lackof communication among residents. This is an
example of a lack of communication amongresidents.
As this researched continued, I came torealize that even if it is the real estate companies
that create the buildings, it is the residents
themselves who must take the initiative to cooperate in order to create a place where they feelat ease and can continue living for a long time.
The atmosphere of a neighborhood can influence the level of attachment residents feel, justas a corporate atmosphere can influence
employees’ feelings about a company. I believe

Expectations of the
Nomura Real Estate Group   The Nomura Real Estate Group adopts a process integrating development, sales, and management. Given the fact that I am usually able
conduct an inspection of a property immediately

The responsibilities of a real estate company
go beyond that of space.
Time is also a crucial element.

after being contacted, I have been able toexperience the functionality of this integrated
process firsthand. The integrated process theGroup has in place to provide timely feedback
from the management company to the development department is functioning properly.
Furthermore, by virtue of our foresight in focusing on residential communities, we collect useful
information faster than our competitors. This is
information that should be utilized as a part ofour toolbox. For instance, town-building does
not have to hinge on condominiums. It could becentered on detached houses. In regard to living
space, the time when three-bedroom units were
the standard is coming to an end. Couples thatno longer live with children may block off a
section of their living space and rent it out.
When they retire, they may turn an extra room
into a home office where they can work separately from where they live. The idea of one
family to one residence is not a given.
Unfortunately, renting a portion of one’s residence to another is restricted under the law inJapan. However, as a company with intimate
knowledge of the housing situation, it may beadvisable for the Nomura Real Estate Group to
recommend a policy aimed at shifting the government’s stance.
The responsibilities of a real estate company
go beyond that of space. Time is also a crucial
element. Long-term survival as a company ofvalue is not possible without that perspective.
Objectively speaking, the Nomura Real EstateGroup’s pool of human resources who are wellversed in construction is quite large when compared with other companies. The Group is also
highly fastidious about its buildings and deliberate in the way it works. While it has several
challenges to overcome, the Group will makegreat use of its strengths in order to create
renowned spaces synonymous with community.

Nomura Real Estate Holdings, Inc.

FEATUREThe atmosphere of a neighborhood can
influence the level of attachment residents feel,
just as a corporate atmosphere can influence
employees’ feelings about a company.

that planning large-scale apartment complexes
is virtually town-building in a short period oftime, and therefore the attachment to the town
itself represents the true value of that location.
Funabashi Morino City is a project that
embodies those concepts. Ms. Soda, whoworked on this project, referenced the resultsof both the Company’s and my research inconceiving a system to urge cooperation amongresidents. I was struck by the way she worked
to instill a sense of autonomy and duty toward
town-building in the residents. Moreover, continuing a relationship after the sale is key. Thereis a concern that being too conscious of theideal town before the sale will cause services toswell, which will only bring the town further fromthat ideal. For instance, an elderly housing facility with supportive services is planned to open in
Funabashi Morino City in October 2017,
approximately four years after the sale. This
represents an ideal approach whereby we gradually add value over a certain period of time.
I believe service development that occurs all at
once without an atmosphere of cooperation
between the town’s residents will eventually leadto a squandering of resources.
Of course, town-building is not only about theintangible aspects. The tangible ones are crucial,
too. For instance, creating a formal entrance hall
is a vital element to condominium construction,
as it functions as the face of the building.
However, it is also important to furnish thatentryway in such a manner as to naturally
encourage residents to not only greet each otherbut also stop and talk. Furthermore, as beautiful
and peaceful as inner courtyards are, building tall
enclosure walls to ensure safety and security
would have a negative impact on the surrounding
environment and do nothing to increase the valueof the town itself. In such a case, it might bebetter to consider an arrangement more
beneficial to both the town and the surrounding
environment, such as a timed gate that opens
onto the courtyard.

Integrated Report 201765

Human Resource Management

Human Resource Management

Diversity for Value Creation through the Nomura Real Estate Group’s Continuous Reform
The Workstyle Reform Promotion Committee, chaired byGroup COO Seiichi Miyajima, was instituted in April 2017,
succeeding Nomura Real Estate Development’s unique
Diversity Challenge committee and launching the nextstage of diversity initiatives throughout the entire Group.
Moving forward, we plan to establish action plans andquantitative targets for each individual business unit andcompany in line with their situations and reform efforts

and based on Group-wide policies. We also intend to lay
out standard quantitative targets for the Group as awhole. By improving productivity and the quality of labor,
we hope to further spur the growth of our employees
and, as a result, improve the Group’s ability to compete.
With the heads of each business unit committed toreform, we will work more than ever to achieve accelerated workstyle reform from a management perspective.

Basic Policy
In 2015, the Nomura Real Estate Group announced its Mid- toLong-term Business Plan for the period from April 2016 to
March 2025. Achieving sustainable growth by raising the caliber of our human resources and offering innovative products
and services to meet increasingly varied customer needs arenecessary elements to fulfilling this plan. Each and every Group
employee bringing diverse values and viewpoints to initiatives isa vital part of generating new ideas to continue creating

valuable products and services. As such, the Group considers
human resources an essential component of its promotion
infrastructure and is putting its energy into reforming workstyles, cultivating human resources, and promoting diversity inorder to create a work climate where employees can expressa range of thoughts and values, regardless of gender, age, job
title, or disability.

To help achieve sustainable growth, the Group is pursuing
reform addressed at resolving social and management issues.
We hope to raise work and life satisfaction in our employees by
shortening working hours, expanding break and free time, andenabling work-life balance. We believe this will create a virtuous
circle of increased drive, performance, and productivity.

In 2013, Nomura Real Estate Development established theDiversity Promotion Committee (also called Diversity Challenge),chaired by then President Nakai (currently executive advisor to
Nomura Real Estate Development) and representing all business units, to advocate for policies concerning Company-wideissues, information dissemination, and workplace environments. In the fiscal year ended March 31, 2017, we continued
ongoing activities and took them a step further, installing diversity promotion systems in the Residential Development Division,
Commercial Property Development & Management Division,
Corporate Real Estate Service Division, Development Planning
Division, Kansai Regional Office, Nagoya Branch, Sendai
Branch, head office administration staff, and Nomura Real
Estate Asset Management Co., Ltd., and accelerating diversity
initiatives. To further disseminate awareness throughout theCompany, we implemented the following measures in the fiscal
year ended March 31, 2017.

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Value creation through continuous reform
Improved performance

Creation of innovation

New business creation

Further demonstration of
the Group’s overall power

Diversity• Began diversity promotion activities in each division•	Established diversity promotion committees in the head officeand branch offices• Expanded the Diversity Promotion Committee to 22 members•	Installed at least one diversity promotion representative ineach department (principally senior managers), for a total of
95 representatives•	Continued the outside instructor-led training for directors,
general managers, and senior managers started in the fiscal
year ended March 31, 2016

Workplace Meetings
Beginning in 2015 and continuing into 2016, a total of 125
workplace meetings were held to disseminate diversity
awareness to all Nomura Real Estate Development employees.
In 2016, we expanded our target number of employees toparticipate in meetings to 1,491 of 1,830, or 81.4%. In thesemeetings, in addition to reporting on the initiatives implemented
to date, we covered topics promoting diversity, such as thestatus of use of the system, effective working methods, andthe practice of diversity management. We also held our third
employee satisfaction survey in two years to discern our status
in relation to othercompanies and the rest of
the world. The results wereanalyzed by department
and compiled into a report.

Group
companies

GenderLGBT

Varied workstyles• Rectifying the long working hour situation• Ensuring proper vacation days are taken• An environment that keeps employees highly motivated• Use of employee strengths to increaseorganizational strengths

Job title

Nationality

Flexible workstyles• Telecommuting and working from home
• Efficient use of flextime systems

Age

Disability

Workstyles using the
productivity-improving PDCA cycle•	Transfer of authority, division of duties,business assignment• Inventory and selection of operations

Foundation: A climate to enable the three workstyles described above

Our Vision for Workstyle Reform
Employee growth andthe competitivenessof the Group

Improved productivity

Work-life balance

Improved job andlife satisfaction

Creation ofa virtuous circle
New value creation

Increased drive andperformance

HUMAN RESOURCE MANAGEMENT

Initiatives for Disseminating Awareness throughout
the Company

Corporate growth• An environment where each and every employee
can demonstrate their abilities to their utmost• Diverse ideas hold a business together

Promoting Diversity
Workstyle Reform

Raising Corporate Value through Diversity and Workstyle Reform

Nomura Real Estate Development’s Initiatives to Decrease Working Hours
With the goal of rectifying the long working hour situation,
we have instituted a 10 p.m. forced shutdown of all individual PCs. We have also set up a policy to ensure that
employees working in residential sales who work on
Saturday or Sunday get one three-day weekend permonth. In addition, as a result of such active efforts at
improvement as the introduction of flextime, the average
number of hours of non-legal overtime logged byresidential sales employees fell an impressive 25.4% year
on year in 2016. By ensuring sufficiently flexible work
structures, we have achieved a number of successful
results, including the positive performance of employees
who have reduced their working hours.

Overtime Reduced by

25.4%

Nomura Real Estate Holdings, Inc.

Integrated Report 201767

Human Resource Management

Human Resource Management

Initiatives to Improve Interdepartmental
Communication
There are roughly 80 departments between the business divisions and branch offices of Nomura Real Estate Development.
With the expansion of the organization, there is concern that
communication between the headquarters and other areas will
decrease. In 2016, we instituted the Boss Change program toallow each department head the opportunity to communicate
with members of other departments. For instance, the heads ofthe commercial property business and residence customer
service department at the Kansai Regional Office changed positions and got to know more about the business of a different
department and its functions within the Company. By communicating with the head of another department with a differing business environment, each department member gained new insightand broadened their perspectives beyond their own department.

Encouraging the Active Participation of Women

Support for Childcare

At Nomura Real Estate Development, we are conducting initiatives to improve work-life balance with the goal of encouraging
the active participation of women in the workplace and increasing the proportion of women in management positions. As partof these improvement efforts, we are using the Company
intranet to raise awareness, introduce model employees, andtake surveys to determine the mind-sets of all staff in order toraise the rate of personnel taking annual paid leave to above
50%. We are also looking into initiatives to encourage employees to take paid time off for stress relief and promote flexible
workstyles. At the same time, we are conducting management-level training to increase awareness of these initiatives.

At the Nomura Real Estate Group, we
consider childcare as an opportunity tolearn a variety of viewpoints and values.
Therefore, by having parental leave,
reduced working hours for childcare, andan assistance program for holiday
daycare, we offer an environment inwhich employees, both male and female, do not have to giveup on work because they have a baby or because of childcare
obligations.
In the fiscal year ended March 31, 2017, 119 employees
benefited from the parental leave program and the rate of
return is 94.1%. This sort of initiative is highly regarded andboth Nomura Real Estate Development and Nomura Real
Estate Urban Net have received Kurumin certification from the
Ministry of Health, Labour and Welfare as companies that
support childcare.

Percentage of Female Employees and Percentage ofFemale Managers%Training According to Rank
Nomura Real Estate Development conducts seminars andtraining on the importance of diversity in order to disseminateawareness. In the first half of the period ended March 31,
2017, we held diversity promotion representative training for
107 senior managers. During training, managers learned about
the need for diversity and examples of diversity promotion at
the Company.
In the second half, we implemented training for 293 management-level employees. During this round of training, wereconfirmed the importance of diversity as a part of leadershipand management strategy when it comes to becoming a diversified organization.

40

30

23.92

25.08

27.10

27.74

28.60

Number of Employees Taking Parental Leave
People
160

120
10

6.04

13

5.56

14

4.37

4.81

5.38

15

16

17

(As of April 1)
Percentage of Female Employees
Percentage of Female Managers*C ertain operating companies of the Group have made changes to their manager
qualifications in 2015 and subsequent years.
* Data is from the Nomura Real Estate Group overall.

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In 2016, Nomura Real Estate
Development received “Eruboshi” certification, which is based on the Act on
Promotion of Women’s Participation andAdvancement in the Workplace. Our
receipt of this certification was likely due
to our efforts to create an atmospherethat encourages the active participation of women, such as theestablishment of a Women’s Forum for female employees ingeneral positions, the implementation of a system to support
child-rearing and caregiving while working as well as careeradvancement, and an awareness program for employees.
Moving forward, we will strive to create a workplace where all ofour diverse employees, including women, can work with enthusiasm and demonstrate their abilities to the fullest by putting
workstyle reform and diversity management into practice.

Support for Nursing CareWith our approaching aging society, restrictions will arise on
how employees work due to nursing care of relatives and,taking into consideration that concern is rising about leaving
work because of nursing care, Nomura Real Estate
Development held seminars on balancing both work and nursing care, aiming for recognition of support initiatives such asproviding basic knowledge, preparations for nursing care, andexplanations of in-house programs in 2016. Also, we are considering revising the nursing care leave and reduced working
hours for nursing care programs and, going forward, expanding the work-from-home program.
Number of Employees Taking Nursing Care Leave(Years ended March 31) (People)

13

14

15

16

17
(Years ended March 31)* Data is from the Nomura Real Estate Group overall.

2014

2015

2016

2017

2

1

1

2

* Data is from the Nomura Real Estate Group overall.

Employee HealthPreventing Overwork

Reinforcing Health Management

The Nomura Real Estate Group has a variety of initiatives inplace to prevent or limit overwork by employees.
Specifically, Nomura Real Estate Development has introduced birthday leave and time off for stress relief as a meansof encouraging employees to take paid leave. In addition, toshorten hours worked, the company has designated “noovertime” days and placed restrictions on computer use times.
Moreover, the Executive Committee, which meets every month,creates labor reports and works systematically on further
improvements.
Employees whose working hours exceed a preset limit in agiven month must complete an overwork self-assessment
checklist to provide feedback to their general manager. Whennecessary, measures are implemented to ensure the health of
the individual employee.

The Nomura Real Estate Group Code of Action states that theGroup will “strive to maintain and enhance sound and pleasant
workplace conditions.” Accordingly, we endeavor to prevent
work-related accidents, facilitate appropriate management ofphysical and mental health, and ensure pleasant, employeefriendly workplaces. Group companies offer health checkups
and examinations, and have set up mental and physical healthhotlines and health consultation desks as part of proactive
efforts to address mental health issues.

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Integrated Report 2017

HUMAN RESOURCE MANAGEMENT

68

Receipt of “Eruboshi” certification

99

119

109

83

0

Winner of New Diversity Management Selection 100
from the Ministry of Economy, Trade and Industry
In 2016, Nomura Real Estate Development was chosen by
the Ministry of Economy, Trade and Industry as a New
Diversity Management Selection 100 recipient. The main
topics influencing selection included the advancement andexpansion of work fields welcoming to women, rectification of the need for long hours as part of workstylereforms, and more. This marks the first time that a realestate company was recognized with this honor in
the large corporation category (workforce of 301
employees or larger).

139

20

The Group is also
included in the MSCIJapan ESG SelectLeaders Index and
the MSCI Japan
Empowering Women
Index (WIN) offered by
MSCI. WIN is part of
the MSCI Japan IMI Top 500 Index, its parent index, and isbased on employment data on women disclosed inaccordance with the Act on Promotion of Women’sParticipation and Advancement in the Workplace, which isused by MSCI to calculate a multifaceted gender diversity
score that is then used to select the corporations with the mostimpressive gender diversity within their industries.

69

Interview with the Chairman and
an External Director

Atsushi Yoshikawa
Chairman of the Board of Directors

The Evolving Governance of
Nomura Real Estate Holdings
Based on its Mid- to Long-term Business Plan, the Nomura Real Estate Group is working to expand its business domains andenhance its business value. As it pursues these endeavors, the Group is evolving its business management framework to reflect thechanging times and its transforming business model. In this section, newly appointed Chairman Atsushi Yoshikawa and External
Director and External Audit & Supervisory Committee Member Satoshi Ogishi discuss the characteristics of the Group’s corporate
governance structure as well as the changes that are occurring to that structure. By reading this section, we hope our stakeholders
will gain a better understanding regarding the Group’s business management structure.

Atsushi Yoshikawa

Satoshi Ogishi

Chairman of the Board of Directors

External Director (Audit & Supervisory Committee Member)

External Director (Audit & Supervisory Committee Member)

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Q. How would you evaluate the effectiveness of theBoard of Directors?
   
Ogishi: With eight internal directors and five external directors,
I believe that the Company’s Board of Directors has a wellbalanced ratio of internal directors to external directors. In addition, the Company’s external directors, including myself, have agreat deal of legal and accounting experience, and the presenceof External Director Satoko Shinohara provides the Company
with not only a woman’s perspective but also a resident-based
perspective. The structure of the Company’s Audit & Supervisory
Board is also extremely balanced, comprising three external
directors and two internal directors. Recently, while there has
been a trend among other Japanese companies of reducing thenumber of directors, the Company’s Board currently consists of
13 directors. Although this may not be the best structure to havein the future, when I see how all directors actively participate inmeetings of the Board of Directors and Audit & Supervisory
Board and engage in meaningful discussions, I get a sense that
the Company has appointed the necessary number of directors
for ensuring a sufficient level of effectiveness.
   Yoshikawa: The external directors we have appointed not only
have an abundance of knowledge and experience, they also haveextremely engaging personalities. While the Board of Directors is
a forum for making decisions, it is also a forum for holding
discussions based on the matter at hand. As far as I haveobserved, the discussions held at Board of Directors’ meetings
are well focused and incorporate a wide range of perspectives,
thereby resulting in appropriate decision-making at these meetings.
Board of Directors’ meetings were held 17 times in the fiscal
year ended March 2017, with the external directors attending
nearly all of these meetings. We distribute important materials
to the external directors as quickly as possible, and they always
make sure to fully digest the content of these materials. I am
truly grateful to these directors for their efforts in this regard.
However, it is not very beneficial to have the external directors
spend much more time on reviewing materials and attending
meetings. As such, to further enhance the quality of discussion
going forward, we will leave matters regarding business execution up to the Management Committee and other relevantbodies and focus on utilizing Board of Directors’ meetings as aforum for holding more meaningful discussions.
Q. Could you please explain the characteristics of theCompany’s decision-making process and the changes
that are happening to that process?
   
Ogishi: When I was asked to be an external director, I wasconcerned that my role would be to simply approve matters thathave already been decided without engaging in much debate.
However, that turned out to be a needless concern, as all members of Board—whether internal or external—actively participate
in discussions and voice their opinions. Furthermore, aside from
Board of Directors’ meetings, there are opportunities for external
directors to exchange opinions amongst themselves, and offsite meetings are held with the executive officers. Accordingly,
I do not believe it is necessary to extend the duration of Boardof Directors’ meetings any further. With that said, it is notpossible to hold truly meaningful discussions if the Board meets
only once or twice a month for about three hours at a time. To
implement better decision-making within the limited amount oftime available for Board of Directors’ meetings, I make sure tooffer a different viewpoint and perspective to the executive
officers when I feel that an agenda item needs to be discussed
more thoroughly. I then ask that the executive officers once
again discuss and examine the item internally and propose it
again at the next Board of Directors’ meeting.
   Yoshikawa: As Ogishi has mentioned, by explaining businessplans, answering questions, and addressing issues pointed out
at Board of Directors’ meetings, executive members are able tobroaden their perspective on the Company’s business, and theirdecision-making process has become more robust and transparent as a result.
In the past, the Residential Development Business was themain pillar of the Company’s operations. However, under thecurrent Mid- to Long-Term Business Plan, we have adopted
a strategy that promotes business diversification to establish
pillars that will stand alongside the residential business. Whilean approach that involves carrying out initiatives specific to eachindividual business is a natural one, there is a need for us topursue Group-wide synergies to a greater extent than everbefore. In other words, we must not only determine the profitability of each individual project but also give consideration fromvarious perspectives to how a project will contribute to theoverall development of the Company’s business. The external
directors often ask probing questions from a perspective thatdiffers from the executive side’s, and many of these questions
involve fundamental issues, such as whether or not a project istruly something in which the Company should be engaging or
how a project will help the Company realize its corporate philosophy. Thanks to these kinds of questions, executive members of the Board of Directors have become much more awareof their responsibility to not only generate profits from individual
businesses but also promote Group-wide synergies and contribute to society as a whole.
   
Ogishi: In reality, the majority of agenda items brought up at
Board of Directors’ meetings relate to construction plans, starting with land acquisition, and property sales. After Kamezo
Nakai, the former chairman, joined the Company, the discussion
points of Board of Directors’ meetings gradually began tochange, going from simply discussing and approving a projectbased on its individual circumstances to discussing and approving a project while also considering its future outlook from aGroup-wide perspective.
The external directors’ understanding of each individual
project is not necessarily as thorough as that of Nomura Real
Estate’s employees, who are well versed in the Company’s
operations. We therefore give consideration to whether or not
a project has been thoroughly examined beforehand and if it isreally something a certain division and the Group as a wholeshould be pursuing. Even when a project offers attractive business opportunities, we examine the balance the project will havewith other business fields, the kinds of synergies it can generate,

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Integrated Report 2017

STRUCTURE OF BUSINESS MANAGEMENT

Satoshi Ogishi

Interview with the Chairman and an External Director

71Interview with the Chairman and an External Director

and the position it will hold within the economic cycle. It is fromsuch perspectives that we participate in discussions on projects
at Board of Directors’ meetings.
As the Board of Directors repeatedly holds discussions
based on the above perspectives, the heads of business units
and directors overseeing business units gradually become moreaware of the perspectives the external directors take into
account. Accordingly, consideration has already been given tosuch matters before an agenda item is proposed at Board of
Directors’ meetings. I believe that a Group-wide perspective isgradually being instilled in not only the members of the Board of
Directors and Management Committee but also the employeeson the front lines.
Also, the Board of Directors is paying particularly close attention to conflicts of interest. In cases where a corporation, such as
Nomura Real Estate Holdings, has a major shareholder, there is aneed to constantly monitor the risk of potential conflicts of interest and ensure that the corporation’s management is operating ina way that benefits all of its shareholders, including generalshareholders. While there are a number of directors who havecome from the Company’s major shareholders, I have never once
gotten the impression that the Company’s governance is being
controlled by its major shareholder. Conversely, I feel that suchdirectors have become a source for management talent that was
missing in the Company or have functioned as a point of contact
for collaboration with the major shareholder.

72

Nomura Real Estate Holdings, Inc.

Integrated Report 2017business execution is an important function of the Board.
However, at times when the executive officers are fulfilling theirduties appropriately, I believe the Board will be able to devote
more time to holding discussions about the future. I would like tocontinue to ask the external directors to help initiate lively discus­
sion at Board meetings. I intend to ask probing questions until
I receive a satisfying answer, and there will be times when I needto interject my opinion to put the discussion back on track. As theworld continues to change, our business itself needs to change
as well. However, there has been a tendency within the Company
to draw conclusions based on past successes. Particularly, in the
Residential Development Business, the establishment of theunified brand name “PROUD” was a major success for theCompany, and I believe that experience can sometimes lead to
overconfidence in our ability to succeed in any other businesssegment we enter into. We therefore need to closely examine
whether shared assumptions within the Company are accurate
and without pitfalls while incorporating the knowledge andexpertise of each member of the Board of Directors.

and on how to reflect a director’s contribution to Group-wide
management in the Company’s compensation system. These
discussions have produced meaningful ideas for addressingthese issues, and the Company is now at the stage where it
must figure out how to put these ideas into practice.
   Yoshikawa: While the activities of the Advisory Committee
Relating to Nominations and Compensation have only justbegun, the committee will help us further enhance the quality ofour discussions and determine more specific policies over theupcoming year. I hope to convey these accomplishments to ourshareholders.
   
Ogishi: Another issue for the Advisory Committee Relating toNominations and Compensation to address is the development
and nomination of successors. This is quite a difficult task, and it
will take a bit more time before we see specific results start toappear. The committee shares information with the Board of
Directors regarding the pool of candidates it has chosen for
future management positions, and the Board intends to monitor
these candidates’ ways of thinking and abilities over the next
several years. We often have these candidates explain agenda
items at Board of Directors’ meetings, which provides us withexcellent opportunities to observe the approach and abilities ofthese candidates. However, making a comprehensive evaluationof these candidates is a difficult endeavor. While there are simple
evaluation standards such as “excellent,” “good,” and “passable,” checking whether or not a candidate has accomplished acertain initiative or project is also an important part of making anevaluation. We recognize that carrying out evaluations from thisperspective in an objective and highly transparent manner is amajor issue for us to tackle going forward. How we incorporate
external management talent is another issue we must address.
   Yoshikawa: In real estate development, construction of a project
starts after development plans have been formulated and theopinions of interested parties have been accounted for. However,in terms of mixed-used developments, in which many business
units and personnel are involved, there are a large number ofprojects that take over 10 years to complete. It is therefore
difficult to make quantitative evaluations that consider who contributed the most to a project and in what way. As such, thoseof us in management must take time to thoroughly observe andcomprehend the work style of each employee if we wish todevelop management talent for the next generation. Moreover,
the type of management talent needed differs depending on thesituation the Company is currently in. Accordingly, I believe acertain amount of flexibility is required in creating a pool of talentfrom a certain number of individuals and observing their actions
over a long period of time.
Q. Could you offer us your opinion on the ideal state of theBoard of Directors going forward?
   Ogishi: The Company increased the number of its external
directors, and discussions are being held at Board of Directors’
meetings from the perspective of Group-wide management.
These aspects can certainly be considered as progress in termsof strengthening governance. However, to further enhance thequality of Board of Directors’ meetings, discussions need to beheld from a medium- to long-term perspective that takes into
account such factors as how the Company approaches theissues facing Japan and how the Company identifies ways for its
overseas business to succeed. If the Company is able to engage
in those kinds of discussions, the Board will transform from being
a forum for approving specific projects to being a forum fordiscussing and determining the future direction of the Company
while supervising the execution of specific projects.
   
Yoshikawa: As chairman of the Board of Directors, I would liketo manage the Board in a way that allows it to deepen discus­
sions regarding the Company’s future direction. Supervising

Q. Mr. Yoshikawa, as the chairman of the Board of Directors,
may I ask you to say a few words to the shareholders andother stakeholders?
   
Yoshikawa: When I was asked to be the chairman of theCompany’s Board of Directors, I had an earnest desire to leverage the experience I have gained thus far to play an importantrole in the Company’s management. I was appointed to thisposition as a non-executive chairman. However, while fulfillingmy duties as the Board’s chairman, I aim to help boost theGroup’s corporate value by providing the Group with the personal network and management know-how I have cultivatedover the years.
From my experience, I believe that new opportunities will
always appear no matter how difficult the situation a corporation
finds itself in. I have also come to realize that, after a company has
enjoyed a favorable performance for a certain period of time,difficult times always seem to be on the horizon. Based on such
experience, I will closely supervise the Company’s business execution so that the executive members do not become overly selfconfident within our businesses. I earnestly wish to turn Nomura
Real Estate Holdings into a company that can offer all of its stakeholders, including its shareholders and other investors, reasonable explanations and provide them with satisfactory returns.
Thanks to the efforts of the Board of Directors, including theformer chairman, and executive officers, the Company hasenhanced both its risk management and corporate governancestructures. However, as our business domains are vast and ourcontact with customers is extensive, it is hard to determine
when an issue could occur that would negatively impact our
reputation. While it is impossible to completely prevent such anissue from occurring, we will collaborate with our external directors to ensure that a prompt and appropriate response is takenin the event of a crisis.
To realize sustainable development for the Company, I intend
to make every effort to fulfill my role as chairman. I therefore ask
our stakeholders for their continued support going forward.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

STRUCTURE OF BUSINESS MANAGEMENT

Q. What results have been achieved through the establishment of the Advisory Committee Relating to Nominations
and Compensation? Also, what issues have occurredsince the committee’s establishment?
   
Ogishi: One year has passed since the Company established theAdvisory Committee Relating to Nominations and Compensation,
which acts as an advisory body to the Board of Directors. Even
before the establishment of this committee, a small group of theCompany’s top management had been examining the ideal typeof director compensation and the way successors are chosen.
As such, I view the establishment of the Advisory Committee
Relating to Nominations and Compensation as an endeavor toshed more light on such issues and ensure transparency in theprocesses for deciding nominations and compensation. Throughdiscussions held by the committee, the Company’s process fordetermining compensation has become clearer, and I view thatas a major step forward. Also, discussions pertaining to director
compensation systems have become much more meaningfulfrom the perspective of improving corporate value. In the realestate industry, simply boosting share prices through short-term
achievements is not sufficient. As a relatively long amount of timeis needed from making an investment to obtaining a return,short-term achievements do not necessarily lead to improvements in corporate value. Furthermore, to improve both corporate value and shareholder value, growth must be realized not on
an individual business unit basis but rather on a Group-widebasis. The Advisory Committee Relating to Nominations andCompensation therefore engages in discussions that focus on
how to boost shareholder value over the medium to long term

Interview with the Chairman and an External Director

73Corporate GovernanceCorporate Governance

Basic Viewpoint on Corporate GovernanceStatus of Shareholdings

Nomura Real Estate Holdings believes that a company must be governed in a way that continuously maximizes corporate value over thelong term while giving consideration to the interest of shareholders and all other stakeholders. It is based on this belief and following our
Basic Corporate Governance Policy that we act as a holding company in managing and supervising the business activities of our subsidiaries and strive to build a highly transparent management organization, which in turn will enhance the earnings power of the entire Group.
Basic Corporate Governance Policya. Investment shares held for purposes other than pure investment and the total amount on thebalance sheet: 15 stocks / ¥3,843 millionb. Stocks, number of shares, amount on the balance sheet, and purpose for investment shares
held for purposes other than pure investment
Numberof shares

Stock

www.nomura-re-hd.co.jp/english/ir/pdf/cgpolicy.pdf

Onward Holdings Co., Ltd.

Amount on balance sheet(millions of yen)

500,000

381

PurposeTo enhance corporate value by
strengthening business ties

Basic Corporate Governance Policy
Shareholder Rights and Securing
Impartiality
Nomura Real Estate Holdings effectively
maintains the same level of equality forevery shareholder based on their shareholdings. We also strive to disclose information in a timely and appropriate mannerso as to prevent information disparities
among shareholders.
Nomura Real Estate Holdings has apolicy concerning strategic shareholdingsthat acknowledges contributing to improving the Company’s corporate value from acomprehensive perspective of strengthening transaction relations with counterparties and strategic business tie-ups, etc.
We continuously examine the rationality of
the holdings from the perspective ofcontributing to improving the Company’s
corporate value. The Company makes
appropriate decisions when exercising
voting rights related to strategic sharehold­ings based on whether holdings contributeto improving the Company’s corporate
value through the enhancement ofinvestee companies’ corporate value.
Appropriate Cooperation with
Stakeholders
Relationship Building with Stakeholders
In recognizing it is a member of society,
the Nomura Real Estate Group has established the Nomura Real Estate Group
Code of Action as a set of relevant guidelines that will enable directors, executive
officers, and employees to follow a set of

highly esteemed ethics and social norms.
We will continue collaborating as appropriate while closely considering the interestsof shareholders, employees, customers,
business partners, creditors, local communities, and other stakeholders.

• Established the Advisory Committee
Relating to Nominations andCompensation

Achieved business execution with a Group-wide and long-term perspective

Deliberates on matters related to thenomination and compensation of
directors and executive officers as anadvisory body to the Board of Directors• Redefined its business segments
Achieved quicker business execution within each business by establishinga management structure for each business segment

Total amount on thebalance sheet(millions of yen)

Total amount ofdividends received(millions of yen)

Total amount of gains/losses on sale(millions of yen)

Total amount of gains/losses on valuation(millions of yen)

—

—

—

—

1,408

26

0

784

Non-listed shares• Increased the number ofexternal directors (1 2)• Disclosed reason for appointment of
directors

President

Information Disclosure
Screening Team

2014

2015

Risk Management
Committee Chairman

2016

Tokyo Stock Exchange

ReportFormed asneededTimely disclosure

Person responsible for
information handling(Executive Officer in chargeof the Corporate
Communications Dept.)

Direction

Department responsible
for timely disclosure(Corporate Communications
Dept.)STRUCTURE OF BUSINESS MANAGEMENT

2013

Risk Management System
Nomura Real Estate Holdings has established Risk Management Regulations asa set of basic principles on risk management, recognizing that ensuring soundmanagement and appropriate comprehension of and responses to various businessrisks facing the Group represents animportant foundation of corporate governance. Within these regulations, we haveestablished a flow of communication to the
executive management team to promptly
convey information in case of an unforeseen incident. The Risk Management
Committee, comprising directors andexecutive officers of Nomura Real Estate
Holdings and Group companies as members, has also been established. The
committee meets monthly to deliberate on
matters pertaining to risk management,compliance, and information security as
they relate to the entire Group. It also
discusses ways to respond to risks that do
emerge and regularly reports to the Boardof Directors.

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

2012

will screen the matter and report theresults to the President. Company information found to require timely disclosure
will be disclosed in a timely manner by thedepartment responsible for timely disclosure (Corporate Communications
Department) at the instructions of theperson responsible for information handling (Executive Officer responsible for the
Corporate Communications Department).
The Group Internal Audit Department
set carries out the monitoring of operations
under the aforementioned timely disclosuresystem. Audit & Supervisory Committee
Members attend Board of Directors’ andother important company meetings as well

the listing rules of the Tokyo Stock
Exchange. Specifically, as our timely disclosure system below indicates, theperson responsible for information handling (Executive Officer in charge of the
Corporate Communications Department)collects information about the Company
through the department responsible for
information collection (Corporate Planning
Department) from each business unit andGroup company. If information must be
reviewed to determine whether timely
disclosure is required, the Information
Disclosure Screening Team made up ofgeneral managers, executive officers, andothers responsible for related departments• Began evaluating the effectiveness of
the Board of Directors• Revised details of subscription rights to shares used as stock options
Revised details of subscription rights to sharesused for stock options as compensation andshared advantages and risks with shareholders

Category

Other shares

Appropriate Information Disclosure
and Transparency
System for Disclosing Information
Nomura Real Estate Holdings strives todisclose information about the Group’s
management strategy, financial condition,risk management, and internal control
system, etc., in a fair, timely, and appropriate manner based on the provisions of theCompanies Act, Financial Instruments &Exchange Act, as well as other laws and

The Nomura Real Estate Group’s Efforts to Reinforce Corporate Governance• Introduced executive officer system at the holding company

c. The total amount recorded on the balance sheet, dividends received, gains/losses on sale, andgains/losses on valuation of investment shares held for the purpose of pure investment in thefiscal year ended March 31, 2017as receive reports from directors and view
relevant documents to investigate whether
the timely disclosure system is functioning
properly.

ReportReport• Appointed external director (0 1)•	Added decision-making function to the Management
Committee to accelerate the transfer of authority•	Transitioned from a company with Audit & Supervisory Board
to a company with Audit & Supervisory Committee•	Increased the number of external directors (2Nomura Real Estate Holdings, Inc.

Integrated Report 2017

ReportDepartment responsible for
information collection(Corporate Planning Dept.)
Report5)•	Established the Basic Corporate Governance Policy

74

Incidents withsignificant
urgency

Departments

Group companies

Nomura Real Estate Holdings, Inc.

Integrated Report 201775

Corporate GovernanceCorporate Governance

Risks

Risks and Issues

Specific Initiatives

Business Risks, etc.

Real estate market trends

Possibility of affecting results• Continuous research into changes in residential development, leasing,and property brokerage markets

Changes in real estate legislationand taxes

Possibility of affecting results• Continuous research by means of regular information exchangewith business groups and local governments

Permits, licenses, etc., in key
businesses

Possibility of affecting results• Continuous research and understanding of licensing by making use of
the legal department

Effects of interest-bearing
liabilities

Possibility of affecting results andfinancial status• Relationships with financial institutions via the finance department

M&A

Possibility of affecting results• Continuous research through the Corporate Planning Department

Natural disasters, etc.

Possibility of affecting results andfinancial status• Establishment of Group BCP and periodic training and disaster
preparedness meetings

Personal information

Possibility of loss of credibility and ofaffecting results• Information management through enhancement ofrisk management systems

Overemphasis on period results

Possibility of affecting results• Comprehension of the promotion of business activities
in each business unit

Foundations
Necessary for
Business Continuity

Capital ties with affiliatedcompanies

Possibility of affecting management• Continuous research through the Corporate Planning Department

Human resources

Responses to globalization and diversification
Labor shortages and long working hours• Continuous Company-wide initiatives for human resource cultivationand diversity through the human resource department and workstylereform committee

Foundations necessary for business continuity• Continuous corporate governance initiatives as a company with
Audit & Supervisory Committee and compliance promotion by the Risk
Management Committee, as well as risk management

Management systems

Key Areas for the Company

Safety / Security

Natural disasters
Aging of real estate stock• Creation of the PROUD Standard Disaster Prevention Manual
for residences• Establishment of disaster preparedness centers andimplementation of emergency response drills

Environment

Environmental problems
Energy shortages• Use of our original PROUD Environmental Assessment Sheets• Promotion of smart towns

Community

Weakening family ties due to a declining birthrate and aging population
Diminished function of local communities

Health / Comfort

Transition into an aging society
Rising concern for health and comfort anddiversifying needs• Publication of the Condominium Community Guide• Urban-type compact town initiatives

Internal Audits and Audit &Supervisory Committee System
The Nomura Real Estate Group has established an internal audit department at eachGroup company, with the exception ofsome small companies. Each department
is supervised under the direct jurisdictionof each Group company president or an
officer who does not hold an additional
office in a business operations division,
which allows the department to maintainorganizational independence. In addition,
we have established the Group Internal
Audit Department in the holding company
that, in collaboration with the auditing firm,
supervises the internal audit functions of
the entire Group and monitors and evaluates as well as audits each division within
the Company. Also, the results of audits
are reported at meetings of the Board of
Directors and the Audit & Supervisory
Committee.
The Audit & Supervisory Committee
receives regular reports from internal audit
departments on the implementation andresults of internal audits. When necessary, it
can recommend or instruct additional audits

or necessary investigations to be carriedout. The Audit & Supervisory Committee
also audits and supervises the execution ofduties by directors and business operations
by executive officers while cooperating withthe auditing firm as needed.
Audit & Supervisory Committee
Members attend Board of Directors’ andother important Company meetings andcan request reports from business execution departments as necessary to collectinformation on Nomura Real Estate
Holdings’ execution of business operations. Nomura Real Estate Holdings has
established an Audit & Supervisory
Committee Department in order to aid theCompliance Systems
The Group Compliance Department spearheads Nomura Real Estate Holdings’ efforts
to promote continuous educational andawareness activities for executives andemployees, and also provides advice, guidance, and assistance to Group companies.
Specifically, training is carried out throughout
the year following the compliance program,
while Compliance Hour is a program
streamed to all officers and employees overthe Internet. These efforts and more ensurethat continuous improvement is achieved inawareness of compliance.

The Nomura Real Estate Group Help
Line was set up as a whistle-blower hotline
independent from executive management
for employees to report or receive consultations about illegal or unethical behavior
they may have witnessed taking place
within the Group. Employees who use thehelp line are ensured their information is
kept confidential and they cannot betreated unfairly for reporting an incident
using the help line.

duties of Audit & Supervisory Committee
Members. This office has its own dedicated staff who work to implement measures for increasing the effectiveness ofaudit operations.
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 with theauditing firm as needed and strives tofollow appropriate accounting procedures.
Certified Public Accountants involved in
auditing are listed below.

Auditing Firm and Certified Public Accountants (as of June 29, 2017)
Auditing Firm

Names of Certified Public Accountants

Ernst & Young ShinNihon LLC

Designated and Engagement Partner

Hidetsugu Kaneko

Designated and Engagement Partner

Kazunori Takenouch

Designated and Engagement Partner

Toru Nakagiri*1. T he length of auditing service of each of the above mentioned Auditors is seven years or less; therefore, thenumber of years is omitted.
*2. E
 rnst & 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 5 / Other 4

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 ofguidelines, etc.
• Establishment of emergency communication networks
at Group companies

Employees of Group companies• Health promotion programs at the sports clubs we operate• Acceleration of the development of elderly housing with added services

NomuraReal Estate
Holdings

Board of Directors
Chairman and PresidentGroup Compliance Officer
Group Compliance Dept.

ReportCommittee
Chairman

Risk Management
Committee

Secretariat

About the Risk Management
Committee<Customarily meets once a month><Extraordinary meetings held as necessary><Reports to the Board of Directors at least
once every three months><Roles> egular monitoring of risks
RRisk evaluation and analysis• Preemptive preventive measures• Incident response• Measures to prevent repeat incidents• Improving compliance awareness••

The Nomura
Real EstateGroup
Companies

Compliance Officers(Directors in charge of administrative operations at Group companies, etc.)

Compliance Leaders

Risk Management
Committee, etc.

STRUCTURE OF BUSINESS MANAGEMENT

Compliance Promotion Framework and Risk Management Framework(General managers of general administrative operations at Group companies)

Compliance Promoters, etc.
(Appointed at each company)

76

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201777

Corporate GovernanceCorporate GovernanceObligations of the Board of Directors
Nomura Real Estate Holdings has selected
the management format of a company
with Audit & Supervisory Committee inorder to strengthen audit and oversightfunctions by providing directors who serve
as Audit & Supervisory Committee
Members with voting rights during Boardof Directors’ meetings. We have also
reinforced the oversight function of theBoard of Directors by appointing multiple
external directors and establishing theAdvisory Committee Relating toNominations and Compensation, which
has enabled us to realize a fair and highly
transparent management system.
Additionally, we have established a risk
management system, compliance system,
and internal control system, with eachreporting to the Board of Directors on aregular basis, which ensures the effectiveness of the supervision by the Board of
Directors concerning the execution of
directors’ duties and business operations
by executive officers.

78

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Audit & Supervisory Committee
The majority of Audit & Supervisory
Committee Membership comprises independent external directors; and at least
one of the members, who also serves as adirector, possesses appropriate knowledge of finance and accounting.
The Audit & Supervisory Committee
performs audits utilizing the Company’s
internal control system and receives periodic reports on internal audits and theresults from the Internal Audit Department.
The Audit & Supervisory Committee also
has the authority to ask directors, executive officers, and business units of theCompany and the Group to report suchmatters when necessary.

Corporate Governance System
General Meeting of Shareholders
Appointment / dismissal

Nomura Real
Estate Holdings

Board of Directors
8 directors (excluding Audit & Supervisory
Committee Members)

Appointment / dismissal
Audit / supervisory

5 directors (Audit & Supervisory
Committee Members)

Audit & Supervisory
Committee
Audit & Supervisory
Committee Dept.

Appointment/
dismissal

Representative Director

Appointment

Advisory Committee Relating
to Nominations and Compensation

Audit

Accounting auditor(auditing firm)

Management Committee
CSR Committee
Risk Management Committee

Various departments

Group Internal Audit Dept.

Guidance and support

Monitoring

Operating companies

Criteria for Determining Impartiality of Independent External Directors(Article 14 of the Basic Corporate Governance Policy)
Article 14 In addition to Independent Director impartiality criteria set by the Tokyo
Stock Exchange, the Board of Directors establishes criteria concerning the impartialityof Independent External Directors and nominates Independent External Directors
having confirmed that they do not correspond to any of the following items.
(1) Individuals who execute business for any other company with which the Company
or its subsidiaries have a reciprocal employment relationship as each other’sExternal Directors;(2) Individuals who are employees of the Company’s or its subsidiaries’ major business
partners*1 or who are employees at companies that consider the Company or its
subsidiaries to be their major business partner*1 (or individuals involved in the execution of business if such business partner is a corporation);(3) Consultants, accounting experts, or legal experts who receive money, or otherproperty gains in excess of ¥10 million in addition to Directors compensation fromthe Company or subsidiaries during the most recent business year;(4) Individuals affiliated to companies, etc. that provide professional services such aslaw firms, accounting firms, and consulting companies that receive large sums ofmoney or other property gains*2 from the Company or subsidiaries;(5) Individuals who are or were involved in the execution of business at one of theCompany’s major shareholders (individuals who are or were involved in the execution of business at such corporation if the major shareholder is a corporation), or
lead managing underwriter; or(6) Close relatives of individuals stated in (1) to (5).
*1 A Major business partner means a business partner whose transactions with the Group exceed 2% of
the Company’s or such business partner’s annual consolidated sales in the most recent business year.
*2 Large sums of money or other property gains means gains that exceed 2% of that company’s annual
consolidated sales in the most recent business year.

Advisory Committee Relating toNominations and Compensation
In February 2016, Nomura Real Estate
Holdings set up the Advisory Committee
Relating to Nominations andCompensation, comprising mainly independent external directors, as an advisory
body to the Board of Directors tostrengthen the objectivity and impartialityof the functions of the Board of Directors
in relation to director nominations andcompensation. The Advisory Committee
Relating to Nominations andCompensation meets as necessary to
discuss matters relating to the nominationof and compensation for directors andexecutive officers and reports the outcomeof discussions to the Board of Directors.
Evaluating the Effectiveness of theBoard of Directors
Directors conduct an annual self-assessment about the effectiveness of the Boardof Directors and their contributions as adirector, while the Board of Directors
carries out an analysis and evaluation of
the effectiveness of the entire Board of
Directors, referencing the self-assessmentof each director, and a summary of theresults are disclosed appropriately. Annual
evaluations will enable us to regularly
ascertain the status of improvements andto further enhance the effectiveness of theBoard of Directors.

Evaluation of the Effectiveness of the Board of Directors
Based on the results of the survey on the effectiveness of the Board of Directors in the fiscal
year ended March 31, 2016, the following points were improved on in the fiscal year ended
March 31, 2017.
Issues Based on the Result ofSurvey on the Fiscal Year
Ended March 31, 2016

Improvements

Explanations of proposals
and document contents• Sharing of points to be clarified in
documents and proposal explanations• Risk analysis and assessment• Positioning of Mid- to Long-term Business
Plan items

Distribution of documents
further in advance• Acceleration of document distribution• Accelerated preparation of Board of
Directors’ meeting minutes

Improvement in strategic
discussions by the
Board of Directors• Refinement of Board of Directors’
meeting agendas

Survey on the Fiscal Year
Ended March 31, 2017

These improvements have beenassessed as likely to contribute to
the increased effectiveness of theBoard of Directors.

In Pursuit of Further Improvements• From April 2017, we have been implementing operational improvements, such as better
document distribution prior to meetings and clarified proposal explanation and document
discussion points.
• From April 2017, we have been implementing operational improvements, such as further
refinements to Board of Directors’ meeting agendas and the establishment of deliberation
opportunities outside of Board of Directors’ meetings.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

STRUCTURE OF BUSINESS MANAGEMENT

Roles of the Board of Directors
The Board of Directors bears the responsibility to realize effective corporate governance for all shareholders and, by doing
so, to continuously grow the Company
and maximize long-term corporate value.
To fulfill this responsibility, the Board of
Directors ensures the fairness and transparency of management by supervising
management and makes the best possible
decisions for the Company through thedetermination of important business execution matters. The Board of Directors ismade up of a diverse collection of directors who possess various knowledge,
experience, and skills in order to achieve
the necessary balance and diversity as aholding company that manages a numberof subsidiaries engaged in various business segments. Specifically, the Board of
Directors comprises eight directors(excluding directors who serve as Audit &Supervisory Committee Members), ofwhom two are external directors, and five
directors who are also Audit & Supervisory
Committee Members, of whom three areexternal directors. The Board of Directors
decides important corporate matters, suchas basic management policies, and supervises the execution of duties by directors
and business operations by executive
officers.

Roles of Independent External Directors
The primary roles of independent external
directors are to use their own knowledge
to provide appropriate advice from theperspective of the sustainable growth of
the Company and enhancing corporate
value, to fulfill a supervisory role overmanagement through important decisionmaking by the Board of Directors, tomonitor for conflicts of interest between
the Company and executive management
or primary shareholders, and to state theviews of shareholders and other stakeholders appropriately to the Board of
Directors using a stance independent fromthe executive management team. Nomura
Real Estate Holdings has established its
own set of criteria for determining theimpartiality of independent external directors, in addition to the requirements of
independent officers established by the
Tokyo Stock Exchange.

79

Corporate GovernanceCorporate Governance

List of External Directors
Name

Shigeru Matsushima

Satoko Shinohara

Audit &
Supervisory Independent Supplemental Explanation ofCommittee
Director
Compliance Item
Member——Satoshi Ogishi

Akira Yamate

Akira Ono

Reason for Appointment as External Director

Attendance Record

Mr. Matsushima is
an External Director of
CAC Holdings
Corporation.

Mr. Matsushima has a wealth of knowledge and wide-ranging
experience through his many years as an expert in businessadministration. He was appointed as an External Director since his
experience will be instrumental toward strengthening oversightfunctions covering the Board of Directors and achieving fair andhighly transparent management.

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

Ms. Shinohara has worked for many years as an architect and has
gained a wealth of knowledge and experience in her field. She wasappointed as an External Director since her experience will be
instrumental toward strengthening oversight functions covering theBoard of Directors and achieving fair and highly transparent
management. Spatial Design Studio, for which Satoko Shinohara
serves as Representative Director, has the above describedtransactions with Nomura Real Estate Development Co., Ltd.
However, the transaction amount in the most recent business year
represents less than 2% of the sales of said company and of theconsolidated operating revenue of the Company.

Attended 17 of the
17 Board of Directors’
meetings held during the
fiscal year ended
March 2017.

Mr. Ogishi is a Partner
at Nishimura & Asahi.

Mr. Ogishi has established a wealth of expertise and wide-ranging
experience as an attorney-at-law. He was appointed as an External
Director and Audit & Supervisory Committee Member to reinforce
the corporate governance system and further enhance the audit
system. The Company and its subsidiaries engage in transactions
concerning legal services with Nishimura & Asahi, of which Satoshi
Ogishi is a Partner. However, the transaction amount in the mostrecent business year represents less than 2% of the sales ofsaid law office and of the consolidated operating revenue of
the Company.

Attended 17 of the
17 Board of Directors’
meetings held during the
fiscal year ended March2017 and 11 of the 11
Audit & Supervisory
Committee meetings held.

Mr. Yamate is an External
Director of Mitsubishi
UFJ Financial Group.

Mr. Yamate has been a Certified Public Accountant for many years
and he has established a wealth of expertise and wide-ranging
experience in his field. He was appointed as an External Directorand Audit & Supervisory Committee Member to reinforce thecorporate governance system and further enhance theaudit system.

Attended 16 of the
17 Board of Directors’
meetings held during the
fiscal year ended March2017 and 11 of the 11
Audit & Supervisory
Committee meetings held.

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 the corporate
governance system and further enhance the audit system.

Attended 17 of the
17 Board of Directors’
meetings held during the
fiscal year ended March2017 and 11 of the 11
Audit & Supervisory
Committee meetings held.

comprising bonuses and stock-relatedcompensation. Bonuses are determinedaccording to the Company’s businessperformance during the relevant fiscal year.
Stock-related compensation, in the form ofstock options, is designed to align executives’ interests with those of theCompany’s shareholders, and to further
enhance corporate value. Stock options
are either market-value stock options, on
which the exercise price (the amountpayable when the right is exercised) is
determined on the basis of market prices,or share compensation stock options,which have exercise prices of ¥1 per share.
In order to make our policy on determining director compensation more specific and based on the Mid- to Long-term
Business Plan, we will examine solutions
along with procedures for determining
compensation that are highly objective
and transparent.

Total compensation,etc. (millions of yen)

80

Total compensation, etc. by type of remuneration (millions of yen)
Basiccompensation, etc

Stock option

Bonus

516

247

98

171

6

Directors (Audit & Supervisory Committee Members)(excluding external directors)

77

57

—

20

2

External directors and Audit & Supervisory Board Members

67

67

—

—

5

Total

660

371

98

191

13

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

IR activities for
institutional investors

Number oftimes held

Earnings briefings

2

Conference calls on the earnings
announcement days

4

Meetings with investors and analysts(This number includes the following
meetings)

427

Small meetings with the president

2

Overseas IR (Europe, U.S., Asia)(including overseas conferences)8

Conference organized by securities
companies (Japan)

5

Property tours

4

SR meetings

11

IR activities for individual investors

Number oftimes held

Company information sessions byCEO1

IR fairs

2

Company information session via
the Internet

1

Please Visit Our IR Site.
Japanese:
www.nomura-re-hd.co.jp/ir/
English:www.nomura-re-hd.co.jp/english/ir/

Our reason for not implementing four of the 73 principles of Japan’s Corporate Governance Code as of April 2017 is explained below. We are now working to implement
these principles as soon as practical.
Principle

Reason for not implementing(3) Please refer to page 80 regarding the current compensation structure for directors.
	In order to make our policy on determining director compensation more specific and based on the Mid- to Long-term Business
Plan, we have discussed policy, in particular, in the Advisory Committee Relating to Nominations and Compensation, but willcontinue to examine designs for thorough systems moving forward.
[Principle 3-1]
Enhance Information Disclosure(4)	When nominating and appointing director candidates and executive officers, the Company nominates and appoints individuals
who have outstanding character, insight, and capabilities, irrespective of their nationality or gender. Specifically, the president
consults with the Company’s directors and executive officers and prepares a list of candidates by, as necessary, exchanging
opinions with officers at each Group company and conducting interviews with potential candidates, and nominates and appoints
director candidates and executive officers following discussion at a meeting of the Board of Directors led by the Advisory
Committee Relating to Nominations and Compensation.
	The Company will continue to investigate the policy and procedures taken to appoint members of management and nominate
candidates for director by means of the Advisory Committee Relating to Nominations and Compensation.

[Supplementary Principle 4-1-3]
Proper Supervision of Successor
Plans for CEO (Planning)

The Company provides training for executive officers and strives to train future members of management by providing opportunities for
initiatives that deepen their knowledge and experience as managers, such as gaining experience working at numerous divisions andattending important meetings, including Management Committee meetings.
The Company is aware that the appropriate appointment of management members in line with the Company’s corporate philosophy
and management strategies, including external candidates, is important for realizing sustainable growth. The Advisory Committee
Relating to Nominations and Compensation will continue to conduct investigations so that we can formulate a succession plan for
management that includes the systematic training of officers.

[Principle 4-14, Supplementary
Principle 4-14-1, Supplementary
Principle 4-14-2]
Disclosure of Training Policy for
Directors

The Company provides necessary management-level financial and legal training when appointing executive officers. The Company
also establishes, using Company expenses, opportunities to train such officers leveraging external organizations after their appointment, and implements initiatives to deepen understanding with regard to management. We also provide explanations pertaining toour business activities, history, and operating environment to external directors with the aim of deepening understanding at the time
we appoint them and after their appointment if needed.
The Company is aware of the need to prepare a policy concerning the systematic training of directors and executive officers basedon our corporate philosophy and management strategies. The Advisory Committee Relating to Nominations and Compensation willcontinue to investigate formulating and disclosing such a policy together with a management succession plan.

Number of directors
applicable

Directors (excluding Audit & Supervisory Committee Members)(excluding external directors)

Main IR Activities during the Fiscal
Year Ended March 31, 2017

Compliance with Japan’s Corporate Governance CodeShareholder Engagement
Nomura Real Estate Holdings conducts
proactive and constructive engagement

Total Compensation, etc., Total Compensation, etc., by Type, and the Number of Directors Applicable(fiscal year ended March 31, 2017)
Director category

Status of Investor Relations Activities
We strive to actively engage individual
investors through investor relations fairs
and Company information sessions
conducted by the CEO and via theInternet. For analysts and institutional
investors, at earnings briefings following

our announcement of semiannual andannual results, the CEO sits down withthem to explain about the Company’s
performance and management strategy.
Videos of this explanation are streamed
through our corporate website.
Additionally, we strive to foster greater
understanding in the Company throughconference calls when quarterly earnings
results are announced as well as throughsmall meetings with the president andproperty tours.
For overseas investors, we offer earnings information in English and stream
English-language versions of earnings
briefings via our corporate website. In
addition, the CEO or CFO visits with overseas investors individually in the UnitedStates, Europe, and Asia where they strive
to promote understanding of the Company
through briefings on business performanceand management strategy.
We have been working to improve thedisclosure section of our website in orderto justly and fairly provide information to
our investors. Consequently, the Company
earned a silver award from Gomez IR Site
Ranking for the fiscal year ended March
31, 2017. Our comprehensive rank was
14, up from 52, putting us at number one
in the industry, up from number three inthe last fiscal year.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

STRUCTURE OF BUSINESS MANAGEMENT

Director Compensation
A resolution was passed at the ordinary
general meeting of shareholders held on
June 26, 2015 setting the annual compensation of directors (excluding those whoserve on the Audit & Supervisory
Committee) at no more than ¥650 million
and that of directors who serve on the
Audit & Supervisory Committee at no morethan ¥150 million.
Nomura Real Estate Holdings’ compensation of directors consists of fixed monthly
compensation and variable compensation,

Attended 17 of the
17 Board of Directors’
meetings held during the
fiscal year ended
March 2017.

with shareholders based on its establishedsystems and policy on initiatives to promote greater engagement. The director in
charge of investor relations takes the leadin engaging shareholders, while thedepartment in charge of investor relations
supports these efforts. The department incharge of investor relations meets withinternal departments and shares information on a daily basis to gather informationand promote engagement with shareholders. The director in charge of investor
relations reports the views and concernsof shareholders found during engagement
to the executive management team, andregularly reports to the Board of Directors,
which discusses this information. We haveestablished Regulations Concerning thePrevention of Insider Trading in order toensure the fairness of information disclosures and prevent leakages of informationthat affect our stock price. We manage
insider information appropriately according
to these regulations, while a silent period
has also been established.

81

Corporate Officers

Corporate Officers(As of June 29, 2017)

Directors

Atsushi Yoshikawa

Eiji Kutsukake

Seiichi Miyajima

Shigeru Matsushima

Chairman of the Board of Directors

President andRepresentative Director, Group CEO

Executive Vice President andRepresentative Director, Group COO

Director (External)

Apr. 1984	Joined Nomura Securities Co., Ltd.
(currently, Nomura Holdings, Inc.)
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.
		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	Representative Director and Executive Vice President of
Nomura Real Estate Holdings, Inc.
Jun. 2015	President and Representative Director,
Chief Executive Officer of
Nomura Real Estate Holdings, Inc.
Apr. 2017	Chairman and Representative Director of
Nomura Real Estate Development Co., Ltd. (present)

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

Toshiaki Seki

Hiroyuki Kimura

Makoto Haga

Satoko Shinohara

Representative Director and Executive Officer,
In charge of Property &Facility Management Business Unit

Director and Executive Officer,
Group CFO and Head of Investor Relations

Director and Executive Officer,
Head of Management Division,
Management of Affiliated Companies

Director (External)

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

82

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Apr. 1989	Joined Nomura Real Estate Development Co., Ltd.
Oct. 2010	General Manager of Management Planning Department of
Nomura Real Estate Development Co., Ltd.
Oct. 2011	Director and Senior General Manager of
Investment Management Division of
Nomura Real Estate Asset Management Co., Ltd.
Apr. 2012	Executive Officer of
Nomura Real Estate Development Co., Ltd.
May 2012	Executive Officer of Nomura Real Estate Holdings, Inc.
(present)
Apr. 2015	Managing Executive Officer of
Nomura Real Estate Development Co., Ltd.
Apr. 2017	Director and Managing Executive Officer of
Nomura Real Estate Development Co., Ltd. (present)		Director of NREG TOSHIBA BUILDING Co., Ltd. (present)		Director of Nomura Real Estate Life & Sports Co., Ltd.
(present)		Director of Geo Akamatsu Co., Ltd. (present)		Director of Nomura Real Estate Reform Co., Ltd. (present)		Director of PRIME X. Co., Ltd. (present)		Director of Nomura Real Estate Wellness Co., Ltd. (present)
Jun. 2017	Director of Nomura Real Estate Holdings, Ltd. (present)

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 (present)
Mar. 2009	Representative Director of Kengo Kuma and Associates(present)
Feb. 2010	Representative Partner of
Satoko Shinohara Living Design Institute LLC (present)
Apr. 2010	Professor at Japan Women’s University (present)
Jun. 2014	Director of Nomura Real Estate Holdings, Inc. (present)

STRUCTURE OF BUSINESS MANAGEMENT

Apr. 1980	Joined Nomura Real Estate Development Co., Ltd.
Jun. 2003	Director of Nomura Real Estate Development Co., Ltd.
Mar. 2007	Managing Director of
Nomura Real Estate Development Co., Ltd.
Apr. 2007	President and Representative Director of
Nomura Living Support Co., Ltd.
(currently, Nomura Real Estate Partners Co., Ltd.)
Apr. 2008	President and Representative Director, and Chief Executive
Officer of Nomura Living Support Co., Ltd.
Dec. 2010	President and Representative Director of
Nomura Real Estate Reform Co., Ltd.
May 2012	Executive Officer of Nomura Real Estate Holdings, Inc.
Apr. 2013	Director of Nomura Living Support Co., Ltd.
(currently, Nomura Real Estate Partners Co., Ltd.)
Apr. 2014	President and Representative Director, and Chief Executive
Officer of Nomura Real Estate Partners Co., Ltd.
Jun. 2014	Representative Director and Executive Officer of
Nomura Real Estate Holdings, Inc. (present)
Apr. 2015	Director of Nomura Real Estate Urban Net Co., Ltd.
		Chairman and Representative Director of
Nomura Real Estate Partners Co., Ltd. (present)		President and Representative Director of
Nomura Real Estate Wellness Co., Ltd. (present)
Jun. 2015	Director of MEGALOS CO., LTD. (currently,
Nomura Real Estate Life & Sports Co., Ltd.) (present)

Apr. 1984	Joined Nomura Real Estate Development Co., Ltd.
Apr. 2009	Executive Officer of
Nomura Real Estate Development Co., Ltd.
Jun. 2009	Director of Nomura Real Estate Holdings, Inc.
Apr. 2010	President and Representative Director of
Nomura Real Estate Investment Management Co., Ltd.
		Director of Nomura Real Estate Capital Management
Co., Ltd.
		Director of Nomura Real Estate Asset Management
Co., Ltd. (currently, Nomura Real Estate AssetManagement Co., Ltd.)
Oct. 2011	Managing Director of Nomura Real Estate AssetManagement Co., Ltd.
May 2012	Executive Officer of Nomura Real Estate Holdings, Inc.
Jun. 2012	Director and Executive Officer of
Nomura Real Estate Holdings, Inc.
Apr. 2013	Director and Managing Executive Officer of
Nomura Real Estate Development Co., Ltd.
Jun. 2013	Executive Officer of Nomura Real Estate Holdings, Inc.
Jun. 2014	Director and Executive Officer of
Nomura Real Estate Holdings, Inc. (present)

Apr. 1973	Joined Ministry of International Trade and Industry(currently, Ministry of Economy, Trade and Industry)
Jun. 1998	Deputy Director-General for Agency ofIndustrial Science and Technology of Ministry ofInternational Trade and Industry
Sep. 1999	Director-General of Chubu Bureau of International Tradeand 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) (present)
Apr. 2008	Professor, Tokyo University of Science Graduate School
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. (present)

Nomura Real Estate Holdings, Inc.

Integrated Report 201783

Corporate Officers

Corporate and Financial Information

Takao Orihara

Shigeki Fujitani

Satoshi Ogishi

Director (Audit & Supervisory Committee Member)

Director (Audit & Supervisory Committee Member)

Director (Audit & Supervisory Committee Member)(External)

86 Main Topics from the Fiscal Year Ended March 31, 2017

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

Apr. 1981	Joined Nomura Securities Co., Ltd.
(currently, Nomura Holdings, Inc.)
Apr. 2008	Executive Managing Director of
Nomura Asset Management Co., Ltd.
Oct. 2008	Executive Officer of Nomura Holdings, Inc.
Apr. 2013	Audit & Supervisory Board Member of
Nomura Real Estate Development Co., Ltd. (present)
Jun. 2013	External Audit & Supervisory Board Member of
Nomura Real Estate Holdings, Inc.
		Audit & Supervisory Board Member of
Nomura Real Estate Urban Net Co., Ltd. (present)		Audit & Supervisory Board Member of
Nomura Building Management Co., Ltd.
(currently, Nomura Real Estate Partners Co., Ltd.) (present)
Apr. 2014	Audit & Supervisory Board Member of
PRIME X. Co., Ltd. (present)
Jun. 2014	Audit & Supervisory Board Member of
Nomura Real Estate Asset Management Co., Ltd. (present)		Audit & Supervisory Board Member of
NREG TOSHIBA BUILDING Co., Ltd. (present)
Jun. 2015	Director (Audit & Supervisory Committee Member) of
Nomura Real Estate Holdings, Inc. (present)
Jun. 2016	Audit & Supervisory Board Member of
Nomura Real Estate Reform Co., Ltd. (present)

Dec. 1981	Registered with Dai-ichi Tokyo Bar Association
		Joined Nishimura & Sanada (currently, Nishimura & Asahi)Jan. 1987	Partner of Nishimura & Sanada(currently, Nishimura & Asahi) (present)
Apr. 2005	Professor of Tokai University Law School		Executive Director of Nozomi Servicing Co., Ltd. (present)
Aug. 2011	External Director of Oracle Corporation Japan (present)
Jun. 2012	Audit & Supervisory Board Member of
Nomura Real Estate Development Co., Ltd.
		Audit & Supervisory Board Member of
Nomura Real Estate Holdings, Inc.
Jun. 2015	Director (Audit & Supervisory Committee Member) of
Nomura Real Estate Holdings, Inc. (present)

90 Consolidated Balance Sheets

88 Group Company Profiles
92	Consolidated Statements of Income /Consolidated Statements of Comprehensive Income
93 Consolidated Statements of Cash Flows
94 Business Unit Information
96 Status of Facilities as of the Fiscal Year Ended March 31, 2017
100 Corporate Data

Executive Officers
Takashi Kaku
Executive Officer in charge of
Quality Management and Architectural Design

Norio Ambe
Executive Officer in charge ofInvestment Management Business Unit

Juntaro Kimura
Akira Ono

Director (Audit & Supervisory Committee Member)(External)

Director (Audit & Supervisory Committee Member)(External)

Nov. 1977	Joined Price Waterhouse & Co.
Jul. 1991	Representative Partner of Aoyama Audit Corporation
Partner of Price Waterhouse & Co.
Apr. 2000	Representative Partner of
Chuo Aoyama Audit Corporation
Partner of PricewaterhouseCoopers
Sep. 2006	Representative Partner of PricewaterhouseCoopers Aarata(currently, PricewaterhouseCoopers Aarata LLC)
Jun. 2013	Audit & Supervisory Board Member of
Nomura Real Estate Development Co., Ltd.
		Audit & Supervisory Board Member of
Nomura Real Estate Holdings, Inc.
Jun. 2015	Director (Audit & Supervisory Committee Member) of
Nomura Real Estate Holdings, Inc. (present)
Outside Director of Mitsubishi UFJ Financial Group, Inc.
(present)		Audit & Supervisory Board Member ofPrudential Holdings of Japan, Inc. (present)

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

Shigeyuki Yamamoto
Executive Officer in charge ofResidential Development Business Unit

Minoru Hatada
Executive Officer in charge of Leasing Business Unit

Akihiro Fukuda
Executive Officer in charge of Development Planning

Haruhiko Nakamura

CORPORATE AND FINANCIAL INFORMATION

Akira Yamate

Executive Officer in charge of Property Brokerage &CRE Business Unit

Executive Officer in charge ofGroup Human Resource Dept.

Hiroshi Kurokawa
Executive Officer in charge of Corporate Planning Dept.,
Corporate Communications Dept.

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

Yukio Ichihara
Executive Officer in charge of Secretariat,
Group IT Planning & Implementation Dept.,
and Group Corporate Administration Dept.,
Internal Audit and Compliance84

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 201785

Main Topics from the Fiscal Year Ended March 31, 2017

Receipt of “Eruboshi” Certification
Based on the Act on Promotion of
Women’s Participation andAdvancement in the Workplace

Completion of Two Landport
Facilities in the Kashiwa-shi
Shonan Industrial Park
Landport Kashiwa Shonan I and Landport
Kashiwa Shonan II were completed, making
them the eighth and ninth in the series. Theselarge-scale, highly functional logistics facilities
consist of three floors, each measuring roughly
16,500 m2, and will likely be used as a fashion
and apparel-related shipping company. In
addition to being designed with immovablestock and seasonable fluctuations in mind,
consideration was given to environmental
performance and secure employment.

With diversity management
positioned as part of ourmanagement strategy, weare taking on diversity
promotion activities in aneffort to create a corporate
climate where each of ourdiverse employees, women included, canadequately demonstrate their abilities. We
received the highest ranking, level 3, of“Eruboshi” certification, which is based on the
Act on Promotion of Women’s Participation
and Advancement in the Workplace, from the
Minister of Health, Labour and Welfare.

Main Topics from the Fiscal Year Ended March 31, 2017

Selection of Business Partners forLarge-Scale Mixed Redevelopment
Project in Front of Nakano Station
We plan to build a multifunctional mixed-use
facility, a source for culture, manufacturing,
information, and people, as well as a largescale hospitality facility, powerful in its draw
and messaging ability. We are also researchinglayout plans to establish public foundations toimprove traffic flow in the areas around thefacilities and achieve a more functional layout.

Toranomon Station-FrontFirst Urban Area Redevelopment

Establishment of First Living Assistance, a New Company
of Home / Living Assistance BusinessAlong with installing an above- and belowground plaza in front of Toranomon Stationon the Ginza Line to contribute to making
the station more multifunctional and tocreating a barrier-free environment, we will
employ qualitative improvements to business and commercial functions to add thefeatures of an international business center and draw crowds. We
also plan to give the area in front of the station a face-lift and will
work to enhance the area’s international competitiveness by forming a multipurpose downtown core that is unique and attractive
and offers a number of urban functions as part of our efforts to
help realize these goals through development.

First Living Assistance Co., Ltd. develops advanced
services that improve property value for its customers.
In addition to working to maximize lifetime satisfaction
for Group customers, this new company also develops
high-quality services of home / living assistance for clients
external to the Group. Offering services to customers ofclient companies is a part of this company’s business.

7
6

2017

5
4
3

2

On-site cafeteria

1
12
11
10
9
8

2016

7
6
5

Development of MultifacetedSports Club

4

Merger of Nomura Real Estate Master
Fund, Inc. and TOP REIT, Inc.

Launch of Sumaino AI Answer
Sumaino AI Answer is the first Q&A chatbot
in the real estate brokerage industry. It offers
access to real estate companies without disclosing personal information and is available
24 hours a day to answer questions from
customers buying and selling residences
anytime, anywhere.

86

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

With the cooperation of
the public, the local government, and local businesses, Funabashi Morino
City has been highly
acclaimed for continuously
creating environmental
value and achieving urban development inpursuit of a low-carbon society. This is the first
non-French project to earn the ÉcoQuartierquality label for environmentally friendly communities from the French government’s Ministryof Housing and Sustainable Home of France.
Please see the Feature section beginningpage 56.

Work on this mixed-use redevelopment project, including residences,a plaza for the station, administrative facilities, a medical clinic, commercial facilities, and a high-rise condominium with public and commercial facilities, has been
completed. A pedestrian walkway has been installed to link
the station plaza and south sideof the complex with centers ofurban commerce, such as the
Uonotana Shopping Street.
In this way, we hope to vitalize
the entire local community.

Completion of the Building with the Largest Standard
Floor Space in Japan—Yokohama Nomura Building

Announcement of New Elderly
Housing Brand OUKASWith a standard floor space of nearly 4,000 m2, Yokohama Nomura
Building is the largest office building in Japan. The building has
been certified with a LEED CS gold level, a CASBEE S ranking,and SEGES for its high performance in terms of business continuity
planning (BCP), including cogeneration systems, equipment witha low carbon footprint, and trees and wall greening in correspondence to Company BCP
and efforts to reduce
environmental impact.

OUKAS, our new elderly housing
brand, was developed to extend
healthy life expectancies through bothtown planning and health maintenance and promotion as well as lifelong housing and independent
living support. OUKAS Funabashi elderly housing with supportive
services have been built next to Funabashi Morino City as the first in
the series and a model project promoting smart wellness housing.

Tomorrow Healthier than Today
Wellness for Tomorrow

CORPORATE AND FINANCIAL INFORMATION

Nomura Real Estate Master Fund, Inc. and
TOP REIT, Inc. concluded a merger agreement. This merger brought our total acquisition
price to over ¥930.0 billion and elevated us tonumber two in the J-REIT market in terms ofasset size.

In modern society,where life andworkstyles are
increasingly
diverse,MEGALOS aims
to create fitness
styles to match its customers’ lifestyles. As
such, MEGALOS is accelerating developmentof 24-hour facilities and facilities for women inorder to meet varying customer needs.

Funabashi Morino City Awarded the
ÉcoQuartier Quality Label Certification
for Environmentally Friendly
Communities

Completion of 216 Units of PROUD Tower Akashi

Nomura Real Estate Holdings, Inc.

Integrated Report 201787

Group Company Profiles

Nomura Real Estate
Development Co., Ltd.

Nomura Real Estate AssetManagement Co., Ltd.

Nomura Real Estate Urban Net
Co., Ltd.

Nomura Real Estate Development conducts a rangeof businesses. The Residential Development Businessprovides quality residential properties under the PROUD
and OHANA brands. Meanwhile, the Leasing Businessplans, develops, and manages office buildings such as
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 the value of real estate heldby companies.

In October 2011, three investment management companies in the Nomura Real Estate Group merged andbecame one of the largest real estate investment management companies in Japan. Nomura Real Estate AssetManagement provides a one-stop shop for a broad variety
of financial products and investment management
services, including privately placed REIT and funds tolisted real estate investment trusts (REITs) and overseas
real estate fund of funds.

Nomura Real Estate Urban Net provides solutions forsatisfying customers in the real estate services andconsulting fields. These include residential real estate
brokerage for helping customers in changing their placeof residence, and commercial real estate brokerage,
which addresses the real estate needs of companies andinvestors. Nomura Real Estate Urban Net also operates aconsignment 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.

Nomura Real Estate Life & Sports
Co., Ltd.

PRIME X. Co., Ltd.

NF Power Service Co., Ltd.

First Living Assistance Co., Ltd.

This company represents the integration of building andcondominium management operations with the capability
to perform overall management of various building types.
Nomura Real Estate Partners combines expertise inbuilding and condominium management with property
management to realize effective real estate management
and construction aimed at handling large-scale repair,
remodeling, and interior work.

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

Fitness facilities such as fitness clubs, kids’ schools,
and tennis schools are planned, developed, and managed
under the MEGALOS brand name. The company alsooffers services aimed at corporations and local
governments.

Based on the accumulated expertise jointly developed with
Nomura Real Estate Development, PRIME X. provides
Internet advertising businesses that specialize in the realestate and housing industries. Prime X. delivers proposals
that maximize customer benefits, ranging from thecreation of corporate websites and project home pages
to creating and managing membership organizations,and handling project sales promotions.

NF Power Service efficiently procures electric powerusing unique electric power energy data accumulated
from operations that supply energy to condominiums.
The company offers added-value through energy services
provided by the Group, which include a high-voltage
collective receiving service.

We offer a home / living assistance service for thecustomers of our corporate clients, which we have built up
through the Residential Development Business of Nomura
Real Estate Development. We have developed a businessthat links corporate clients and their customers in a varietyof lifestyle-related fields through a service that dispatches
housing experts on home visits.

Nomura Real Estate Heating andCooling Supply Co., Ltd.

Geo Akamatsu Co., Ltd.

Nomura Real Estate ReformCo., Ltd.

NOMURA REAL ESTATEHONG KONG LIMITED

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

NOMURA REAL ESTATE ASIA
PTE. LTD.

Nomura Real Estate Heating and Cooling Supply is
responsible for the supply of heating and cooling services
to Yokohama Business Park, a large-scale business facility,
through its district heating and cooling system. Using a“bestmix” system that combines gas and electricity, thecompany uses energy efficiently to curtail costs andminimize environmental impact.

Geo-Akamatsu provides a full range of property consulting
and other services that maximize its 50 years of accumulated expertise. These services include surveys of commercial facilities, project planning, leasing, commercial
space design, and property management.

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

NOMURA REAL ESTATE HONG KONG offers inboundinvestment support specializing in the Japanese realestate market for international investors based in Hong
Kong, and strengthens ties between local companies andinvestors, enhancing business opportunities for the Group.

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

NOMURA REAL ESTATE ASIA promotes the Group’sbusinesses, including pursuing business opportunities inreal estate development in Southeast Asia and supporting
investors’ demand for Japanese real estate.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Nomura Real Estate Wellness
Co., Ltd.

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

Nomura Real Estate Amenity
Service Co., Ltd.

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

NREG TOSHIBA BUILDINGFACILITIES Co., Ltd.

NREG TOSHIBA BUILDING FACILITIES offers services tomaintain or improve the property value through facility
management, inspection, cleaning, security andconstruction, while providing safe and comfortableenvironment to all customers.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

CORPORATE AND FINANCIAL INFORMATION

88

Group Company Profiles

89Consolidated Balance Sheets

Consolidated Balance Sheets(Millions of yen)

ASSETS
Current Assets’16/3

Cash and deposits
Notes and accounts receivable–trade
Real estate for sale
Real estate for sale in process
Land held for development
Equity investments
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets’17/3¥   57,593 ¥   47,701
15,371
16,535
78,132
120,385
269,546
249,663
148,729
199,812
819
2,567
5,285
5,555
33,33842,123(38)(37)
608,779
684,306(Millions of yen)

LIABILITIESCurrent Liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Deposits received
Deferred tax liabilities
Provision for bonuses
Provision for directors’ bonuses
Provision for loss on business liquidation
Other
Total current liabilities

’16/3

’17/3

¥   51,162
137,300—
13,232
29,617
17
7,073
738
61
49,903
289,107¥   35,612
106,300
10,00016,052
29,459
20
7,516
639
47
50,149255,799

60,000524,600
63,76664,0703,900
313
18,018
5,264
739,933
1,029,041

70,000623,800
57,59763,5923,900
257
18,931
5,402
843,4811,099,280

116,598
109,842
207,203(3)
433,642

116,779
110,023
242,704(3)
469,503

6,664
155
7,861
43
(3,513)
11,212
1,685
9,868
456,408
1,485,449

7,947
119
7,860
62
(4,129)11,860
1,986
10,462493,813
1,593,093

Non-Current Liabilities
Bonds payable
Long-term loans payable
Lease and guarantee deposits received
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for loss on subleasing businessNet defined benefit liability
Other
Total non-current liabilities
Total Liabilities

Non-Current Assets
Property, plant and equipment   Buildings and structures   Accumulated depreciation    Buildings and structures, net  Land  Other   Accumulated depreciation   Other, net   Total property, plant and equipment
Intangible assets

374,378(139,309)
235,068
523,696
28,164(7,838)20,325779,091
10,681

394,607(152,718)
241,888549,671
26,053(8,787)
17,265808,825
10,985   Lease and guarantee deposits   Deferred tax assets  Other   Allowance for doubtful accounts
Total non-current assets
Total Assets

90

Nomura Real Estate Holdings, Inc.

Integrated Report 2017  Capital surplus  Retained earnings  Treasury shares   Total shareholders’ equity
Accumulated Other Comprehensive Income   Valuation difference on available-for-sale securities

45,511
21,37914,8405,167(0)86,897
876,670
1,485,449

46,252
21,73814,9925,992(0)88,975
908,786
1,593,093   Revaluation reserve for land   Foreign currency translation adjustment   Remeasurements of defined benefit plans   Total accumulated other comprehensive income
Subscription Rights to Shares
Non-Controlling Interests
Total Net Assets
Total Liabilities and Net Assets

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

CORPORATE AND FINANCIAL INFORMATION   Total investments and assets

Shareholders’ Equity  Capital stock   Deferred gains or losses on hedges

Investments and other assets  Investment securities

NET ASSETS:

91

Consolidated Statements of Income / Consolidated Statements of Comprehensive Income

Consolidated Statements of Cash Flows(Millions of yen)

Consolidated Statements of Income’17/3

Operating Revenue¥569,545¥569,680

Operating Cost

391,571

392,438

Operating Gross Profit

177,973

177,241

Selling, General and Administrative Expenses

97,061

99,970Operating Profit

80,912

77,271

Non-Operating Income

71

52

1,007

252

Interest income
Dividends income
Share of profit of entities accounted for using equity method

16

83

Other

459

310

1,555

698

Interest expenses

7,817

7,539

Other

1,970

1,477

Total non-operating income
Non-Operating Expenses

9,787

9,017

72,67968,952Gain on sales of non-current assets—

946

Total extraordinary income

—

946

1,426

254

—

337

278

—

Total extraordinary losses

1,705

591

Profit before Income Taxes

70,97469,307

Income Taxes–Current

20,992

22,957

Income Taxes–Deferred824(1,177)

Total Income Taxes

21,817

21,780

Profit49,15747,527

Profit Attributable to Non-Controlling Interests

1,975

521

Profit Attributable to Owners of Parent

47,18247,005

Total non-operating expenses
Ordinary Profit
Extraordinary Income

Extraordinary Losses
Impairment loss
Loss on building reconstruction
Loss on valuation of investment securities(Millions of yen)

Consolidated Statements of Comprehensive Income

’16/3

’17/3

Profit¥49,157¥47,527

Other Comprehensive Income

1,282

77

(36)

Revaluation reserve for land

216

(0)

Foreign currency translation adjustment

(10)

19

(4,944)(616)

Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive Income

(7)

(0)

(3,073)648¥46,084¥48,175¥44,109¥47,654

1,975

521

(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

92

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Cash Flows from Operating Activities
Profit before income taxes
Depreciation
Impairment loss
Loss (gain) on valuation of investment securities
Loss (gain) on sales of non-current assets
Share of (profit) loss of entities accounted for using equity method
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on business liquidation
Increase (decrease) in provision for loss on subleasing business
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in inventories
Decrease (increase) in equity investments
Increase (decrease) in notes and accounts payable–trade
Increase (decrease) in deposits received
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash Flows from Investing Activities
Purchase of investment securities
Proceeds from sales and liquidation of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Purchase of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment and intangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Repayments of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received
Other, net
Net cash provided by (used in) investing activities
Cash Flows from Financing Activities
Net increase (decrease) in short-term loans payable
Repayments of finance lease obligations
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from issuance of common shares
Proceeds from share issuance to non-controlling shareholders
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change of scope of consolidation
Cash and Cash Equivalents at End of Period’17/3¥  70,974
16,026
1,426
278
—
(16)
(13)
(21)
(152)
(282)
(1,079)7,817(623)(67,146)
5,497
2,497
4,522
1,953
41,658
1,064(7,970)(21,494)
13,258¥ 69,307
16,877
254
—
(946)
(83)
(1)
(13)
(55)
912
(304)
7,539
(1,157)(73,977)(1,748)(15,546)(158)(2,244)(1,346)285(9,332)(21,495)(31,889)(3,989)2,907(9,692)(50,367)
308
(757)
1,502
(2,558)4,520(1,586)(59,714)(1,499)1,410—(61,300)
12,066(1,018)964(12,448)
6,124
1,142
(54,558)(3,300)(148)
184,000(102,500)
29,820(3,000)426
105(0)(10,047)(1,465)

(500)
(148)
160,000(91,300)
19,869—88
98(0)(11,504)(26)(40,253)
53,637(8)
7,173
50,418—76,575(25)(9,897)57,591—  57,591

4
47,699Nomura Real Estate Holdings, Inc.

Integrated Report 2017

CORPORATE AND FINANCIAL INFORMATION

1,595

Deferred gains or losses on hedges

Valuation difference on available-for-sale securities(Millions of yen)
’16/3

’16/3

93

Business Unit Information

Business Unit Information

Operating Revenue

Assets(Millions of yen)
’14/3*4’15/3*4’15/3*5’16/3*5’16/3*6’17/3*6’18/3¥307,625¥359,397¥359,397¥334,514¥334,514¥329,787¥365,000

Housing sales

295,923

332,999

332,999

318,795

318,795

308,960—

Other

11,702

26,397

26,397

15,71915,71920,827—

Leasing*1

99,86692,87892,878110,625

110,226

115,009

143,000

Leasing (offices)

48,131

46,563

46,56349,594

49,594

51,981—

Leasing (retail facilities)

10,544

10,323

10,323

10,873

10,873

11,649—

Leasing (other)

5,151

5,552

5,552

5,882

5,882

5,954

—

Property development

25,60816,026

—

—

—

—

—

—

—

12,31833,26033,26035,350—Residential Development

Property development (sale)Property development(leasing)
Other

—

—

3,167

3,320

3,320

4,054

—

10,42914,413

14,953

7,694

7,295

6,018

—

Investment Management

18,326

9,166

9,166

10,973

10,973

9,662

9,500

Property Brokerage & CRE

29,16830,23230,23235,37335,37334,82038,000Property brokerage

24,52025,83325,83328,02828,02830,283

—

Other

4,647

4,399

4,399

7,345

7,345

4,536

—

Property & Facility
Management*2,3

72,15071,63585,837

90,29491,552

95,764

104,000

Property & facility
management

48,74349,79449,511

50,662

47,952

48,301—

23,406

21,841

21,583

24,636

24,636

26,857—

Fitness club & elderly care——

14,742

14,995

14,995

15,523

—

Other

—

—

—

—

3,967

5,081

—

18,64017,753

3,008

1,353

1,353

106

0

Construction ordered

OtherAdjustments(Eliminations or Corporate)(13,761)(13,905)(13,362)(13,590)(14,449)(15,470)(13,500)

Total

532,016

567,159

567,159

569,545569,545569,680

646,000(Millions of yen)

Residential Development
Leasing
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (Eliminations or Corporate)
Total’14/3*1’15/3*1’15/3*2’16/3*2’16/3*3’17/3*3¥ 331,779
776,097
67,34621,14232,891
34,133¥ 382,585
849,885
40,55522,60632,375
19,833¥ 382,585
849,885
40,55522,606
49,696¥ 414,812
918,710
36,692
32,04755,695

21,383

2,485
21,411¥ 414,812
922,748
36,692
32,04751,403

1,313,887

1,369,226

1,369,226

1,485,449

1,485,449¥ 450,698
993,985
35,64922,87356,529929
32,427
1,593,093¥281,698
62,918
—
1,162
92
3,380
(84)
349,167¥338,530
88,446
—
1,184
49
1,638
(84)
429,764¥338,530
88,446
—
1,184
168
1,519
(84)
429,764¥377,849
118,277
—
—
271
638
(126)
496,910¥377,849
118,277
—
—
271
638
(126)
496,910¥403,232
166,997
—
—
964
13
(319)
570,888

9.4
3.5
11.7
38.3
15.5
1.5
5.8

8.8
2.9
11.9
37.5
16.9
0.8
5.4

8.8
2.9
11.9
37.5
11.6
—
5.4

7.7
3.5
20.1
30.9
10.3
—
5.6

7.7
3.5
20.1
30.9
10.2
—
5.6

6.2
3.3
16.9
39.9
12.3
—
4.9

50,496

1,565
26,1801,565
25,926Inventories(Millions of yen)

Residential Development
Leasing
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (Eliminations or Corporate)
Total

Return on Assets (ROA)*4(%)

Residential Development
Leasing
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Total*5

Business Unit Operating Results’14/3

Operating Income(Millions of yen)

31,17733,81133,811

31,90931,90927,78725,000

Leasing

26,81824,44724,44732,09931,71932,56732,000Investment Management

7,902

4,813

4,813

7,376

7,376

6,016

5,500

Property Brokerage & CRE

8,101

8,477

8,477

9,900

9,900

9,124

10,500Property & Facility
Management

5,107

5,477

5,758

5,314

5,693

6,939

7,000

508

167

(113)

(152)

(152)

(30)

0

Adjustments(eliminations or corporate)(5,307)(5,300)(5,300)(5,536)(5,535)(5,132)(4,000)Total

74,307

71,894

71,89480,91280,912

77,271

76,000Other*1. The breakdown of operating revenue for the Leasing Business Unit has been changed since the second quarter of the fiscal year ended March 31, 2016. In line with thischange, the figures for the fiscal year ended March 31, 2015 and the fiscal year ended March 31, 2016 are classified under the new classification.
*2. The breakdown of operating revenue for the Property & Facility Management Business Unit has been changed from “Building management” and “Housing management”
to “Property & facility management” and “Construction ordered” since the first quarter of the fiscal year ended March 31, 2015. According to this change, the figures forthe fiscal year ended March 31, 2013 and after are classified under the new classification.
*3. From the first quarter of the fiscal year ended March 31, 2016, the breakdown of operating revenue has been changed due to the fact that MEGALOS CO., LTD.
(Present: Nomura Real Estate Life & Sports Co., Ltd.), which used to be classified in the Other Business Unit, and Nomura Real Estate Wellness Co., Ltd., which was
newly established in the first quarter of the fiscal year ended March 31, 2016, are classified in the Property & Facility Management Business Unit. In line with this change,
the figures for the full-year results of the fiscal year ended March 31, 2015 are classified under the new classification.
*4. From the second quarter of the fiscal year ended March 31, 2015, a partially revised method of allocating Company-wide costs among adjustments to each business unit
was incorporated. In addition, the house leasing business was transferred from the Residential Development Business Unit to the Leasing Business Business Unit. In linewith this change, the full-year results of the fiscal year ended March 31, 2014 and the fiscal year ended March 31, 2015 are reflected in the published figures.
*5. From the first quarter of the fiscal year ended March 31 2016, MEGALOS CO., LTD. (Present: Nomura Real Estate Life & Sports Co., Ltd.), which used to be classified in
the Other Business Unit, was classified in the Property & Facility Management Business Unit. In line with this change, the figures for the full-year results of the fiscal year
ended March 31, 2015 are classified under the new classification.
*6. From the fiscal year ended March 31, 2017, the classification of Yokohama Business Park Heating & Cooling Supply Co., Ltd (Present: Nomura Real Estate Heating andcooling Supply Co., Ltd.) has been changed from the Leasing Business Unit to the Property & Facility Management Business Unit. Due to this change, the full-year results
for the fiscal year ended March 31, 2016 and the fiscal year ended March 31, 2017 are classified under the new classification.

94

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

’15/3

’16/3

’17/3

’18/3

5,491
718
21.7
31
0

6,162
859
21.1
87
2

5,363
643
21.9
134
215

4,885
682
21.7
252
402

5,400
600
—
—
—

2.9

4.5

2.2

0.8

—

1,132,246

1,123,188

1,074,481

1,260,064—

7,437
672,774

7,174
710,980

7,710
713,5748,272
745,147——

703
147,516
141,564729
155,706
140,395

705
163,036
144,263

702
168,999
140,743

—
—
—

*1. F
 rom the second quarter of the fiscal year ended March 31, 2015, a partially revised method of allocating Company-wide costs among adjustments to each business unit
was incorporated. In addition, the house leasing business was transferred from the Residential Development Business Unit to the Leasing Business Unit. The full-year
results for the fiscal year ended March 31, 2014 and the fiscal year ended March 31, 2015 are reflected in the published figures.
*2. F rom the first quarter of the fiscal year ended March 31, 2016, the classification of MEGALOS CO., LTD. (Present: Nomura Real Estate Life & Sports Co., Ltd.) has beenchanged to the Property & Facility Management Business Unit from the Other Business Unit. In line with this change, results for the fiscal year ended March 31, 2015 andthe fiscal year ended March 31, 2016 are classified under the new classification.
*3. F rom the fiscal year ended March 31, 2017, the classification of Yokohama Business Park Heating & Cooling Supply Co., Ltd. (Present: Nomura Real Estate Heating andcooling Supply Co., Ltd.) has been changed from the Leasing Unit to the Property & Facility Management Business Unit. Due to this change, the full-year results for the
fiscal year ended March 31, 2016 and forecast results for the full-year of the fiscal year ended March 31, 2017 are classified under the new classification.
*4. ROA for each business unit = Business unit operating income / Business unit assets at end of the fiscal year
*5. Total ROA = (Operating income + Non-operating income) / Total assets at end of the fiscal year
*6. C lassification for completed housing inventories changed as of the third quarter of the fiscal year ended March 31, 2017. As a result, data from the fiscal year ended
March 31, 2014 to the year ended March 31, 2017 has been altered to reflect this change.

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

CORPORATE AND FINANCIAL INFORMATION

Residential Development

Residential Development
Condominiums sales (unit)
Detached housing sales (unit)
Gross margin ratio of housing sales (%)
Completed housing inventories (unit)*6
Completed housing inventories (unit)*6
Leasing
Vacancy rate (%)
Investment Management
Outstanding assets under management (millions of yen)
Property Brokerage & CRE
Brokerage: Number of transactions
Brokerage: Total transaction value (millions of yen)
Property & Facility Management
Buildings under management
Condominiums under management (unit)
Members of MEGALOS

95

Status of Facilities as of the Fiscal Year Ended March 31, 2017

Status of Facilities as of the Fiscal Year Ended March 31, 2017

1. Status of Facilities
In the fiscal year ended March 31, 2017, we invested a total amount of ¥60,374 million in facilities, including the NOF Nihonbashi

Company Namehoncho Building (Chuo-ku, Tokyo).
FY16/3(millions of yen)

Business Unit

Residential Development

FY17/3(millions of yen)

Increase / Decrease(millions of yen)

685

427

(257)

47,88556,2248,339

Investment Management

45

22

(23)

Property Brokerage & CRE

633

649

16

1,335

1,754

419

6

—

(6)

50,591

59,079

8,487

1,213

1,295

81

51,80560,374

8,569

Leasing

Property & Facility Management
Other
Subtotal
Adjustments
Total

We acquired the following properties in the fiscal year ended March 31, 2017:
Company Name

Property Name (location)

Business
Segment

Use

Size of Construction or Details of Facility, etc.

Area (m2)

Acquisition Price(millions of yen)

Nomura Real Estate
Development Co., Ltd.

Yokohama Nomura Building*(Nishi-ku, Yokohama-shi, Kanagawa)Leasing

Office,Retailfacility

Steel-framed concrete construction,
17 floors above ground / 1 other building

Building:58,755
Land:6,721

29,573

Nomura Rea Estate
Development Co., Ltd.

NOF Nihonbashi honcho Building(Chuo-ku, Tokyo)

Leasing

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

Building:29,430
Land:3,196

23,130Nomura Real Estate
Development Co., Ltd.

NOF Tameike Building(Minato-ku, Tokyo)

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

Building:6,478
Land:690

4,562

Hotel,
Retailfacility

Steel-framed concrete construction,(partially steel-framed reinforced concrete
construction), 10 floors above ground /1 floor below

Building:5,905
Land:946

3,068

NREG TOSHIBA BUILDING
Co., Ltd.

Leasing

NREG Sapporo Building(Sapporo-shi, Hokkaido)

Leasing* Refers to calculated area owned, including both total floor and land area.

We sold the following properties in the fiscal year ended March 31, 2017:
Company Name

Nomura Real Estate
Development Co., Ltd.

Property Name (location)

Fukagawa Gyazaria Tower*(Koto-ku, Tokyo)

Business
Segment

Leasing

Use

Size of Construction or Details
of Facility, etc.

Area (m )OfficeSteel-framed concrete construction,(partially steel-framed reinforced concrete
construction), 22 floors above ground /2 floors below

Building:41,446
Land:2,948

2Selling Price(millions of yen)

7,820

* Land area includes leased land.

2. Major Facilities and Equipment
Major facilities and equipment by business unit for the Nomura Real Estate Group and its consolidated subsidiaries are as follows.
1) Leasing Business Unit
Use

NREG TOSHIBABUILDING

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

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

158,732

March 1984

NomuraReal Estate
Development

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

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

245,200

Mainly70,817
February 1990

NREG TOSHIBABUILDINGLAZONA Kawasaki
Toshiba Building(Saiwai-ku, Kawasaki-shi,
Kanagawa)

Shinjuku Mirai
Development

MIRRAZA Shinjuku*2(Shinjuku-ku, Tokyo)

NomuraReal Estate
Development

Nihonbashi Muromachi
Nomura Building(Chuo-ku, Tokyo)

Nomura Real Estate Holdings, Inc.

OfficeSteel-framed construction,
15 floors above ground

98,428March 2013

33,921

9,764

Book Value (millions of yen)
Other

Total

15,795 129,809

313

145,918

33,272524

48,382

15,733

Land

14,584

22,245543

38,522Completion ofArea of
Total Floor Construction or
Property(time of
Area (m2)(m2)
acquisition)

Facility

Land

Other

Total

Office,Steel-framed construction, 17 floors
Retail facility above ground, 1 other building

58,755January 2017

6,721

20,1688,809

594

29,573Use

Size of Construction or
Details of Facility, etc.

Book Value (millions of yen)

NomuraReal Estate
Development

Yokohama
Nomura Building*2(Nishi-ku, Yokohama-shi,
Kanagawa)

NomuraReal Estate
Development

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

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

26,748March 1982

3,184

1,868

22,67718

24,564

NomuraReal Estate
Development

NOF Nihonbashi
Honcho Building(Chuo-ku, Tokyo)

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

29,430April 1961

3,196

2,080

21,026—

23,107

NomuraReal Estate
Development

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

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

58,512

May 1978

4,639

5,955

16,303

163

22,422

Midosuji Mirai
Development

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

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

20,420 February 2009

1,939

3,835

15,70727

19,571

NomuraReal Estate
Development

Nomura Fudosan
Tennozu Building*2, 3(Shingawa-ku, Tokyo)

OfficeSteel-framed reinforced concrete
construction (partially reinforced
concrete), 2 floors below ground,
26 floors above ground39,943June 1996

5,730

4,484

11,68583

16,253

NREG TOSHIBABUILDINGLAZONA Kawasaki
Plaza*3, 4, 5 (Saiwai-ku,
Kawasaki-shi, Kanagawa)Retail facility

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

98,254September
2006

72,013

15,611—379

15,990Toranomon
Real Estate

Toranomon Station-Front
Redevelopment(tentative name)(Minato-ku, Tokyo)

Office,Land slated
for building
construction

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

3,289

October 1973

1,099

60

15,12010

15,191

NomuraReal Estate
Development

Nomura Fudosan
Shibadaimon Building(Minato-ku, Tokyo)

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

15,700April 2010

2,447

4,055

10,65083

14,790NomuraReal Estate
Development

OtemachiNomura Building*2, 3(Chiyoda-ku, Tokyo)

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

9,815

February 1994

749

1,309

12,584

5

13,899NomuraReal Estate
Development

Nomura Musashikosugi
Building N*3 (Nakahara-ku,
Kawasaki-shi, Kanagawa)

OfficeSteel-framed construction, 1 floor
below ground, 14 floors
above ground

21,268 February 2010

3,979

5,764

7,529

9

13,303

NREG TOSHIBABUILDING

Toshiba Hamamatsucho
Building (Minato-ku, Tokyo)

OfficeSteel-framed reinforced concrete
construction, 8 floors above ground

13,482

July 1974

2,907

359

10,9560

11,316

NomuraReal Estate
Development

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

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

43,509January 2013

5,797

6,153

4,649

418

11,221

NomuraReal Estate
Development

Dai-ni Edobashi Building*4(Chuo-ku, Tokyo)

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

13,359November
1973

1,376

663

10,553

0

11,217

NomuraReal Estate
Development

Minamigyotoku SC*2
(Ichikawa-shi, Chiba)

Steel-framed construction (partially
Retail facility reinforced concrete), 2 floors below
ground, 2 floors above ground

35,612

April 2000

16,503

5,388

4,942

15

10,346

NomuraReal Estate
Development

Landport Takatsuki Project(tentative name)(Takatsuki-shi, Osaka)Land slated
for building
construction—(September
2014)

35,276—

10,247—

10,247

NREG TOSHIBABUILDING

Fuchu Toshiba Building(Fuchu-shi, Tokyo)

OfficeSteel-framed reinforced concrete
construction (partially reinforced
32,299concrete), 1 floor below ground, eightfloors above ground, 1 other building

April 1993

8,290

3,917

5,247

23

9,188

NREG TOSHIBABUILDING

Shinyokohama Toshiba
Building*5 (Kohoku-ku,
Yokohama-shi, Kanagawa)Training
facility

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

28,822MainlyJune 1969

15,829

3,082

5,660

33

8,776

NomuraReal Estate
Development

Iidabashi Plano Stage
Building*3(Chiyoda-ku, Tokyo)

OfficeReinforced concrete construction,
2 floors below ground, 38 floors
above ground

3,958

February 2009

785

1,717

6,401

1

8,120

NomuraReal Estate
Development

Nihonkouku Tamachi
Building*2(Minato-ku, Tokyo)

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

17,515January 1984

4,134

75

7,820

—

7,895

Office—Steel-framed construction (partiallysteel-framed reinforced concrete),
Retail facility
3 floors below ground, 10 floors
above ground

7,628

August 2010

781

2,863

32,13224

35,019NREG TOSHIBABUILDING

NREG Kawasaki Logistics
Center*5 (Kawasaki-ku,
Kawasaki-shi, Kanagawa)Logistics
facility

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

March 2014

27,866

3,975

3,109

465

7,550

Steel-framed construction (partiallysteel-framed reinforced concrete),
5 floors below ground, 21 floors
above ground

44,989September
2010

2,737

15,141

19,227348

34,717

NREG TOSHIBABUILDING

Umeda Sky Building*3, 5(Kita-ku, Osaka-shi, Osaka)

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

43,093

March 1993

8,325

2,404

4,585

85

7,075

OfficeIntegrated Report 2017

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

CORPORATE AND FINANCIAL INFORMATION

96

Facility

Property Name(location)

Company Name

Size of Construction or
Details of Facility, etc.

Completion ofArea of
Total Floor Construction or
Property(time of
Area (m2)(m2)
acquisition)

Property Name(location)

97

Status of Facilities as of the Fiscal Year Ended March 31, 2017

Company Name

Property Name(location)

Use

Status of Facilities as of the Fiscal Year Ended March 31, 2017

Size of Construction or
Details of Facility, etc.

Completion ofArea of
Total Floor Construction or
Property(time of
Area (m2)(m2)
acquisition)

FacilityLand

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

Book Value (millions of yen)
Other

Total

Property Name (location)

Rentable Area (m2)

Nomura Real Estate Development

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

17,298

Nomura Real Estate Development

AKS Building (Chiyoda-ku, Tokyo)

7,516

NREG TOSHIBABUILDING

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

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

15,220

October 1965

1,307

1,008

5,989

6

7,004

NREG TOSHIBABUILDING

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

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

21,007

April 1974

2,366

596

5,768

27

6,391

NomuraReal Estate
Development

Nomura Fudosan
Ichigaya Building(Chiyoda-ku, Tokyo)

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

6,753

January 1982

1,220

3,098

3,182

3

6,285

Company Name

Residential

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

26,352January 1992 20,590

4,378

1,516

43

5,938

Nomura Real Estate
Life & Sports

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

6,000

March 2010

1,078

1,632

4,115

48

5,796

* 1.	“Facility” represents building accounts, “land” represents land accounts, and “others” represents structures; machinery; tools, appliances, and fixtures; vehicles anddelivery equipment; and leased asset accounts. “Total” represents tangible fixed assets excluding construction in progress accounts.
2.	“Total floor area” represents the total owned area of Megalos Kashiwa, Megalos Chikusa, and Megalos Saginuma. “Area of property” represents the leased land area ofthe three preceding facilities. “Size of construction or details of facility, etc.,” and “completion of construction of (time of acquisition)” are in reference to Megalos Kashiwa.

4,431

August 1977

548

762

4,999

0

5,762

NREG TOSHIBABUILDING

Creare Toshiba Fuchu*5(Fuchu-shi, Tokyo)

2) Property & Facility Management Business Unit
Property Name (location)

Use

Megalos Souka and other36 facilities(Souka-shi, Saitama
and others)

Fitness Club

Size of Construction or
Details of Facility, etc.

Total Floor
Area (m2)Reinforced concrete
construction, 3 floors,
1 other building andfitness club

15,321

NomuraReal Estate
Development

Nomura Fudosan
Nishishinjuku Building(Shinjuku-ku, Tokyo)

NomuraReal Estate
Development

Toranomon Central Building(Minato-ku, Tokyo)

OfficeSteel-framed construction (partiallysteel-reinforced concrete andsteel-framed reinforced concrete),
3 floors below ground, 10 floors
above ground

NREG TOSHIBABUILDING

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

Office,Residential

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

20,648March 1991

3,501

2,536

3,073

42

5,652

3. Construction and Renovation of Facilities

NomuraReal Estate
Development

Fukuoka Tenjin Center
Building*2, 3 (Chuo-ku,
Fukuoka-shi, Fukuoka)

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

25,103

April 1976

2,256

1,003

4,413

1

5,418

expansion or removal of facilities.

NomuraReal Estate
Development

Nomura Musashikosugi
Building S*3 (Nakahara-ku,
Kawasaki-shi, Kanagawa)

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

7,375

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

7,074

5,333

January 2013

701

1,078

3,716

14

4,809

February 2010

2,878

2,093

3,210

2

Company Name

NomuraReal Estate
Development

PMO Nihonbashi
Muromachi*3(Chuo-ku, Tokyo)

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

NomuraReal Estate
Development

NOF Tameike Building(Minato-ku, Tokyo)

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

6,478

July 1959

690

223

4,393

—

4,616

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

23,711

July 1993

4,597

2,063

1,918

30

4,013

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

6,716

October 1993

1,249

996

2,700

2

3,698

16,179April 1975

1,731

667

2,817

8

3,493

—

(March 2005)

1,599

—

3,306

—

3,306

NREG TOSHIBABUILDING

Toshiba Manseibashi
Building*4(Chiyoda-ku, Tokyo)

NREG TOSHIBABUILDING

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

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

NREG TOSHIBABUILDING

Toshiba Sendai Building*3, 4,
5(Aoba-ku, Sendai-shi,
Miyagi)

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

NomuraReal Estate
Development

Nomura Fudosan Sendai
Aoba-dori Building Project(tentative name)*6(Aoba-ku, Sendai-shi,
Miyagi)Land slated
for building
construction—

NREG Sapporo Building(Chuo-ku, Sapporo-shi,
Hokkaido)

Steel-framed construction (partiallysteel-framed reinforced concrete),
Hotel,
Retail facility 1 floor below ground, 10 floors
above ground

5,319

May 2013

September
1961

931

681

1,428

260

3,840

3,551

32

1

Integrated Report 2017

Land

8,360

Other

Total

— 1,136

9,497

August 2016

946

1,526

1,396

113

Business
Segment

Size ofConstruction
or Details of
Facility, etc.

Sources of Funding

Total

Amount Paid

35,30011,971

Schedule
Start

Completion

Loans payable
and own funds

FY17/3

FY21/3

NomuraReal Estate
Development

Toranomon Station-Front
Redevelopment
Leasing(tentative name)(Minato-ku, Tokyo)

Office,Retail facility

NomuraReal Estate
Development

Landport Takatsuki
Project (tentative name)(Takatsuki-shi, Osaka)

Logistics
facility

Steel-framed concrete
construction (partiallyreinforced concrete) 5 floors
above ground

21,60012,602Loans payable
and own funds

FY16/3

FY18/3

NomuraReal Estate
Development

Nomura Fudosan Sendai
Aoba-dori Building
Leasing
Project (tentative name)(Aoba-ku, Sendai-shi,
Miyagi)*

OfficeSteel-framed concrete
construction (partiallyreinforced concrete), 10
floors above ground / 1 floor
penthouse / 1 floors below

8,000

5,689

Loans payable
and own funds

FY16/3

FY18/3

NREG TOSHIBABUILDING
CO., Ltd.

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

OfficeSteel-framed concrete
construction (partiallysteel-framed reinforced
concrete construction)
11 floors above ground /3 floors below

4,600

2,083

Loans payable
and own funds

FY18/3

FY19/3

3,813

3,036

Planned Aggregate
Investment(millions of yen)

Use

Steel-framed concrete
construction (partiallysteel-framed reinforced
concrete construction),
24 floors above ground /4 floors below

Leasing

Leasing* This building was completed in April 2017.

2) Renovation of major facility
Company Name

5,905

Property Name(location)

5,300* 1.	“Facility” represents building accounts, “land” represents land and lease accounts, and “others” represents structures; machinery; tools, appliances, and fixtures; vehicles
and delivery equipment; and leased asset accounts. “Total” represents the sum of lease accounts and tangible fixed assets excluding construction in progress accounts.
* 2.	Includes the trust beneficial right.
* 3.	Refers to calculated area owned including both total floor space and land area.
* 4. Area of property includes rental property.
* 5. The floor space of annexed buildings has been included in the floor space of the main building since March 2017.
* 6. Construction of property completed in April 2017.

Nomura Real Estate Holdings, Inc.

15,430

Facility

NomuraReal Estate
Development

Property Name

Existing buildings

Business
Segment

Leasing

Planned aggregate
investment(millions of yen)
Total

Amount Paid

3,300

—

Construction Period

April 2017–March 2018

Note

Construction for facility renovation

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

CORPORATE AND FINANCIAL INFORMATION

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

June 2002

Book Value (millions of yen)In the fiscal year ended March 31, 2017, we began constructing and renovating the following facilities. However, there was no major

5,307

PMO Yaesu Dori(Chuo-ku, Tokyo)

NREG TOSHIBABUILDING

Completion ofConstruction or
Area of(Time of
Property (m2)
Acquisition)

1) Construction of major facilities

NomuraReal Estate
Development

NREG TOSHIBABUILDING

98

Company Name

99

Corporate Data

Corporate Data

Corporate Data

Stock Information (As of March 31, 2017)

Stock Price
Yen

Corporate Name:

Nomura Real Estate Holdings, Inc.

Common Stock:¥116,779,573,800

Representative:

Eiji Kutsukake, President

Number of Authorized Shares: 450,000,000

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

Number of Shares Issued:

3,000

Date of Establishment:

June 1, 2004

Number of Employees:

6,467 (As of March 31, 2017 on
a consolidated basis)

Fiscal Year:

From April 1 to March 31

191,877,801
2,000Market Listing:	First Section of theTokyo Stock Exchange
Minimum Trading Unit:

100 shares

Number of Shareholders:

39,407

1,000

13/4

General Meeting of Shareholders: June

Organizational Chart

14/4

15/4

Trends of Number of Shareholders

Advisory Committee Relating toNominations and Compensation

17/3

10 Largest Shareholders

PeopleBoard of Directors
Audit & Supervisory Committee

Chair
President

Name of Shareholders

No. of Shares

Shareholding(%)

Nomura Holdings, Inc.
Japan Trustee Services Bank, Ltd.
(Trust account)
BNYML - NON TREATY ACCOUNT
Japan Trustee Services Bank, Ltd.
(Trust account 9)
The Master Trust Bank of Japan, Ltd.
(Trust account)
HSBC BANK PLC A/C CLIENTS 1
THE BANK OF NEW YORK 133972
Nomura Real Estate Holdings Employee
Shareholding Association
STATE STREET BANK - WEST PENSIONFUND CLIENTS- EXEMPT 505233
Japan Trustee Services Bank, Ltd.
(Trust account 5)

64,777,500

33.75

8,828,500

4.60

7,028,400

3.66

6,847,490

3.56

6,292,200

3.27

3,376,900
3,368,612

1.75
1.75

3,073,282

1.60

2,857,433

1.48

2,406,200

1.25

80,000Management Committee
60,000

Audit & Supervisory
Committee Dept.

16/4

CSR Committee

Budget Committee

40,00020,000

Risk Management Committee

08

09

10

11

12

13

14

15

16

17

(Years ended March 31)

IT Planning Committee

Leased Asset Strategy Committee

Composition by Number of Shareholdings
Corporate
Planning
Dept.

Finance &Accounting
Dept.

Finance
Dept.

Corporate
Communications
Dept.

Secretariat

Group IT
Group
Group HumanGroup Internal
Planning &Corporate
Resources
Audit Dept.
Implementation
Administration
Dept.
Dept.
Dept.

Group
Compliance
Dept.

%

19.14

2016

20.19

2017

21.38

34.51

34.21

12.14

34.25

35.05

10.50

34.27

33.19

11.15

(Years ended March 31)
Financial Institutions

100

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

Other Japanese Firms

Other Foreign Investors

Individuals and Others

Nomura Real Estate Holdings, Inc.

Integrated Report 2017

CORPORATE AND FINANCIAL INFORMATION

2015

101