Integrated Report2019

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

New Value,
Real Value

Printed in Japan

Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

To Our Stakeholders

Our Group Vision “New Value, Real Value”

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.

Action Guideline “What We Value”

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

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

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

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

Working with vigor and achieving wellness
Recognizing that working with vigor brings growth to both the company and ourselves,

The Nomura Real Estate Group has adopted “New Value, Real Value” as its Group Vision towardmeeting the expectations of its customers and all other stakeholders. It represents the Group’s
determination to resolve the issues of society head on in building cities, developing real estate,
and providing a wide range of services related to real estate.
Moreover, we aim to enhance our sustainable corporate value through the constant awarenessof the Group’s Action Guideline “What We Value” among all employees and the realization of ourGroup Vision “New Value, Real Value.”
We recently launched a new Mid- to Long-term Business Plan, which will run from FY2020/3 toFY2028/3. The Group aims to further enhance corporate governance and realize profit growththrough creating new value for society while maintaining high asset and capital efficiency. I believethat the initiatives in this plan will not only contribute to enhancing corporate value, but also to
realizing a sustainable society.
This integrated report contains both financial and non-financial information regarding our ideas
and specific measures for enhancing sustainable corporate value based on the external factors
surrounding the Group. We hope that this report will help provide a better understanding of theGroup to our stakeholders and deepen dialogue with us.

September 2019

we take the utmost care of our mental and physical health.

Eiji Kutsukake
President and Representative Director,
Group CEO1

2Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Contents
Nomura Real Estate Holdings, Inc.
Integrated Report 2019
New Value, Real Value

Part 1


6

The Nomura Real Estate Group’s Path of Creation and Ambition

8

The Nomura Real Estate Group at a Glance

10

I would like to know about …

The Nomura Real Estate Group’s Business Units… the Group’s values
and direction toward
growthCorporate Information
The Nomura Real Estate Group–
Continually Creating Unique Value… the Group’s strengths
and competitive edge

18

Message from the CEO

Part 224

Process for Enhancing Corporate Value

26

The Group’s Strengths

Corporate Strategy

30

Message from the COO & CSR Officer

34

Materiality

36

The New Mid- to Long-term Business Plan

40

Message from the CFO

44Strategies by Business Unit

The Nomura Real Estate Group’s
Approach to Enhancing Corporate Value
over the Medium to Long Term

Index

Eiji Kutsukake
President and Representative Director,
Group CEO		48

Commercial Real Estate Business Unit

Executive Vice President andRepresentative Director, Group COO

		52

Investment Management Business Unit

		56

Property Brokerage & CRE Business Unit

		60

Property & Facility Management Business Unit

70

Human Resource Management74

Corporate Governance		74	Message from the Chairman of theBoard of Directors
		76

Messages from External Directors

		78

Corporate Officers

		81

Corporate Governance

P.30

The Nomura Real Estate Group at a Glance

P.8(position in the competitive landscape)

The Group’s Strengths

P.26

Business model

The Nomura Real Estate Group’s Business Units

P.10(essential elements for ensuring
a competitive advantage)

Message from the CFO

P.40

Message from the COO & CSR Officer

P.30

Materiality

P.34

The Nomura Real Estate Group’s Business Units

P.10

Strategies by Business Unit

P.44

Message from the CEO

P.18

Message from the CFO

P.40

Process for Enhancing Corporate Value

P.24

Strategies by Business Unit

P.44

Message from the CFO

P.40

The New Mid- to Long-term Business Plan

P.36

Strategies by Business Unit

P.44

Business Structures Underpinning Growth

P.64

Human Resource Management

P.70

Business model(relationships with key stakeholders)

Sustainability and growth

Seiichi Miyajima

Business Structures Underpinning GrowthMessage from the COO & CSR Officer

Sustainability and growth

Residential Development Business Unit(risks within changing environment)… the Group’s specificstrategies

Makoto Haga
Director,
Group CFO

… the Group’s indicatorsfor measuring the progressof its strategies… the Group’s position
on managing its businessportfolio and cost of equity

Page

P.18

Sustainability and growth… the likelihood of theGroup achieving
sustainable growthContents

Message from the CEO

Values(recognition of ESG factors)

		44

64

… the Group’s profit
structure

Related items in the Guidance for Integrated
Corporate Disclosure and Company-Investor
Dialogues for Collaborative Value Creation

Strategy

Performance and key performanceindicators (KPI)

The New Mid- to Long-term Business Plan

P.36

Strategies by Business Unit

P.44

StrategyMessage from the CFO

P.40

Performance and key performanceindicators (KPI)

The New Mid- to Long-term Business Plan

P.36

Editorial Policy for Integrated Report 2019

Part 392

Financial and Non-financial Data

94

10-Year Summary

96

Consolidated Balance Sheets

This report is published in order to foster understanding among shareholders, investors, and other stakeholders of the Nomura Real EstateGroup’s strategies and measures toward the creation of mid- to long-term value. The editing and layout of this report follow guidelines suchas the International Integrated Reporting Framework of the International Integrated Reporting Council (IIRC) and the Guidance for Integrated
Corporate Disclosure and Company–Investor Dialogues for Collaborative Value Creation of the Ministry of Economy, Trade and Industry.

Corporate and Financial Information

98	Consolidated Statements of Income /The Nomura Real Estate Group’s
Financial and Non-financial Performance

99

Consolidated Statements of Cash Flows

Atsushi Yoshikawa

100

Business Unit Information

Chairman of the Board of Directors

102

Facilities Situation

106

Environmental and Human Capital Data

108

Group Company Profiles

110

Corporate Information

Consolidated Statements of Comprehensive Income

Referenced Guidelines

Period Covered by the Report

Scope of the Report• Global Reporting Initiative (GRI) Standards

This report covers the period from
April 1, 2018 to March 31, 2019.

Nomura Real Estate Holdings, Inc. andNomura Real Estate Group 21 companies• ISO 26000–Guidance on Social
Responsibility• International Integrated Reporting
Framework of the International Integrated
Reporting Council (IIRC)•G uidance for Integrated Corporate
Disclosure and Company–
Investor Dialogues for
Collaborative Value Creationof the Ministry of Economy,
Trade and Industry

Parts may discuss information from times
prior to this period or activities or outlooks
for times following this period.
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 forwardlooking statements are not historical facts. Rather, they are estimates, forecasts, and projections based on information
currently available to the Company and are subject to a number of risks and uncertainties, which include economic
trends, intensification of competition in the real estate industry, legal and taxation systems, and other regulations. As
such, actual results may differ from those projected.

3

4Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 1
Corporate Information

The Nomura Real EstateGroup–Continually
Creating Unique Value

Shinjuku Nomura Building

Contents
6	The Nomura Real Estate Group’s
Path of Creation and Ambition
8	The Nomura Real Estate Groupat a Glance
10	The Nomura Real Estate Group’s
Business Units

5

6

Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

The Nomura Real Estate Group’s Path of Creation and Ambition

For more than 60 years since its founding, the Nomura Real Estate Group has worked to meet the
expectations of its customers and society by tackling their issues. We will continue to innovate
and challenge to contribute to the realization of a sustainable society.
2014

Completes construction of urban-type compact town
Funabashi Morino City

2008

2005

Completes construction of
PMO Nihonbashi Honcho

Completes construction of PROUD FLAT
Yoyogi Uehara

2015

2017

Establishes NOMURA REAL ESTATE ASIA PTE. LTD.

Participates in residential development in
Bangkok, Thailand

2018

1957

Spins off from Nomura Securities Co., Ltd. andlaunches real estate business focused on leasing
and management of office buildings
1978

2002

Completes construction of Shinjuku Nomura Building.
Head Office moved from Nihonbashi to Shinjuku
Nomura Building

Establishes “PROUD” brand for residential development and services
PROUD Kugayama

2007

2012

Completes construction of Landport Atsugi

Completes construction of GEMS Shibuya

Lothbury Investment Management Group Limited,a real estate investment manager in the UK, joins
the Nomura Real Estate Group2011

Launches condominium brand “OHANA” withcompletion of OHANA Yasaka-hagiyama-cho

2017

Establishes “NOHGA HOTEL” hotel brandwith completion of NOHGA HOTEL UENO

1961

Launches real estate development business with
development of Kajiwarayama residential area in
Kamakura-shi, Kanagawa

1988

2006

2008

2017

2019

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

Nomura Real Estate Holdings, Inc. is listed on the First Section of theTokyo Stock Exchange

NREG TOSHIBA BUILDING Co., Ltd. joins the Nomura Real Estate Group

Opens OUKAS Funabashi, our first elderly
housing with supportive service

HOTEL NIWA TOKYO joins the
Nomura Real Estate GroupOperatingrevenue(billions of yen)
1963

1999

2000

2011

2014

Launches condominium development businesswith construction of Co-op Takenomaru in
Yokohama-shi, Kanagawa

Launches real estate information website
nomu.com

Establishes Nomura Real Estate
Urban Net Co., Ltd.

Nomura Real Estate Asset Management Co., Ltd.
is established from merger of three Group
companies

Establishes Nomura Real Estate Partners Co., Ltd.

600

500

Operating revenue for FY2019/3
1995

2003

2015

Opens first MEGALOS-branded fitness clubin Soka-shi, Saitama(currently MEGALOS_X SOKA 24)

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

Nomura Real Estate Master Fund, Inc. isestablished from merger of three Group REITs

400¥668.5 billion

300

Tops ¥300-billion markTops ¥100-billion markTops ¥200-billion mark200

Operating revenue (billions of yen)100

* Non-consolidated data for Nomura Real Estate Development until
FY2004/3

1956

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2019

7

8

Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

9

The Nomura Real Estate Group at a Glance

The Group’s Business Assets

Outcomes

Solid and sound financial base enabling
continuous development in the real estatebusiness which has a long business cycle

526.7 billion
29.9%
1.7 times
* 
A* 
A

Shareholders’ Equity* ¥1Shareholders’ Equity Ratio*1 
D/E Ratio*1 Rating (Rating and Investment Information, Inc.) 1
Rating (Japan Credit Rating Agency, Ltd.) 1

Diverse, professional human resources
who create unique, high-quality products
and services
Number of consolidated employees*1 

6,980
253*
2

First-class licensed architects*1 

Differentiated knowledge cultivated throughout
a history of taking on challenges andcreating value
Cumulative numberof custom-built
condominiums supplied 

200 units (approx.)

Quality management
manuals
consolidating approximately

60 years of expertise

Assets under managementin Investment Management
Business Unit*1 ¥

Development Sector• Development and sale of residences including
condominiums and detached housing• Development planning and managementbusiness for elderly housing with supportive
services• Development and sale of rental housing• Housing-related Internet advertising business• Home/living assistance business, etc.

• Development, leasing, and managementof office buildings, retail facilities, logistics
facilities, and hotels• Property development and sales business• Consignment planning and operation ofretail facilities• Management of fitness clubs, etc.

ROE*5, 7 

Total return ratio*5, 9 Business Overview

Page 11

Evolution toward further growthBusiness Strategies

Residential redevelopment projects*10 Pages 44 to 47• Supervision of design andconstruction•P roduct development, etc.
Business Strategies
Business Overview

Pages 64 to 65

Page 12Business Strategies

Redevelopment and Rebuilding

Pages 48 to 51

Entry into new
asset types SingaporeC apital alliance with Tokio Property Services
Pte. Ltd., a real estate brokerage corporation

Good Design Award

Business Overview

Page 13
Business Strategies

Real estate
brokerage rating*12• Participation in urban redevelopment
projects and support for management
association of such projects•C ondominium rebuilding business,
etc.

220,000 (approx.)

Number of condominiums
under management*1 

177,000 units
Number of MEGALOS fitness clubs* 
44
Number of MEGALOS members*  145,000
Number of overseas offices* 
61Pages 66 to 67

Property Brokerage & CRE Business Unit
• Real estate brokerage andconsulting business• Consignment of sales of newly
built condominiums and detached housing• Insurance agency business• Operation of real estate information
website, etc.

Business Overview

Overseas Business

Page 14
Business Strategies

Pages 56 to 59

1

4

Property & Facility Management Business Unit
• Management of condominiums,
office buildings, and educational andother facilities• Repair and tenant-related construction work
• Condominium and detachedhousing renovation• Cleaning of condominiums, office buildings,
and other properties, etc.

No.1

PROUD brand rating*11 

Business Overview

Page 15
Business Strategies

Pages 60 to 63• Residential and leasing business•A sset management and brokeragebusiness that responds to crossborder needs, etc.
Business Strategies

Pages 68 to 69

Award recipient for17th consecutive year
No.1 forfourth consecutive year

Condominium
management
satisfaction level*13

Business Strategies

1

Expansion of hotel business

Expansion of overseas businessUK-based Lothbury Investment Management
Group Limited, a real estate investment
manager, joins the Nomura Real Estate Group

Investment Management Business Unit
• Asset management of real estate
securitization products including REITs
and private equity funds

No.1

Provision of carefully produced, high-quality
products and services

Service & Management Sector

Pages 52 to 55

120,000 (approx.)
Number of retail brokerage branches* 
81¥

ROA*5, 8 Commercial Real Estate Business Unit

Broad customer base

Number of nomu.com
members*3 

Product Development andQuality Management

Residential Development Business Unit

1.6 trillion (approx.)

Nomura Real Estate Group
Customer Club members

668.5 billion¥79.6 billion
8.9%
4.7%
41.4%

Operating revenue*5 Business profit*5, 6 

5,000 units (approx.)

Number of
Property development 

Business Structures
Underpinning Growth

The Group’s Business Sectors

Generation of profits and shareholder returns
through highly efficient management

ESG management
reputation 

No.1


for
10th consecutive year
GRESB sector leader*14*1		 As of March 31, 2019*2		Number of Nomura Real Estate Co., Ltd. and Nomura Real Estate
Partners Co., Ltd. employees qualified as first-class architects*3		As of February 28, 2019*4		China, Hong Kong, Singapore, Vietnam, Thailand, and theUnited Kingdom*5		For the fiscal year ended March 31, 2019*6		Business profit = Operating profit + Share of profit (loss) of entities
accounted for using equity method + Amortization of intangible
assets associated with corporate acquisitions*7		ROE = Profit attributable to owners of parent / Shareholders’ equity(average over the fiscal year)*8		ROA = (Operating profit + Non-operating profit) / Total assets(average over the fiscal year)*9		Total return ratio = (Total amount of dividends + Total amount ofacquisition of treasury shares) / Profit attributable to owners of parent*10	Based on in-house research*11	In the 2018 Condominium Brand Survey, published by Nikkei Inc.,PROUD was ranked No. 1 in seven out of 10 categories.
*12	Received No. 1 ranking from 2016 to 2019 in the Oricon Customer
Satisfaction Report for real estate brokerage in both the condominium (purchases) and detached housing (sales) categories*13	According to customer satisfaction from a property management
satisfaction survey conducted by Sumai Surfin*14	In 2018, Nomura Real Estate Master Fund, Inc. and Nomura Real
Estate Private REIT, Inc. were selected as a Global Sector Leader
and Asia Sector Leader, respectively, by the Global Real Estate
Sustainability Benchmark (GRESB).

10Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

The Nomura Real Estate Group’s Business Units

Operating Revenue by Business Unit*

Residential Development Business Unit

54.8% (¥375.3 billion)

29.6% (¥25.0 billion)

Commercial Real Estate Business Unit

Commercial Real Estate Business Unit

25.0% (¥171.6 billion)

44.9% (¥38.0 billion)

1.4% (¥9.6 billion)

Total

668.5

¥

Property Brokerage & CRE Business Unit

Total

7.1% (¥5.9 billion)

79.6

Property Brokerage & CRE Business Unit¥

5.4% (¥37.2 billion)

billionInvestment Management Business Unit

FY19/3

Property & Facility Management
Business Unit

13.3% (¥91.3 billion)

8.8% (¥7.4 billion)

Other Business Unit

Other Business Unit

0.0% (¥0 billion)(0.1)% (¥(0) billion)

1,759.4¥

Number of employees

1,133(FY19/3)

26.3% (¥463.2 billion)

16.2% (1,133)

Commercial Real Estate Business Unit

Commercial Real Estate Business Unit

61.7% (¥1,086.0 billion)

19.4% (1,353)
Investment Management Business Unit

2.7% (186)

As of March 31, 2019

Total

6,980

1.6% (¥28.2 billion)

billionBusiness profit¥25.0 billion

Number of housing units soldResidential Development Business Unit

Property Brokerage & CRE Business Unit

Assets on balance¥463.2 billion• Nomura Real Estate Development• Nomura Real Estate Wellness• PRIME X• First Living Assistance

Key Figures

Residential Development Business Unit

2.4% (¥42.4 billion)

Total

Operating revenue¥375.3 billion

Group companies

Executive Officer, in charge of Residential Development Business Unit

Number of Employees by Business Unit

Investment Management Business Unit

As of March 31, 2019

Assets on balance /Number of employees

Daisaku Matsuo

Property & Facility Management
Business Unit

Asset Balance by Business Unit

Operating revenue /Business profit

9.7% (¥8.1 billion)

billion

P.44–47

Business Scale

Business Profit (Loss) by Business Unit*

Residential Development Business Unit

Investment Management Business Unit

FY19/3Business Strategies

Residential Development Business Unit

Ranking for supply of
condominiums in Japan

PROUD brand rating(2018)

5,890

3

*1

units

No.

(domestic market share: 6.5%)

1

Residential redevelopment
projects

*2

No.

1

*3

No.

Major Businesses
Housing Sales Business

Rental Housing Business

Property Brokerage & CRE Business Unit

22.6% (1,575)

Property & Facility Management
Business Unit

Property & Facility Management
Business Unit

2.4% (¥42.2 billion)

34.0% (2,370)

Other Business Unit / Adjustments

Other, Companywide (shared)

5.5% (¥97.1 billion)

5.2% (363)

The signature condominium brand of Nomura Real Estate

Large-scale, urban-type detachedhousing

Note: The percentage breakdown is calculated based on the simple total amount for each segment. The resulting figure is rounded to the first decimal place,which in some cases may mean the total does not add up to 100.0%.
*T he total shown at the center of the pie chart includes “eliminations or corporate” amount within segment information. As a result, data differs when totaling
operating revenue and business profit from each business unit.

Rental housing

PROUD FLAT
Monzen-nakacho V

Senior BusinessBusiness Profit by Business Unit
(Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions)


PROUD Daikanyama Sarugakucho

PROUD Ebisu Hillside Garden

PROUD SEASON Gakugeidaigaku

Billions of yen

Elderly housing with supportive services

Residential
Development
Business Unit

27.7
24.5

25.0

Commercial
Real EstateBusiness Unit

32.8

35.5

38.0

Investment
Management
Business Unit
6.0

5.9

5.9

Property
Brokerage & CRE
Business Unit

Property & Facility
Management
Business Unit

9.1

6.9

8.4

7.1

High-rise condominiums

FY18/3

FY19/3Suburban-type condominiums

7.4

OUKAS Funabashi

8.1

Internet Advertising
Business
PROUD TOWER Musashi-Koganei
Cross

FY17/3Large-scale condominiums

FY17/3

FY18/3

FY19/3

FY17/3

FY18/3

FY19/3

FY17/3

FY18/3

FY19/3

FY17/3

FY18/3

FY19/3

PROUD CITY Hiyoshi

OHANA Akishima-nakagami*1 According to Real Estate Economic Institute Co., Ltd.
*2 In the 2018 Condominium Brand Survey, published by Nikkei Inc., PROUD was ranked No.1 in seven out of 10 categories.
*3 Based on in-house researchCompany specializing in real estate andhousing industries

11

12

Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long TermBusiness Strategies

Commercial Real Estate Business Unit

P.48–51

Business Scale

Business Strategies

Investment Management Business Unit

P.52–55

Business Scale

Operating revenue /Business profit

Assets on balance /Number of employees

Operating revenue /Business profit

Group companies

Operating revenue

Assets on balance¥171.6 billion¥1,086.0 billion

Business profit

Number of employees¥38.0 billion

1,353• Nomura Real Estate• NREG TOSHIBA BUILDING• Nomura Real Estate
Life & Sports• Geo Akamatsu• Nomura Real Estate Hotels• UHM• NREG TOSHIBA BUILDING FACILITIESAssets on balance /Number of employees

Operating revenue

Assets on balance¥9.6 billion¥42.4 billion

Business profit

Number of employees¥5.9 billion

186

Group companies• Nomura Real Estate• Nomura Real Estate AssetManagement• Lothbury Investment Management

Toshiaki Seki

Norio Ambe

Executive Vice President, in charge of Commercial Real Estate Business Unit

Executive Officer, in charge of Investment Management Business Unit

Key Figures

Key Figures
Net lettable area

Number of property developments

Members of MEGALOS (Sports Club)

Domestic assets under management

Overseas assets under management(as of March 31, 2019)(as of March 31, 2019)(as of March 31, 2019)(as of March 31, 2019)(as of March 31, 2019)

1.3

300.0

953,000

m2 *4

109

Total

145,000

buildings *5

Major Businesses¥
trillion (approx.)

Top-class ESG external evaluations
Nomura Real Estate
Master Fund, Inc. (NMF)¥

No.

Nomura Real Estate
Private REIT, Inc. (NPR)

billion (approx.)(out of nine companies in Asia in non-listed,
diversified sector)

Major Businesses

Leasing Business

Property Development and Sales Business

Major office buildings

Major retail facilities

Offices

Listed REIT / Private REIT

Retail facilities

Assets under management

1,074.0 billion¥(as of March 31, 2019)

Assets under management

216.9

¥
billionJapan’s first private REIT, in operation(as of March 31, 2019)
since 2010. As of March 31, 2019, we
achieved a balance of ¥216.9 billion in assets under management
and are aiming for further growth through selective investment.
Characteristics of the REIT Business

PMO Shibakoen

Yokohama Nomura Building

One of the largest diversified REITs in Japan, managing approximately ¥1.1 trillion in offices, residences, retail facilities, logistics
facilities, hotels, etc.

bono Sagamiono

Private Equity Funds and Indirect Investment Funds

Landport Iwatsuki

Hotel Business
NOHGA
HOTEL
HOTEL
NIWA
TOKYO

Nihonbashi Muromachi
Nomura Building

Hamamatsucho Building

Fitness Business

Cooperative strengths of the2 Nomura Real Estate Group

1 Diversified portfolio

GEMS Kayabacho

Logistics facilities

Shinjuku Nomura Building

1*6(out of 29 companies globally in listed,
diversified sector)• Office funds• Healthcare funds• Fund of J-REITs• Overseas Open-end FoFs, etc.

Assets under management

75.4 billion

3

Conservative financial
strategy

Stable income
and returns
4

Asset management
expertise

Overseas Business
Assets under management

303.0 billion¥¥(as of March 31, 2019)(as of March 31, 2019)

Responding to the needs of investors, we provide a diverse lineup of
products including private equity funds and indirect investment funds.

Morisia Tsudanuma*4 Total net lettable area of offices and retail facilities for long-term leasing*5 Rental housing developments are not included due to their transfer to the Residential Business Development Unit. Includes projects in their planning stage.

*6 According to GRESB Real Estate Assessment 2018

We manage 64 properties valued at approx. ¥300.0 billion primarily
for retail, office, and logistics use in London and southeastern
United Kingdom.

13

14

Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long TermBusiness Strategies

Property Brokerage & CRE Business Unit

P.56–59

Business Scale
Operating revenue /Business profit

Property & Facility Management Business Unit

Business Strategies

P.60–63

Business Scale
Assets on balance /Number of employees

Operating revenue

Assets on balance¥37.2 billion¥28.2 billion

Business profit¥8.1 billion

Operating revenue /Business profit

Group companies• Nomura Real Estate• Nomura Real Estate Urban Net• Tokio Property Services

Assets on balance /Number of employees

Operating revenue

Assets on balance¥91.3 billion¥42.2 billion

Number of employees

Business profit

Number of employees

1,575¥7.4 billion

2,370Group companies• Nomura Real Estate Partners• Nomura Real Estate Heating andCooling Supply• Nomura Real Estate Amenity Service

Juntaro Kimura

Akihiro Fukuda

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

Executive Officer, in charge of Property & Facility Management Business Unit

Key Figures

Key Figures

Total transaction value

Property brokerage branches(FY19/3)(as of March 31, 2019)

4

*

7

NO.
(¥767.3 billion)

81

nomu.com(real estate company website)
Number of visits

Customer satisfaction survey

1

*8

NO.

1

We provide total support forreal estate sales and purchases, and for changing
places of residence in theTokyo metropolitan area,
Kansai, and Nagoya.

We consign sales of newly
built condominiums anddetached housing; contributeto housing sales businessthrough providing total support
that meets customer needs.

(as of March 31, 2019)

Management satisfaction survey ofcondominium residents

1buildings

No.

*11

(Tenth consecutive year)

Wholesale Brokerage business for corporations

Property and Facility Management

Construction Ordered

Domestic Wholesale
Sales Offices

Condominiums

Office building renovation

Office buildings

Large-scale repair work that maintains and increases the value of condominiums

We respond to the real estateneeds of domestic companies, corporate owners,
institutional investors, andhigh-net-worth individual
on a nationwide scale.

Condominium repair and renovation

Fukuoka
Hiroshima
Kyoto

Sendai(New)
Tokyo(Shinjuku)
NagoyaOverseas Offices
We respond on a wide scale to the real estateneeds of companies, institutional investors, andothers in the Southeast Asia region.

Tokyo

Cycle of Large-scale Repair Work

Hong Kong

ASEAN countries

Business Collaboration
Number of transactions through collaboration with
Nomura Securities and other financial institutions(banks, credit unions, credit associations, etc.)

Approx.

900(FY19/3)

We propose and provide services that meet theneeds of customers for real estate by closelycollaborating with a variety of financial institutions.

*7 Based on in-house research*8	The number of visits was approximately 1.112 million according to the February 2019 Nielsen NetView (page views from home or work computers, excluding apps) and approximately
2.589 million from smartphones according to Nielsen Mobile NetView (page views from iOS or Android, including apps). This represents the largest number of monthly website visits for areal estate company (brokerage). While there are redundant users of both computers and smartphones, the total number represents an estimate made by the Nomura Real Estate Group
based on the Nielsen Digital Consumer Database.
*9 According to 2019 Oricon Customer Satisfaction Ranking; ranked No.1 in detached housing sales and condominium purchases categories of real estate brokerage business

General
cycle

First
repairSecondrepairre:PremiumFirstrepairSecondrepairThird
repairThird
repairFourthrepairFifth
repairFourthrepairAllowance

Save on maintenance costs fromreduction in total number of large-scale repairs

Public facilities

We provide for first-time buyers and sellers with advice and information on topics suchas market conditions, the latest real estate news, and housing loans.

130

*10

Singapore

Real Estate Information Website (nomu.com)

Licensed, first-class building
operation and management
engineers

Major Businesses

Osaka

Consignment Sales
Business(as of March 31, 2019)

units (approx.)

Major Businesses
Retail Brokerage business for individuals

Number of buildings undermanagement

177,000 732

*9

NO.

Number of housing undermanagement

Realizing Long-term Guarantees
Standard specifications

re:Premium specifications

Rooftop waterproofing work

10-year guarantee

15-year guarantee

Exterior sealing work

5-year guarantee

10- to 15-year guarantee

Exterior painting work

5-year guarantee

7-year guarantee

Metal area painting work

2-year guarantee

3- to 5-year guarantee

Balcony and corridor waterproofing work

5-year guarantee

10-year guarantee*10 According to management satisfaction survey conducted by Sumai Surfin*11 Number of licensed employees within Nomura Real Estate Partners Co., Ltd. (as of March 31, 2019)

15

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2
Corporate Strategy

The Nomura Real Estate Group’s
Approach to Enhancing
Corporate Value over the
Medium to Long Term

Contents
18 Message from the CEO
24	Process for Enhancing Corporate Value
26 The Group’s Strengths
30	Message from the COO & CSR Officer
34 Materiality
36	The New Mid- to Long-term
Business Plan
40 Message from the CFO
44 Strategies by Business Unit
		 44	Residential Development
Business Unit
		 48	Commercial Real EstateBusiness Unit		 52	Investment Management
Business Unit
		 56	Property Brokerage & CRE
Business Unit		 60	Property & Facility Management
Business Unit
64	Business Structures
Underpinning Growth
70 Human Resource Management
74 Corporate Governance		 74	Message from the Chairman of theBoard of Directors
		 76	Messages from External Directors
		 78 Corporate Officers

Kichijitsu School, held on the premises of PROUD CITY Hiyoshi (please refer to page 26 for details)

		 81	Corporate Governance

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Message from the CEO

Formulation of the New Mid- to Long-term
Business Plan and its Background
Based on our Group Vision of “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,” we pursued the previous Mid- to Long-term
Business Plan from April 2016 to demonstrate our commitment to all stakeholders. During the three years ofPhase 1 of the previous Mid- to Long-term Business Plan, we steadily laid the groundwork for future growth,such as accelerating initiatives in mixed-use redevelopment for residences, in addition to offices and othercomplexes, expanding businesses for property development for sales, and establishing the foundations forour overseas business.
During that period, while Japan’s overall economy recovered moderately, social issues such as population
decline and labor shortage became more apparent. At the same time, the diversification of lifestyles andwork styles, such as the increasing number of dual-income households, is advancing at a rapid pace stemming from the low birthrate and aging population and other factors. In the real estate market, in addition tosignificant changes in customer needs, sales prices of new housing are rising as a result of high construction
costs and increased competition for land acquisition.
Under these circumstances, the Group’s operating profit in FY2019/3 was ¥79.1 billion, compared withthe ¥85.0 billion targeted for Phase 1 of the previous Mid- to Long-term Business Plan, while ROE was
8.9%, compared with its targeted level of 10%. As a result, the issues to be addressed by each business
unit have become clear, and the Group is keenly aware of the seriousness of these issues.
In April 2019, we announced our new Mid- to Long-term Business Plan. Based on the groundwork for
growth laid out in the previous Mid- to Long-term Business Plan, we formulated the new Mid- to Long-term
Business Plan through a backcasting perspective with an eye on future, asking ourselves what we must do
strategically in response to the rapidly changing social environment based on a medium- to long-term perspective. This plan is aimed at realizing sustainable growth by continuing to create new value through leveraging the Group’s strengths.

Eiji Kutsukake

Corporate Philosophy and Business Strategy
In corporate management, it is extremely important to have a clear corporate philosophy and the businessPresident and Representative Director,
Group CEOstrategies, organization, and governance structure necessary for realizing that philosophy. Without them, wecannot expect to achieve sustainable corporate growth. And we believe that real estate is the aggregation ofvarious h­ istories and thoughts in which land and buildings have been connected. Through providing development and related services that leverage the uniqueness of each real estate, we will utilize such landand nurtured assets while changing roles with the times, creating new value, and linking this value to the
future. I believe this is our responsibility to society.

The Nomura Real Estate Group aims to achieve
the new Mid- to Long-term Business Plan bycreating new value.

Responsiveness to the Changing Social Environment
When formulating and executing business strategies, it is important to have an accurate understanding of
the continuously changing social and business environments, and to address the social issues of the times.
For more than 60 years since its foundation, the Nomura Real Estate Group has confronted various continually changing social issues through its real estate development business and diverse real estate services.
For its Action Guideline “What We Value,” the Group has established the following five points: taking aclient-first approach; creating new value based on original ideas; always being a challenger; acknowledging

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

our growth with society; and working with vigor and achieving wellness. These points are connected to the“market-in” approach, which anticipates and addresses changes occurring in all fields surrounding realestate. These include shifts in customer preferences in the residential development business resulting from

Profit Plan and Business Portfolio

diversifying lifestyles and work styles, growing office needs in the leasing business stemming from work-

Under our new profit plan, we have established business profit*1 as our profit target and set targets of ¥85.0

style reforms and technological innovations, as well as the progress of IoT and digital technology, expanding

billion for Phase 1, ¥100.0 billion for Phase 2, and ¥120.0–140.0 billion for Phase 3. The new profit planbusiness opportunities for inheritance-related real estate brokerage, and increases in inbound investments

takes into account the current and future real estate market and the business environment. I would particu-

to Japan. This is a major strength of the Group’s business strategy.

larly like to mention our ideal business portfolio. To date, the Group’s business portfolio has been aimed at

Additionally, I believe that it is important to continue to fully leverage the Group’s strengths such as its devel-

achieving well-balanced growth in terms of its composition ratio for the property sales business, whereopment results for a wide range of asset types in urban development, not limited to housing, as well as its

development profits can be realized in a relatively short term, the leasing business, which produces stablecommitment to product quality and the Group’s abilities as a whole, in order to achieve growth in each phasecash flows, and service and management business such as investment management, including REIT, prop-

under the new Mid- to Long-term Business Plan. Going forward, we must continuously heighten our creative

erty brokerage and CRE, and property and facility management. Under this profit plan, in accordance withstrengths through Groupwide efforts to translate customer needs obtained from the front lines into specificthe business growth of the entire Group, we adopted a policy of targeting high levels of ROE and ROA byproduct development, as well as raise our sensitivity to global trends and customer needs.

controlling the volume of total assets while accelerating asset

Business Profit Plan

turnover. In pursuit of this target, we will work to have the Property

Billions of yen

120〜140

150

Significance of the Four Value Creation Initiatives under
the New Mid- to Long-term Business Plan

property development businesses such as PMO and other prop-

100
85

90

erty sales businesses that realize development profits are the main
pillars of our business. In addition to accelerating their develop-

We have established the following four themes under the new Mid- to Long-term Business Plan to be ofment, we plan to conduct management of total assets, including

60

existing properties for lease with an eye on expected completion

opment toward exceptional convenience, comfort, and safety; urban development and community building
toward the future of the global environment and local communities; and global expansion of high-quality
products and services. These initiatives embody the direction of the vision laid out in the Group’s corporate
philosophy. They also clarify the process through which the Group will increase corporate value in theof new large-scale leasing properties in the near future, in order to30

manage the balance sheet to an appropriate scale and, at the
FY17/3 FY18/3 FY19/3
Previous plan

medium to long term over the next nine years.
These four themes for value creation can be realized only by utilizing both the strengths cultivated by thebusiness in FY2028/3.
The housing sales business, as exemplified by PROUD, and120

particular importance for our value creation: enriched lifestyles and work styles; multifunctional urban devel-

Sales and Service & Management each account for 40% of our

New plan

FY22/3Phase 1

FY25/3Phase 2

FY28/3Phase 3same time, realize development profits.
*1 Business profit = operating profit + share of profit (loss) of entities accounted forusing equity method + amortization of intangible assets associated with corporate
acquisitions

Group and the groundwork laid out to date, along with a spirit of taking on challenges. Each theme is
directed at a future that goes beyond the track record built up by the Group. Going forward, we will continue to strive to create new value.
In addition to continuously growing in response to the changing social environment in Japan, pursuing ouroverseas business is becoming increasingly significant for the sustainable growth of the Group. We will not

Strategic Initiative for Our Overseas Businessonly look to capture growth in Asian countries, including ASEAN countries, but also consider business expan-

We are moving ahead with the establishment of the foundations set forth in the previous Mid- to Long-termsion in the mature markets of Europe and the United States. We also believe that there is no time to waste in

Business Plan for our overseas business. Under the new Mid- to Long-term Business Plan, we will strategi-

promoting our global business and acquiring expertise, such as inbound needs from overseas to Japan.

cally increase the number of target countries and investment amount in order to expand our overseas profits
in the near future. We plan to increase our overseas business profit to 15–20% of our total profit by FY2028/3
under the new Mid- to Long-term Business Plan by accelerating investment and recovery in each phase.
Real estate development is a strongly localized business, closely related to the living and working styles

Group Initiatives for Value Creation
Seeds for Growth Planted under the Previous
Mid- to Long-term Business Plan

Four Value Creation Initiatives under the
New Mid- to Long-term Business Plan

Mixed-use development

Platform of overseas businessNew asset types

Mutual growth with Group REITs

Accelerated growth throughM&As and other measures

1
2

The Group’s Strengths

P.26–29Development capabilities basedon the market-in approach

Development of and expertise invarious types of assets

Commitment to the quality of
products and services

Group synergy

3
4that stem from the country’s laws, culture, business customs, and history. Accordingly, it is important toP.36–37

Enriched lifestyles and work styles

promote joint-venture businesses with reliable local partners. In addition to providing funding to businesses,
there are many opportunities for the Company to provide its problem-solving know-how and expertise cultivated in Japan, and we will aim to develop our businesses by creating new value.
At the same time, we must carefully consider the variety of risks involved with overseas expansion, suchas currency risks. As a function of headquarters, we have established the International Business

Multifunctional urban development toward
exceptional convenience, comfort, and safety
Urban development and community building
toward the future of the global environment andlocal communities
Global expansion of high-quality products
and services

Department to facilitate coordination between business units and to research and monitor real estate markets in each country. We will expand the scale and accelerate the pace of our overseas business. The
expansion of our overseas business provides a good opportunity for our employees to change their mindset and perspectives. We expect the new environment to provide us with a broader perspective and greater
sensitivity, which will lead to positive returns for both our domestic and overseas businesses.

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Realizing Development Profits and Enhancing Corporate ValueI believe that net asset value (NAV), which is based on the market value of assets that create value throughthe development of land and areas, should be used as the appraisal standard for corporate valuation in thereal estate industry. However, looking at capital markets, most real estate developers in Japan, ourselves
included, have a lower valuation than their NAV. Of course, while valuation is also influenced by market
conditions and the operating environment, real estate investment trusts (REITs), which own properties andacquire stable cash flows from leasing, are generally appropriately
NAV per Share*2 / P/NAV*3

valuated, with an NAV ratio to market value of approximately 1.0

YenTimes
4,000

0.94

3,630
3,333

0.77

3,063

2,708

3,000

0.75

0.58

2,000

0.50

of the new Mid- to Long-term Business Plan. In order to achieve this target, we will aim for ROA of over 5%
by combining more development profits in the property sales business and the service & managementtion is below 1.0 times. Therefore, it must be said that our accuunrealized profits have not led to an appropriate market valuation.
Through repeated discussions with investors, I have come tofind that, in the Company’s valuation, trust in the realization of

0.25

Under the new Mid- to Long-term Business Plan, management’s focus is on capital policies, particularly
expected by investors, we will target ROE of over 10% as a key performance indicator (KPI) from Phase 2

most developers, including the Group, having an ROA at the 4%

mulation and growth of profits as well as our expansion of

0.59

1,000

those that enhance capital efficiency and shareholder returns. Taking into account the level of cost of equity

times, and an ROA of approximately 2–3%. Meanwhile, despite
level and surpassing REITs for efficiency, the stock market’s valua-

0.75

2,299

Achieving ROE That Exceeds Cost of Equity and Increasing
Shareholder Returns

1.00

unrealized gains is not enough. To sustainably increase corporate
value, it is essential for the value we produce to obtain appropriate

FY15/3
NAV per share

FY16/3

FY17/3

FY18/3

FY19/3

P/NAV (right scale)valuations from capital markets. As CEO, I believe that it is my duty
to achieve a higher evaluation from stakeholders by appropriately*2 NAV per share = shareholders’ equity + unrealized gains (after deduction of tax) /number of shares issued at the end of the fiscal year (excluding treasury shares)*3 P/NAV = closing price at the end of the fiscal year / NAV per sharerealizing value under our new Mid- to Long-term Business Plan.

business, in which asset efficiency is high.
In addition to achieving increased dividends for seven consecutive fiscal years, we have managed ourshareholder returns based on dialogue with capital market participants, such as in FY2018/3 when we
became the first company in Japan’s real estate industry to execute share buybacks, which we have subsequently continued to do. For Phase 1 of the new Mid- to Long-term Business Plan, our target for the total
return ratio is 40–50%.

In Conclusion
The new Mid- to Long-term Business Plan is a nine-year plan that will run from April 2019 to March 2028.
As I mentioned at the beginning of my message, the core of the plan is the creation of new value with an

Furthering Our Efforts in CSR and ESG
As for CSR and ESG initiatives, we need to raise awareness regarding sustainable growth of our corporate
value. Going forward, we will explain internally and externally in specific terms the risks and opportunities tobe looked at from both environmental and social standpoints when considering the sustainable enhance-eye on the significantly changing social environment and the establishment of a framework for realizing newvalue creation, encompassing profit plans and capital policies.
Through the achievement of our new Mid- to Long-term Business Plan, I hope that the Group’s corporate
value will be recognized by all stakeholders over the medium to long term and that we continue to be a
corporate group that is supported by our stakeholders.
We ask for your continued understanding and support going forward.

ment of corporate value and earnings power, as well as outlining the strategies to be pursued to capture
opportunities and minimize risks. The Group has incorporated efforts to address environmental and social
issues into the performance evaluation of corporate officers.

In May 2019, we signed the United Nations Global Compact and registered as a participating company,
placing CSR and ESG at the center of our management and business activities. During the process of formulating the new Mid- to Long-term Business Plan, in addition to recognizing business opportunities andrisks, we held numerous discussions, including with external directors, from a variety of angles and from abackcasting perspective, in regard to the allocation of management resources, our approach for enhancing
our strengths, and ways to offset our weaknesses. These efforts are playing a part in enhancing the Group’s
corporate governance and, in turn, enhancing its corporate value. Furthermore, I have great expectations
for the new external directors who were appointed at the Ordinary General Meeting of Shareholders in June
2019. Moving forward, we will strive to evolve our corporate governance further, based on our evaluation of
the effectiveness of the Board of Directors, which we have conducted for several years.

Eiji Kutsukake
President and Representative Director,
Group CEO

September 2019

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

25

Process for Enhancing Corporate Value

Realizingsustainablevalue creation

P.36–37

We will continue to provide new value to our customers and society by offering innovative businesses andservices that leverage our strengths accumulated over the years, while keeping an eye on the changes inthe social environment, diversifying customer needs, and social issues.

Four Value Creation Initiatives under the
New Mid- to Long-term Business Plan

Enriched lifestyles and work styles

P.26–29

New Value Created by the Group
Safety/Security

Development
capabilities
based onmarket-in
approach

P.26–29

The Group’s Strengths

Environment

Community

Health andWell-being

Improving disaster Utilizing assets
Creating sustainable Diverse healthcare
prevention through through developopen communities support by
redevelopment
ment of hybrid-style with BE UNITED
sports clubs
condominiums
concept

Offering high level Installing solar
Development
and expertise of of security through power generator
Premium
Midsizeat “Landport”
various types of
Office, “PMO”
assetsIncorporating
Received thecommunity design Good Design
methods inAward for 17th
“PROUD”
consecutive year

Multifunctional urban development
toward exceptional convenience, comfort,
and safety
Urban development and community
building toward the future of the global
environment and local communities

Contributing to achieve the SDGs

Global expansion of high-quality
products and services

P.34–35

Development capabilities basedon market-in approach
Development and expertise ofvarious types of assets

Commitment to Providing long-term Acquiring
guarantees through environmental
the quality oflarge-scale repair
certification
products andwork service,services“re: Premium”

Offering highly
Providingevaluated services comfortable andin brokerage andrefined dining
propertyin “GEMS”
management

Group synergy

Commitment to the quality of
products and services

Providing housing
ESG investment
Creatingwith safety andthrough “Leasing
communities
security throughValue Chain”
through Nomura“integrated
Real Estate Groupdevelopment, sales,
Customer Cluband management
system”

Enabling seniors tocontinue living
healthy lives
through “OUKAS”

Group synergy

Community
Safety/Security
Health and Well-being

New Value Creation

Four KeyCSR Themes

Environment

P.34–35“Our Group Vision”
Human Capital

Initiatives for Social Issues
CSR Promotion
Foundations

New Value, Real Value

P.70–73

Management
Structure

P.74–89

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.

Promotion Foundations

We create new value, social value, and, above all, real value.

Group Vision

Present

New Mid– to Long–term Business Plan (from FY2020/3 to FY2028/3)

26Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

The Group’s Strengths

Development Capabilities Based on Market-In Approach
We have continued to develop products that exceed customer
and market expectations through a “client-first approach.”Through this effort, we have fostered a corporate culture thatreflects customer and market needs in our manufacturing.
Combining engineering strength and knowledge and enthusiasm with our industry-leading development capabilities willlead to the generation of new value toward future urban development through the four value creation initiatives.

Redevelopment Business Improving the Fire Resistance ofHighly Populated Areas with Wood-frame Housing(PROUD TOWER Higashi-Ikebukuro)
In 2013, PROUD TOWER HigashiIkebukuro was positioned as a core
project in the Tokyo Metropolitan
Government’s ten-year project toimprove fire resistance of highly
populated areas with wood-frame
housing. The area had been densely
populated with aged, wood-frame
housing with a high risk of disaster.
After the redevelopment project, thearea was reborn as a safe andsecure building with strong resistance for disasters.

PROUD TOWER Higashi-Ikebukuro

Development Capabilities Based on Market-in Approach
Safety /Security

Key CSR
ThemesRedevelopment business improving the fire resistanceof highly populated areas with wood-frame housing

Environment Hybrid-type condominium
Community

BE UNITED approach

Health andWell-being

Diversifying our fitness clubs

Development and Expertise of Various Types of Assets
Leveraging our expertise in “PROUD,” our housing brand, weestablished a highly original business model for property development businesses such as “PMO (Premium Midsize Office),”which features high-quality design and functionality that reflect
customer needs ascertained through the front lines, wherecontact with customers takes place. Through participation in
the senior and hotel businesses, the Group is further broadening its horizons for urban development into the future.

Development Results and Expertise in a Wide Variety of Asset Types
Safety /Security

Key CSR
ThemesPMO—Medium-sized offices with high levels of security

Environment

Landport—Logistics facilities that featuresolar power generation

Community

PROUD—Incorporating the idea of 100 CommonSpace Design Patterns for the Condominium Complex

Health andWell-being

GEMS—Comfortable and refined retail facilities
specializing in dining

Hybrid-type Condominium (PROUD Uehara Forest)
We have transformed a condominium constructed in 1984 into Japan’s
first hybrid-type condominium by adding extra units to the existing
property along with enhancing the livability of the entire property. Bytaking on repeated technical and legislative challenges, we havebecome the first private real estate developer to obtain Long-life Quality
Housing certification for an aged condominium. This property represents our policy of pursuing environmental friendliness through preserving properties of value for a long time.

PROUD Uehara Forest
Existing property completed
in 1984

Condominiums

Offices

Logistics facilities

Retail facilities

Elderly housing withsupportive services

HotelsHybrid-type condominium scheduled
for 2020* A new condominium being built on
existing property

BE UNITED Approach (PROUD CITY Hiyoshi)
Medium-sized Offices with High Levels of Security

We believe that “civic pride”—residents’fondness for and pride in a city—contributes
to its development. Our new concept for
urban development—“BE UNITED
approach”—was established to nurture thisidea. In order to turn cities into places where
people want to continue to live or visit, we
aim to create open communities throughcooperative relationships between our internal and external starkholder in each city.
We have labeled the activities necessary torealize the BE UNITED approach as ACTO.
As a first step, we introduced these activities
at PROUD CITY Hiyoshi. We will continue
conducting urban developmentin harmony with its community, which willheighten the value of developments by cultivating an open community that crosses allboundaries.

The fundamental design accommodates one tenant per floor, withdedicated plumbing for tenants on each floor to ensure security andfunctionality. Despite being
medium sized, PMOs offer
quality and crime-prevention
performance that compares
favorably with high-grade,large-scale buildings throughsuch features as security gate
at entrances.

We have opened a part of the site as a basefor community creation and hold a variety ofevents in cooperation with various partners
such as a local university and a non-profit
organization.

Diversifying Our Fitness Clubs
Amid the trend of diversifying work styles, in MEGAROS fitness clubs, we are
increasing the number of clubs, which are open 24 hours a day. We are also striving
to support health and enrich lifestyles by operating clubs in accordance with a varietyof needs, such as MEGALOS Reflet women-only studios, and MEGALOS_0+ clubs,
which offer personal training.
MEGALOS Reflet
Shinsaibashi

Landport—Environmentally Friendly Logistics Facilities That
Feature Solar Power Generation
As part of our efforts to consider the environment and to reduce operating costs, we utilize LED lighting throughout our Landport facilities
and installed solar panels. In
FY2019/3, the total amount of
power generated at Landport
was approximately 12.08 million
kWh. This figure is equivalent tothe annual electricity consumption of approximately 3,360
ordinary households.

PROUD—Incorporating the Idea of 100 Common Space
Design Patterns for the Condominium Complex

GEMS—Comfortable and Refined Retail Facilities
Specializing in Dining

As a method for utilizing communal spaces to improve communities, we developed the 100
Common Space Design Patterns
for the Condominium Complex
through industry–academia
collaboration. We adopt design
patterns that facilitate connections between people and places
and between people and people.

GEMS is based on the conceptof a facility where people cancasually drop by and enjoyrefined dining, time, and space.
We aim to develop GEMS
mainly in areas that lack goodrestaurants.

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Commitment to the Quality of Products and Services
Since our founding, we have earned the firm trust of customers
and society through our commitment to quality. This commitment has been passed down through the generations, eventhough it has been reshaped over the years. Through our commitment to quality, we provide various products and services
with high added value such as properties with environmental
certification and “re: Premium,” our repair-work service thatprovides long-term guarantees.

Group Synergy

Commitment to the Quality of Products and Services

Key CSR
ThemesSafety /Security

re: Premium—Repair-work service offering long-term
guarantees that exceed industry standards

Environment

Acquired environmental certifications such as DBJ,
BELS, and LEED

Community
Health andWell-being

Ranked No. 1 for high-quality brokerage service

In order for the Group to generate new value through originalideas, each and every employee must take on a variety of roles
while developing a culture of cooperation between organizations throughout the Group. The integrated development, sales,and management system produced through this culture is oursource of significant growth.

Safety /Security

Key CSR
ThemesRanked No. 1 for condominium management service
Received Good Design Award for 17th consecutive year

Integrated development, sales, and management systemin the housing sales business

Environment

Leasing value chain that takes into account
ESG investment

Community

Nomura Real Estate Group Customer Club

Health andWell-being“OUKAS”—elderly housing with supportive services

Residential
Development

re: Premium—Repair-work Service For Housing Offering Long-term Guarantees That Exceed Industry Standards
Through quality-assured construction by Nomura Real Estate
Partners, we provide our “re: Premium” large-scale repair-work
service, which offers long-term guarantees for PROUD condominiums. By extending the cycle for carrying out large-scale
repair work, residents are able to keep down maintenancecosts. Moreover, they can improve property value by allocating
the money saved to construction work such as upgrades tocommunal spaces.

Group Synergy

Property &Facility
Management

Rooftop waterproofing work

Exterior sealing work

Exterior painting work

Standard specifications

10-year guarantee

5-year guarantee

5-year guarantee“re: Premium”
specifications(long-term guarantee)

15-yearguarantee

10- to 15-year
guarantee

7-yearguarantee

Number of Newly Acquired Environmental Certifications by Asset Typein FY2019/3* Indicates acquisition of DBJ Green Building, LEED, CASBEE, or BELS certification.
Office buildings

6 properties

Retail facilities

7properties

Logistics facilities

1property

Rental housing

6 properties

Ranked No. 1 for High-Quality Brokerage Service for FourthConsecutive Year

Ranked No. 1 for Condominium Management Service for10th Consecutive YearIn the 2019 Oricon Customer Satisfaction Ranking, Nomura Real
Estate Urban Net achieved the top ranking in the sales for detachedhousing and purchases for condominiums categories for the fourthconsecutive year. We provide high-quality services that bring pleasure
to our customers.

Nomura Real Estate Partners continues to strive to elevate its management quality as a property management company. In a resident satisfaction survey conducted by Sumai Surfin, we were ranked No. 1 forthe 10th consecutive year.

PROUD CITY
Tsukaguchi

PROUD
Shinjuku
Nakaochiai

PROUD TOWER Nagoya Sakae

Residential Development

Property & Facility Management

Property
Brokerage& CRE

Leasing Value Chain That Takes into Account
ESG Investment
Commercial Real Estate

Investment Management

We have established our exclusive
integrated system for the PROUD
series, encompassing land acquisition, product design, construction
management, sales, after-sales
service, and property management
services. We provide housing withsafety and security to customers
through cooperation of theemployees in charge of thevarious aspects of this system.

Nomura Real Estate AssetManagement is a signatory to theUnited Nations’ Principles for
Responsible Investment (PRI) andengages in ESG-related asset management. We incorporate environmental considerations that leverage
our Leasing Value Chain, suchas providing feedback to theCommercial Real Estate Business
Unit on environmental standards
for development projects from an
investor’s point of view.

Nomura Real Estate Group Customer ClubOUKAS—Elderly Housing with Supportive Services

Residential
Development

Received the Good Design Award for 17th Consecutive Year
Our commitment to manufacturing,which has been a part of the Group’s
DNA since its foundation, led to thereceipt of the Good Design Award forthe 17th consecutive year. We received
the Good Design Award for nine projects
in fiscal 2018, our most ever. Goingforward, we will continue to work
toward the realization of sustainable
cities by focusing on what people
and communities.

Investment
Management

Integrated Development, Sales, and Management Systemin the Housing Sales Business

Acquired DBJ Green Building, BELS, and LEED Environmental Certifications
Our commitment to quality is also linked to our acquisition of various typesof environmental certification. For PROUD condominiums, we set a targetof achieving a BELS evaluation of* or higher. Moreover, we achieved
a 100% acquisition rate* for Green Building Certification for all newly completed office buildings, retail facilities, logistics facilities, and rental housing
in FY2019/3.

Commercial
Real Estate

Property
Brokerage & CRE

Property & Facility
Management

Nomura Real Estate, Nomura Real Estate Urban Net, and Nomura Real
Estate Partners cooperate to provide services such as relocation support
and long-term maintenance in order to deliver higher quality to daily lives.
Moreover, the Nomura Real Estate Group Customer Club provides
programs such as musical events as part of efforts to provide fulfilling
experiences and promote the development of local communities.

Residential Development

Commercial Real Estate

OUKAS is the brand of elderly housing with supportive services operated by Nomura Real Estate Wellness. As part of efforts to maintainand promote the health of seniors, instructors from MEGALOS, operated by Nomura Real
Estate Life & Sports,
provide health maintenance and improvement
programs at OUKAS inorder to support lifelong,independent living.

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About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Message from the COO & CSR Officer

The Nomura Real Estate Group has adopted New Value, Real Value as
its corporate philosophy and, with its Group Vision directed at its customers and all other stakeholders, it continues to work toward creating
new value through “building cities—dynamic stages that connect todaywith tomorrow’s possibilities” and “embracing every moment of life’s
pursuits.” Since my appointment as the chair of the CSR committee in
2016, we have further accelerated CSR and ESG initiatives and established priority themes for our activities. Based on our two CSR promotion foundations of Human Capital and Management Structure, we
identify and analyze current social issues in order to apply them to specific activities and then focus on the following four key themes: Safety /Security, Environment, Community, and Health and Well-being. The
promotion of CSR and ESG activities is closely related to the implementation of our corporate philosophy through our business activities.
Going forward, we will continue to position CSR and ESG as the foundation for our business activities, as we aim to heighten corporate value
and achieve sustainable growth.

Aiming for Sustainable Growth through the Promotion of CSR and ESG
We stipulated our four value creation initiatives under the new Mid- to Long-term Business Plan, announcedin April 2019. These initiatives indicate the Group’s direction toward continuing to provide value to society
and its customers by leveraging its unique strengths.
Looking firstly at Japan, lifestyles, work styles, and values are rapidly diversifying because of major changes
in the structure of society, such as population decline, low birthrate and aging population, and labor shortage.
Looking from a global perspective, alongside problems related to climate change such as global warming andthe outbreak of natural disasters, there are human rights, labor, and a variety of other social issues. The international consensus such as the Paris Agreement and the United Nations Sustainable Development Goals,
and movements such as the expansion of ESG investment demonstrate that interest in these social issues is
growing around the world. Under these conditions, it goes without saying that it is essential for corporations
to resolve social issues and meet the needs of their customers through CSR and ESG initiatives in order toachieve sustainable growth. I believe that creating new value in response to the needs of society and ourcustomers will lead to the acquisition of new technologies and business opportunities and, in turn, lead tothe reduction of business risk.
For example, promoting activities in collaboration with suppliers helps to resolve social issues such as

Seiichi Miyajima

human rights and poverty while reducing business continuity risk throughout the entire supply chain. Similarly,
amid the global acceleration of initiatives toward the reduction of greenhouse gas emissions, opportunities
for developing new technologies and businesses are being created, such as plans for post-carbon and zero-

Executive Vice President andRepresentative Director,
Group COO

energy housing and buildings. I believe that these opportunities will lead to the creation of new social andcustomer value going forward. Through full engagement in CSR and ESG activities in these ways, we intend
to heighten awareness and sensitivity toward a sustainable society and produce products and services withhigher added value.

Four Value Creation Initiatives under the
New Mid- to Long-term Business Plan

1
2
3
4

P.36–37

Value Creation Initiatives under the New Mid- to Long-term Business PlanThroughout the approximately 60 years of its history, the Group has earnestly dealt with social issues by

Enriched lifestyles and work stylesbuilding many cities mainly through residential development. In the era of our foundation, we managed
residential development with the aim of resolving the housing shortage, while in recent years we have

Multifunctional urban development toward exceptional­convenience, comfort, and safety

responded to various housing needs with our condominium brands such as PROUD and OHANA.
Moreover, we have achieved sustainable growth by meeting the needs of customers and society. We have

Urban development and community building toward the futureof the global environment and local communities

pursued multifunctional and highly convenient urban development through station-front redevelopment andurban-type compact towns, as well as property development by replacing old buildings with safe and comfortable buildings with high environmental performance.

Global expansion of high-quality products and services

On the other hand, lifestyles and work styles have changed greatly over the past few years. In addition tochanges in customer preferences and values, work–life balance is significantly changing due to advances in
the aging of society and the increase in dual-income households. Furthermore, the structure of society is

Key Sustainable Development Goals (SDGs)
Determined by the Group

P.34–35

changing due to rapid technological advances with the introduction of IoT and AI-driven services, which arehighly convenient. In addition, there are greater expectations and needs among society and capital markets
for the environment, CSR, and ESG.
Under these circumstances, we analyzed the opportunities for and threats to our business when formulating
the new Mid- to Long-term Business Plan, and repeatedly discussed what kinds of value we could continue
to provide to society and our customers in the future based on our strengths. The development of safe andcomfortable properties and the realization of environments where people can live, work, communicate, andgather while embracing every moment of life’s pursuits will allow us to fulfill our social responsibilities throughour business, as well as enabling us to achieve earnings growth and sustainable growth as a corporation.
Accordingly, the Group announced its four value creation initiatives under the new Mid- to Long-term Business

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Plan, which define the role it should play and its vision going forward (please see p.36–37 for details). These four
initiatives will contribute to resolving social issues while aligning with the SDGs and I believe that this value
creation is essential to the sustainable growth of the Group. To realize this aim, we are accelerating unique,
new initiatives and I feel confident about their progress.

Providing Value to the Future
We further accelerated our CSR and ESG activities, in FY 2019/3.
Firstly, we signed the United Nations Global Compact. This signing is a declaration of our determination

In Conclusion

as a member of society to contribute to the achievement of a sustainable society, and a demonstration of

The Nomura Real Estate Group is striving to raise its value and competitiveness through creating new value

our corporate stance to global stakeholders. Secondly, as an environmental initiative, we set a target ofand acquiring new business opportunities. I feel that we have been certainly creating this virtuous circle for

reducing greenhouse gas emissions 30% compared with their 2013 levels in 2030, and established an

growth. As I have mentioned already, CSR and ESG initiatives have accelerated on a global scale in the lastaction plan for our own business domain (Scope 1 and 2*). We are also moving forward with discussions on

few years. It is impossible to achieve sustainable growth based solely on the view of a company. The value

setting longer-term targets for 2050 and establishing an action plan for the domains of our customers andcreation that the Group aims to achieve refers to growing together with society beyond the next 30 or 50

suppliers (Scope 3). Specifically, we intend to develop low-carbon and post-carbon type products andyears. We will fulfill our responsibilities to all of our stakeholders, aiming to be a leading company in CSR

services, such as Net Zero Energy House (ZEH). Thirdly, we have set new guidelines. We will realize theand ESG. The four value creation initiatives and individual business strategies under the new Mid- to Long-

sustainability of the entire supply chain by conducting business activities in line with the Nomura Real Estateterm Business Plan were created by incorporating the expertise of directors and external directors, in addi-

Group CSR Procurement Guidelines, the operation of which was commenced in November 2018 throughtion to the Group’s track record and strengths. They are also the result of our CSR and ESG activities thatthe cooperation of suppliers and business partners.

we have focused on to date.

Moreover, we have worked to enhance our information disclosure. In addition to making our CSR andWe will deliver the social and customer value that will be demanded by society in the future and raise our

ESG stance as qualitatively understandable as possible, we are disclosing information meticulously on activ-

corporate value by reducing risks and expanding earnings. We will achieve closer communication with allities carried out to date to internal and external stakeholders via our website and other means. We havestakeholders, including customers and investors, through appropriate information disclosure on our CSR

created a corporate culture in which everyone from the top management to the employees works with theand ESG activities. And through these activities, we will expand our business and realize the sustainableawareness that CSR and ESG are the foundation of our business activities by establishing specific targets

growth of the Group.

to promote CSR and ESG in each business unit and Group company.
Amid the promotion of urban development with a focus on offering better access to the workplace, andthe development of compact cities led by governments, the need for multifunctional and highly convenient

Initiatives for Generating Added Value in Cooperation with Surrounding Communities (ACTO)

urban development that is safe and comfortable is increasing more and more. To ensure that the Groupwill continue to be chosen by customers going forward, it will be vital to provide further added value andengage in initiatives aimed at differentiation. One such initiative is the BE UNITED concept (please see p.26

We will aim to realize sustainable urban development by creating open communities with cooperative relationships between our internaland external stakeholders through the continued involvement of the Nomura Real Estate Group.

for details), which developed out of the experience gained from one of our projects, Funabashi Morino City.

Based on the concept of urban development in harmony and together with the surrounding community,

OPEN
The Nomura Real EstateGroup retains ownershipof the space

we engage not only with the residents of condominiums but also with the community itself. Through the
involvement of a wide array of players, we will aim for urban development through cooperative r­elationships
between our internal and external stakeholders.
Furthermore, we commenced ACTO, a community activity that is the means for realizing the BE UNITED
concept. This activity was designed under the concept of “a place open to everyone.” Through Nomura

Five activities for community development
2 Assign an “Area Designer” who connects people

residents, this space is lent out free-of-charge to an area community management organization, which

3 Establish a “Community Company”

enables the creation of open and sustainable communal spaces. We assign a specialist to conduct the

4 Launch a “Community Website” as a base forinteraction by establishing a community website with information on community activities and events that
forms the foundation for interaction and encounters.
* Scope: Scope of calculation and reporting on the amount of CO2 emissions by a company
Scope 1: Direct emissions such as fuel combustion
Scope 2: Indirect emissions resulting from the use of electricity or heat purchased by the Company
Scope 3: Indirect emissions other than those in Scope 1 and 2, such as through the use and disposal of products sold by the Company,
and business trips and commuting by employees

Establish a sharedcommunity space

1 Set up a “Shared Community” space

Real Estate’s ownership of the communal space of properties, which was traditionally owned and used byplanning and operation of area community management. In addition, we create a virtual environment forOpen and relax

FutureRealize collaboration
between communities
by using IoT platform

virtual interactions
5 Commence activities before property completion
ACTION
Projects where ACTO will be introduced(including those planned to be introduced)

Completion of
construction

Community
opening

PROUD CITY Hiyoshi

March 2020

Spring 2022

Higashi-Ikebukuro 4-chome Second District

FY22/3

TBD

Kameido 6-chome Project

FY22/3TBD

Itabashi Station Itabashi Exit District

FY26/3

TBD

Act and expand

Assign management staff
Implement initiatives torevitalize communities

CONNECT
Connect and enjoy

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About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Materiality

The Nomura Real Estate Group is promoting CSR activities in all of its business by addressing social issues that require attention and meetingthe expectations of its stakeholders. Under the Nomura Real Estate Group’s Policy on CSR/ESG, we set quantitative and qualitative targets inaccordance with our four key themes and two promotion foundations. We are promoting CSR activities by steadily utilizing the PDCA cycle.

The Nomura Real Estate Group’s Policy on CSR / ESG
CSR
Theme

CSR Management Systemmanagement plans and business activities. Further, we have alsoestablished the CSR Promotion Council, which is responsible for
implementing the policies decided by the CSR Committee. The CSR
Promotion Council comprises members of each business unit
appointed by the Chairman of the CSR Committee who are responsible for business promotion in their unit and implement activities,
provide management, and raise awareness of CSR among
employees.

E

The Nomura Real Estate Group recognizes that community
dysfunction and reduced vitality, and the related weakening ofcommunities due to factors such as the declining birth rate
and aging population and the increase in the number of vacant
dwellings are important social issues. The Group fosters
connections with customers and local communities andsupports the nurturing of communities by means of building
design initiatives and operational services. Through thesemeasures, it is promoting smooth mutual assistance inemergencies and community revitalization, and contributing
to the realization of a cooperative society.

Health and Well-being

The Group selected its Four key themes for CSR in FY2016/3. In FY2018/3, we added steps five through seven and formulated the
Nomura Real Estate Group’s Policy on CSR/ESG and determind the Group’s material issues.

The Nomura Real Estate Group recognizes that building andinfrastructure deterioration and obsolescence, reduced urban
functions, and increased natural disasters are important social
issues. It contributes to the realization of the safety andsecurity of customers and local communities through theprovision of products and services based on appropriatequality management and sustainable urban development.
It also promotes the creation of work and living environments
in which business and daily living can continue even in timesof emergency.

Community

Four Key Themes

S

Safety/Security

The Group’s Focus Areas for the SDGs

Process for Formulating Our Four Key Themes, Policies, and Material Issues

The Nomura Real Estate Group recognizes that climatechange, the depletion of natural resources, and the collapsingof ecosystems are important social issues. It contributes to therealization of a sustainable society through environmentallyfriendly urban development, including energy saving andlow-carbon initiatives as well as the use of renewal energy andappropriate utilization of resources. It also complies withenvironmental laws, ordinances, and regulations, andpromotes appropriate environmental management.

Material Issues

Group Targets / Indicators

Upgrades to environmental
management

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

Responding toclimate change

The Nomura Real Estate Group recognizes that the declining
birth rate and aging population, globalization, and the diversification of individual values and lifestyles are important social
issues. It communicates with stakeholders and provides
products and services for a healthy and comfortable life to allsorts of people, regardless of their attributes. In that way, it
respects diversity and contributes to the realization of ahealthy and vigorous society.

Reducing CO2 emissions
Promoting solar power generation
Reducing energy use

Effective utilization ofwater resources

Reducing water usage

Consideration for biodiversity

Acquiring biodiversity certification(ABINC / JHEP / SEGES)

Appropriate utilizationof resources andpollution control

Contributing to Achieve the Sustainable Development Goals (SDGs)
The 17 SDGs were adopted at the United Nations Sustainable
Development Summit in September 2015. Worldwide cooperation isrequired to achieve these goals. The Group understands the importance of contributing to their attainment. Through efforts guided by
the four key themes and their materiality, we will contribute toachieving the SDGs.

Environment

To further strengthen and promote its CSR activities, the Company
established the CSR Committee (Chairman: Executive Vice
President and Representative Director, Group COO of Nomura Real
Estate Holdings, Inc.). The committee comprises directors, executive
officers, and external directors selected by the Board of Directors
and is in charge of deliberating on and establishing policies andaction plans concerning CSR and ESG. The Board of Directors
checked the results of the CSR Committee and reflected them inGroup Policy

Reducing waste discharge
Promoting use of domestic and
FSC certified timber

Improved safety/security indesign and construction

Complying with design andconstruction standards and quality
manuals

Improved quality of safety/
security in operation andmanagement

Improved management quality andexpanding after-sales service

Initiatives for longer life andincreased durability

Providing of long life and highdurability products and services

Safety and security
in disasters

Expanding of disaster
preparedness
Expanding of planning and design
for revitalization of communities

Care for communities andsupport for revitalization

Response to aging
population and diversity andsupport for health

Improved customer
satisfaction and comfort

Supporting revitalization ofcommunities in operations andmanagement

Promoting universal design
Supporting health and increasing
healthy life expectancy
Promoting communication to
improve customer satisfaction
Improving comfort
Preventing work-related accidents

Review social issues

STEP 1 extensively

Four key themes
Environment
STEP
2–4

Identify key themes via CSR Committee meetings, such as impact
on the Company’s business, relevance, and degree of risk

STEP 3

Identify key themes forstakeholders

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

Community
Health andWell-being

Importance for our business

Key Social Issues for the Group• Building and infrastructure aging and obsolescence

STEP 4 Finalize four key themes
STEP
1• Decline in urban function• Increased natural disasters• Depletion of natural resources• Collapsing of ecosystems• Community dysfunction and loss of vitality, and weakening ofcommunity ties due to factors such as the declining birth rate
and aging population and the increase in the number ofvacant houses• Diversification of individual values and lifestyles

Evaluate and discuss

STEP 6 issues

Determine and approve

STEP 7 policies and materiality

Identify four key themes by allocation based on importance fromthe perspectives of stakeholders and the Company
Determine policies and priorities for each key theme to promote
CSR activities. Identify activities and business for each key theme
via the CSR Promotion Council
Conduct evaluations and hold discussions based on policy trends
and international frameworks, such as the SDGs and the SASB
Determine policies and material issues after the CSR Committee
and the CSR Promotion Council conclude discussions, andsubmit to the Board of Directors for approval

G

The Nomura Real Estate Group aims to provide wellness
management so that all its executives and employees can
carry out their work energetically and in good physical andmental health, which leads to sustainable corporate growth.
In this way, it contributes to the realization of a sustainable
society, the continuation of business activities, and increased
corporate value. The Group also promotes the occupationalsafety and health maintenance of its employees and suppliers,
recognizing that those matters are important management
issues. Also, recognizing that the innovations brought about
by diversity are important for the continued creation of newvalue, the Group works to promote diversity and create fairand rewarding workplaces so that human capital with a varietyof perspectives and ways of thinking, regardless of their
attributes, can fully demonstrate their personalities andcapabilities.

Health and safety of
employees

Promoting thorough physical andmental health management
Promoting taking of paid leave
Preventing overwork
Promoting active participation
by women

Promotion of diversity

Supporting childcare and nursing
care
Promoting hiring of seniors andpeople with disabilities

Creation of fair and rewarding
workplaces

Implementing fair assessment andcompensation
Improving employee satisfaction

Improvements tohuman capital

Enhancing cultivation ofhuman capital

Supplier safety

Complying with CSR procurement
guideline
Ensuring supplier safety

Management Structure• Climate change

STEP 5

Identify activities andbusiness related toeach key theme

Two Promotion Foundations

STEP 2

Identify key themes for
the Group

Human Capital

Importance for our stakeholders

Safety/Security

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

The Nomura Real Estate Group promotes the strengtheningof compliance as well as risk management and corporate
governance, recognizing that they are important management
issues for the realization of a sustainable society, the continuation of business activities, and increased corporate value.
It also conducts its business activities with respect for thehuman rights of all people, including customers, local communities, employees, and suppliers.

Corporate governance

Ensuring diversity in Board of
Directors

ComplianceObserving compliancerequirements

Risk management

Implementing thorough risk
management

Human rights

Implementing thorough humanrights training

Improved suppliermanagement

Compliance with CSR
procurement guidelines

Related SDGs

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

The New Mid- to Long-term Business Plan

Development Sector

Service & Management Sector

Property & Facility
Management
Business Unit

Investment Management
Business Unit

Commercial
Real EstateBusiness Unit

Residential Development
Business Unit

Property Brokerage & CRE
Business Unit

Based on the Group’s strengths and theseeds for growth planted under theprevious Mid- to Long-term Business Plan,
we create new value by having each business unit appropriately take advantage ofbusiness opportunities.

Four Value Creation Initiatives under the New Mid- to Long-term Business Plan
1 Realization of Enriched Lifestyles and Work Styles

Construction ordered

Property and facility
management

Real estate
consignment sales

Real estate brokerage

Investment
management

Fitness

HotelsProperty for saleLeasing

Internet advertising

Senior housing

Rental housing

Housing sales

To date, the Group has offered highly unique products andservices based on feedback from the front lines and its marketin approach for a variety of asset types, such as PROUD,OHANA, PMO, GEMS, Landport, OUKAS, and NOHGA HOTEL.
As lifestyles and work styles change dramatically and values
diversify, we must anticipate and respond swiftly to them. I
believe that our responsiveness to change and our productdevelopment capabilities are the Group’s major strengths.
Going forward, as the market leader, we will continue todevelop our original business model throughoffering products and services that remain a step ahead ofcustomer needs and changes in society.

Increase in single, dual-income, andsenior households
Tokyo’s growing city power andglobal competitiveness2 	Multifunctional Urban Development toward Exceptional Convenience,

Opportunities

Comfort, and Safety

Demand for compact towns in regional core cities

Accumulation of property stock
Growing demand for renovation and rebuilding of
aged properties

Creating
New Value

Increase in demand for real estate investment andgrowth of cross-border real estate investment
Continuous growth in the Asian market

3 	Urban Development and Community Building toward the Future of theDiversification of lifestyles and work styles

Global Environment and Local Communities

As ESG investments spread throughout capital markets, CSR and ESG
activities have become essential elements for companies to achievesustainable growth. In terms of the SDGs, we have set the targets throughour daily business and shared them throughout the entire Group.
Going forward, we will promote urban development that reduces environmental impact and enhances relationships with surrounding communities. We believe that we can contribute to resolving environmental issues
and local communities through such urban development.

Diversification of values toward housing and offices

Rapid advances in technology
Growth of e-commerce and changing
consumer trends
Japan’s declining population

Threats

Decrease in the number offamily households
Rapid changes in economic
conditions

Labor shortages

Seeds for Growth Planted under the Previous
Mid- to Long-term Business Plan
• Mixed-use development
asset types• New• Accelerated growth through M&As
• Platform
for our overseas business• Mutual
growth with Group REITs
WeakStrong
Relevance

The Group’s Strengths

As is the case with Funabashi Morino City, as well as PROUD CITY Hiyoshi,
PROUD CITY Kichijoji, and PROUD TOWER Musashi-Koganei Cross, which
are now on sale, the Group will actively move ahead with mixed-use redevelopments and the development of urban-type compact towns featuring
diverse urban functions, such as retail, medical, childcare, and senior facilities, in conjunction with housing development. Continuing from the previous
Mid- to Long-term Business Plan, the Group has positioned these multifunctional, highly convenient, and safe and comfortable urban developments as a key area for its provision of value to society.

P.26–29• Development capabilities based on themarket-in approach• Commitment
to the quality of products and services•D evelopment and expertise of various types of assets•G roup Synergy

4 	Global Expansion of High-Quality Products and Services
The Group has cultivated various expertise and strengths in Japan.
Opportunities to leverage them have been increasing globally. As we havepositioned the overseas business as one of the Group’s major growth
drivers, each business unit has provided quality products/services throughincreased investment. Going forward, by selecting and increasing business areas for investment, we aim to increase the ratio of business profit
accounted for by the overseas business to 15–20% by Phase 3 of the
new Mid- to Long-term Business Plan.

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Profit Plan (Business Profit)*

Financial and Capital Policies

Realize sustainable profit growth while maintaining high asset and capital efficiency.
(Billions of yen)

Achieve a balance between profit growth and shareholder returns. The total return ratio is targeted to be 40–50% in Phase 1.

FY19/3

FY22/3(Phase 1)

FY25/3(Phase 2)

FY28/3(Phase 3)

79.6

85.0

100.0

120.0–140.0

Residential Development

25.0

30.0

36.0

Commercial Real Estate

38.0

33.0

36.0

Service & Management

21.6

28.0

35.0

Investment Management

5.9

9.0

12.0

Property Brokerage & CRE

8.1

11.0

14.0

Asset Efficiency

ROA:

Property & Facility Management

7.4

8.0

9.0

(5.0)

(6.0)

(7.0)

Shareholder Returns (Phase 1)

ROE:

5

Business Profit by Business Unit*

Adjustments

Capital Efficiency

Total return ratio:10% or more% or more

approx.

40–50%

FY19/3 (Results)

Phase 1 (FY20/3–FY22/3)

Phase 2 (FY23/3–FY25/3)

Phase 3 (FY26/3–FY28/3)

ROA

4.7%

Approx. 4–5%

5% or more

ROE

8.9%

Approx. 8–9%

10% or more

* Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions

Investment Plan

Business Portfolio Strategy (Profit structure)

Accelerate new investments while heightening asset turnover and controlling net investment to increase asset efficiency.

Optimizing Our Business Portfolio

Investment and Balance Sheet

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

End of FY19/3

Service &Management

Development Sector

Property Sales
Business

40%

el o

Resid
ent
i

Profitclassification
Recovery ofcapitalProfitfluctuation

Phase 3

6

Total

Service & Management
SectorResidential Development
Business Unit

Service &Management

Investment

–

1,100

1,250

1,250

3,600

4

Recovery

–

1,000

1,200

1,250

3,450

3

Investment

–

550

650

700

1,900

Recovery

–

400

500

550

1,450

–

1,650

1,900

1,950

5,500

(50)

(100)

(150)

(300)

1,400

1,700

1,800

4,900

(0)

(50)

(100)

(150)

2,000

2,200

2,400

–

Property Sales
Business

Leasing Business

Development profit

Leasing profit

Fees

Short termLong term–

High

Phase 2

Low

Low

5

Commercial Real EstateBusiness Unit

2

Total
investment¥5.5 trillion

Total
recovery¥4.9 trillion
Net
investment¥0.6 trillion

1
0

Total
tat

e

Business profit
portfolio
FY28/3

or
ect
tS
pment
velo
De
al

t
en

40%

pm
en

e&
Servic Manag
em

De v

(Billions of yen)Phase 1Com m

ercial R

e al

Es

Realize development
profits throughdevelopment and sales
in the short term,
both in Japan andoverseas

Build a competitive
asset portfolio bydeveloping valuableleasing properties andstrategic property
replacement

Expand business
opportunities throughM&As and partnershipbuilding, in addition toutilizing the Group’sbusiness resources

Mid- to Long-term
Targets

ROA: 5% or more

ROE: 10% or more

Leasing Business20%

Total investment(overseas)
Total recovery(overseas)
Total balance ofassets–1,759.4* Amounts shown represent forecasts of total asset balances for the final fiscal year of each phase.

Overseas Business Strategies
Expand overseas business profit ratio to 15–20% of total business profit in Phase 3 by capturing growing overseas markets.
Business Development

Overseas Platform

Risk Management

Establishment oflocal offices

Business risks

Overseas BusinessBusiness expansion inexisting business areas

15–20%

Thailand, Vietnam, thePhilippines, China, and the UK

Business in new areas
Business profit
FY28/3

Target countries in terms ofmarket size, growth potential,
and stability

Global network
Expansion through M&As,
capital alliances

Capital and businessalliances with local
companies

Overseas human resource
development

Reference

Strategic Investments Implementing investments aimed at future growth, independent of above investment plan
Investment Goals

Expand business in service & management
sector and overseas

Monitor risks related to thebusiness environment, financial
markets, laws, and regulations

Develop business in new fields

Gain external expertise and resources

Strategic Investments
Major Investment Targets

Stress tests
Confirm soundness ofshareholders’ equity ratio
and business balance basedon assumed risks

Health services

Real estate brokerageand consulting

Overseas real estatedevelopment

Hotel business

Senior business

Investment managementbusiness

ICT and digital sectors

Property management

39

40

Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Message from the CFO

During the period of the previous Mid- to Long-term Business
Plan, we made steady progress in establishing the foundations forsustainable growth while maintaining stable profitability and highcapital efficiency. I also think that we were able to demonstrate ourpositive stance on shareholder returns during the three-year period.

Review and Assessment of Phase 1 of thePrevious Mid- to Long-term Business Plan(from FY2017/3 to FY2019/3)

Managing the pace of asset expansion andincreasing ROA by accelerating asset rotation
while maintaining a balance between investment
and shareholder returns

Makoto Haga

Operating revenue for FY2019/3, the final year of Phase 1 of theprevious Mid- to Long-term Business Plan, was ¥668.5 billion,
compared with its target of ¥700.0 billion, while operating profit was¥79.1 billion, compared with its target of ¥85.0 billion. These targets
were not met mainly due to the market environment surrounding theResidential Development Business Unit.
Currently, the Group’s business portfolio is being transformed
from a portfolio that heavily focuses on the Residential Development
Business Unit to a more diversified one. A symbolic example of thatis the acquisition of NREG TOSHIBA BUILDING in 2008. As a resultof this business diversification, we have been able to stabilize theGroup’s earnings. Specifically, the target shortfalls in earnings for the
Residential Development Business Unit were made up by otherbusiness units.
As for financial and capital policies, we targeted ROE at the 10%
level and ROA of over 5%. Assuming cost of equity of 7%–8%, we
believe that by targeting ROE that realizes an equity spread of over
2%, we will be able to create corporate value that meets the expectations of investors. We have set a policy of achieving a shareholders’ equity ratio at the 30% level, and we believe that ROA of over
5% is necessary in order to realize ROE of 10% while maintaining
the shareholders’ equity ratio at the aforementioned level.
Under the previous Mid- to Long-term Business Plan, we achieved
ROE of 8.9%–10.1% and ROA of 4.7%–5.1%. Although there were
fiscal years in which ROE and ROA fell below our targets, we still
kept high levels in comparison with other major real estate developers. As for shareholder returns, we realized a total return ratio of
41.4%–50.6% as a result of steadily increasing dividends and sharebuybacks in FY2018/3 and FY2019/3.

Director,
Group CFO

Shareholder Returns

%

Yen%
11.2

100

100

10.1
9.4

80
8.9
75

9

5.8
6

ROE

75

Phase 1
(FY20/3–FY22/3)

50.6
5.1

4.7

4.7

50

25

3

FY16/375

70

65

FY17/3

FY18/3

FY19/3Years ended March 31

ROA

ROE = Profit attributable to owners of parent / Shareholders’ equity(average over the fiscal year)
ROA = (Operating profit + Non-operating profit) / Assets (average over the fiscal year)

26.5

26.5

FY17/3

41.4

50

Total return ratio:

approx.
40%–50%

30.5

28.9

FY18/3In April 2019, the Group announced its new nine-year Mid- to Longterm Business Plan comprising three phases. The new plan aims toachieve sustainable earnings growth while maintaining high asset
and capital efficiency based on the groundwork laid out under theprevious Mid- to Long-term Business Plan. We have also taken into
consideration the characteristics of the real estate development
business and the future completion of large-scale properties.
We have established business plans and profit plans for eachphase of the new Mid- to Long-term Business Plan (please see
p.38–39 for details). We will make every effort to achieve the targets

for Phase 1, which will conclude in FY2022/3.
We will continue to target ROE of over 10.0% and ROA of over
5.0% in the medium term while creating corporate value with costof equity in mind. By continuing to maintain a level of 30% for theshareholders’ equity ratio, we aim to achieve our ROE target while
securing financial soundness. In addition, we will realize a high total
return ratio of 40%–50% in Phase 1.
Both establishing an optimal business portfolio and striking abalance between growth investments and shareholder returns willbe crucial to realizing these targets.

Establishment of an Optimal Business
Portfolio

ROE / ROA
12

Business Strategies and Capital Policies for
the New Mid- to Long-term Business Plan(from FY2020/3 to FY2028/3)

FY19/3

Annual cash dividends
Dividend payout ratio (right scale)

FY20/3(Plan)

FY21/3(Plan)

25

FY22/3(Plan)

Years ended /ending March 31

Total return ratio (right scale)

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

As I mentioned earlier, establishing a business portfolio that achieves
ROA of over 5% is indispensable to the Group. We will aim to establish a business portfolio that strikes a balance between high asset
efficiency and stable profitability by combining the three businessesof property sales, leasing, and service & management, which havedifferent risk and return characteristics.
One of the characteristics of the property sales business is that it
fluctuates greatly in terms of profitability and the business period,
from land acquisition through to property sales, is short at about
three years. We will look at the volatility of the market carefully withaccurate business projection as we aim to realize development
profits and achieve a high level of ROA.
In the leasing business, we are able to generate stable cash flows
and keep fluctuations in profitability to a minimum, while ROA stands
at a relatively low level. We will establish a competitive asset portfolio

by controlling its total volume by implementing strategic sales ofassets. We plan to return a part of profits rather than retain all ofthem as unrealized gains.
This strategy is a component of the property sales business, and
it is important for the Group to pursue high ROE.
The service & management business generates earnings fromcommission and fee revenue without using assets. The business
contributes to enhancing the Group’s ROA with relatively low risk.
In addition to utilizing “the Group’s business stock” (sold real estate,
relationship with customers, etc.), we will aim to further explore
business opportunities through M&A and the establishment ofpartnerships.
Under the new Mid- to Long-term Business Plan, we target a
profit composition of 40%, 20%, and 40% for the property sales
business, leasing business, and service & management business,
respectively, over the medium to long term. We will increase thepercentages of the property sales business and the service & management business compared with those under the previous plan.
Guided by precise asset risk management, we will build a solid
business portfolio, aiming for ROA of over 5%. In order to achievethis, we are managing earnings based on ROA in all business units
underpinning our efforts to attain our goals.
For the final phase of the new Mid- to Long-term Business Plan,
which concludes in FY2028/3, we plan to have the overseas business account for 15%–20% of our total business profit. In countries
and cities with high-growth potential, demand for real estate is shiftingfrom a focus on quantity to quality. Centered on our development
business, we will aim to realize earnings by leveraging the experience and expertise cultivated by the Group in Japan. There aremany risks that we should pay attention to in our overseas business,such as the real economic growth rate, interest rate, currency rate,
and asset liquidity. I believe that thorough monitoring is important,including for selecting local partners. As the initial investment stage
will continue for the time being, we will fully disclose our progress.

Targeting of Balance between Growth
Investments and Shareholder Returns
We plan to conduct investments totaling approximately ¥5.5 trillion
during the period of the new Mid- to Long-term Business Plan, andto recover approximately ¥5 trillion. We will keep the net increaseamount of total assets to approximately ¥600 billion–¥700 billion ona cumulative basis over the plan’s nine years by accelerating asset
turnover while investing actively. This strategy helps to increase
ROA. It will also help our strategy of maintaining our shareholders’equity ratio at the 30% level. We are able to provide high returns to
our shareholders due to the effectiveness of this strategy.
Striking a good balance between growth investments and shareholder returns is our basic policy. Starting with Phase 1 of the newMid- to Long-term Business Plan, we have targeted a total return
ratio of 40%–50% for each fiscal year. Guided by our policy of
increasing dividends, we will maintain a dividend payout ratio of

41

42

Part 1:
About the Nomura Real Estate Groupapproximately 30%. Combining that policy with share buybacks,
we will realize our total return ratio target.
As I stated previously, our policy of focusing on shareholder
returns and heightening the total return ratio does not mean that
we are slowing the pace of growth investments for the future. The
total investment amount in the new Mid- to Long-term Business
Plan is of a level exceeding that under the previous Mid- to Longterm Business Plan. We will be able to acquire growth opportunities,
maintain the shareholders’ equity ratio at the 30% level, and realize
even higher levels of shareholder returns by accelerating asset
recovery and managing total asset volume. This balance between
investments and returns is the main focus of our equity strategy.

Debt Financing Strategy

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

ROE Logic Tree

To Investors
In the real estate industry, investors’ expectations for returns on
investments differ significantly between the property sales businessand the leasing business. In addition, taking into account the tax
laws in Japan, real estate funds such as J-REITs will expand theirpresence as property owners while real estate developers such as
ourselves will shift our position to focus on value creation throughproperty sales and service management. I am forecasting that thesechanges will happen in Japan’s real estate sector in the future.
The Group will aim to establish a unique position by maintaining
ROE at a high level centered on realizing development profits while
securing a source of stable earnings of a certain level. I intend tomeet the expectations of shareholders and investors by implementing the new Mid- to Long-term Business Plan and delivering results.

I believe that the current fund procurement environment of low
interest rate levels will continue going forward. While the strategy ofincreasing financial leverage in order to take full advantage of realestate returns and the procurement cost yield spread is conceivable,
we have set the shareholders’ equity ratio at the 30% level as anindicator of financial soundness. I believe that, in a low interest rateenvironment, devising diverse means of fund procurement in preparation for future expansion is an important task, rather than simply
increasing financial leverage.
During the period of the previous Mid- to Long-term Business
Plan, we moved ahead with increased conversion of floating-rateloans to fixed-rate loans and the extension of average loan maturities as well as implementing hybrid financing. We can leverage thecapital-like characteristics of hybrid financing to carry out flexible
growth investments targeting higher earnings and to supplement
shareholders’ equity when market conditions are unfavorable.
I believe that it is a unique means of fund procurement that
responds to future market changes.

1,000

877.8
810.1
721.9

30.2
500

29.9

30.2

31.5
30.0

32.9
30

29.9

15

250

FY16/3

FY17/3

FY18/3ReturnProfit*reserveROE
10%targetFY

Shareholders’ Equity Ratio / ROE(Major domestic real estate companies and J-REIT)

Development profit

Leasing profit

Fees

Recovery of capital

Short termLong term—

Profit fluctuation

High

Low

Low

ROA

High

Low

Very highProfit composition ratio

40%

20%

40%

KEY POINTS

40%–50%ReturnGrowth inequityProfit*reserveROE
10%targetGrowth inequity• Generate balanced distribution of
profits through highly efficientmanagement of growth investments and shareholder returns•M anage increases of approximately 5% for shareholders’equity through internal reservesof profit in each fiscal year

FY+1

FY+2

Investment Plan That Focuses on Balance Sheet Management
Select properties for salefrom the entire portfolio

60
REIT A

1.65

50

1.95

1.70

1.80

1.40

NMF
REIT C

Major domestic
real estate companies

J-REIT
40

30

The Group’s
last three years

FY19/35

6

an annual rate of approximately
5% in order to maintain sharehold-4.9 trillion
0.6 trillion

¥

7
8
9
10
11
12
ROE (%)ROE = Profit attributable to owners of parent / Shareholders’ equity(average over the fiscal year)* Calculated by the Company for each company from the most recent fiscal period as ofMarch 31, 2019
* ROE for REITs is calculated by annualizing the profit for the relevant fiscal year

AssetsInvestment

Recoveryers’ equity ratio at the 30% level•P ursue both investment returns
that realize development profits
and growth investment
opportunities

FY22/3Phase 1

• Control balance sheet increase to

 ¥

2.40

2.20

KEY POINTS

Total recovery

C

20
4

5.5 trillion

0.15

0.20

2.00

1.75

B

3

 ¥

Net investment
0.25

A

P.39
Total investment

1.90

D

* 50% of ¥105.0 billion, or ¥52.5 billion, in hybrid financing was calculated as capital

Profit classification* Profit attributable to owners of parent

FY19/3

Long term
Short term
Shareholders’ equity ratio (right scale)
Shareholders’ equity ratio (considering hybrid finance*) (right scale)Service &Management

40%–50%E
As of March 31

Leasing Business

Growth in profit

Total return ratio

REIT B
45

Property Sales
Business

Total return ratio

Shareholders’ equity ratio (%)

750

Shareholders’equity ratio:
30% level

Financial
discipline
Shareholders’equity ratio:
30% level

Service &Management Sector

Equity Story Balancing Growth Investments and Shareholder Returns

60

914.0

Development Sector

Equity%Establishing a portfolio that strikes a balance between
a high asset efficiency and profit stability(profit composition ratio)

ROA
5% or more

EquityBillions of yenROE
10% or more

P.38

EquityInterest-bearing Debt / Shareholders’ Equity Ratio

Cost of Equity
7%–8%

FY25/3Phase 2
Net investment

FY28/3Phase 343

44Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Residential Development Business Unit
We aim to achieve continuous growth by expanding our product lineup to meetchanging customer needs and enhancing our business in regional core cities
and overseas.

Business
Environment opulation decline, decline in family households
PIncrease in single, dual-income, and senior households
Development of compact cities in regional core cities
Expanding needs for high-quality housing in growing
Asian countries

Business Strategies

Business Profit Plan
Billions of yen
40

30

36.0

The Group’s
Strengths

30.0

27.7
24.5

25.0

 roduct planning and development capabilities generatedP
by integrated development, sales, and management system
Solid customer base and high-value-added services tailoredto diverse customer needs
Expertise in urban-type compact town, redevelopment,
and rebuilding projects

20

10Foundations
for Growth
FY17/3 FY18/3 FY19/3

FY22/3

FY25/3

 xpand housing business domain by integrating theEhousing sales, rental housing, and senior businesses into
one business unit
Establish a framework to enable the provision of products
and services that cater to customers’ various life stages
Establish business bases in Asian cities

 xpand product lineup andE
improve services for customers
 trengthen urban-type compact
S
towns and redevelopment
business xpand business in regionalE
core cities
Expand business in Asian cities

Strategies Going Forward
Business Environment in Japan and Overseas
The Nomura Real Estate Group’s housing sales business—theGroup’s founding business—has created many unique values byleveraging the strengths of its integrated development, sales, andmanagement system. The products of the PROUD series are important sources of earnings for the housing sales business. We havesignificant brand strength, a leading track record for residential
redevelopment projects, and a solid customer base.
The environment surrounding the entire residential development
business is changing significantly. In the long term, the population
decline and low birthrate in Japan are anticipated to continue further and we are already seeing signs of these. The diversification offamily structure is particularly remarkable. In the past, families consisting of a couple and their children were the main home buyers,
and so the Group targeted its products on this consumer group.
Nowadays, however, our customer base is diversifying due to factors such as the significant increase in the ratio of single-personand senior households and the rise in the proportion of dual-income
households. I believe that responding to this change is an urgent
issue. Turning our focus to overseas, the need for high-quality housing is increasing in many Asian countries due to rapid economic
growth. Within such an environment, there exists many opportunities
for creating new value in Japan and overseas by gathering theGroup’s strengths and expertise.

Business Strategies under the New Mid- to Long-term
Business Plan
The new Mid- to Long-term Business Plan targets business profitof ¥30.0 billion in FY2022/3, and ¥36.0 billion in FY2025/3. In orderto achieve these targets, we are responding to the diversification ofcustomer needs. The increase in the number of dual-income households in Japan has led to an increase in the need for better commuting access and better lifestyles and child-rearing environment.
Accordingly, we will focus on developing areas and locations thatare more convenient to meet these needs. In addition, we are
actively promoting the development of multifunctional and highly
convenient urban-type compact towns, one of the Group’s strengths.
In order to address the needs of the growing number of singleperson and senior households, we transferred the rental housing

Daisaku Matsuo
Executive Officer, in charge of Residential Development Business Unitbusiness and the senior business to the Residential Development
Business Unit in FY2020/3. By capitalizing on its business foundation which can respond to the needs of various households, theGroup will develop a wide range of products in addition to its specialty products for families. We will expand our business domain
for housing by integrating our broad customer base, and aim tobecome “the leading brand in housing” by offering products andservices in line with the customer’s life stage.
For property development in highly convenient areas, such as
station fronts, we will acquire business opportunities through meansof redevelopment and rebuilding. Although only a few redevelopment and rebuilding properties have been completed under Phase 1of our Mid- to Long-term Business Plan due to a variety of tentative
factors, from Phase 2 onward we will complete many projects. The
Group has maintained its position as one of the top companies in
the redevelopment business. Moreover, we will utilize our expertiseto accelerate the redevelopment business in regional core cities in
addition to the Tokyo metropolitan area. I believe that we can expect
growth in the housing business in Japan from Phase 2 onward byoffering a broad lineup of products and securing business volume
through redeveloping and rebuilding properties.
We are also taking steps to expand our overseas business in Asian
countries, where the economy is booming. In the Chinese market
and Southeast Asian markets such as Thailand, the Philippines, andVietnam, where we have already entered, we are promoting businessby establishing joint ventures with local partners. Finding reliable
partners is very important as the real estate business is greatly
influenced by the local characteristics of each area. We will also lookfor opportunities for collaboration with the Commercial Real EstateBusiness Unit and further business opportunities in the markets inwhich we have yet to enter.

Initiatives from an ESG Perspective
The Nomura Real Estate Group has concentrated its efforts onenvironmental initiatives and community building through the development of multifunctional and highly convenient urban-type compact
towns. Funabashi Morino City in Funabashi City, Chiba Prefecture is
one of our representative projects. In addition to its environmental
performance, the community revitalization efforts carried out by theresidents have been highly praised overseas. The Company believes
that, in urban development going forward, the area where communities take shape that are open to the outside is an important factor
for increasing the value of cities. At PROUD CITY Hiyoshi, which
is currently under development, in Yokohama City, Kanagawa
Prefecture, the Group will introduce a new system under which it will
own the communal space of properties and lend it to a non-profit
organization. Through this system, the Group will be actively involvedin the local community even after the completion of properties
through mutual cooperation with not only condominium residents
but also residents of the surrounding area, retailers, corporations,schools, and other organizations. The Company will continue these
efforts to develop the areas where communities take shape andcontribute to the realization of a cooperative society by realizing
sustainable urban development.

45

46

Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Residential Development Business Unit

Expand Product Lineup and Improve Services for Customers

Expand Business in Regional Core Cities

In order to capture the changing customer needs amid increases in dual-income, single, and senior households, we will leverage
the product planning and development capabilities we have cultivated to date to develop products for new business domains.

We will expand our business in regional core cities with the expertise we havecultivated to date in the Tokyo metropolitan area in order to respond to the needs forcompact towns.

Expansion of Our Business Domain for Housing
Condominium and Detached Housing

Rental Housing
Condominiums for leasing andelderly housing with supportive services

Expansion into 12 cities
Niigata
Kanazawa

ToyamaUtsunomiya Station East Exit District

Fukushima
Akashi
Okayama

Utsunomiya

TakasakiMishima• Unify and expand customer
service

ShizuokaMatsuyama

KasugaiOkayama Ekimaecho 1-chome District• Integrate membership ­program• Diversity product planning

Expand Business in Asian Cities
We will expand our business by leveraging the expertise cultivated by the Group in Japan through partnerships withlocal developers in order to meet the growing needs for quality housing in Asian cities that continue to grow.

New Fields
High-end, compact, senior housing

Ho Chi Minh City, Vietnam

Strengthen Urban-type Compact Towns and Redevelopment BusinessWe are promoting redevelopment projects at station-front locations and development of multifunctional urban-type compact
towns in order to meet our customers’ needs for convenience.
Urban-type Compact Towns

Redevelopment

Multifunctional urban development encompassing mixed use of
housing, retail facilities, and senior housing

Long-term cooperation with communities and local governments
for large-scale developments near stations
Shenyang, China

500 Profit Ratio of Overseas Business
400
Bangkok, Thailand

Manila, the Philippines

300
200
100
0

Kameido 6-chome Project

PROUD TOWER Musashi-Koganei Cross

Phase 1

Phase 2Phase 3Japan
Overseas

Capture growing overseas markets to increase the profit
ratio of overseas business to approximately 20% in Phase 3

47

48

Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Commercial Real Estate Business Unit
We will develop diverse assets that reflect user needs and promote large-scale,
mixed-use development projects in central Tokyo.

Business
Environment

 hanging user needs due to work-style reforms,
C
expansion of e-commerce, etc.
Increasing accommodation needs due to rise in number ofoverseas visitors to Japan
Intensifying competition for land acquisition

Business Strategies

Business Profit Plan
Billions of yen
38.0

40

36.0

35.5
32.8

33.0

The Group’s
Strengths30

 rack record for developing diverse asset types
TBrands including PMO, GEMS, and Landport, which werecreated from the “market-in” approach
Participation in large-scale development in central Tokyo,
such as Shibaura 1-chome District and Nihonbashi 1-chome
Central District

20

Enhance property
development business tocapture user needs
Promote large-scale
mixed-use developments
Expand hotel businessPromote overseas business

10

Foundations
for Growth
FY17/3 FY18/3 FY19/3

FY22/3

FY25/3

 ursuing development of new asset types basedP
on user needs
Launched NOHGA HOTEL and made HOTEL NIWA
part of the GroupEstablishing foundations for overseas business

Strategies Going Forward
Business Environment in Japan and Overseas
The Commercial Real Estate Business Unit has accumulated expertise in developing diverse assets through the development of properties such as offices, retail facilities, and logistics facilities. In thisprocess, we have placed particular emphasis on the market-in
approach in our daily sales activities and facility management, whichenables us to obtain and respond to customers’ needs. Based on
this approach, we created high-value brands, such as PMO for
offices, GEMS for retail facilities, and Landport for logistics facilities.
The property development businesses that we operate with thesebrands are now major sources of our earnings. Recently, we also
entered the hotel business in order to meet the increasing needs offoreign visitors to Japan. I believe the ability to develop and manage
diverse assets, including the fitness business, which was transferredto the Commercial Real Estate Business Unit in FY2020/3, is astrong competitive advantage of this business unit.
Turning our focus to the investment market environment, as
CAP rates for each asset class remain at a low level, competition toacquire land for development is intensifying. From the perspective of
tenant needs, improvements to the work environment are accelerating
as a result of work-style reforms, which have become a megatrend
in recent years. An increasing number of companies are introducing
flexible working styles and enhancing their office environments. Weview this as a major change that will lead to increased use of spaces
for offices and expansion in the need for shared offices. In addition tothese changes, there are many other changes in market conditions
that could present opportunities for our business unit, which placesemphasis on the market-in approach. These include the increased
need for logistics facilities resulting from the acceleration of e-commerce, and the change in need for retail facilities due to increasing
customer preferences for experience-oriented shops.

Business Strategies under the New Mid- to Long-term
Business Plan

Toshiaki Seki
Executive Vice President, in charge of Commercial Real Estate Business Unit

We will continue to pursue a policy of developing properties according to tenant needs in line with the “market-in” approach. We particularly focus on the needs of those who actually use each property.
To date, I have been engaged in our business from the user’s perspective as the Head of the Property & Facility Management
Business Unit. Based on this experience, I have come to realize thatthe user’s perspective will be of the utmost importance to our realestate business going forward. I believe that responding to theneeds of office workers, logistics warehouse staff, and restaurant
customers, and improving their satisfaction is important for property
development. Producing products and services by focusing on userneeds will result in a high level of competitiveness in subsequentleasing activities and property management, as well as property
sales with high added value. In addition, it will be the source of ourcompetitiveness in new land acquisition. We will expand our property development business by efficiently rotating a cycle of landacquisition, product planning and development, and sales based onan understanding of user needs through our daily leasing activities
and property management.
At the same time, by focusing on the user’s perspective, we willseek to further enhance the asset value of the Group’s stock and its
long-term leasing business.
In mixed-use developments, we are steadily promoting largescale mixed-use developments centered on central Tokyo, such as
the Shibaura 1-chome District, the Group’s largest development
project, and the Nihonbashi 1-chome Central District.
As for the hotel business, in addition to NOHGA HOTEL, ourdirectly managed brand, we started to link it with HOTEL NIWA,
which recently joined the Group, to offer unique added value otherthan accommodation such as ties with local communities andJapanese hospitality. By combining the hotel management expertiseof HOTEL NIWA with the Group’s land acquisition and development
capabilities, I believe that we can expand our hotel business.
In our overseas business, we have positioned Asia, which isexperiencing significant growth, as our immediate focus and are
pursuing a variety of projects. The development and management
expertise and quality-control capabilities we have cultivated in Japan
allow us to distinguish ourselves from the competition and we arehighly regarded in the field. Going forward, in addition to Asia, wewill seek to discover opportunities in Europe by leveraging the network of Lothbury Investment Management Group Limited of theUnited Kingdom. We will strive to generate concrete results during
the period of the new Mid- to Long-term Business Plan.

Initiatives from an ESG Perspective“Environment” is one of the key themes for CSR adopted by theGroup. As an environmental initiative, we have decided to switch thepower supply for all NOHGA HOTELs to renewable energy to achieve
zero CO2 emissions from power supply. Through these efforts, wewill contribute to achieving the Groupwide target of reducing greenhouse gas emissions 30% in 2030 compared with their 2013 levels.
Moreover, as part of our activities for “Health and Well-being,”
we are providing programs offered at MEGALOS fitness clubs at
OUKAS, our elderly housing operated by the Residential Development
Business Unit. Through the programs conducted by sports staff
based on-site, we will help promote healthy life expectancy by
improving the physical well-being of residents.

49

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Commercial Real Estate Business Unit

Enhance Property Development Business to Capture User Needs

Promote Large-scale Mixed-use Developments

We will develop properties for sale by understanding user needs, which are changing due to various factors such as
work-style reform and the expansion of e-commerce. Over the medium to long term, we aim to engage in the acquisitionand sales of property development totaling ¥120 billion in each fiscal year.

We will steadily promote large-scale mixed-use development projects focused on central Tokyo, such as the Shibaura
1-chome District and Nihonbashi 1-chome Central District projects.
Shibaura 1-chome District

Nihonbashi 1-chome Central District

Responding to User Needs
We design unique products that focus on user needs by utilizing our expertise in developing diverse assets.
SectorNeeds

Brands• Small to medium-sized, yet high-grade buildings• Buildings with a high level of security• Rental convention space for company events
Offices• Office space for small business• Private office space equipped with high security• Reception services such as guest support• Attractive stores for customers• Experience of a distinctive restaurant• Extraordinary atmosphere• Restaurants near customer’s workplace

RetailExpand Hotel Business• High storage efficiency• Securing labor resources• Pleasant work environments• Building specifications in line with characteristics of products

Logistics

We are expanding our hotel business to meet the growing needs of foreign visitors to Japan. Following the launch of our­directly managed NOHGA HOTEL brand, “HOTEL NIWA” joined the Group in January 2019. We will aim for further growth of
our hotel business through cooperation between these two brands.

Property Development Business Cycle

We develop properties with high added value by reflecting our understandingof user needs gained through our daily activities with tenants into our
product planning.
Product planning
development
Sales
Tenant Leasing
and Property
Management

We enhance property value through leasing that leverages the characteristics
of properties and property management that raises the satisfaction levelsof tenants.

Promote Overseas Business
Based on partnerships with local developers, we will promote our overseas business by leveraging the development andmanagement expertise cultivated by the Group in Japan.
Bangkok, Thailand

Beijing, China(Serviced apartment)
Staybridge Suites, Thong Lo, Bangkok

We realize high added value through the sale of properties.

(Property management business)
Beijing Fortune Building

Moreover, we will help enhance property and brand value by continuing
to be involved in the management of properties after their sale.
Land acquisition

We aggressively acquire attractive sites and create new business
opportunities through these strengths to create high added value.

Ho Chi Minh City,
Vietnam(Office)
SUN WAH TOWER

Manila, the Philippines
ZEN
PLAZA

(Condominium and retail)Sunshine Fort

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Investment Management Business Unit
We will move forward with the expansion of our private equity funds and overseas
business, in addition to achieving the growth of our REIT business in Japan.

Business
Environment

 rowing alternative investment needs of major long-termG
investors, including pension funds
Cross-border investment needs in global real estate market
Future market changes in real estate and financeBusiness Strategies

Business Profit Plan
Billions of yen
15

12.0

The Group’s
Strengths

9.0

10

6.0

5.9

 usiness growth model through Leasing Value Chain
BRelationships built with institutional investors over many
years of experienceProduct capabilities that meet the needs of investors

 sset management focusedA
on ESG reate products tailored to theCneeds of institutional investors
 xpand overseas businessEthrough partnerships

5.9

5Foundations
for Growth
FY17/3 FY18/3 FY19/3

 xpand AUM by leveraging theE
Leasing Value Chain

FY22/3

 verseas business foundations focused on Lothbury
O
Investment Management
ESG assessment track record

FY25/3Strategies Going Forward
Business Environment in Japan and Overseas
Nomura Real Estate Master Fund, Inc. (NMF), one of the largest
diversified listed REITs in Japan, and Nomura Real Estate Private
REIT, Inc. (NPR), a steadily expanding private REIT, are significant
sources of earnings for the Investment Management Business Unit,
and we expect them to continue to generate stable growth.
The operating platform we have built to date, consisting of ourmutual growth business model through the Leasing Value Chain, thehigh external ratings for our ESG activities, and our broad network of
institutional investors, will be a significant strength for developing ourbusiness going forward. As for our overseas business, challenges
lie in terms of building up our track record and securing/developing

global human resources. However, starting with our partnership with
Lothbury Investment Management, we view the overseas businessnetwork that we are trying to build as an important foundation for
future business expansion.
With respect to the environment surrounding the asset management business, we expect the amount of capital allocated to realestate investment to continue to increase due to the expansion ofalternative investments by major long-term investors including
pension funds, the favorable debt procurement environment, andthe cross-border investment needs of the global real estate market.
I believe this increase will offer significant business opportunities for
the Investment Management Business Unit. On the other hand, anychanges to the historically low level of cap rates in the real estatemarket or to the low interest rate environment in the financial market
would have a major impact on this unit. Therefore, we are strengthening our in-house research capabilities and will carefully monitorchanges in the market.

Business Strategies under the New Mid- to Long-term
Business Plan

Norio Ambe
Executive Officer, in charge of Investment Management Business Unit

In addition to our REIT business in Japan, we will focus on private
equity funds, indirect investment funds, and our overseas businessas the next drivers of growth. It goes without saying that it is important for us to continue to be selected by retail and institutional investors. As an investor-oriented business, we will continue with ourefforts on achieving high performance. For the REIT business inJapan, we will work toward growing our assets under management(AUM) by continuing to leverage the Leasing Value Chain.

In the private equity fund business, we will establish a broad
product lineup to respond to the rising demands of institutional
investors for alternative investment. By combining the relationships
we have built with institutional investors and our expertise and­experience in asset management, we will expand our productlineup to meet the needs of each investor.
As for the overseas business, we will further solidify relationships
with our existing business partners, such as Lothbury Investment
Management. In addition, from Phase 2 of the new Mid- to Long-term
Business Plan, we will take further steps toward forming alliancesand partnerships with asset management companies in North
America, the largest market, continental Europe, where we see
investment needs from Japanese investors, and Asia, where theeconomy is rapidly growing. We aim to expand our network to swiftly
address the diversifying overseas investment needs of clients, which
are projected to increase going forward.
Quantitative targets for the Investment Management Business
Unit under the new Mid- to Long-term Business Plan, are businessprofit of ¥9.0 billion in Phase 1 and ¥12.0 billion in Phase 2. Whilethese are highly set targets, if we are able to increase our AUM,
expand our revenue base, and establish the foundations for ouroverseas business by implementing the measures I have mentioned,
I believe they can certainly be achieved.

management and the establishment of a corporate governancesystem. As an asset management company, we signed thePrinciples for Responsible Investment (PRI) and the United Nations
Environment Programme Finance Initiative (UNEP FI) in December
2017 and the Principles for Financial Action for the 21st Century
in July 2019. Through these measures, we will promote ESG realestate investment. NMF has determined its material issues for ESG
in order to resolve the environmental and social issues that wereadopted in the United Nations Sustainable Development Goals
and the Paris Agreement (COP21). One of those issues is climatechange. Based on the policies, targets, and key performance indicators we have established, we are trying to improve the efficiency of
our energy use by investing in properties with low environmental
impact and implementing environmental and energy-saving measures for existing properties.
These efforts have been highly evaluated by external organizations and, in 2018, NMF and NPR were selected as a Global Sector
Leader and Asia Sector Leader, respectively, by the Global Real
Estate Sustainability Benchmark (GRESB), a global benchmark forassessing the ESG performance of the real estate sector. Moreover,in 2019, NMF was included in the MSCI Japan ESG Select Leaders
Index, an index of corporations with high ESG performance.
We expect the growth in ESG investment to continue to increase
going forward and therefore alongside efforts to enhance our performance, we will continue our commitment to sustainable investments.

Initiatives from an ESG Perspective
The Investment Management Business Unit is promoting a variety of
ESG initiatives in order to enhance investors’ value over the medium
to long term, such as consideration for the environment within fund

53

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Investment Management Business Unit

Expand AUM by Leveraging the Leasing Value Chain

Create Products Tailored to the Needs of Institutional Investors

We will steadily expand assets under management (AUM) and enhance the asset value of our properties under management
by utilizing our property acquisition and management pipelines through the Leasing Value Chain.

We will form various funds that meet the needs of institutional investors by utilizing both our relationships with institutional
investors and our experience in managing diverse assets, which we have built through our many years of asset management.
Building Relationships with Institutional Investors

Property acquisition pipeline(Supply high-grade properties to Group REITs)

We build relationships with pension funds, financial
institutions, and other corporations.

Nomura Real Estate Group

Group REITs

Number of Institutional Investors (Excluding NMF)
Management pipeline

Corporations(Strengthen brand power and enhance asset value of
properties under management)

11%

165

(Provide development opportunities to the Group)

Sales to the Nomura Real Estate GroupNOF Nihonbashi-Honcho Building
NOF Tameike Building
NOF Minami Shinjuku Building
Total

Morisia Tsudanuma
Ito Yokado Higashinarashino store
Mitsubishi Motors Shibuya (land)
Mitsubishi Motors Suginami (land)¥51.1 billion*¹

We have accumulated expertise in managing a variety offunds for different property sectors and strategies.
Investor fundswith suitable asset
management
products

Products

Number of investors

Property sales toward redevelopmentby the Group

Property Sales toward Redevelopment by the Group

Private Equity Fund Lineup

Acquisition of Group Development Projects(since May 2015)

Offices (PMO, etc.)
Retail facilities (GEMS, etc.)
Condominiums (PROUD FLAT, etc.)
Logistics facilities (Landport, etc.)
Total

No. ofProperties

Acquisition Amount

14
11
16
6
47

¥61.3 billion¥34.7 billion¥20.0 billion¥57.0 billion¥173.1 billion*¹

Fund Strategies

OfficeCore funds

Residential

Super core funds

Industrial

Opportunistic funds

RetailValue added funds

HotelsForward commitment
funds

Pension funds

45%

Financial institutions

Acquisition of Properties Based on Property Acquisition Pipeline

Sector44%

Healthcare
As of February 28, 2019

Expansion of AUM*1 As of March 31, 2019

Expand Overseas Business through Partnerships

Redevelopment Track Record
Summit Store
Hontennuma store(formerly Mitsubishi
Motors Suginami(land))

Landport HigashiNarashino(formerly Ito Yokado
Higashinarashino
store)PROUD FLAT
Shibuya Tomigaya(formerly Mitsubishi
Motors Shibuya(land))

We will respond to the cross-border investment needs in the global real estate market through strengthening existing partnerships. We will also consider forming alliances with new asset management companies to expand overseas business further.
Domestic investors

Overseas investors

EuropePartnerships

Asset Management Focused on ESG

Nomura Real Estate
Asset Management

Local AssetManagement
Companies

Inbound investment

Outbound investment

Japan

Partner companies
in EuropeAsia

We will implement various ESG initiatives with the aim of enhancing value for our investors over the medium to long term.
Initiatives as an Asset Management Company
Signatory to ESG-related initiatives

Initiatives Regarding REITs
Our efforts toward sustainability have been highly evaluated, and we havereceived high marks in the global index GRESB.
NMF selected asa Global Sector Leader*²*2 According to GRESB Real Estate Assessment 2018

NPR selected
as an Asia Sector Leader*²

Domestic funds

Overseas funds

Expansion of AUM

North America
Partner companies
in America

Oceania
Partner companies
in Asia• Establish strategic partnerships with asset management companies inNorth America, Europe, and Asia
• Respond to outbound investment needs from investors in Japan• Expand assets under management overseas

55

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Property Brokerage & CRE Business Unit
We will grow stably through the establishment of new retail and wholesalebranches and the expansion of our overseas business.

Business
Environment

Business Profit PlanIncrease in existing housing stockExpansion of real estate transaction needs addressing
business succession and inheritanceGrowth in inbound investment needs of wealthy individuals
in AsiaChange in business models due to new entrance ofcompetitors from other industries

Billions of yen

The Group’s
Strengths

11.0
10Expand retail branch network

14.0

15

9.1

8.4

Business Strategies

 xpertise in IT services
E
High level of customer evaluation in retail businessCooperation with Nomura Securities and regional financial
institutions

8.1

Strengthen marketingby leveraging IT stablish new wholesaleEbranches and expand
cooperation with regional
financial institutions
Expand overseas business

5Foundations
for Growth
FY17/3 FY18/3 FY19/3

FY22/3

 stablishment of branch in Hong Kong and partnership withE
Tokio Property Services in Singapore
Expansion of retail and wholesale branch networks

FY25/3Strategies Going Forward
Business Environment in Japan and Overseas
The number of retail brokerage branches under the “Nomura no
chukai +” brand stood at over 80 as of March 31, 2019. Althoughbranch numbers are increasing steadily each year, we are still inthe expanding phase compared with competitors having a larger
branch network. On the other hand, the quality of our service has
earned high evaluation from customers, such as in the 2019 Oricon
Customer Satisfaction Ranking where we were ranked number one
in two categories. Moreover, services leveraging IT, in which weinvested with an eye on the future, have become a major strengthof the Property Brokerage & CRE Business Unit as represented bynomu.com, our website that offers a wide range of information.
In our wholesale brokerage business, we have established astructure for responding quickly to customers throughout Japanby expanding our branch network. In addition to our branches, theGroup has a close relationship with Nomura Securities, which has anextensive customer base both in Japan and overseas. We have alsoestablished strategic alliances with approximately 60 regional financial
institutions in Japan, which have become a major strength for us.
Looking at the secondhand housing market environment, there isan increasing trend in stocks of high-quality existing housing. The
ratio of transactions of resale housing is increasing compared withnew housing, and the market volume of the retail business is
expected to expand further.
Regarding the wholesale business, where our main customers arecompanies in Japan, the business environment is undergoing majorchanges. At the request of shareholders and stakeholders, there isa growing need for large companies to improve asset efficiency byreorganizing and utilizing idle assets. Additionally, as the number ofowners of small and medium-sized corporations are reaching theage of retirement, needs for business succession and inheritancerelated real estate transaction are increasing.
As for our overseas business, demand for investment in Japanesereal estate by wealthy individuals is increasing in prospering Asian
countries. We recognize these various changes as an important areafor business opportunities.
Meanwhile, we need to constantly monitor the possibility that thecompetitive environment of the real estate brokerage business will
intensify as a result of not only the entrance of competitors fromother industries but also from technological innovation leveraging ICT.

Juntaro Kimura
Executive Officer, in charge of Property Brokerage & CRE Business Unit

Business Strategies under the New Mid- to Long-term
Business Plan
In order to respond to the increase in real estate brokerage needs
for existing housing, we plan to increase the number of retailbranches to 100 by FY2024/3 and to 120 by FY2028/3. Rather thansimply increasing the number of branches under a similar concept,
we will develop branches tailoring to regional characteristics andcustomer segments. Moreover, we will further strengthen our services leveraging ICT. Our entire real estate brokerage service, frominitial response to closing, was traditionally carried out by our sales
staff. Going forward, with our website “nomu.com” as an entry point,
we will aim to attract more customers via the Internet and raise theefficiency of our customer responses by having initial responses
carried out by ICT. In 2019, we will establish a new wholesale branch
in Sendai and will capture the needs of customers in the surrounding area through cooperation with regional financial institutions.
We are also accelerating our overseas business. Accordingly,
we are strengthening collaborations between our bases in Tokyo,
Hong Kong, and Singapore. We formed a capital alliance with Tokio
Property Services in Singapore in January 2019. We will aim tocapture business opportunities for the domestic real estate market
from Asian countries. Furthermore, we intend to approach wealthy
individuals in Asia through cooperation with Nomura Securities, withwhich we have strong customer relationships.

Initiatives from an ESG Perspective
In Japan, the ratio of vacant houses continues to rise due to population decline and the aging of society. Through its daily businessactivities, the Property Brokerage & CRE Business Unit will contributeto realizing a sustainable, recycling-oriented society by encouraging
transactions in underutilized land and vacant houses. As a more
direct activity, in the retail business, if we notice any changes in thecustomer’s home upon visits within our daily business, we immediately contact the government agencies or the police or fire department to watch over vulnerable groups, including the elderly, incooperation with local governments. Furthermore, we also utilize ourbranches as evacuation areas for children in case of danger andtrouble. Through these activities, we will continue to tackle suchsocial issues as the declining number of children and the aging
of society.

57

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Property Brokerage & CRE Business Unit

Formulate Strategies by Target Customer

Establish New Wholesale Branches and Expand Cooperation with Regional Financial Institutions

We will establish a structure that can appropriately respond to our broad customer base.

We will establish branches and strengthen cooperation with regional financial institutions in order to establish a structure thatcan serve customers throughout Japan.

Strategies by Target Customer
Wholesale Brokerage Commissions of the Group
Major companies
Funds and REITs

Develop new business by implementing CRE proposals and area strategies
Develop and strengthen relationships with property funds and real estate companies

WholesaleBillions of yen
12

Corporate owners

Wholesaleand Retail
Cooperation

High-net-worth individuals

RetailExpand market share in target areas

6

Contracts and Prices for Secondhand Condominiums(Tokyo metropolitan area)

Number of Retail Branches and Retail Brokerage
Commissions of the Group

Units

Billions of yenMillions of yen

28,87133,798 34,776

37,189 37,329 37,217

30,00020,00060
4531.95 33.33
28.92 30.49
25.30 25.00 25.89 27.27

10,000

12

13

14

15

16

17

No. of branches

25

20.0

20
15

30
10
15

11

11.5

Fukuoka
Hiroshima

10.8
43

12.1
50

14.9
56

14.9
62

16.5
68

73

20.7

21.6

100

78

81

80

Sendai (New)Expand Overseas BusinessWe will strengthen cooperation with overseas branches and business partners in order to respond to inbound investment
needs from Asian countries to Japan.

Cooperation with overseas
offices and local partners

40
20

Retail brokerage commissions

NagoyaOsaka

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3

Wealth ofbusiness information• Capture cross-border transactions through collaboration between our Tokyo,
Hong Kong, and Singapore offices

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3(Year)
Contracts
Prices (right scale)
Source: Real Estate Information Network for East Japan, graph prepared by Nomura Real
Estate Holdings

Kyoto

Tokyo (Shinjuku)

60

5

18

5.5

3

In order to meet the growth of the resale housing market, we will expand our branch network and build an efficient marketing
structure through IT.

36,432

10.2

10.8

9

Expand Retail Branch Network / Strengthen Marketing by Leveraging IT

31,39711.4

7.1

Residential customers

40,000

10.8
9.6

Strengthen human capabilities through personnel interactions within business unit
Strengthen ties with Nomura Securities and regional financial institutions
Strengthen consulting on business succession and inheritance-related measures

Network of Domestic Wholesale Sales Offices

Retail branches at fiscal year-end (right scale)• Establish a network through strengthening cooperation with Nomura
Securities branches in Asia and strategic partnerships with local partners

Strengthening Marketing and Increasing Productivity by Leveraging IT
Our Vision
Attract customers

Identify needs
Website + AI

Introduce properties

Inspect properties

Agree to contract
Sales Staff

Overseas Offices

Transactions with Overseas Customers

In January 2019, we acquired 50% of the shares of Tokio Property
Services of Singapore, a real estate brokerage corporation who has
been our business partner over the years.

Commission (millions of yen)

Business Expansion
Going Forward• Introduce cutting-edge communication by utilizing ICT and AI• Strengthen digital marketing centered on nomu.com• Create business model focused on digital innovation• Enhance consulting capabilities• Improve and expand lineup of services such as“Home Staging”• Develop area marketing through establishment of
network comprising 120 branches(by FY2028/3)

600• Brokerage of inboundinvestment from Asia
to Japan• Business in neighboring
countries

800

Tokyo
400
Hong Kong• Brokerage of outboundinvestment from Japan
to Asia

200

15

16

17

18

19
(As of March 31)

Singapore

ASEAN countries

59

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Property & Facility Management Business Unit
We will achieve growth in new business domains in addition to contributing toenhanced property value through high management quality.

Business
Environment

Business Profit PlanIncrease in number of condominiums that requirelarge-scale repair work
Aging of public facilities
Greater attention on Japanese-style facility managementin AsiaDifficulty in securing cleaning and management staff

Billions of yen
10.0

7.5

9.0

6.9

7.1

7.4

The Group’s
Strengths

8.0

 table increase in property under management throughS
Group cooperation
High level of external evaluation for management quality
Competitiveness for construction proposals

5.0

Business Strategies
 ontribute to development
Cbusiness Groupwide andenhance brand value
 xpand business domainE(redevelopment, PPP,
public facilities)
Increase large-scale repair work

2.5

Foundations
for Growth
FY17/3 FY18/3 FY19/3

FY22/3

 aunch of initiatives for re: PremiumLLaunch of initiatives for PPP projects

FY25/3Strategies Going Forward
Business Environment in Japan and Overseas
The Property & Facility Management Business Unit has expanded
its business scale by steadily adding properties developed by the
Residential Development Business Unit and the Commercial Real
Estate Business Unit as well as the properties managed by theInvestment Management Business Unit to its management stock.
One of our strengths is that we can expect further increases in ourmanagement stock through Group cooperation. In addition, our highlevel of management quality is a source of our competitive edge.
Nomura Real Estate Partners, the core company of this unit, has beenranked No.1 for 10 consecutive years in a management satisfaction
survey of condominium residents conducted by “Sumai Surfin,”a website for purchasers of condominiums. Having a strong reputation among Japanese customers, who expect a high level of service,
is a major advantage. We have also been highly evaluated for ourmanagement of offices and other buildings by the owners andtenants.
If we look at the market environment of the Property & Facility
Management Business Unit, in addition to condominium and officemanagement, I believe there will be a greater need for the management of public facilities and public–private partnership (PPP) projects
in cooperation with government bodies. Considering the financial
challenges faced by local and national governments, we expect anincrease in the number of areas where the power of the private
sector will be required for the management of aging public facilities.
We view this trend as a business opportunity to fully leverage ourmanagement expertise.
As for the market environment of construction orders, we regard
the increasing number of condominium stock requiring large-scale
repair work as a major change. As for PROUD, the number of largescale repair work will also increase. Therefore, we expect business
opportunities to increase significantly.
On the other hand, we recognize that it is difficult to secure humanresources for facility management and cleaning services due to thedeclining and aging population in Japan.

Business Strategies under the New Mid- to Long-term
Business Plan

Akihiro Fukuda
Executive Officer, in charge of Property & Facility Management Business Unit

The Property & Facility Management Business Unit will continue tocontribute to promoting the real estate development business forthe entire Group while maintaining and enhancing brand value.
This will be achieved by raising the management quality of theproperties developed by the Group, such as PROUD, Premium
Midsize Office (PMO), urban-type compact towns, and mixed-use
development projects.
As one measure of responding to the labor shortage, which isnecessary for maintaining high management quality, we are introducing cleaning robots. We will aim to reduce management costs andresolve labor shortages by introducing the cleaning robots at largescale office buildings, which require multiple cleaning staff. We will
also promote labor-saving measures that leverage IT and security
systems for condominium management. Regarding management
quality, while it is difficult to realize unmanned management of condominiums for family households, I believe it is possible to achieve­completely unmanned management of compact condominiums
for single and two-person households.
As growth areas of the Property & Facility Management Business,
we will expand our efforts in redevelopments, PPPs, and our overseas business. In mixed-use redevelopment projects on which theGroup places emphasis, we will not only participate in projects fromthe initial planning stage to become directly involved in urban development as facility managers, but we will help enhance the value of
cities as a whole by contributing to area management as well.
In addition, we will aim to increase PPP projects under management by proposing efficient facility management approaches thatleverage our expertise. In overseas business, we will aim to expand
our business areas from the partial building inspections we are
currently undertaking in China and Vietnam, to facility management
services. To achieve this, we plan to utilize our Japanese-style
expertise in preventive maintenance.
As for our construction orders business, we will use the large
amount of housing stock under our management to increase thenumber of large-scale repair-work orders. We will enhance relationships with condominium associations through our daily management

operations to realize proposals that fit their needs. Through these
proposals, we will utilize re: Premium, the large-scale condominium
repair-work brand developed independently by the Company. Underthe re: Premium system, we use highly durable parts and materials
and construction methods to extend the cycle for carrying out largescale repair work and enable the residents to allocate the surplus
funds to improving property value. Through these activities, we will
carry out proposals that provide value to residents and increase thenumber of construction orders.

Initiatives from an ESG Perspective
Nomura Real Estate Heating and Cooling Supply operates a business that supplies steam and cold water to Yokohama Business
Park through its district heating and cooling system, in addition tooperating a solar power generation and electricity retailing businessthat makes use of solar panels installed at Landport buildings. We
will develop businesses efficiently by effectively using parts of properties developed by the Group. In addition, we will continue toexamine improvements to the energy efficiency of properties under
our management in order to reduce management costs.
Nomura Real Estate Amenity Service accepts trainees from
Vietnam and other countries under the Industrial Training andTechnical Internship Program. We are establishing an environmentthat will allow trainees to work in Japan comfortably, and will increase
the number of trainees going forward. In addition to the spreadingof Japanese-style management expertise by the trainees upon
returning to their home country in the future, we see the potential
for promoting joint businesses in those countries. We will continue
to promote international contributions through the fostering of
human resources.

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About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Property & Facility Management Business Unit

Contribute to Development Business Groupwide and Enhance Brand Value

Expand Business Domain (Redevelopment, PPP, public facilities)

We will contribute to promoting the real estate development business and increase property value for the entire Group by
providing high-quality management services.

Contributing to Improvements in Brand Value through Groupwide Collaboration

We will expand our business domain by engaging in projects such as mixed-use redevelopment, for which our projects are
increasing, and PPP and public facilities, where we expect to utilize our private sector know-how.
Contributing to redevelopment projects

Participating in PPP / public facility management

Comprehensive management of housing, retail facilities,
and public facilities

Participation in establishment and management of locations for
cutting-edge industries and promotion of “Cool Japan”

PROUD TOWER Musashi-Koganei Cross

HANEDA INNOVATION CITY

Property & Facility Management Business Unit
Provision of high-quality
management services

Properties under management

Residential
Development
Business Unit
Developmentof properties

Commercial
Real EstateBusiness Unit

Investment
Management
Business Unit

Enhance
Brand Value

Outsourcing ofproperty management

Increase Large-scale Repair WorkWe will address the increasing number of condominiums that require large-scale repairs by utilizing re: Premium and increase
the sales volume of repair work.

Stable Expansion of Properties under Management

High-Quality Management

Steadily increase number of buildings and housing units
under management

Ranked No.1 for 10 consecutive years
for overall satisfaction by condominium
residents in a management satisfaction
survey (Sumai Surfin)

Number of Buildings/Housing under Management
Buildings

Thousands of units

800

200

Condominiums under Management by Construction
Completion Period

Total standard repair costs
Total repair costs under Attractive 30 and re: PremiumTotal maintenance fees accumulated by residents

Units“PROUD” established10,000Long-term Simulation of Large-scale Repair Work

Fourthlarge-scale
repairTiming of large-scale
repair work

7,500

Significant
reduction inrepair costs

Thirdlarge-scale
repairResolving Labor Shortages
600

Allocate surplus
funds to improving
property value

Fifthlarge-scale
repairFourthlarge-scale
repair150
Secondlarge-scale
repairUtilize cleaning robots to reduce the use of labor in cleaning
5,000

400

Third
large-scale
repairSecondlarge-scale
repairFirst
large-scale
repair100Firstlarge-scale
repair

2,500
200

50

New

12 16
years years

12 years
75

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3
Number of buildings under management
Number of housing under management (right scale)• General large-scale
repair work: 12-year
cycle

80

85

90

95

00

05

10

15

16 years

24
years

12 years

32 36
years years
12 years

16 years• Large-scale repair work
under Attractive 30*1
and re: Premium*2:
48
years

12 years

16 years

60
years

16-year cycle

12 years

16 years*1 Our efforts to lengthen the cycle of large-scale repair work by adopting high-durability
materials and construction methods for new buildings, and introducing
re: Premium*2 The Group’s brand for large-scale repair work for condominiums whereby we workwith material manufacturers and construction companies for PROUD condominiums.
High-quality construction can prolong the large-scale repair-work cycle.

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About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Business Structures Underpinning GrowthCommitment to Safety and Security and Product Development for Resolving Social Issues
Commitment to Safety and Security
Complying with Design and Construction Standards andQuality Manuals
We have established design and construction standards (structure,
construction, equipment, and electrical) and quality manuals toensure the quality of safety and security in design and construction.
We also require thorough compliance from architecture companies
and construction companies.

Thorough Quality Control
At main stages of the construction work process, our quality management engineers carry out quality inspections to confirm compliance with design standards and quality manuals as well as
construction conditions and progress.

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

Product Development for Resolving Social Issues and Creating New Value
Integrated Development, Sales, and Management System
Through its integrated development, sales, and management system, the Nomura Real Estate Group provides land acquisition, design andconstruction, and sales activities as well as management and after-sales services for residents. We incorporate opinions from customers andinformation from construction sites into our operational improvements and product planning.
In the Case of PROUD
Development

Land acquisition
and architecturaldesignSales

Management

Preliminary
designMarketingConstruction
design (design,
structure, andequipment)

Certificate of Building
Construction
Start of construction

Reinforcement
inspection
Building frame
inspection

Product planning

Opening of sales gallery
Sales launch

Sales contract

Formulation of plans for after-sales service
and management and repairs

Interiminspection

Completion of
inspection

Certificate ofConstruction
Completion
Buyer
inspection

Housingtransferred
to buyer
Commencement of plans forafter-sales service andmanagement and repairs

Customer opinions and information from construction sites are incorporated into the product planning of
future PROUD projects.

Received the Good Design Award for 17th Consecutive Year

Pursuing Ideal Solutions for Buildings with Our TechnicalEngineers
Buildings where people live or work are diversified, complicated, andenormous single products. For this reason, we are able to create
significant added value by leveraging our creativity and ­originality inboth construction and usage processes.
First, it is important to consider how to create value from theprocess of building. The Group has many engineering-related
employees, including over 200 first-class licensed architects. These
members play the main role of pursuing ideal solutions while taking
into account a diverse range of perspectives, such as the attractiveness of the property, level of earthquake resistance, use of space,and cost management for each project.
During construction, the Group’s employees constantly visit­construction sites to ensure quality in conjunction with the builders,
based on our original design standards, quality manuals, and management methods. We continually update these design standards
and quality manuals to reflect the opinions of customers and builders, as well as social issues. For example, anticipating the local
torrential rainfall, which has become increasingly severe in recent
years, we began heightening the capacity of buildings to process
rainwater on-site over ten years ago. Through such efforts, we areproviding added value.
Architecture is often described as “experience-based engineering.”
Every time a new challenge is taken on, new issues are encountered.
Although we may sometimes face issues that we have never experienced before as a result of the diversification of asset types, we aremaking concerted efforts to thoroughly ensure the quality of safety
and security, which is our social responsibility.
Product Development That Continually Focuses on Usage
Without Preconceptions
Second, in order to meet the needs of homeowners and users, andto provide value through the perspective of usage, knowing “what tobuild” is important.

PROUD Minami-Azabu“1000 Comfortable Ways to Live”

Mi-Liful (siphon drainage system)

Through the Group’s integrated development, sales, and management system, we incorporate the needs and opinions of customers,
frontline employees, and suppliers into the development of our
products and services. Custom-made condominiums, Mi-Liful, which
offers room layout flexibility, and the PMO and GEMS series ofproperties are the first products and services in the industry to be
developed independently based on potential customer needs.
These services also challenge to be free from existing preconceptions and bias.
For example, while there was the idea that condominium residents value privacy and do not want to socialize, we carried out asurvey on the use of communal spaces at our condominiums andheld interviews. Based on this, we formulated 100 Common Space
Design Patterns for the Condominium Complex, which was introduced in the “Funabashi Morino City” project. In that project, ourhigh regard for communities in our urban development was highly
evaluated. The French government’s “Label ÉcoQuartier (eco-districtcertification)” was awarded for the first time outside of France, andthe property received extremely high evaluations from both insideand outside of Japan.
Addressing Social Issues through BusinessIn recent years, ESG investment has been active and it is importantto reflect that trend in our products and services. In FY2019/3, theGroup ramped up its response to climate change and formulated
targets to reduce carbon emissions by 2030. The lifecycle of realestate is long, and the duties of real estate developers, such as theefficient utilization of existing properties and the reduction of CO2
emissions throughout its period, is clear. To date, the Group has
aspired to develop and manage energy-saving and low-carbon
products. We will further raise the bar going forward to promote net
Zero Energy House (ZEH) and utilize renewable energy, while pursuing energy-saving and low-carbon initiatives.

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About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Redevelopment and Rebuilding Business
Major Projects during the Period of the New Mid- to Long-term Business Plan
• In addition to our track record for being a leading company in the residential redevelopment business, we are leveraging our expertise in the­mixed-use redevelopment business. We are promoting a variety of projects in highly convenient areas.
•D uring the period of the new Mid- to Long-term Business Plan, we are targeting further expansion by achieving sales of over approximately¥500 billion*1 for condominiums and securing business volume of approximately 320,000 m²*2 in the leasing business.
Phase 1 (FY20/3 to FY22/3)

Phase 2 (FY23/3 to FY25/3)

Phase 3 (FY26/3 to FY28/3)

Shigeyuki Yamamoto
Executive Officer,
in charge of Development Planning

Toranomon Station-front District

Musashi-Koganei Station 2nd District

Mihama City Kemigawahama

Nagoya Nishiki 2-chome• Kanamachi 6-chome Station-front District• Sakai Higashi Station South District• Higashi Ikebukuro 4-chome 2 Block, etc.

Nishi-Azabu 3-chome North-East District

Hirai Station North Exit District

HARUMI FLAG

Shibaura 1-chome District (S Tower)• Minami Ikebukuro 2-chome C District• Kawaguchi Sakaecho 3-chome District• Hankyu-Tsukaguchi Station-front (Rebuilding)

Nihonbashi 1-chome Central District Nishi-Shinjuku 3-chome West District

Minamikoiwa 6-chome District

Itabashi Station Itabashi Exit District• Iidabashi Station Central• Nishi-Nippori Station-front• Soto-Kanda 1-chome• Mishima Station South Exit Eastern Block, etc.

*1 Expected business volume for the redevelopment and rebuilding business during the Mid- to Long-term Business Plan, as of March 31, 2019.
*2 Areas of offices, retail facilities, hotels, etc. for the properties being promoted for redevelopment and rebuilding, which the Company plans to acquire during the Mid- to Long-term Business Plan, as of March 31, 2019.
*3 Each project (including names) is subject to change, as they are currently in their planning stage.

Examples of Our Urban Development Efforts through the Redevelopment and Rebuilding Business• Promoting business while working closely with local communities and governments to address the challenges facing the region.
•A iming to maximize asset value through attractive urban development.

Redevelopment Project

Redevelopment in Higashi-Ikebukuro Area
The redevelopment projects in which the Group has been engaged in the HigashiIkebukuro area, such as PROUD TOWER Higashi-Ikebukuro, are scheduled to becompleted in succession. We are promoting highly convenient, safe, and secure urban
development through close cooperation with local communities and governments.

Revitalization throughmixed-use developments
directly linked to stations
PROUD Fuchu Station Arena

PROUD TOWER
Higashi-Ikebukuro

Ikebukuro
StationImproving the fire resistanceof highly populated areas
with wood-frame housing(please see p.26 for details)

Higashi-Ikebukuro Area (Toshima District) Map

Total of 132 units(Completed in
March 2019)

PROUD TOWER Higashi-Ikebukuro

Rebuilding Project
Minami-Ikebukuro
2-chome C District

Revitalization ofold housing complexes

Total of approximately
1,450 units

PROUD CITY Asagaya(Scheduled for completion in
FY2025/3)

Higashi-Ikebukuro
4-chome 2 Block
Total of 248 units(Scheduled for completion
in FY2022/3)

Promoting Business through a Community-based Approach“Convenience” is valued more than ever in all facets of real estate,such as residences and workplaces. It has become the crucial
keyword for determining the success or failure of a real estate development business. In order to capture business opportunities inhighly convenient locations such as station fronts, redevelopment
and rebuilding methods are indispensable. We have promoted many
redevelopment and rebuilding projects though our reputable PROUD
housing brand and other high-quality products and services. As aresult, the Group is at the top of the industry for the number ofresidential redevelopment projects in Japan. At present, in addition
to residential redevelopment projects, the Group is also promoting
office redevelopment projects, such as the Toranomon Station-front
District and Nihonbashi 1-chome Central District projects. We are
now approaching a phase in which these projects can be expected
to make major contributions to the Group’s business growth.
There are three important factors to consider when pursuing
redevelopment and rebuilding projects. The first is the fact that themain stakeholders of the redevelopment and reconstruction projects
are the landowner and local communities, and the government
bodies that support them. We visit the project site frequently,
engage with the community, meet the residents face-to-face, andconsider with them what is truly the best and ideal for everyone. We
place great importance on such process to reach a consensus. In
addition, we endeavor to provide careful support for all aspects ofthe project, including both practical operations and finance. Thisdevelopment approach and expertise is a strength of the Group andhelps differentiate it from its competitors. The second is the developer’s track record and credibility, given that it takes many years before
a project gets off the ground and the developer must cooperate
closely with landowners and government bodies. As the Group’s
track record heightens its credibility and its reputation spreads toother regions, we can receive new business inquiries, which in turnwill lead to the capturing of new business opportunities. To date, theGroup has led many projects to success. This is a key ­differentiating
factor for capturing projects. The third factor is the diverse asset
types and services that the Group is able to provide. Our high-quality facility management, which is essential for maintaining the valueof a building or area after a project has been c­ ompleted, is a crucial
element for participating in redevelopment projects. Our track recordin the hotel and senior businesses will be a key strength for redevelopment projects in regions in need of revitalization or with an aging
population. The expertise in developing, operating, and managing
diverse asset types that the Group has cultivated over the past 60
years plays a major role in these projects.
Realizing Attractive Urban Development by Responding toSocial Issues Facing Communities
In the redevelopment and rebuilding business, there are a total of
approximately 100 projects underway in the Tokyo metropolitanarea, with approximately 10 of these projects completed each year.
We believe this trend will continue for the time being. There is also
an increasing trend for redevelopments in regional core cities and
we are seeing an increase in business opportunities. For both residential and office developments, in order to develop attractive areas,
it is important to combine building development as a hardware andfacility management as a software. It is the very type of urban­development to which the Group aspires.
CSR- and ESG-related initiatives are indispensable for corporations to achieve sustainable growth and the redevelopment andrebuilding businesses are the core businesses for these initiatives.
Communities still face a host of challenges, such as addressingbuildings with concerns regarding earthquake resistance and dealing with high-disaster-risk areas that are densely populated withaged, wood-frame housing. The Group will apply its collective
strengths to resolve social issues and achieve sustainable growth
while working in close cooperation with national and local governments and other bodies.

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Overseas Business• Expand business through both the Residential Development and Commercial Real Estate Business Units centered on the countries ofSoutheast Asia, in which demand is shifting from quantity to quality. Aim to increase the ratio of overall business profit accounted for by theoverseas business to 15–20% (by FY2028/3)• Aim
to expand business with a plan to invest ¥300.0 billion cumulatively over the nine years of the Mid- to Long-term Business Plan,
while conducting thorough risk management

Residential Development Business Unit Overseas Projects

Mitsubishi Corporation
Local developer

11.25%

12.25%

Masaomi Katayama

Ho Chi Minh

Approx. 2,400 units

The
Philippines

ManilaApprox. 1,400 units

Federal Land
Isetan Mitsukoshi Holdings

20.00%

Start

Bangkok
Ratchayothin

A Building: 334 units
B Building: 489 units

Origin Property

49.00%

Start

Bangkok
On Nut

601 units

Origin Property

49.00%

Start

BangkokRamkhamhaeng

685 units

Origin Property

49.00%

Start

BangkokThong Lo1,236 units

Origin Property

49.00%

Start

Bangkok
Ratchathew

264 units

Origin Property

49.00%

Start

BangkokRama IV

501 units

Origin Property

49.00%

Start

Executive Officer,
in charge of International
Business Department

Completion

Vietnam

Phu My Hung Development
Daiwa House
Sumitomo Forestry

Completion

Approx. 4,100 units

Mid- to Long-term Business Plan
Phase 1
Phase 2Phase 3
(20/3–22/3)(23/3–25/3)(26/3–28/3)

Completion

Previous Plan
(17/3–19/3)

Completion Completion

Our Share

Completion

Shenyang

Joint Partner

Completion

China

Number of Units

Completion

Project

Completion Completion Completion

Completion

Approx.
¥20.0 billion

Thailand
Vietnam
The Philippines
China

Completion

Thailand

Scheduledinvestment
amountCompletion Completion

Commercial Real Estate Business Unit Overseas Projects

The
Philippines

Project

Total Business Size

Joint Partner

Our Share

Preceding Target
Period(17/1–19/3)

ManilaRetail:Approx. 28,000 m²

Federal Land
Isetan Mitsukoshi Holdings

20.00%

Start

BangkokThong Lo

Service apartments:
303 rooms

Origin Property

49.00%

Start

BangkokSukhumvit 24

Service apartments:
411 rooms

Origin Property

49.00%

Ho Chi Minh
SUN WAH Tower

Office:Approx. 32,000 m²

SUN WAH GROUP

24.00%

Ho Chi MinhZEN PLAZA

Office:Approx. 17,000 m²—

100%
wholly owned
subsidiaryBeijing
Beijing Fortune
Building

Office:Approx. 55,000 m²

Beijing Capital Development

Mid- to Long-term Business Plan
Phase 1
Phase 2Phase 3
(20/3–22/3)(23/3–25/3)(26/3–28/3)
Opening (plan)

Opening (plan)

Scheduledinvestment
amountThailand

Vietnam(existing property)(existing property)

China(existing property)—(Participation in
management)

Start

Opening (plan)

Approx.
¥13.0 billion

Investment

Investment

Thailand
Vietnam
The Philippines
China

Participation in
management

The Group’s International Business Offices
LondonBeijing
Tokyo
Hong Kong
Bangkok
Singapore

Ho Chi Minh

Overseas Business Development Leveraging the Group’s
Strengths
The Residential Development and Commercial Real Estate Business
Units are developing their businesses in prospering Asian countries
such as Thailand, Vietnam, the Philippines, and China. Moreover, we
are accelerating a variety of overseas business developments, suchas the capital alliance with Lothbury Investment Management Group
Limited of the United Kingdom, a real estate asset manager, in theInvestment Management Business Unit and the capital alliance with
Tokio Property Services Pte. Ltd. of Singapore, a real estate brokerage company, in the Property Brokerage & CRE Business Unit.
Under the Mid- to Long-term Business Plan announced in
April 2019, we set a target to increase the ratio of overall businessprofit accounted for by the overseas business to 15–20% and plan
to invest ¥300.0 billion cumulatively over nine years (please see
p.38–39 for details).
In order to achieve our target, it will be important to understandpotential local needs and create new value through the provision of
products and services. We will address needs by leveraging theexpertise cultivated by the Group in Japan in development, management, and real estate related services and the market-in approach.
With the establishment of partnerships with leading local companies,
we will continue to build our business structure rooted in each market.
In Southeast Asia, we are seeing growing needs for higher quality
and greater comfort for living environments. The circumstanceis changing to one in which the Group is able to make full use of
its expertise, and our projects are performing favorably in all of themarkets where we have already entered. We are also conducting
investments and management of outstanding office buildings withmany Japanese and multi national tenants.
In large-scale and mature markets with high transparency, suchas the United States and Europe, we will aim to expand theInvestment Management Business Unit through an M&A strategy,
such as the capital alliance with Lothbury Investment Management.
Furthermore, as Lothbury Investment Management also possesses
development capabilities, we will examine the possibility of participation in development projects in the United Kingdom through collaboration with the Commercial Real Estate Business Unit.

Establishing a Comprehensive Risk Management System
When developing businesses overseas, comprehensive risk management is even more indispensable than it is in Japan. The principal
risks that we should focus on include risks stemming from a country’s particular political situation and social conditions, risks resulting
from the slowdown of economic growth, and interest rate and currency trends. In conducting risk management, we set investment
limits for each country considering the Group’s acceptable level offinancial risk after investigating and analyzing the political, economic,
and social environments of countries. As for currency risks, we takerisk-hedging measures as necessary. In regions where we will continue to pursue business, we will look into procuring funds in theirlocal currencies.
As for individual business risks, we constantly consider the balance between risk and return by investing in businesses surpassing
profit margins that are based on our investment criteria in Japan,
adding a risk premium determined for each country based on certain conditions.
The International Business Department, which formulates andpromotes overseas strategies across local offices and business units,
responds to risks by monitoring the conditions of partner companies,
the economic situation, the real estate market, changes to relevantlaws, and the progress of projects to take appropriate measures.
Toward Securing Global Human Resources
Cultivating human resources is also crucial to expanding our overseas business. Utilizing foreign language programs and otherresources developed in cooperation with universities, we are training
approximately 10 employees each year as well as directly hiring
employees in each region. We plan to increase our global humanresources who are capable of managing our overseas business toapproximately 200 people. These employees play an active role atthe forefront of our overseas business. We will cultivate humanresources who can contribute to business expansion both in Japanand overseas by creating a cycle in which knowledge is shared
between Japan and overseas through the rotation of personnel.

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Human Resource Management

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

Promoting Wellness Management

Overview of Wellness Management

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

Management Structure
At the Nomura Real Estate Group, the executive officer in charge of
its Human Resources Department is responsible for promoting
initiatives to realize wellness management.
In April 2017, we established the Workstyle Reform Promotion
Committee (Chairman: Executive Vice President and Representative
Director, Group COO of Nomura Real Estate Holdings), which comprises directors of Nomura Real Estate Holdings, Inc. and Group
companies. The Committee examines issues and measures andsets targets aimed at promoting wellness management and diversity
while monitoring the results of its activities and reporting to theBoard of Directors twice a year.
Furthermore, the CSR Committee (Chairman: Executive Vice
President and Representative Director, Group COO of Nomura Real
Estate Holdings), which comprises directors of Nomura Real Estate
Holdings and Group companies, deliberates on and establishes
related policies and reports to the Board of Directors.
Targets• Prevent overwork• Encourage employees to take paid vacation• Implement comprehensive health management covering thephysical and mental health of employees• Prevent industrial accidents

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

Diversity• Build an environment where each person can
maximize their abilities• Cultivate a work climate that accepts and expresses
diverse values

Wellness

Examples of Major Initiatives
Management Initiative for Improving Health and Safety
The President and Representative Director and the Executive Vice
President and Representative Director of Nomura Real Estate
Holdings have held 69 meetings with employees to directly discuss
about improving productivity, reducing working hours, and enhancing the work–life balance of employees.

Employees can work creatively with a healthy body and mind = our fundamental policy

In October 2017, Nomura Real Estate Development­formulated the “Healthy Business Declaration of Nomura
Real Estate Development Co., Ltd.” to promote employee
health management, regarding it as one of the key management issues. Also, the President was appointed as the
person responsible for promoting healthy business.

“Healthy Business Declaration of
Nomura Real Estate Development Co., Ltd.”Management meeting with employees

At Nomura Real Estate Development, we believe that humanresources are our greatest asset, and that the physical and mental
health of our employees is the wellspring for new value creation
for future business. Guided by our corporate philosophy, which
gives personnel a central role, we will promote health management to actively support health maintenance and enhancement
for employees.

Hours/Month
20

19.66

18

–5.59 hours

16

14.07

14
12

FY18/3

FY19/3* Excludes overseas Group companies

Preventing Overwork
As a part of its initiatives for work-style reform launched in
FY2018/3, the Group carries out a variety of measures aimed
at preventing overwork among its employees.
Main Measures• Working hours made visible• No overtime days created• Quitting time declaration program• PCs turned off at 8 p.m.
• Various measures to encourage employees to take vacation time suchas allowing employees to take the day off on their birthdays

In addition, employees who work more than a certain number ofhours in a single month are required to check their physical condition using a Cumulative Fatigue Self-Diagnosis Checklist and provide
the results to their supervisor. We also implement other measures toensure health, such as scheduling meetings between such employees and an industrial physician.
Improving Health Management
The Group has made it mandatory for all employees to have physical checkups and health examinations. We have also set up “mental
and physical consultation services” as a contact point for outside
experts, and a “Health Consultation Office,” staffed by doctors andnurses, within the Group, to promote the physical and mental healthof our employees. In FY2019/3, 100% of employees at Nomura Real
Estate underwent comprehensive medical examinations.

The Group aims to provide wellness management so that all of its executives and employees can carry out their work energetically and in good
physical and mental health, which leads to sustainable corporate growth. Senior management will convey this policy on a continual basis tosteadily reinforce its understanding among employees.

Healthy Business Declaration of
Nomura Real Estate Development Co., Ltd.

Average Amount of Overtime Work*Management of Overtime Work under Labor Laws
At the Group, the Board of Directors reports and confirms monthly
the status of compliance with the 36 agreements of Group companies. In addition, each month we report on working hours and thestatus of holidays taken by each business unit and share information
on any identified issues.

Health and Safety Risk Management
Nomura Real Estate conducts “wellness meetings” once every six
months, where general managers and senior managers share information on employees requiring health care with the executive officer
in charge and the executive officer in charge of the Human
Resources Department. As for the health and safety of generalmanagers and senior managers, the executive officer in charge
grasps the situation and shares the information with the Human
Resources Department.

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Part 1:
About the Nomura Real Estate Group

Promotion of Work-style Reform and Diversity
In view of the importance of innovations brought about by diversity,
the Nomura Real Estate Group has formulated the Nomura Real
Estate Group Code of Action, which stipulates respect for fundamental human rights and prohibits discrimination and harassment.
The Group also conducts diversity management to ensure equal
hiring and employment for all persons regardless of individual attributes so that all employees can fully demonstrate their diverse
individuality and capabilities.
In addition, the Nomura Real Estate Holdings Basic Corporate
Governance Policy provides that the Board of Directors shall bemade up of diverse directors with varied knowledge, experience,and skills.
 or details on corporate governance,Fplease see p.74–89 for details.

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Initiatives for Promoting the Active Participation of Diverse
Human Resources
The Group is promoting the active participation of human resources
regardless of gender, age, and nationality in the workplace based on
the belief that leveraging diverse perspectives in business is a key tocreating new corporate value. As of April 1, 2019, womenaccounted for 30.76% of employees, 5.58% of managers, and16.07% of junior managers.* The Group also employed 127 persons
with disabilities, equal to 1.96% of our total workforce.
* Junior manager: Candidates for promotion to manager in the near future

Percentage of Female Employees and Percentage ofFemale Managers
40• Promote employment of women

25.08

28.60

27.74

27.10

20

• Hire and utilize diverse human capital

10

5.56

4.37

4.81

5.38

5.45

5.58

2014

2015

2016

2017

2018

2019



(As of April 1)
Percentage of female employees

Percentage of female managers* Certain Group companies have made changes to their manager qualifications since 2015.

Hiring and Utilization of Diverse Human Capital

Main Measures• Setting regular days off at sales offices
Encouraging employees• Encouraging employees to take leave
not to work on holidays andsuch as by assigning days off on
to take vacation time
employee birthdays
Raising awarenessregarding shorter
working hours

Support for childcare andnursing care

• Working hours made visible• Creating work end time declaration
program• No overtime days created• Introducing productivity assessments• PCs Turned off at 8 p.m.
• Creating staggered commuting time
programs• Creating job position transition programs• Subsidizing a portion of babysitter
expenses• Creating paternity leave programs

Ratio of employees withdisabilities (%)

148

139

150

99

119

109

100

50

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

The Group has introduced systems designed to foster a corporate
culture where employees are willing to tackle the challenges of value
creation through innovation and that encourages Groupwide collaboration, and raise individual and organizational motivation.

30.76

29.75

• Promote diverse work styles

Promoting diverse
work styles

178

200

Fostering a Corporate Culture That Encourages Challenges%30• Establishing telecommuting programs(including working from home)• Creating satellite offices• Expanding flextime working programs

PeopleFY14/3

Targets

Examples of Our Key Initiatives
Promoting Work-style Reform and Diverse Work Styles
In April 2017, the Group established the Workstyle Reform
Promotion Committee, chaired by the Group COO and comprising
the heads of each business unit.

Number of Employees Taking Childcare Leave

2016

2017

2018

2019

1.85

1.97

1.90

1.96

Examples of Our Key Initiatives
Holding the Nomura Real Estate Group Awards
The Nomura Real Estate Group Awards has been held annually
since 2016 to recognize outstanding businesses, products, andservices in the year. The most recent awards were given to“Watching over the Community,” a program for visiting elementary
schools, and “Area Management Nanzan,” a project for cultivatingorganizations led by residents while cooperating with local
governments.
Evaluation Criteria• Reform and innovation* Figures as of June 1 for each year

• Increase in customer satisfaction

Support for Childcare and Nursing Care
The Group has set up a personnel system that enables employees
to continue working after major life events, such as childbirth, as wellas with duties, such as childcare and nursing care. This system isalso disclosed via the Company intranet and other forums to spreadawareness. Moreover, we foster a work environment where all
employees feel comfortable utilizing this system without prejudice.

• Group wide collaboration• CSR activities and social contribution• Continuity and perseverance

Principal Systems• Childcare leave• Family care leave• Holiday childcare support program and subsidies for a portion ofbabysitter expenses• Paternity leave program• Reduced working hours for family care
“Watching over the Community” team, first prize winners at the Nomura Real EstateGroup Awards 2019

Number of Employees Taking Family Care Leave
FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

2

1

1

2

4

4

Business Idea Proposal Program
In November 2017, the Group launched the Business Idea Proposal
Program, which allows all employees to propose new businesses,
products, or services that go beyond the boundaries of their ordinary work. To date, the Group has received 45 entries (five in
FY2019/3) with 18 currently under consideration while three havebeen commercialized or realized. We are working to foster morebusiness ideas and in FY2020/3, we began revising our operationalrules to make it easier to make voluntary proposals.

Cultivating and Improving Human Capital
Aiming to realize the Nomura Real Estate Group’s Action Guideline“What We Value,” the Group is striving to improve human capital.
We offer programs to enhance the qualifications and capabilities ofeach Group employee so that every employee can perform his or
her work as a professional with a high degree of specialization.
Nomura Real Estate’s Basic Human Resources
Development Policies• Proactive medium- to long-term human resources developmentthat focuses on careers• Human resources development that responds to change overtime, fosters innovation, and supports future management
Training Results
FY18/3

FY19/3Training time per employee

Category

12.53 hours

12.65 hours

Total training time

27,073 hours

25,077 hours¥59,482¥79,985

Training cost per employee* Figures for Nomura Real Estate Holdings, Inc. and Nomura Real Estate
Development Co., Ltd.

Skill Development Program
Nomura Real Estate has established “N-COLLEGE” as a program
to support the self-improvement of employees. N-COLLEGE offers
programs for real estate specialist qualifications, such as for becoming a real estate notary, real estate appraiser, or first-class architect,
as well as on all aspects of business skills, such as finance andforeign languages.
Example of Our Key Initiatives
Group Personnel Division Meetings
The Group holds monthly Group Personnel Division Meetings
attended by officers responsible for human resources and managersof human resource divisions of Group companies. Participants
exchange information and opinions regarding human resources
development and best practices and implement Groupwide measures for human capital improvement.

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Corporate Governance

Message from the Chairman of the Board of Directors

Board of Directors Diversity Matrix

Toward Further Evolution of Corporate GovernanceInitiatives to Date
In the previous Mid- to Long-term Business Plan, in addition topromoting existing businesses such as the residential development
and office building development businesses, we accelerated the
expansion of our business to new asset types such as senior housing and hotels as well as extending our business area into regionalcore cities. In these ways, we took up the challenge of expanding
our business domain to serve as the foundation for our future
growth. I believe that we have also made great strides in corporate
governance. In particular, we have concentrated efforts on introducing a new compensation system for directors. This new system
consists equally of fixed and variable compensation, while the variable part is divided between short-term and long-term incentives.
The achievement-linked portion of long-term incentives has beentied to the achievement goals at the end of the third year, thereby
having a system in place that is tailored to the characteristics of thereal estate industry, where it takes time before profits are realized.
We have set business profit and ROE as performance indicators,
thereby declaring the Company’s stance of focusing on both profit
amount and capital efficiency. The introduction of this system has
clarified incentives for the enhancement of corporate value over thelong term, as well as firmly linking the establishment of goals ofexecutive officers to corporate value and compensation. I believethat this system has more closely aligned our viewpoints with thoseof our shareholders. Executive officers are now required to engage
in deeper communication with their respective senior management,
which is fostering better mutual understanding. We also partiallychanged the compensation system for employees in February 2019.
We abolished the stock-option system that we had in place forcertain employees, such as those in positions close to management,
and we decided to introduce the “ESOP Trust for Granting Stock,” a
new employee incentive plan that confers shares. In addition, we will

expand the scope of eligible employees. This measure is an expression of our desire to have employees better understand the viewpoints of shareholders while enhancing corporate value. I believethat we have created the foundation for a corporate culture in which
directors and employees work together to enhance corporate value
over the long term.
The New Mid- to Long-term Business Plan
In formulating the new Mid- to Long-term Business Plan, we heldcareful discussions over the course of a year. These discussionscommenced with those on the Group’s vision for the future and theoperating environment and cost of equity on which the businessplan for realizing that vision should be based. We also paid attention
to the balance between investment and shareholder returns when
considering specific policies for the business plan. As a company
entrusted with our shareholders’ investments, striking an appropriate balance between asset efficiency and shareholder returns isimportant, particularly in the real estate industry, which utilizes large
amount of assets. I believe the content of the plan we announced
after repeated discussions with the executive officers is one that canbe welcomed by our shareholders. After formulating the plan, we
need to implement it and deliver results. The Board of Directors
certainly must pay closer attention to risks such as those related tothe increase of asset types and the expansion of overseas business.
As the asset replacement plan incorporated in the new Mid- toLong-term Business Plan requires us to make decisions more precisely than ever before, we will continue our efforts to conduct management with an awareness of asset efficiency. While I recognizethat both our executive officers and employees have a high awareness of risks, striking a balance between accelerating and braking is
crucial for the healthy growth of the Company as a whole. As the
Chairman of the Board of Directors, I intend to carry out discussions
that contribute to the healthy development of the Company over the
medium to long term. While continuing to monitor risks, we will takea more proactive approach when necessary.
Evaluation of the Effectiveness of the Board of Directors
As for the evaluation of the effectiveness of the Board of Directors,
this is the fourth time since its commencement in FY2016/3. We
have been implementing interviews with all directors through athird-party assessment organization since the last evaluation. Basedon assessments that take into account the content of those interviews, we conduct discussions at the Board of Directors and promote improvement plans, which are decided by the Board.
Specifically, we clarified the division of roles between the Board of
Directors at operating companies and at Nomura Real Estate
Holdings, in order to reinforce the monitoring functions of the Boardof Directors at our holding company. As a result, the Board of
Directors at our holding company is now able to monitor businessexecution and conduct strategic discussions from a broader perspective. We spent a considerable amount of time on the Board of
Directors’ discussions and informal discussions. Through discussions held by the Board of Directors, we also established theIndependent
director

GenderYears asdirector

Internal(non-executive)Male

2 years

InternalMale

5 years

Seiichi Miyajima

InternalMale

5 years

Toshiaki Seki

InternalMale

5 years

Internal/external

Atsushi Yoshikawa
Eiji Kutsukake

Makoto Haga

InternalMale

2 years

Satoko Shinohara

External

Female5 years

Tetsuro Higashi

External

Male

New

Takao OriharaInternal(non-executive)
Internal(non-executive)Male

4 years

Male

New

Akira Ono

ExternalMale

4 years

Yoshio Mogi

External

Male

New

Akiko Miyakawa

External

FemaleNew

Yasushi Takayama

Audit &
Supervisory
Committee
Member*1

Advisory Committee
Relating to Nominations
Corporate
and Compensation
management
Member*1

Fields of expectation for directors
Finance*2

Financeand audit

Legaland audit

Overseasbusiness

ArchitecturaldesignIT*1 indicates Committee Chairman*2 Knowledge of capital markets and business experience in capital procurement, etc.

Overseas Planning Department and local subsidiaries in order tofurther ramp up the progress of our overseas business. At present,
we are establishing a framework in which the front lines submit
reports to the Board of Directors when appropriate, based on amatrix chart that gathers together the key monitoring points foroverseas businesses, and respond to recommendations from theBoard of Directors in a timely manner.
Composition of the Board of Directors
The Board of Directors reconfigured its size and diversity basedon the evaluation of the effectiveness of the Board of Directors.
Specifically, we reduced the number of internal directors by one,decreasing the total number of directors from 13 to 12. Previously,
the director in charge of corporate planning served concurrently as adirector. However, we have reconsidered this position from theperspective of separating the execution and supervision of management. Three external directors resigned and three new external
directors were appointed at the General Meeting of Shareholders inJune 2019. The number of independent external directors remains
unchanged at five members including two female directors. These
external directors, including reappointed directors, consists of thosewith management experience at IT and global companies, an architect, an attorney at law, and a certified public accountant. I believethat the composition is well-balanced and we can expect lively
discussions as each director makes full use of his or her experienceand knowledge. Under the new Mid- to Long-term Business Plan, it
is envisaged that we will conduct M&A activities and other measures
to expand overseas business and make strategic investments inpursuit of a new growth stage. I believe that the number of situations
requiring us to make difficult decisions will increase. The abundantbusiness experience and specialized know-how possessed byexternal directors will surely play a major role in the promotion ofhealthy growth strategies for the Company. Moreover, the Advisory

Committee Relating to Nominations and Compensation got underway with the participation of three external directors in addition tomyself as Chairman, for a membership of four in total. As an advisorycommittee to the Board of Directors, the Advisory Committee
Relating to Nominations and Compensation will thoroughly deliberate on matters including the nomination process, succession plan,and training of future candidates for key management positions
such as the CEO, in addition to deliberating on compensation.
In Conclusion
In our surrounding business environment, demand for highly transparent management is increasing by the year, as shown by theannouncements of the “Revised Japan’s Corporate GovernanceCode” by the Tokyo Stock Exchange in June 2018 and “Principles
Regarding the Disclosure of Narrative Information” by the Financial
Services Agency in March 2019. To meet the expectations of
our shareholders and stakeholders, I will strive to enhance theCompany’s corporate value over the medium to long term by conducting highly transparent discussions on the Board of Directors
with the new members.


Atsushi Yoshikawa
Chairman of the Board of Directors
Nomura Real Estate Holdings Co., Ltd.

September 2019

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Messages from External Directors

Satoko Shinohara
Professor at Japan Women’s University
Representative Director, Spatial Design Studio
Ms. Shinohara has worked for many years as
an architect and possesses a wealth of knowledge andwide-ranging experience on approaches to the common
areas of collective housing units as a researcher.
She has been an external director since 2014.

As a Japanese corporation rooted in mature society, it is important to explore ways in which
we can contribute to society by leveraging the experience and perspectives we have cultivated to date. In addition, it is important for the Group, which has grown centered on the
housing domain to this point, to fully leverage the knowledge it has garnered in order to conduct sustainable and responsible business overseas going forward.
Through serving as an external director of the Group since 2014, I recognize that the monitoring of its business execution is of the utmost importance. To date, I have made proposals
on the need for periodic monitoring of large-scale projects and new projects once they havebeen approved by the Board of Directors. Moreover, as an architect and specialist in the studyof housing, I have thought seriously, not only about design and architecture, but also about
the nature of our contribution to sustainable urban development, and how we can fulfill our
responsibilities to communities and make proposals.
In society going forward a comprehensive design value that realizes such factors as safety/
security and the environment will become increasingly important. I hope to continue to offer
support as the Group strives to provide new value to society.

Compared with other companies in the real estate industry, I find the Group’s business model andmanagement vision intriguing. The real estate industry is one that is closely tied to people’s lifestyles and the ways of society, through living spaces, working spaces, and spaces for enjoyment.
Being aware of the changes in society, we continue to provide enrichment and enjoyment, suchas comfort, convenience, and happiness, to the lifestyles of individuals and lifestyles in society,while emphasizing the importance of always being imaginative and creative to provide the added
value demanded by the era. I believe that it is important for the Group to be in a position to continue to take on the challenge of being imaginative and creative.
In order to develop the distinctive features of the Group, in terms of monitoring business execution, rather than just pursuing business scale expansion, I will also pay close attention toenhancing the profitability of the Group’s businesses while keeping an eye on quality, new value,
cooperation between businesses, and originality that earns true customer satisfaction. To realize
strong medium-sized management and avoid long-term asset stagnation, the Group needs toachieve an ROE that exceeds that of the industry.
Based on my experience to date as a manager, in globalization, and in M&A activities withoverseas corporations, among other experiences, I intend to actively offer opinions that are usefulfor management and opinions on matters that require attention.

Akira Ono
Attorney-at-Law, Partner at Spring Partners
Mr. Ono has worked for many years as an attorneyat-law and possesses a high level of specialization anda wealth of experience in corporate law. He has served
as an external Audit & Supervisory Board Member of
MEGALOS CO., LTD. (currently, Nomura Real Estate Life
& Sports Co., Ltd.), a subsidiary of the Company, since2012, and an external director (Audit & Supervisory
Committee Member) of the Company since 2015.

The new Mid- to Long-term Business Plan was formulated after repeatedly conducting avariety of discussions on all elements, on the premise of an awareness of the business environment, such as growth strategies of business units, business portfolio, financial and capital
policies, and the value creation for which the Group, who will enact these strategies andpolicies, aspires. As an external director, I expressed my opinions principally from the point ofview of how to explain all the factors to investors and gain their understanding, in addition tomonitoring the process for formulating the plan. Moreover, the new Mid- to Long-term
Business Plan includes the undertaking of ambitious challenges such as positioning the overseas business as one of the major growth drivers, while using the strengths cultivated by theGroup to date as a foundation. The fact that our corporate governance and other systems,
which underpin these strengths, have been appropriately established and continue to operate
is an important base for achieving the plan, and an important factor in my monitoring.
In addition to the knowledge and experience I have cultivated through my professional
duties as an attorney-at-law, I have deepened my knowledge of the Group’s business andmanagement over the total of seven years I have served with the Group, four of which as anexternal director of the Company, as well as an external Audit & Supervisory Board Member
at a subsidiary of the Company. I will fuse and channel this knowledge and experience as
I devote myself to strive to meet the expectations of our shareholders and investors.

Amid increases in the expectations of external directors from capital markets and the importance of the role of such directors, I asked myself how I could fulfill this important task when I
was notified about becoming an external director of the Group. From the outside, the sales
side of the real estate industry is highly visible, but when looking from the inside, I have been
impressed by the Group’s precise and careful way of working.
How should a finite resource such as real estate be leveraged and linked to profit? Howshould we expand business in new areas such as regional cities and overseas? What sort ofadded value can be generated from collaboration with financial institutions? In a variety ofareas, I believe that there is still room for the Group to cultivate new businesses. I recognizethat the extent to which we can open the way for such new businesses is a major issue,
encompassing areas such as the cultivation of human resources. I intend to conduct thoroughmonitoring by focusing my attention on overseas business management and on how weshould manage real estate risk and return. I hope to leverage even a bit of the experience I
have cultivated thus far to assist execution.

Yoshio Mogi
Former Representative Director,
Executive Vice President & CFO, CCO,
Sojitz Corporation
Mr. Mogi has many years of experience as a corporate
manager and possesses abundant knowledge andwide-ranging experience on corporate management.
He has served as an external director (Audit &Supervisory Committee Member) of the Company sinceJune 2019.

Tetsuro Higashi
Former Representative Director,
President & CEO, Tokyo Electron Ltd.
Mr. Higashi has many years of experience as a corporate
manager and possesses abundant knowledge andwide-ranging experience on corporate management.
He serves as an external director at Seven & i Holdings
Co., Ltd. and has been an external director sinceJune 2019.

Akiko Miyakawa
Representative of Akiko Miyakawa CPA Office
Ms. Miyakawa has many years of experience as acertified public accountant and possesses abundant
knowledge and wide-ranging experience in accounting
and auditing. She has served as an external director(Audit & Supervisory Committee Member) of theCompany since June 2019.

Prior to my appointment as an external director, I often saw the Group’s name in newspapers
and on construction sites and felt an affinity with it. It caught my attention as I have an interestin the real estate industry. I have always been impressed by the earnest and studiousdemeanor of the Group’s employees, and I received the same impression of sincerity from the
management I met after my appointment.
Amid the sense of maturity of the Japanese housing market, including after 2020, I believethat diversification with an awareness for balance, enrichment of services, and realization ofdifferentiation from competitors will be vital. As the challenges we take on increase, we willencounter new risks and issues and unexpected events. I intend to focus on and monitor
how we recognize and deal with such issues, and whether the framework for doing that has
been properly established or not.
I intend to contribute to the strengthening of the Group’s sound and assertive corporate
governance system based on my experience in both similar and not so similar cases in theaccounting industry, including overseas, and by leveraging my expertise in root cause analysis.

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Corporate Officers(As of September 30, 2019)

Toshiaki Seki
Executive Vice President andRepresentative Director, Business Unit Manager ofCommercial Real Estate Business Unit
9
6
4

8

7

1

10

2

11

3

12

5

1 Atsushi Yoshikawa

5 Makoto Haga

9 Yasushi Takayama

2 Eiji Kutsukake

6 Satoko Shinohara

10 Akira Ono

3 Seiichi Miyajima

7 Tetsuro Higashi

11 Yoshio Mogi

4 Toshiaki Seki

8 Takao Orihara

12 Akiko Miyakawa

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, andChief 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 BUILDING MANAGEMENT
CO., LTD. (currently, Nomura Real Estate
Partners Co., Ltd.)
Apr. 2014	President and Representative Director, andChief Executive Officer of Nomura Real Estate
Partners Co., Ltd.
Jun. 2014	Representative Director and Executive Officer of
Nomura Real Estate Holdings, Inc.
Apr. 2015	Director of Nomura Real Estate Urban Net Co., Ltd.
Chairman and Representative Director of
Nomura Real Estate Partners Co., Ltd.
President and Representative Director of
Nomura Real Estate Wellness Co., Ltd.
Jun. 2015	Director of MEGALOS CO., LTD.
(currently, Nomura Real Estate Life & Sports
Co., Ltd.) (present)
Apr. 2018	Executive Vice President and Representative
Director of Nomura Real Estate Holdings, Inc.
(present)
Director of Nomura Real Estate Reform Co., Ltd.
President and Representative Director of
NF Power Service Co., Ltd.
Apr. 2019	Executive Vice President and Representative
Director of Nomura Real Estate Development
Co., Ltd. (present)
Director of NREG TOSHIBA BUILDING Co., Ltd.
(present)

Directors
Atsushi Yoshikawa

Eiji Kutsukake

Seiichi Miyajima

Makoto Haga

Satoko Shinohara

Tetsuro Higashi

Director and Chairman of the Board of Directors

President and Representative Director,
Group CEO

Executive Vice President andRepresentative Director,
Group COO

Director and Executive Officer,
Group CFO,
Supervisor of Management Division,
Investor Relations,
Corporate Communications Dept.

External Director

External Director

Apr. 1983	Joined Koyama 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 andAssociates (present)
Feb. 2010	Representative Partner of Satoko Shinohara
Living Design Institute LLC(currently, Living Design Institute LLC)
Apr. 2010	Professor of Japan Women’s University (present)
Jun. 2014	External Director of Nomura Real Estate
Holdings, Inc. (present)

Apr. 1977	Joined Tokyo Electron Ltd.
Dec. 1990	Director of Tokyo Electron Ltd.
Apr. 1994	Managing Director of Tokyo Electron Ltd.
Jun. 1996	Representative Director and President ofTokyo Electron Ltd.
Jun. 2003	Representative Director, and Chairman of theBoard of Tokyo Electron Ltd.
Jun. 2011	Director, and Chairman of the Board ofTokyo Electron Ltd.
Jun. 2012	Outside Director of Ube Industries, Ltd.
Apr. 2013	Representative Director, Chairman andPresident & CEO of Tokyo Electron Ltd.
Jun. 2015	Representative Director, and President & CEO ofTokyo Electron Ltd.
Jan. 2016	Corporate Director and Corporate Advisor ofTokyo Electron Ltd.
May 2018	Outside Director of Seven & i Holdings Co., Ltd.
(present)
Jun. 2019	Outside Director of Ube Industries, Ltd. (present)		External Director of Nomura Real Estate
Holdings, Inc. (present)

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

Apr. 1984	Joined Nomura Securities Co., Ltd.
(currently, Nomura Holdings, Inc.)
Apr. 2007	Executive Managing Director of
Nomura Securities Co., Ltd.
Oct. 2008	Senior Managing Director of
Nomura Securities Co., Ltd.
Apr. 2009	Senior Corporate Managing Director of
Nomura Securities Co., Ltd.
Apr. 2011	Senior Corporate Managing Director and Chief
Operating Officer of Nomura Holdings, Inc.
Executive Vice President of
Nomura Securities Co., Ltd.
Apr. 2012	Executive Managing Director of
Nomura Holdings, Inc.
Aug. 2012	Deputy President of Nomura Securities Co., Ltd.
Apr. 2013	Director and Deputy President of
Nomura Securities Co., Ltd.
Apr. 2014	Advisor of Nomura Real Estate Holdings, Inc.
Jun. 2014	Representative Director and Executive Vice
President of Nomura Real Estate Holdings, Inc.
Jun. 2015	President and Representative Director, andChief Executive Officer of
Nomura Real Estate Holdings, Inc. (present)
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	Representative Director and Senior Managing
Executive Officer of Nomura Real Estate
Development Co., Ltd.
May 2012	Executive Officer of Nomura Real Estate
Holdings, Inc.
Apr. 2014	Representative Director and Executive Vice
President of Nomura Real Estate Development
Co., Ltd.
Jun. 2014	Representative Director and Executive Officer of
Nomura Real Estate Holdings, Inc.
Apr. 2015	President and Representative Director, andChief 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)

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

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Corporate Governance

Basic Viewpoint on Corporate GovernanceDirectors
Takao Orihara

Akira Ono

Akiko Miyakawa

Director(Audit & Supervisory Committee Member)

External Director(Audit & Supervisory Committee Member)

External Director(Audit & Supervisory Committee Member)

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

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

Apr. 1978	Joined Tokyo Branch of Chase Manhattan Bank
(currently, JPMorgan Chase Bank, N.A.)
Nov. 1987	Joined Marunouchi & Co.
(currently, Deloitte Touche Tohmatsu LLC)
Jan. 2000	Joined the Los Angeles Office of Deloitte US
Jun. 2005	Partner of Deloitte Touche Tohmatsu LLC
Jul. 2008	Joined the Taipei Office of Deloitte Taiwan
Oct. 2015	Joined Deloitte Touche Tohmatsu LLC
Tokyo Office
Aug. 2018	Representative of Akiko Miyakawa CPA Office(present)
Jun. 2019	External Director (Audit & Supervisory Committee
Member) of Nomura Real Estate Holdings, Inc.
(present)

Yoshio Mogi
External Director(Audit & Supervisory Committee Member)
Apr. 1975	Joined Nichimen Co., Ltd.
(currently, Sojitz Corporation)
Apr. 2006	Executive Officer of Sojitz Corporation
Apr. 2008	Managing Executive Officer of Sojitz Corporation
Apr. 2012	Senior Managing Executive Officer, CFO of
Sojitz Corporation
Jun. 2012	Representative Director, Senior Managing
Executive Officer, CFO of Sojitz Corporation
Apr. 2014	Representative Director and Executive Vice
President, CFO of Sojitz Corporation
Jul. 2014	Outside Director of Sojitz Infinity Inc.
Apr. 2017	Representative Director and Executive Vice
President, CCO of Sojitz Corporation
Director of Sojitz REIT Advisors K.K.
Apr. 2018	Advisor of Sojitz Corporation
Jun. 2019	External Director (Audit & Supervisory Committee
Member) of Nomura Real Estate Holdings, Inc.
(present)

Nomura Real Estate Holdings believes that a company must be governed in a way that continuously maximizes corporate value over the longterm while giving consideration to the interests of shareholders and all other stakeholders. It is based on this belief and in accordance with 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 Policy www.nomura-re-hd.co.jp/english/ir/pdf/cgpolicy.pdf

Basic Corporate Governance Policy
Shareholder Rights and Securing Impartiality
Nomura Real Estate Holdings effectively maintains the same level of
equality for every shareholder based on their shareholdings. We also
strive to disclose information in a timely and appropriate manner so
as to prevent information disparities among shareholders. Nomura
Real Estate Holdings has a policy concerning strategic shareholdings that acknowledges contributions to improving the Company’s
corporate value from a comprehensive perspective of strengthening
transaction relations with counterparties and strategic businesstie-ups, etc.
We continuously examine the rationality of the holdings from theperspective of contributing to improving the Company’s corporate
value. The Company makes appropriate decisions when exercising
voting rights related to strategic shareholdings based on whether

2012

2013

2014

Directors (No.)

Director(Audit & Supervisory Committee Member)

Executive Officers

 stablished the Management
E
Committee at the holding
company to help strengthenGroup management systems

Masaomi Katayama

In charge of Quality Management andArchitectural Design

In charge of International Business Dept.

Masato Yamauchi

In charge of Investment Management Business Unit

In charge of Corporate Planning Dept.,
ICT & Innovation Planning Dept.

Juntaro Kimura

Yukio Ichihara

In charge of Property Brokerage & CRE
Business Unit

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

In charge of Development Planning

Yoichiro Ishikawa

Akihiro Fukuda

In charge of Group Human Resources Dept.

In charge of Property & Facility Management
Business Unit

Toshihide Tsukasaki

Daisaku Matsuo
In charge of Residential Development Business Unit

6*

5

5*

8

External Directors (No.)

0

1

2

0

1

1

0

2017

2018

2019

 stablished the Advisory Committee Relating toENominations and Compensation

13

12
5

4

5
1

 egan evaluating theBeffectiveness of theBoard of Directors

Evaluation of
Effectiveness

Compensation2016

 ransitioned from a company with an Audit & Supervisory
T
Board to a company with an Audit & Supervisory Committee	Independent Directors(No.)
Female Directors (No.)

Takashi Kaku

Shigeyuki Yamamoto

Relationship Building with Stakeholders
In recognizing that it is a member of society, the Nomura Real EstateGroup 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 esteemedethics and social norms. We will continue collaborating as appropriate while closely considering the interests of shareholders, employees, customers, business partners, creditors, local communities,
and other stakeholders.

2015

Introduced executive officer system to separate thebusiness execution function from the management
and supervisory functions of the holding company

Organization

Norio Ambe

Appropriate Cooperation with Stakeholders

The Nomura Real Estate Group’s Efforts to Reinforce Corporate GovernanceYasushi Takayama
Apr. 1988	Joined Nomura Securities Co., Ltd.
(currently, Nomura Holdings, Inc.)
Jun. 2011	Director, Nomura Financial Products & Services, Inc.
Oct. 2012	Managing Director and General Counsel of
Nomura Securities International, Inc. (New York)
Sep. 2013	Managing Director and General Counsel of
Nomura Holding America Inc.
Apr. 2015	Senior Managing Director and Chief Legal Officer
of Nomura Holdings, Inc.
Senior Managing Director and Chief Legal Officer
of Nomura Securities Co., Ltd.
Jun. 2016	Outside Director of Japan Securities Depository
Center, Incorporated
Apr. 2019	Audit & Supervisory Board Member of Nomura
Real Estate Development Co., Ltd. (present)
Advisor of Nomura Real Estate Holdings, Inc.
(present)
May 2019	Audit & Supervisory Board Member of
UHM Co., Ltd (present)
Jun. 2019	Director (Audit & Supervisory Committee Member)of Nomura Real Estate Holdings, Inc. (present)
Audit & Supervisory Board Member of Investment
Management Division of Nomura Real Estate
Capital Management Co., Ltd. (present)
Audit & Supervisory Board Member of Nomura
Real Estate Urban Net Co., Ltd. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Partners Co., Ltd. (present)
Audit & Supervisory Board Member of
NREG TOSHIBA BUILDING Co., Ltd. (present)
Audit & Supervisory Board Member of
PRIME X Co., Ltd. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Wellness Co., Ltd. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Hotels Co., Ltd. (present)

holdings contribute to improving the Company’s corporate value
through the enhancement of investee companies’ corporate value.

 aised the maximum number of share acquisitionRrights used for stock options in order to increase theratio of performance-based incentive in order toshare interests with shareholders

2 egan evolution the effectiveness ofB
the Board of Directors utilizing athird-party evaluation organizationImplemented performancebased stock incentive plan

Increased the delegation of authority from the Board of Directors to theManagement Committee to speed up business execution

OthersDisclosed reason for appointment of directors

Establishedthe Basic
Corporate Governance Policy

In charge of Finance & Accounting Dept.,
Finance Dept.
* Reduction due to resignation or retirement during the fiscal year is not noted.

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Compliance with Japan’s Corporate Governance CodeTimely Disclosure System

Our reasons for not implementing two of the 78 principles of Japan’s Corporate Governance Code as of August 2019 are provided below.

President

Principle

Reason for not implementing[Supplementary
Principle 4-1-3]
Proper Supervision of
Successor Plans for CEO,etc. (Planning)

The Company believes that the appropriate appointment process of its CEO, i.e. one that is carried out in line with the Company’s corporate
philosophy and management strategies and which also considers external candidates, is important for realizing sustainable growth. As for the planfor the CEO’s successor, based on the respective appointment criteria for officers and for the CEO, the Company established its training policy andthe process up to the CEO’s election. Going forward, in addition to the Advisory Committee Relating to Nominations and Compensation providing
regular monitoring and reporting to the Board of Directors, the Company will strive for the further enhancement of the structure and content oftraining, to ensure that the training of successor candidates, in relation to the aforementioned established successor plan, goes as planned.

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

The Company provides training that takes into consideration the Company’s corporate philosophy and management strategies. The Company also
regularly provides opportunities for all directors to receive training from guest lecturers from outside the Company, to improve their knowledge of topics
such as finance and corporate governance. Also, when external directors assume office, they are provided with an explanation regarding topics such as
the Group’s history, business framework, and business model, to deepen their understanding of said topics. Then after the external directors’ tenures
begin, in addition to ensuring regular opportunities for training, the Company also provides opportunities for them to tour the Company’s properties
inside and outside Japan. Going forward, the Company will continue to investigate the aforementioned topics, mainly through the Advisory Committee
Relating to Nominations and Compensation, in order to further enhance the structure and content of training primarily for directors.

Tokyo Stock Exchange

ReportTimely disclosure

Formed as needed

Information Disclosure Screening Team
(Made up of general managers, executive officers, andothers responsible for related departments)

Risk Management Committee Chairman

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

Direction

Department responsible fortimely disclosure(Corporate Communications Dept.)

ReportReportIncidents withsignificant urgency

Department responsible for information collection

Report(Corporate Planning Dept.)

Status of Shareholdings

Reporta. Number of companies with investment shares held for purposes other than pure investment and total amount recorded on balance sheet
Number of companies

Total amount on balance
sheet (millions of yen)

Non-listed shares

12

779

Shares other than non-listed shares

1

292

Stock

Nomura Real Estate Holdings, Inc.
departmentsb. Stocks, number of shares, amount recorded on balance sheet, and purpose for investment shares held for purposes other than pure investment
Stock

Number of shares

Amount on balance
sheet (millions of yen)

PurposeHolding of shares of
Nomura Real Estate Holdings

Onward Holdings Co., Ltd.

500,000

292

To enhance corporate value by strengthening business ties

Not holdingc. Total amount recorded on balance sheet, dividends received, gains/losses on sale, and gains/losses on valuation of investment shares held for
purpose of pure investment in FY2019/3
Category

Number ofcompanies

Total amount on balance sheet(millions of yen)

Total amount of dividends
received (millions of yen)

Total amount of gains/losses onsale (millions of yen)

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

Non-listed shares

1

0

0

—

—

Other shares

15

1,045

30

—

420

Appropriate Information Disclosure and Transparency
System for Disclosing Information
Nomura Real Estate Holdings strives to disclose 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 the Companies Act and the
Financial Instruments & Exchange Act, as well as other laws and thelisting rules of the Tokyo Stock Exchange. Specifically, as our timely
disclosure system (on the following page) indicates, the person
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 and Group company. If information must be reviewed todetermine whether timely disclosure is required, the Information
Disclosure Screening Team made up of general managers, executive
officers, and others responsible for related departments will screen
the matter and report the results to the President. Company information found to require timely disclosure will be disclosed in a timely
manner by the department responsible for timely disclosure(Corporate Communications Department) at the instruction of theperson responsible for information handling (Executive Officer incharge of the Corporate Communications Department).
The Group Internal Audit Department carries out the monitoring ofoperations under the aforementioned timely disclosure system. Audit& Supervisory Committee Members attend Board of Directors’ andother important Company meetings as well as receive reports fromdirectors and view relevant documents to investigate whether thetimely disclosure system is functioning properly.

Risk Management System
Nomura Real Estate Holdings has established Risk Management
Regulations as a set of basic principles on risk management, recognizing that ensuring management soundness and appropriate comprehension of and responses to various business risks facing theGroup represents an important foundation of corporate governance.
Within these regulations, we have established a flow of communication with the executive management team to promptly convey
information in case of an unforeseen incident. The Risk Management
Committee, comprising directors and executive officers of Nomura
Real Estate Holdings and Group companies, has also been established. In addition, we have established the Group Risk Meeting,comprising mainly directors and executive officers of Group companies appointed by the chair of the Risk Management Committee.
The Risk Management Committee and the Group Risk Meeting shallin principle meet every other month or when necessary, to deliberate
on matters pertaining to risk management, compliance, and information security as they relate to the entire Group. The Risk
Management Committee and the Group Risk Meeting also discusscountermeasures in the event of a risk occurring and regularly reportto the Board of Directors.

Group companies

Internal Audits and Audit & Supervisory
Committee System

Audit & Supervisory Committee Members attend Board of
Directors’ and other important Company meetings and can request
reports from business execution departments as necessary to collect information on Nomura Real Estate Holdings’ execution ofbusiness operations. Nomura Real Estate Holdings has establishedan Audit & Supervisory Committee Department in order to aid theduties of Audit & Supervisory Committee Members. This office has
its own dedicated staff who work to implement measures forincreasing the effectiveness of audit operations.
Nomura Real Estate Holdings has concluded an auditing contract
with Ernst & Young ShinNihon LLC (the auditing firm). In addition toregular accounting audits by the auditing firm, the Company discusses and verifies accounting issues with the auditing firm as
needed and strives to follow appropriate accounting procedures.

The Nomura Real Estate Group has established an internal audit
department at each Group company, with the exception of somesmall companies. Each department is supervised under the direct
jurisdiction of the president of each Group company or an officer who
does not hold an additional office in a business operations division,
which allows the department to maintain organizational independence. In addition, we have established the Group Internal Audit
Department in the holding company that, in collaboration with theauditing 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 frominternal audit departments on the implementation and results ofinternal audits. When necessary, it can recommend or instruct additional audits or necessary investigations to be carried out. The Audit& Supervisory Committee also audits and supervises the executionof duties by directors and business operations by executive officers
while cooperating with the auditing firm as needed.

Compliance Systems
The Nomura Real Estate Group regards compliance, including theobservance of laws and regulations and corporate ethics, as one of its
most important management issues. As a set of relevant guidelines,
the Company has formulated the Nomura Real Estate Group Code of
Action. We have established the Risk Management Committee andCompliance Promotion Framework and Risk Management Framework
NomuraReal Estate
Holdings

Board of Directors
PresidentGroup Compliance Dept.
Group Legal & Compliance Department

NomuraReal Estate Group
Companies

ReportCommittee
Chairman

Risk Management Committee
Secretariat

Group Risk Meeting

Members, other attendees

Compliance Officers

Members

Risk Management Committee

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

Compliance Promoters

About the Risk Management Committee
and the Group Risk Meeting<Customarily meets every other month><Extraordinary meetings held as necessary><Reports to the Board of Directors at least
once every three months><Roles>• Regular monitoring of risks• Risk evaluation and analysis• Preemptive and preventive measures• I ncident response• Measures to prevent repeat incidents• Improvement of compliance awareness

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Group Legal & Compliance Dept. in the Company to promote continuous education and enlightening activities for the executives andemployees of the entire Group, and to provide advice, guidance,and support to Group companies.
Furthermore, based on our priority of collecting information
regarding risks, the Company has set up the Nomura Real EstateGroup Helpline as a point of contact for internal reporting by Group
employees. Employees who use the helpline are ensured their information is kept confidential and they cannot be treated unfairly forreporting an incident using the helpline.

Flow of Communication
Nomura Real Estate Holdings
Chairman, Risk Management Committee
Group Legal & Compliance Department

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

Employees of Group Companies

Obligations of the Board of Directors
Nomura Real Estate Holdings has selected the management format
of a company with an Audit & Supervisory Committee in order tostrengthen audit and oversight functions by providing directors who
serve as Audit & Supervisory Committee Members with voting rights
at Board of Directors’ meetings. We have also reinforced the oversight function of the Board of Directors by appointing multiple external directors and establishing the Advisory Committee Relating toNominations and Compensation, which has enabled us to realize afair and highly transparent management system. Additionally, we
have established a risk management system, compliance system,
and internal control system, with each reporting to the Board of
Directors on a regular basis, which ensures the effectiveness of thesupervision by the Board of Directors concerning the execution of
directors’ duties and business operations by executive officers.

Supervision of Group Management
The Company has introduced an executive officer system with an
aim to strengthen Group management, to separate and enhance thebusiness execution function from the decision-making and supervisory functions. Each executive officer appointed by the Board of
Directors is delegated management authority based on the Company’s
internal rules and other stipulations to execute business under the
direction of the President & Representative Director and policies
approved by the Board of Directors of the Company.
As a holding company, the Company manages its Group companies under various regulations such as the Partner Company
Management Regulations and Group Internal Audit Regulations andstrengthens Group management. Also, its directors (excluding those
who serve as Audit & Supervisory Committee Members) and executive officers act as directors and other at major Group companies
and directors who serve as Audit & Supervisory Committee
Members act as Audit and Supervisory Board Members at major

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Group companies. Furthermore, the Company and its Group companies have established systems for risk management, compliance,
and internal audits and determined that the monitoring of Groupmanagement is effective as the Board of Directors regularly receives
reports on each of the systems.
Roles of the Board of Directors
The Board of Directors bears 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 Boardof Directors is made up of a diverse group of directors who possess
various knowledge, experience, and skills in order to achieve thebalance and diversity necessary for a holding company that manages a number of subsidiaries engaged in various business segments. Specifically, the Board of Directors comprises sevendirectors (excluding directors who serve as Audit & Supervisory
Committee Members), of whom two are external directors, and fiveare directors who also serve as Audit & Supervisory Committee
Members, of whom three are external directors. The Board of
Directors decides important corporate matters, such as basic management policies, and supervises the execution of duties by directors and business operations by executive officers.

Committee, gather information on the business execution andexpress their opinions so that an effective system for audits andsupervision.
Main items on the agenda at the meetings of the Audit &Supervisory Committee include drawing up audit plans, preparing
audit reports, evaluating on the reappointment of the Accounting
Auditor, and giving consent to compensation for the Accounting
Auditor.
The full-time Audit & Supervisory Committee Members attend
important meetings of the Company and request for reports fromthe business execution departments as necessary to gather information on the Company’s business execution conditions.

Corporate Governance System
General Meeting of Shareholders
Appointment / dismissal

NomuraReal Estate Holdings
Advisory Committee
Relating toNominations andCompensation

Appointment / dismissal

Board of Directors 7 directors (excluding Audit &Supervisory Committee Members)

Audit & Supervisory Committee

Appointment / dismissal

Audit & Supervisory Committee Dept.

Representative Director

Accounting auditor(auditing firm)

Audit

Management Committee
Risk Management Committee

Various departments

Group Internal Audit Dept.

Guidance and support

Monitoring

Operating companies

Composition of the Board of Directors and the Two Committees
Board of Directors
Non-executive Directors (8)Chairman

Audit & Supervisory Committee

Director

External Director
Chairmanhttps://www.nomura-re-hd.co.jp/english/company/pdf/cgpolicy.pdf

Audit & Supervisory Committee
The majority of Audit & Supervisory Committee Members comprises
independent external directors; and at least one of the members,
who also serves as a director, possesses appropriate knowledge offinance and accounting. The Audit & Supervisory Committee performs audits utilizing the Company’s internal control system andreceives periodic reports on internal audits and the results from theInternal Audit Department. The Audit & Supervisory Committee also
has the authority to ask directors, executive officers, and business
units of the Company and the Group to report such matters whennecessary.
Audit & Supervisory Committee Members can attend theCompany’s important meetings, including those of the Management

Appointment

Audit / supervision

5 directors (Audit & Supervisory Committee Members)

Please refer to the Board of Directors Diversity Matrix on page 75 for the fields inwhich directors are expected to play roles.

Roles of Independent External Directors
The primary roles of independent external directors are to use their own
knowledge to provide appropriate advice from the perspective of thesustainable growth of the Company and enhancing corporate value, to
fulfill a supervisory role over management through important decisionmaking by the Board of Directors, to monitor for conflicts of interest
between the Company and executive management or primary shareholders, and to state the views of shareholders and other stakeholders
appropriately to the Board of Directors using a stance independentof the executive management team. Nomura Real Estate Holdings
has established its own set of criteria for determining the impartialityof independent external directors, in addition to the requirements of
independent officers established by the Tokyo Stock Exchange.
Please refer to Article 14 of the Basic Corporate Governance
Policy for details on the Company’s criteria for determining theimpartiality of independent external directors.

Advisory Committee Relating to Nominations andCompensation
In February 2016, Nomura Real Estate Holdings set up the Advisory
Committee Relating to Nominations and Compensation, comprising
mainly independent external directors, as an advisory body to theBoard of Directors to strengthen the objectivity and impartiality
functions of the Board of Directors in relation to director nominationand compensation. The Advisory Committee Relating toNominations and Compensation meets as necessary to discussmatters relating to the nomination of and compensation for directors
and executive officers and reports the outcome of discussions to theBoard of Directors.

Yoshikawa

OriharaTakayama

Shinohara

HigashiExecutive Directors (4)President andRepresentative
Director

KutsukakeExecutive Vice President andRepresentative Director

Miyajima

Seki

Director andExecutive Officer

Haga

Ono

Mogi

Miyakawa

OriharaTakayama

Ono

Mogi

Miyakawa

Advisory Committee Relating toNominations and Compensation
Chairman

Yoshikawa

HigashiOnoInternal(Non-executive
directors)

Mogi

External(Independent
directors)

Internal(Executive
directors)

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Assessment of the Effectiveness of the Board of
Directors
Initiatives to improve the effectiveness of the Board of Directors
With the goal of enhancing sustainable corporate value, theCompany is aiming to further improve the effectiveness of the Boardof Directors. To improve Board effectiveness, we (1) carry out anassessment of the effectiveness of the Board of Directors and (2)determine and implement appropriate response policies of theBoard of Directors based on the results of the assessment.

(1) C arrying out an assessment of the effectiveness of the Board of
Directors(i)	Confirm the implementation status of policies and determine
the assessment criteria(ii)	Issue questionnaires to and conduct interviews of eachdirector(iii)	Discuss the results of the questionnaires and interviews at
Board of Directors’ meetings and evaluate the effectiveness(2) D etermining and implementing policies of the Board of Directors
based on the results of the assessment(i)	Determine policies of the Board of Directors based on the
results of the effectiveness assessment(ii)	Execute and operate the Board of Directors, etc. based on thedetermined responses

Assessment of the Effectiveness of the Board of Directors
Assessment of the Effectiveness
Period for Assessments

FY2017/3

FY2018/3

FY2019/3

Outline of Assessment

Results of Assessment

Conduct questionnaires for
all directors including Audit &Supervisory Committee
members. Analyze andassess questionnaire results
based on discussions at a
meeting of the Board of
Directors(Members)
The scale of the Board of Directors and the ratio of independent external directors are generally appropriate.
(Discussions)
Discussions are free and lively, among internal and external directors and the knowledge and experience of each director are being
leveraged.
(Operation)
Improvements to the operation of the Board of Directors implemented in FY2016/3 are generally evaluated as having contributed to
improving the effectiveness of the Board of Directors. From April 2017, the Company has been taking measures to further improvethe effectiveness of the Board of Directors, such as ensuring the distribution of materials prior to meetings and further clarifying thediscussion points in explanations and materials.
(Matters for discussion)
During FY2017/3, the Company narrowed down the items for discussion by the Board of Directors in order to enhance discussion
on the direction and policies of management over the medium to long term. From April 2017, the Company has been making
operational improvements to enhance strategic discussion, such as further narrowing down of matters for discussion by the Boardof Directors and providing opportunities for deliberation outside of regular Board of Directors meetings.
Going forward, the Company will regularly grasp the status of the improvement by analyzing and evaluating the situation eachyear and will further improve the effectiveness of the Board of Directors.

Conduct questionnaires andinterviews for all directors
including Audit & Supervisory
Committee members, utilizing
a third-party evaluation
organization, and thenanalyze and assess interview
and questionnaire results
based on discussions at a
meeting of the Board of
Directors(Members)
The scale of the Board of Directors and the ratio of independent external directors are generally appropriate.
(Discussions)
Discussions are free and lively, among internal and external directors and the knowledge and experience of each director are being
leveraged.
(Operation)
Improvements to the operation, such as ensuring distribution of materials prior to meetings and further clarifying the discussion
points in explanations and materials, implemented in FY2017/3 are generally evaluated as having contributed to improving theeffectiveness of the Board of Directors.
By continuing to strive for thorough improvements to the operation, the Company will take measures to further improve theeffectiveness of the Board of Directors.
(Matters for discussion)
During FY2018/3, the Company carried out operational improvements, such as further narrowing down of matters for discussion
by the Board of Directors and providing opportunities for deliberation outside of regular Board of Directors meetings. As for
FY2019/3, the Company will continue to make improvements to enhance policies of management over the medium to long termand strategic discussion, mainly through further narrowing down of matters for discussion.
Going forward, the Company will regularly grasp the status of the improvement by assessing the effectiveness of the Board of
Directors each year and will further improve the effectiveness of the Board of Directors.

Conduct questionnaires andinterviews utilizing a thirdparty evaluation organization
for all directors including
Audit & Supervisory
Committee members, andthen analyze and assessinterview and questionnaire
results based on discussions
at a meeting of the Board of
Directors

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information(Members)
The scale of the Board of Directors and the ratio of independent external directors are generally appropriate.
(Discussions)
Discussions are free and lively, among internal and external directors and the knowledge and experience of each director are being
leveraged.
(Operation)
Continuous improvements to the operation, such as ensuring distribution of materials prior to meetings and further clarifying thediscussion points in explanations and materials, are generally evaluated as having contributed to improving the effectiveness of theBoard of Directors.
By continuing to strive for thorough improvements to the operation, the Company will take measures to further improve theeffectiveness of the Board of Directors.
(Matters for discussion)
Discussions about the new Mid- to Long-term Business Plan were enhanced by continuous improvements to the operation, suchas narrowing down of matters for discussion by the Board of Directors and providing opportunities for deliberation outside ofregular Board of Directors meetings. For FY2020/3, the Company aims to improve strategic discussions taking into account the
new Mid- to Long-term Business Plan.
Going forward, the Company will regularly grasp the status of the improvement by assessing the effectiveness of the Board of
Directors each year and will further improve the effectiveness of the Board of Directors.

Director Compensation
At the Ordinary General Meeting of Shareholders held on June 26,
2018, based on the policy to further clarify the link among directors’compensation, performance, and shareholder value, in place ofstock option system, the Company determined to introduce a
performance-based stock incentive plan, etc. linked to mid-to longterm performance. The introduction of the Plan has gone throughdeliberation at the Advisory Committee Relating to Nominations andCompensation, for which the majority of committee members are
independent external directors.
The Company’s compensation of directors consists of fixed compensation, comprising base compensation, and variable compensation, comprising bonus and share-based compensation. Policy onratios between fixed and variable compensation and details of compensation are as follows.
Policy on ratios between fixed and variable compensation
Compensation of directors concurrently serving as Executive
Officers consists of base compensation, bonus and share-based
compensation so that it works as a clear incentive to improve performance not only for the short term, but also for the medium-tolong term. The policy for the ratios of the compensation items is as
described in “Composition of Compensation” below.
Compensation of the Director and Chairman of the Board of
Directors who is a director other than executive director, consists ofbase compensation and the RS portion (mentioned below) of sharebased compensation, to align interests with the Company’s shareholders, due to his position of overseeing the business execution
from an objective standpoint and also of shouldering a duty toenhance corporate value over the long term.
Compensation of External directors and directors who are Audit &Supervisory Committee Members consists only of base compensation due to their position of overseeing the business execution froman objective standpoint.
Details of compensation
Base Compensation
The amount of base compensation is determined according to therole and position of the director.
Bonuses
The amount of bonus is determined according to the Company’sbusiness performance, such as consolidated operating profit, andevaluation of individuals. The individual evaluation is used to evaluate
the progress of initiatives for single-year and the medium-to-long
term, for which achievements are difficult to measure based only on
financial results.
Share-based compensation
The Plan was introduced in FY2019/3 to replace the conventional
stock option (SO) plan. The compensation under the plan is comprised of a Performance Share (PS) portion in which the vesting, etc.
of the Company shares, etc. is conducted three years after the startof each business year, and a Restricted Stock (RS) portion in which
the vesting, etc. of the Company shares, etc. is conducted in principle when a director or an officer of the Company Group resigns.
The Plan adopts the system of executive compensation BIP (Board
Incentive Plan) trust (the Trust). The number of shares to be vested,
etc. is set at one Company share per one point, according to thenumber of points calculated based on the below formula.
By linking directors’ compensation to the Company’s share price,
the Plan is expected to have an effect that it will create an incentive
to enhance corporate value in the medium-to-long term and aligninterests with the Company’s shareholders.
For FY2019/3, the amount of SO was recorded as compensationof directors for FY2018/3.
Calculation formula of points
PS Portion
The number of points (the “Number of PS Points”) to be granted totarget directors, etc. for each business year during the covered
period is calculated by dividing the amount of pre-determined basecompensation with respect to each executive position by the shareprice as of the acquisition of the Company’s shares by the Trust. The
number of achievement-linked points shall be calculated by multiplying the Number of PS Points granted for each business year by theachievement-linked coefficient determined based on the level of
performance three years after the beginning of the applicable business year. As the achievement-linked coefficient may vary in a range
of 0–200% depending on the level of achievement of target ranges
set based on the “business profit” from the viewpoint of profit
growth, and return on equity (ROE) from the viewpoint of maintaining
the capital efficiency, from the financial performance targets listed in
the Mid- to Long-term Business Plan. This portion enhances theconsistency with the features of the real estate business, whichspans the medium-to-long term, and provides a clearer incentive
toward better performance for the medium-to-the long term.
The ranges for FY2021/3, the third year from the start of the planin FY2019/3, has been determined by the Board of Directors after
deliberation by the Advisory Committee Relating to Nominations andCompensation, which consists of a majority of independent external
directors, based on factors such as the medium-to-long term planat the beginning of FY2019/3.
RS Portion
The number of points (the “Number of RS Points”) to be granted totarget directors, etc. for each business year during the covered
period is calculated by dividing the amount of pre-determined basecompensation with respect to each executive position by the shareprice as of the acquisition of the Company’s shares by the Trust. By
delaying the vesting of stock until retirement of each Director, etc.
from the Company Group, this portion creates incentives to contribute to the Company Group and enhance corporate value over thelong term.

87

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Composition of Compensation
Fixed Compensation

External directors/Audit & Supervisory
Committee Members

Basic compensation, etc.

Fixed Compensation
Internal directors (executive officers)

Variable Compensation

Basic compensation, etc.
50%

Bonus
25%

Share-based compensation(PS/RS) 25%

Note: The ratios above indicate a basic model when the Company pays 100% of its standard variable
Note: Compensation for the chairman of the Company and chairman of the Board of Directors (director other than executive officers) comprises base compensation and stock compensation(restricted stock portion).

Breakdown of Compensation of Directors
Fixed compensation

Variable compensation
Cash compensation

Cash compensation

Basic compensation,
etc.

Share-based compensation

Bonus

PS

RS

•A
 chievement-linked evaluation after
three years• Evaluation indicator: business profit and ROE
Evaluation/Criteria

Timing of cash payment / share vesting

Each executive
position• Consolidated operating profit, etc.
• The progress of initiatives, etc. for single-year
and the medium-to-long termMonthly

Annually

Range for FY2021/3•A chievement -linked coefficient:
between 0% and 200%•B
 usiness profit:
between ¥75.4 billion and ¥105.6 billion• ROE: between 6.5% and 12.5%
Three years from the applicable fiscal year

Each executive
position

When a director
resigns

Total Compensation, etc., by Type of Remuneration (FY2019/3)
Total compensation,etc. (millions of yen)

Director category

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

Bonus

Share-based
compensation

Number of directors
applicable

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

528

291

115

122

6

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

102

102

—

—

2

External directors and Audit & Supervisory Board Members

69

69

—

—

5

Total

700

462

115

122

13

The amount of compensation for each Director excluding Director
who is an Audit & Supervisory Committee Member is determined at
the Board of Directors following discussions at the Advisory
Committee Relating to Nominations and Compensation, for which
the majority of committee members are Independent External directors, and the amount of compensation for each Director who is an
Audit & Supervisory Committee Member is determined by consultation between Audit & Supervisory Committee Members, within the
maximum amount resolved at the aforementioned Ordinary General
Meetings of Shareholders.
The Board of Directors determines the establishment, revision andabolishment relating to the compensation system associated withdirectors, maximum compensation amounts, individual compensation amounts, bonuses based on performance evaluations andimportant provisions on compensation for directors after it requests
for advice about its proposals from the Advisory Committee Relating
to Nominations and Compensation, which discusses the proposals,
and reports on its proposals to directors. In reviewing the appropriateness of the compensation level and the content of the sharebased compensation system that has been introduced at present,
the Company make a determination on the basis of factors such as
the size of the Company, after obtaining advice from an external
compensation consultant.
The activities of the Board of Directors and the Advisory
Committee Relating to Nominations and Compensation during
the decision-making process of compensation amounts, etc. in
FY2019/3 are as follows.
• About the establishment of the total and individual amountsof compensation for directors• About the introduction of the performance-based stockcompensation plan and establishment of provisions about
stock vesting• About compensation for directors in FY2020/3

Note: The payment amount in “Share-based compensation” is the amount recorded as an expense for FY2019/3 (including compensation in stock options recorded as an expense for
FY2019/3 (28 million yen)).

Total amount of compensation, etc. of those whose total amount of compensation, etc. was 100 million yen or more for
FY2019/3.
Name

Director category

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

Share-based
compensation

Total compensation,etc. (millions of yen)

Basic compensation, etc.

Bonus

Eiji Kutsukake

Director

61

34

27

123

Seiichi Miyajima

Director

54

29

23

107

Note: The payment amount in “Share-based compensation” is the amount recorded as an expense for FY2019/3.

Decision-making process of compensation for officers, etc.
The maximum amount of compensation for directors excluding
directors who are Audit & Supervisory Committee Members is limited to up to ¥550 million per year in a separate framework from theperformance-based stock incentive plan, etc. according to a resolution at the Ordinary General Meeting of Shareholders held on June
26, 2018. The number of directors excluding directors who are Audit& Supervisory Committee Members at the time of the resolution waseight, including two external directors.
Furthermore, as for the share-based compensation plan, etc., themaximum amount of money to be contributed to the trust by theCompany during the covered period (three fiscal years) is ¥730

million, and the maximum number of the Company shares to bevested, etc. to directors of the Company is 423,000 shares according to a resolution at the Ordinary General Meeting of Shareholders
held on June 26, 2018. The number of directors who were subject
to the Plan at the time of the resolution was six excluding two external directors.
The maximum amount of compensation for Directors who are
Audit & Supervisory Committee Members is limited to up to ¥150
million per year according to a resolution at the Ordinary General
Meeting of Shareholders held on June 26, 2015. The number of
directors who were Audit & Supervisory Committee Members at thetime of the resolution was five including three external directors.

Status of Investor Relations Activities
We strive to actively engage retail investors through investor relations fairs and Company information sessions conducted by theGroup CEO and via the Internet. For analysts and institutional investors, at earnings briefings following our announcement of semiannual and annual results, the Group CEO sits down with them toexplain about the Company’s performance and management strategy. Videos of this explanation are streamed through our corporatewebsite. Additionally, we strive to foster greater understanding in the
Company through conference calls when quarterly earnings results
are announced as well as through property 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 Group CEO, Group COO orGroup 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 performance andmanagement strategy.
We have been working to improve the disclosure section of our
website in order to justly and fairly provide information to our investors. Consequently, the Company earned a silver award from Gomez
IR Site Ranking for FY2019/3. Our comprehensive rank was 41 (35in the previous fiscal year), putting us fourth in the industry (fourth in
the previous fiscal year).

Main IR Activities during FY2019/3
IR activities for institutional investors
Earnings briefings

2

Conference calls on the earnings announcement days

4

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

364

Overseas IR (Europe, U.S., Asia) (including overseas conferences)6

Conference organized by securities companies (Japan)

6

Property tours

6

SR meetings

13

Shareholder Engagement
Nomura Real Estate Holdings conducts proactive and constructive
engagement with shareholders based on its established systems
and policy on initiatives to promote greater engagement. The director in charge of investor relations takes the lead in engaging withshareholders, while the department in charge of investor relations
supports these efforts. The department in charge of investor relations meets with internal departments and shares information on adaily basis to gather information and promote engagement withshareholders. The director in charge of investor relations reports theviews and concerns of shareholders found during engagement to
the executive management team, and regularly reports to the Boardof Directors, which discusses this information. We have established
Regulations Concerning the Prevention of Insider Trading in order toensure the fairness of information disclosures and prevent leakagesof information that affect our stock price. We manage insider information appropriately according to these regulations, while a silent
period has also been established.

Number oftimes held

IR activities for retail investors

Number oftimes held

Company information sessions by Group CEO

1

IR fairs

1

Company information session via the Internet

1

Please Visit Our Investor Relations Website:
Japanese:
www.nomura-re-hd.co.jp/ir/
English:www.nomura-re-hd.co.jp/english/ir/

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 3
Corporate and Financial Information

The Nomura Real EstateGroup’s Financial andNon-financial PerformanceContents
92 Financial and Non-financial Data
94 10-Year Summary
96 Consolidated Balance Sheets98	Consolidated Statementsof Income /Consolidated Statementsof Comprehensive Income99	Consolidated Statementsof Cash Flows
100 Business Unit Information
102 Facilities Situation
106	Environmental and
Human Capital Data
108 Group Company Profiles
110 Corporate Information

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Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

93

Financial and Non-financial Data

Main Financial Indicators

Annual Cash Dividends / Dividend Payout Ratio / Total Return Ratio
Yen%
97.3
80

Operating Revenue

87.0

65.00

70.00

75.00

100

57.50

Millions of yen
750,000
600,000

434,226

517,740

480,983

532,016

567,159

569,545569,680

623,76260

668,51040

450,807450,000

75

45.00
25.00

25.00

25.00

30.00

27.1

29.5

FY12/3

FY13/3

20

50.6

35.00

41.4

24.9

22.4

23.3

26.5

28.9

30.5

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

877.8

914.0

50

25

300,000

FY10/3150,000

Annual cash dividends

FY10/3

FY11/3

FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY11/3

Dividend payout ratio (right scale)

Total return ratio (right scale)

FY19/3

Interest-bearing Debt / Interest Paid
Billions of yen
1,000Operating Profit / ROA*

1

Millions of yen%

100,000

8

75,00058,30850,00039,27442,0832.8

2.9

49,93980,91274,307

71,894

5.6

5.5

5.8

4.5

77,271

76,660

4.7

750

4.7

3.7

4

14.9

Operating profit

FY11/3

FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/347,18250,00047,00546,02945,87325,00017,591

Profit attributable to owners of parent%

19,3575.7

5.9

FY12/3

FY13/3

10.3

11.2

10.1

9.4

7.8

FY14/3

FY15/3

FY16/3

FY17/315

60

FY18/3

8.9

10

40

5

20

450

21.4

1,474.3

1,402.6

22.6

20.7

1,369.9

1,313.8

1,369.2

24.5

27.1

28.8

1,485.4
29.9

1,593.0
30.2

1,673.0

30.0

1,759.4

29.9

%

8.7

10

7.3

13

14

15

16

17

18

19

Interest paid (right scale)

0.069

34

0.067

0.058

35

31

0.057
31

69

74

77

77

0.049

0.047

kl / m2 / year
0.100

0.075

0.053
0.044

0.047

0.045

0.050

29

0.025

FY11/3

FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

140

143

Energy use intensity (right scale)

304.5

317.0

336.2

355.6

394.0

444.8

10

11

12

13

14

15

16

481.3

501.4

40

30

120

18

Shareholders’ equity ratio (right scale)*1 ROA = (Operating profit + Non-operating profit) / Assets (average over the fiscal year)*2 ROE = Profit attributable to owners of parent / Shareholders’ equity (average over the fiscal year)

t-CO2 / m2 / year

131

80

130

133

53

0.102
52

0.088

0.086

0.081

47

47

44

0.089

0.089

0.081

0.088

0.089

40

CO2 emissions

0.100

0.050

FY10/3

19

0.200

0.150

0.107

526.7
10

17

1,000 t-CO2 / year
160

20

301.4

Shareholders’ equity

7.5

CO2 Emissions / Intensity*4

As of March 31
Total assets

1265

FY10/3

FY19/3
Energy use

1,350

900

11

1,000 kl / year20

ROE (right scale)Billions of yen

1,405.4

7.8

As of March 31

80

Total Assets / Shareholders’ Equity / Shareholders’ Equity Ratio
1,800

8.8

5

10

26,8441.8
FY11/312.5

250

38,44137,5001.7
FY10/315616.7

Oil Converted Energy Use / Intensity*3

Millions of yen

5,471

721.9
617.5

Main Non-financial Data

ROA (right scale)

4,660

669.2

20

FY19/3

Profit Attributable to Owners of Parent / ROE*2

12,50014.3

10.0

Interest-bearing debt

FY10/3

810.1

758.5

500

2

25,000

816.9

13.5

79,162
6

5.1

759.6

Billions of yen

FY11/3

FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3Emissions intensity (right scale)*3	Up until FY2014/3, data was calculated for the seven buildings (buildings with office space as primary use) in which the Nomura Real Estate Group retains an interest of more than 50,000 m2
and which are subject to the Tokyo Metropolitan Ordinance on Environmental Preservation. Data for FY2015/3 was calculated for 143 facilities excluding condominium sales sites, etc. thatare subject to notification under the Energy Conservation Act. Under these same conditions, data for FY2016/3 was calculated for 142 facilities, data for FY2017/3 was calculated for
181 facilities, data for FY2018/3 was calculated for 184 facilities, and data for FY2019/3 was calculated for 182 facilities.
*4	CO2 emissions are calculated using the emissions coefficient designated in the Tokyo Metropolitan Ordinance on Environmental Preservation.

94

Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

10-Year Summary(Millions of yen)
FY10/3

FY11/3

FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3 (forecast)

Operating revenue

434,226

480,983

450,807517,740

532,016

567,159

569,545569,680

623,762

668,510739,000

Operating gross profit

105,576

107,222

114,910

134,571

159,335

162,051

177,973

177,241

182,053

188,712—

Operating profit

39,27442,08349,93958,30874,307

71,89480,912

77,271

76,66079,16279,500Ordinary profit

23,967

26,14934,17345,80664,05863,681

72,67968,952

68,03369,32370,000

Profit attributable to owners of parent

4,660

5,471

17,591

19,357

26,84438,44147,18247,00546,02945,87346,000Cash flows from operating activities

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

13,258(31,889)

21,49889,964—

Cash flows from investing activities(24,571)(33,730)

7,809(2,588)(20,191)(32,476)(59,714)(54,558)(51,637)(46,699)—

Cash flows from financing activities

13,098(7,485)(63,296)(94,666)(57,858)(8,983)53,63776,57543,787

13,723—

Capital investment*1

26,79637,57014,09818,963

21,93838,87150,36761,30071,66520,824—

Depreciation*2

10,758

12,835

13,534

13,513

14,333

15,25816,026

16,877

18,824

19,201—Per Share Data (Yen):
Profit attributable to owners of parent

25.69

28.74

92.38

101.61140.70201.28246.42245.10240.89245.99251.13

Annual dividends

25.00

25.00

25.00

30.00

35.00

45.00

57.50

65.00

70.00

75.00

80.00

Total assets

1,405,424

1,474,331

1,402,624

1,369,949

1,313,887

1,369,226

1,485,449

1,593,093

1,673,099

1,759,455—

Current assets

709,618

636,925585,332

535,103496,978

549,300

608,779

684,306

717,635

849,528—  Inventories

458,921433,386

396,857

369,667

349,167

429,764

496,910570,888592,996

636,925—  Equity investments

94,88960,94841,89529,578

7,128

6,316

819

2,567

9,612

18,066—

Non-current assets

695,805

837,406

817,292

834,845816,909819,926

876,670

908,786

955,464

909,926—

Total net assets

349,437

357,365

376,486

398,276

418,697

461,031456,408

493,813514,982

541,562—Interest-bearing debt

759,636

816,910758,562

669,268

617,583

616,700

721,900

810,100

877,800

914,000

—

ROA*3

2.8

2.9

3.7

4.5

5.6

5.5

5.8

5.1

4.7

4.7

—

ROE*

1.7

1.8

5.7

5.9

7.8

10.3

11.2

10.1

9.4

8.9

—

Operating margin

9.0

8.7

11.1

11.3

14.0

12.7

14.2

13.6

12.3

11.8

10.8

Dividend payout ratio

97.3

87.0

27.1

29.5

24.9

22.4

23.3

26.5

28.9

30.5

32.1

Shareholders’ equity ratio

21.4

20.7

22.6

24.5

27.1

28.8

29.9

30.2

30.0

29.9

—

Number of employees (consolidated)

5,195

5,300

5,399

5,581

5,747

6,029

6,233

6,467

6,636

6,980

—

Composition of Operating Revenue*5, 6

FY19/3¥668.5 billion

Millions of yen

 esidential Development
R
Business Unit
Commercial Real EstateBusiness Unit
Investment Management
Business Unit
Property Brokerage & CRE
Business Unit
Property & Facility
Management Business Unit

17/3

18/3

19/3

329,787355,445362,761

115,009

134,941

167,628

9,662

9,378

9,641

34,82035,70337,29895,764

104,581

107,802

106

107

94

Other Business Unit

Balance Sheet Data (As of March 31):

Operating Profit Factor Analysis*5, 6
Billions of yen
+3.6

+0.9

+0.0
(0.2)

76.6

(0.0)

79.1
(0.4)

(1.3)

Management Benchmarks (%):

4

*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 represents the amount shown for “Depreciation” in the consolidated statements of cash flows.
*3	ROE = Profit attributable to owners of parent / Shareholders’ equity (average over the fiscal year)*4	ROA = (Operating profit + Non-operating profit) / Assets (average over the fiscal year)*5	From FY2019/3, Nomura Real Estate Reform Co., Ltd. has been reclassified from the Residential Development Business Unit to the Property & Facility Management Business Unit.
Due to this change, the full-year results for FY2018/3 reflect the change in classification.
*6	From FY2020/3, the Leasing Business Unit has been renamed the Commercial Real Estate Business Unit.

18/3

19/3

Main Factors
 esidential Development
R
Business Unit
Commercial Real EstateBusiness Unit
Investment Management
Business Unit
Property Brokerage & CRE
Business Unit
Property & Facility
Management Business Unit
Other Business Unit

Decrease in fees from joint venture
projects
Increase in property sales
Increase in asset management fees due
to expansion of AUM
Increase in business expenses from new
branch openings
Increase in number of building undermanagement

Adjustments

95

96

Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Consolidated Balance Sheets

Millions of yen

Assets

FY18/3

Millions of yen

Liabilities

FY19/3Current assets

FY18/3

FY19/3Current liabilities   Cash and deposits

52,347

81,351   Notes and accounts payable—trade

41,696   Notes and accounts receivable–trade17,30826,601  Short-term borrowings

102,300

79,500  Securities

9,000

37,000   Income taxes payable

14,993

13,31853,927   Real estate for sale

102,884

161,224  Deposits received

18,807

26,915   Real estate for sale in process

261,278

290,398   Provision for bonuses

7,679

8,176

   Land held for development

228,326

184,650   Provision for bonuses for directors (and other officers)

590

495

  Equity investments

9,612

18,066   Provision for loss on business liquidation

36

26  Other

36,91750,274  Other

48,07349,513   Total current liabilities

234,176

231,873  Bonds payable

140,000

140,000  Long-term borrowings

635,500

694,500   Leasehold and guarantee deposits received

60,241

59,249   Deferred tax liabilities

59,82861,563   Deferred tax liabilities for land revaluation

3,900

3,900

   Provision for loss on subleasing business

102

15

18,375

18,175   Allowance for doubtful accounts   Total current assets

(39)

(39)

717,635

849,528
Non-current liabilities   Retirement benefit liability   Provision for share-based remuneration  Other   Total non-current liabilities
Non-current assets

Total liabilities

—

719

5,991

7,895

923,940

986,019

1,158,116

1,217,893   Property, plant and equipment   Buildings and structures

403,011

394,979    Accumulated depreciation(163,985)(171,594)    Buildings and structures, net

239,026

223,385  Share capital

117,072

117,293   Land592,550544,226  Capital surplus

110,316

110,537   Other

26,57629,885  Retained earnings

275,299

307,570    Accumulated depreciation(9,778)(10,464)  Treasury shares(10,004)(18,787)    Other, net

16,797

19,421   Total shareholders’ equity

492,683

516,613    Total property, plant and equipment

848,374

787,033  Intangible assets

12,364

18,104

4,516

6,718

   Investments and other assets

Net assets
Shareholders’ equity

Accumulated other comprehensive income   Valuation difference on available-for-sale securities   Deferred gains or losses on hedges

262

(259)

7,860

7,860

   Investment securities

42,36250,522   Revaluation reserve for land    Leasehold and guarantee deposits

23,131

25,448   Foreign currency translation adjustment

(225)

(677)

   Deferred tax assets

20,843

20,863   Remeasurements of defined benefit plans(3,605)(3,507)   Other

8,387

7,956

   Total accumulated other comprehensive income

8,807

10,134(0)(0)

Share acquisition rights

2,424

2,346

94,725

104,789

Non-controlling interests

11,067

12,467    Allowance for doubtful accounts    Total investments and other assets   Total non-current assets
Total assets

955,464

909,926

1,673,099

1,759,455

Total net assets
Total liabilities and net assets

514,982

541,562

1,673,099

1,759,455

97

98Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Consolidated Statements of Income /Consolidated Statements of Comprehensive Income

Consolidated Statements of Cash Flows

Millions of yen(Consolidated Statements of Income)

FY18/3

FY19/3Operating revenue

623,762

668,510

Operating cost

441,708

479,797

Operating gross profit

182,053

188,712Selling, general and administrative expenses

105,393

109,549

Operating profit

76,66079,162

Interest income

45

44Dividend income

75

69

Share of profit of entities accounted for using equity method

25

167

Gain on donation of non-current assets—

54

Interest on refund

162—

Gain on transfer of right to request purchase of shares

112

—

Other

351

409

773

746

Non-operating income

Total non-operating income
Non-operating expenses
Interest expenses

7,334

8,753

Other

2,065

1,831

Total non-operating expenses

9,400

10,584

68,03369,323Gain on sales of non-current assets

3,311

—

Gain on sales of investment securities

455

—

3,766

—

3,614

1,989

462

835

Ordinary profit
Extraordinary income

Total extraordinary income
Extraordinary losses
Impairment loss
Loss on building reconstruction
Loss on transfer of non-current assets

—

1,091

Total extraordinary losses

4,077

3,916

Profit before income taxes

67,72265,407

Income taxes–current

23,811

23,263

Income taxes–deferred(2,755)(4,385)

Total income taxes

21,05518,877

Profit46,666

46,529Profit attributable to non-controlling interests
Profit attributable to owners of parent

636

655

46,02945,873
Millions of yen(Consolidated Statements of Comprehensive Income)
ProfitFY18/3

FY19/3

46,666

46,529(3,430)

2,201

142

(521)

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land

(0)

(0)

Foreign currency translation adjustment

(33)

(216)

Remeasurements of defined benefit plans, net of tax

523

98

Share of other comprehensive income of entities accounted for using equity method

(254)

(296)

Total other comprehensive income
Comprehensive income(3,052)

1,265

43,61347,79542,97647,201

636

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

Millions of yen
FY18/3

FY19/3

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Loss (gain) on sales of non-current assets
Loss (gain) on sales of investment securities
Share of loss (profit) 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 retirement benefit liability
Interest and dividend 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 dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

67,722
18,824
3,614(3,311)
(455)
(25)
1
(11)
(155)
(555)
(121)
7,334
(769)
(28,943)(7,044)
6,084(10,652)
4,566
56,10394(9,425)(25,274)
21,49865,407
19,201
1,989
—
—
(167)
0
(9)
(87)
(291)
(114)
8,753
(8,922)32,938(8,454)
11,7818,102(8,105)122,023257(8,181)(24,134)
89,964

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
Proceeds from sales 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 of leasehold and guarantee deposits
Proceeds from refund of leasehold 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(4,439)3,491——(71,665)
19,589(1,148)1,240(3,153)
4,189
258(51,637)(4,971)
143(21,544)520(20,824)
0
(649)
951
(3,859)3,219
314(46,699)

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
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
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
Cash and cash equivalents at end of period(11,500)(149)
80,000(60,800)
69,360(10,000)
391(10,048)(13,435)(31)
43,7870
13,64847,69961,347(8,000)(160)
112,500(68,300)——
122(8,790)(13,602)(44)
13,723(5)
56,983
61,347
118,33099

100Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long TermBusiness Unit Information

Operating Revenue

AssetsMillions of yen

Millions of yen
FY16/3*1

FY17/3

FY18/3*2

FY19/3

FY19/3*4, 5

FY20/3 (forecast)

Residential Development

334,514

329,787355,445362,761

375,373

365,000

Housing sales (Japan)

318,795

308,960

336,819

342,055

342,055—

Rental housing (sales)*4

—

—

—

—

11,740—Rental housing (leasing revenue)*4

—

—

—

—

495

—

Senior*4

—

—

—

—

377

—

15,71920,827

18,626

20,70520,701—
242,000

Other

110,226

115,009

134,941

167,628

171,612

Leasing (offices)

49,594

51,98153,312

53,97553,975—

Leasing (retail facilities)

10,873

11,64912,686

13,817

13,817—

Leasing (other)

5,882

5,954

7,193

7,946

7,974

—

Property for sales (sales)

33,26035,35043,301

77,09065,350—Property for sales (leasing)

3,320

4,054

4,724

5,031

4,533

—

Commercial Real Estate*3

Fitness*5
Other

—

—

—

—

16,647

—

7,295

6,018

13,722

9,766

9,312

—

Investment Management

10,973

9,662

9,378

9,641

9,641

12,000Property Brokerage & CRE

35,37334,82035,70337,29837,29841,000Brokerage fee (retail)16,572

20,03820,791

21,61821,618—Brokerage fee (wholesale)

11,456

10,244

10,845

11,517

11,517—

Other
Property & Facility Management

7,345

4,536

4,065

4,162

4,162

—

91,552

95,764

104,581

107,802

91,37492,000Property & facility management

47,952

48,301

50,386

51,222

51,524—

Construction ordered

24,636

26,85731,60432,08332,371—

Fitness club & elderly care

14,995

15,523

16,064

17,025

—

—

Other

3,967

5,081

6,526

7,469

7,478

—

1,353

106

107

94

94

0

Adjustments (eliminations or corporate)(14,449)(15,470)(16,396)(16,717)(16,885)(13,000)

Total

569,545569,680

623,762

668,510

668,510739,000

Other

Operating Profit

Residential Development
Commercial Real Estate*3
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (eliminations or corporate)
Total

FY18/3*2

FY19/3

FY19/3*4, 5

414,812918,710
36,692
32,04755,695
1,565
25,926
1,485,449

450,698
993,985
35,64922,87356,529929
32,427
1,593,093

448,4121,060,815
34,84017,18162,781921
48,147
1,673,099

415,826
1,110,951
42,46328,22864,984929
96,071
1,759,455

463,277
1,086,064
42,46328,22842,294929
96,197
1,759,455

377,849
118,277
—
—
271
638
(126)
496,910403,232
166,997
—
—
964
13
(319)
570,888

401,030
187,299
—
—
5,091
13
(437)
592,996345,255
285,164
—
—
7,061
11
(567)
636,925

391,508
245,575
—
—
397
11
(567)
636,925

8.0
3.6
19.1
36.2
10.8
—
5.8

6.4
3.4
16.6
33.2
12.4
—
5.1

5.5
3.4
16.8
42.2
11.9
—
4.7

5.4
3.6
15.4
36.0
12.6
—
4.7

5.5
3.5
15.4
36.0
14.2
—
4.7

Millions of yen

Residential Development
Commercial Real Estate*3
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (eliminations or corporate)
Total

Return on Assets (ROA)*7(%)

Residential Development
Commercial Real Estate*3
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Total*8

Key Results

Residential Development

31,90927,787

24,52323,18025,069Commercial Real Estate*3

31,71932,56735,23238,85837,600—Investment Management

7,376

6,016

5,911

5,943

5,943

—

—

Property Brokerage & CRE

9,900

9,124

8,452

8,170

8,170

—

Property & Facility Management

5,693

6,939

7,078

8,067

7,434

—

(152)

(30)

(10)

(43)

(43)

—

Adjustments (eliminations or corporate)(5,535)(5,132)(4,527)(5,013)(5,013)—

Total

80,912

77,271

76,66079,162

79,16279,500Business Profit*6
Millions of yen

Residential Development

FY17/3Inventories

Millions of yen

Other

FY16/3*1

—

—

—

—

25,032

23,500Commercial Real Estate*3

—

—

—

—

38,04338,500Investment Management

—

—

—

—

5,969

7,000

Property Brokerage & CRE

—

—

—

—

8,170

9,000

Property & Facility Management

—

—

—

—

7,464

7,500

Other

—

—

—

—

(43)

0

Adjustments (eliminations or corporate)

—

—

—

—

(5,013)(5,500)

Total

—

—

—

—

79,62380,000FY16/3

Residential Development
Condominium sales (units)
Detached housing sales (units)
Gross margin ratio of housing sales (%)
Completed housing inventories (released for sale) (units)
Completed housing inventories (unreleased) (units)
Commercial Real Estate*3
Vacancy rate (offices, retail facilities) (%)
Members of MEGALOS
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 (units)

FY17/3

FY18/3

FY19/3

5,363
643
21.9
134
215

4,885
682
21.7
252
402

5,258
607
19.1
239
218

5,243
647
19.1
229
47

2.2
144,2630.8
140,7430.7
139,8364.7
145,065

1,074,481

1,260,064

1,285,903

1,669,476

7,710
713,5748,272
745,147

8,561
800,739

8,922
767,324705
163,036702
168,999723
173,705

732
177,582

FY20/3 (forecast)

4,600
500
—
—
—
—
—
—
—
—
—
—
—
—
—
—

*1	From FY2017/3, the classification of Yokohama Business Park Heating & Cooling Supply Co., Ltd. (present: 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 FY2016/3 reflect the change in classification.
*2	From FY2019/3, Nomura Real Estate Reform Co., Ltd. has been reclassified from the Residential Development Business Unit to the Property & Facility Management Business Unit. Due tothis change, the full-year results for FY2018/3 reflect the change in classification.
*3 From FY2020/3, the Leasing Business Unit has been renamed the Commercial Real Estate Business Unit.
*4	From FY2020/3, the rental housing business and the senior business have been reclassified from the Commercial Real Estate Business Unit and the Property & Facility Management
Business Unit to the Residential Development Business Unit. Due to this change, the full-year results for FY2019/3 reflect the changes in classification.
*5	From the FY2020/3, the fitness business has been reclassified from the Property & Facility Management Business Unit to the Commercial Real Estate Business Unit. Due to this change,
the full-year results for FY2019/3 reflect the change in classification.
*6 Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions*7 ROE = Profit attributable to owners of parent / Shareholders’ equity (average over the fiscal year)*8 ROA = (Operating profit + Non-operating profit) / Assets (average over the fiscal year)

101

102

Part 1:
About the Nomura Real Estate Group

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Facilities Situation

1. Facilities Situation

2. Major Facilities and Equipment

In FY2019/3, we invested a total amount of ¥19,776 million, including for the acquisition of NOHGA HOTEL UENO
(Taito-ku, Tokyo).

Major facilities and equipment by business unit for the Nomura Real Estate Group are as follows.
1) Commercial Real Estate Business Unit*

FY18/3

FY19/3

Residential Development

Business Unit (Millions of yen)

645

537

(107)

Commercial Real Estate*

69,151

15,880(53,270)

Investment Management

26

10

(15)

Property Brokerage and CRE

527

488

(38)

2,110

1,692

(418)

Property and Facility Management
Other
Subtotal
Adjustments
Total

Change2

19

1672,464

18,628(53,835)

1,111

1,148

37

73,575

19,776(53,798)

Company Name

* From FY2020/3, the Leasing Business Unit has been renamed the Commercial Real Estate Business Unit.

The following facilities were completed in FY2019/3.
Company Name
NREG TOSHIBABUILDING, etc.

Property Name (Location)
NOHGA HOTEL UENO
(Taito-ku, Tokyo)

Business Unit

Major Use

Commercial
Real Estate

HotelConstruction Size,
Details of Facility, etc.
Steel-framed construction,
10 floors above ground

Area (m2)Completion

Building: 4,868
Land: 966

October 2018

Acquisition Price(Millions of yen)
3,153

The following properties were acquired in FY2019/3.
Company Name
Nomura Real Estate
Development Co., Ltd.

Property Name (Location)
Kyoto Kiyomizu-Gojo Project*(tentative name) (Higashiyama-ku,
Kyoto-shi, Kyoto)

Business Unit

Major Use

Commercial
Real EstateLand slated
for building
construction

Construction Size,
Details of Facility, etc.
—

Area (m2)
Land: 1,382

Acquisition Price(Millions of yen)
3,631

* Land area is multiplied by our share ratio.

The following non-current asset was reclassified as land held for development and others in FY2019/3.
Company Name

Property Name (Location)

Business Unit

Nomura Real Estate
Development, etc.

Nihonkouku Tamachi Building(Minato-ku, Tokyo) and 6 otherbuildings

Commercial
Real Estate

Major Use
OfficeConstruction Size,
Details of Facility, etc.
Steel-framed reinforced concrete
construction, 1 floor below ground,
7 floors above ground

Area (m2)
Building: 17,531
Land: 4,134

Acquisition Price(Millions of yen)
77,033* The property name, business unit, major use, construction size, details of facility, etc., and area (m2) shown are those of the Nihonkouku Tamachi Building.

As a result of the acquisition of shares of Ryubundo Co., Ltd. in FY2019/3, the following facility was classified as a major facility.
Company Name
Ryubundo, Co., Ltd., etc.

Property Name (Location)
HOTEL NIWA TOKYO(Chiyoda-ku, Tokyo)

Business Unit

Major Use

Construction Size,
Details of Facility, etc.

Commercial
Real Estate

Hotel

Steel-framed construction (partially steelframed reinforced concrete construction),
16 floors above ground, 2 other buildings

Area (m )Building: 9,280
Land: 1,710

2

Acquisition Price(Millions of yen)
19,782

As a result of the sale of shares of Toranomon Real Estate Co., Ltd. in FY2019/3, the following facility is no longer classified as a major facility.
Company Name
Toranomon Real EstateCo., Ltd.

Property Name (Location)

Bansui Building (Minato-ku, Tokyo)

Business Unit
Commercial
Real Estate

Major Use

OfficeConstruction Size,
Details of Facility, etc.

Area (m2)Reinforced concrete construction(partially steel-framed reinforced concrete
Building: 3,289
construction), 1 floor below ground, 7 floors Land: 555
above ground

Acquisition Price(Millions of yen)
5,892

Property Name (Location)

Major Use

Construction Size, Details
of Facility, etc.
Steel-framed reinforced concrete­construction (partially steel-framed­reinforced concrete construction),
3 floors below ground, 39 floors
above ground
Steel-framed construction (partiallysteel-framed reinforced concrete­construction), 2 floors below ground, 21
floors above ground, 11 other buildings

Total Floor
Area (m2)Completion ofConstructionor (Date ofacquisition)

Land
Area
(m2)

FacilityLand

158,732

March
1984

33,921

13,464

129,809228

143,502245,200

MainlyFebruary
1990

70,81728,976

14,584960

44,521

Book Value(Millions of yen)
Other

Total

NREG TOSHIBABUILDING
Co., Ltd.

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

OfficeNomuraReal Estate
Development
Co., Ltd.

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

OfficeNREG TOSHIBABUILDING
Co., Ltd.

LAZONA Kawasaki
Toshiba Building(Saiwai-ku, Kawasaki-shi,
Kanagawa)

OfficeSteel-framed construction,
15 floors above ground

98,428

March
2013

9,764

14,07922,245438

36,762

Nihonbashi Muromachi
Nomura Building(Chuo-ku, Tokyo)

OfficeSteel-framed construction (partially reinforced concrete and steel-framed reinforced concrete construction), 5 floors
below ground, 21 floors above ground

44,989September
2010

2,737

13,571

19,227

330

33,130

Yokohama Nomura Building*3(Nishi-ku, Yokohama-shi,
Kanagawa)

OfficeSteel-framed construction,
17 floors above ground,
1 other building

58,755January
2017

6,721

18,831

8,809

503

28,144

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

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

26,748

March
1982

3,184

1,691

22,677

10

24,380Nomura Fudosan
Nihonbashi Honcho Building(Chuo-ku, Tokyo)

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

29,430

April
1961

3,196

1,918

21,116—23,035

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

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

58,512

May
1978

4,639

5,920

16,303279

22,504

Landport Takatsuki(Takatsuki-shi, Osaka)

Logistics
facility

Reinforced concrete construction­(partially steel-framed construction),
5 floors above ground, 1 other building

70,529June
201735,276

9,879

10,247341

20,468

Ryubundo
Co., Ltd., etc.

HOTEL NIWA TOKYO(Chiyoda-ku, Tokyo)

Hotel

1,710

March
2009

9,280

3,229

16,418120

19,768

Midosuji Mirai
Development, LLC

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

Office20,420February
2009

1,939

3,519

15,70721

19,248Morisia Tsudanuma*2(Narashino-shi, Chiba)

Retailfacility

97,699MainlyOctober
1978

19,194

1,781

16,03730

17,849—(December
2017)

24,822—

17,497—

17,497

15,700

April
2010

2,447

3,555

10,65072

14,2789,815

February
1994

749

1,290

12,584

7

13,881

98,254September
2006

72,013

13,142—442

13,585

NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.

NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.

Kameido 6-chome Project(tentative name)*2, 4(Koto-ku, Tokyo)

Land slated
for building
construction

Steel-framed construction (partiallysteel-framed reinforced concrete­construction), 16 floors above ground,2 other buildings
Steel-framed construction (partiallyreinforced concrete construction),
2 floors below ground,
14 floors above ground
Steel-framed reinforced concrete construction (partially reinforced concrete
construction), 3 floors below ground,
12 floors above ground, 1 other building—
Steel-framed construction (partiallysteel-framed reinforced concrete­ onstruction), 2 floors below ground,c
11 floors above ground
Steel-framed construction (partiallysteel-framed reinforced concrete­construction), 5 floors below ground,27 floors above ground
Steel-framed reinforced concrete construction (partially reinforced concreteand steel-framed construction), 1 floor
below ground, 6 floors above ground

Nomura Fudosan
Shibadaimon Building(Minato-ku, Tokyo)

OfficeOtemachi Nomura
Building*2, 3(Chiyoda-ku, Tokyo)

OfficeNREG TOSHIBABUILDING
Co., Ltd.

LAZONA Kawasaki
Plaza*3, 5 (Saiwai-ku,
Kawasaki-shi, Kanagawa)Retailfacility

NREG TOSHIBABUILDING
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.

Toshiba Hamamatsucho
Building(Minato-ku, Tokyo)

OfficeSteel-framed reinforced concrete
construction, 8 floors above ground

13,482

July
1974

2,907

389

10,9562

11,349Dai-ni Edobashi Building*5(Chuo-ku, Tokyo)

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

13,359November
1973

1,376

486

10,553

1

11,041bono Sagamiono
Shopping Center*3(Minami-ku, Sagamihara-shi,
Kanagawa)

Retailfacility

43,059January
2013

5,797

5,458

4,649

315

10,422

Minamigyotoku SC*2
(Ichikawa-shi, Chiba)

Retailfacility

35,612April
2000

16,503

4,873

4,942

10

9,826

Reinforced concrete construction(partially steel-framed construction),
1 floor below ground,
11 floors above ground
Steel-framed construction (partiallyreinforced concrete construction),
2 floors below ground,
2 floors above ground* From FY2020/3, the Leasing Business Unit has been renamed the Commercial Real Estate Business Unit.

103

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Part 1:
About the Nomura Real Estate Group

Company Name

Property Name (Location)

Major Use

NomuraReal Estate
Development
Co., Ltd.

TOKYO TORANOMONGLOBAL SQUARE (tentativename)*6 (Minato-ku, Tokyo)

NREG TOSHIBABUILDING
Co., Ltd.

Fuchu Toshiba Building(Fuchu-shi, Tokyo)

OfficeShinyokohama
Toshiba Building (Kohoku-ku,
Yokohama-shi, Kanagawa)Training
facility

Nomura Fudosan Sendai
Aoba-dori Building(Aoba-ku, Sendai-shi, Miyagi)

OfficeWako Building(Minato-ku, Tokyo)

OfficeNREG Kawasaki Logistics
Center (Kawasaki-ku,
Kawasaki-shi, Kanagawa)Logistics
facility

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

OfficeKanda Nishikicho 1-chome
Project (tentative name)(Chiyoda-ku, Tokyo)

Land slated
for building
construction

NREG TOSHIBABUILDING
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NREG TOSHIBABUILDING
Co., Ltd.
NREG TOSHIBABUILDING
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NREG TOSHIBABUILDING
Co., Ltd.

Land slated
for building
construction

Construction Size, Details
of Facility, etc.

Total Floor
Area (m2)

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Part 2:
Enhancing Corporate Value over the Medium to Long Term

Completion ofConstructionor (Date ofacquisition)

Land
Area
(m2)

Book Value(Millions of yen)
Facility

Land

Other

Total

(October
2018)

2,782

—

9,369

—

9,369

32,299

April
1993

8,290

3,497

5,247

13

8,758

28,822MainlyJune
196915,829

3,067

5,660

30

8,758

Steel-framed construction,
1 floor below ground, 10 floors above
ground12,026

April
2017

1,595

4,012

3,306

89

7,407

Steel-framed reinforced concrete­construction, 1 floor below ground,
8 floors above ground

3,171

April
1971

621

536

6,786

—

7,323

49,046March
2014

27,866

3,634

3,109

400

7,145

43,093

March
1993

8,325

2,417

4,585

99

7,102

—
Steel-framed reinforced concrete
construction (partially reinforced­concrete construction), 1 floor below
ground, 8 floors above ground, 1 otherbuilding
Reinforced concrete construction,
1 floor below ground, 4 floors above
ground, 4 other buildings

Reinforced concrete construction(partially steel-framed construction),
5 floors above ground
Steel-framed construction (partiallysteel-framed reinforced concrete andreinforced concrete construction),
2 floors below ground,
40 floors above ground———(September
2017)

886

—

7,049

—

7,049

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

15,220

October
1965

1,307

959

5,989

4

6,954

NREG TOSHIBABUILDING
Co., Ltd.

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

535

5,768

32

6,336

NomuraReal Estate
Development
Co., Ltd.

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

2,871

3,182

2

6,056

4,431

August
1977

548

709

4,999

0

5,709

26,352January
1992

20,590

4,080

1,516

36

5,633

Toranomon Central Building(Minato-ku, Tokyo)

NREG TOSHIBABUILDING
Co., Ltd.

Creare Toshiba Fuchu(Fuchu-shi, Tokyo)

NREG TOSHIBABUILDING
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.

Residential

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

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

OfficePMO Nihonbashi
Muromachi*3(Chuo-ku, Tokyo)
Nomura Fudosan
Tameike Building(Minato-ku, Tokyo)

March
1991

3,501

2,360

3,073

18

5,452

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

25,103

April
1976

2,256

856

4,413

30

5,301

OfficeSteel-framed construction(partially steel-framed reinforced­concrete construction), 1 floor below
ground, 9 floors above ground

5,333

January
2013

701

974

3,716

12

4,703

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

6,478

July
1959

690

179

4,393

—

4,572

—

(March
2018)

663

—

4,168

—

4,168

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

23,711

July
1993

4,597

1,860

1,918

26

3,805

NREG TOSHIBABUILDING
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.

Toshiba Manseibashi
Building*5(Chiyoda-ku, Tokyo)

5,319

September
1961

681

Kyoto Kiyomizu Gojo Project(tentative name) (Higashiyama-ku,
Kyoto-shi, Kyoto)(September
2018)

1,382

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

OfficeOffice—Steel-framed construction(partially steel-framed reinforced­concrete construction), 2 floors below
ground, 17 floors above ground
Reinforced concrete construction,
1 floor below ground,
9 floors above ground

Land slated
for building
construction—

OfficeSteel-framed construction (partially steelframed reinforced concrete and reinforced concrete construction), 1 floor
below ground, 8 floors above groundConstruction Size, Details
of Facility, etc.

Major Use

NREG TOSHIBABUILDING
Co., Ltd.

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

Hotel

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

NREG TOSHIBABUILDING Co.,
Ltd., etc.

NOHGA HOTEL UENO
(Taito-ku, Tokyo)

Hotel

Steel-framed construction,
10 floors above groundBook Value(Millions of yen)

Total Floor
Area (m2)Completion ofConstructionor (Date ofacquisition)

Land
Area
(m2)

16,179

April
1975

1,731

592

2,817

4

3,413

4,868

October
2018

966

2,109

617

353

3,080

Facility

Land

Other

Total

*1	“Facility” represents building accounts, “land” represents land and leasehold interests in land accounts, and “other” represents structures; machinery; tools, appliances, and fixtures; vehicles
and delivery equipment; and leased assets accounts. “Total” represents the sum of leasehold interests in land accounts and tangible fixed assets excluding construction in progress.
*2 Includes trust beneficiary right.
*3 Refers to calculated area owned including both total floor area and land area.
*4 “Land area” refers to total area at the planning stage including housing sales business.
*5 Land area includes leased land.
*6 Land area refers to the area on which the redevelopment property will exist.

The following major Commercial Real Estate Business Unit facilities for sublet are rented by the Group and do not appear in the previous table.
Property Name (Location)

Rentable Area (m2)

Nomura Real Estate Development Co., Ltd.

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

17,298

Nomura Real Estate Development Co., Ltd.

AKS Building (Chiyoda-ku, Tokyo)

7,5162) Property and Facility Management Business Unit
Company Name

Property Name (Location)

Nomura Real
Estate Life &Sports Co., Ltd.

MEGALOS Souka and45 other facilities (Souka-shi,
Saitama and others)

Completion of
Total Floor Construction or2(Date of
Area (m )acquisition)

Major Use

Construction Size,
Details of Facility, etc.

Fitness
club

Reinforced concrete
construction, 3 floors, 1 other building
and fitness club

15,321

June
2002Book Value(Millions of yen)

Land
Area
(m2)

Facility

15,430

8,304

Land
—

Other

Total

1,055

9,360

Notes: 1 “Facility” represents building accounts, “land” represents land and leasehold interests in land accounts, and “other” represents structures; machinery; tools, appliances, and fixtures;
vehicles and delivery equipment; and leased asset accounts. “Total” represents tangible fixed assets excluding construction in progress.
2	“Total floor area” represents the total owned area of MEGALOS Kashiwa, MEGALOS Chikusa 24, and MEGALOS Saginuma. “Land area” represents the leased land area of thesethree facilities. “Construction size, details of facility, etc.” and “completion of construction or (date of acquisition)” are in reference to MEGALOS Kashiwa.

3. Establishment and Renovation of Facilities

20,648

Soto-Kanda 3-chome Project Land slated
for building(tentative name)construction(Chiyoda-ku, Tokyo)

NREG TOSHIBABUILDING
Co., Ltd.

NREG TOSHIBABUILDING
Co., Ltd.

OfficeSteel-framed construction (partiallyreinforced concrete and steel-framed
reinforced concrete construction),
3 floors below ground,
10 floors above ground
Reinforced concrete construction(partially steel-framed reinforcedc­ oncrete construction),
10 floors above ground
Steel-framed reinforced concrete
construction, 1 floor below ground,
10 floors above ground

Property Name (Location)

Company Name

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

NomuraReal Estate
Development
Co., Ltd.

Company Name

As of FY2019/3, the following facilities were scheduled to be established and renovated.
There is no major ­expansion or removal of facilities.
1) Establishment of major facilities
Property Name
(Location)

Planned Aggregate Investment(Millions of yen)

Construction Size, Details
of Facility, etc.

Commercial
Real Estate

OfficeSteel-framed construction(partially steel-framed reinforced
concrete construction), 4 floors below
ground, 24 floors above ground

35,361

14,643Loans payable
and own funds

FY18/3

FY21/3

Commercial
Real Estate

Hotel

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

11,9293,666

Loans payable
and own funds

FY20/3

FY22/3Kanda Nishikicho 1-chome
Project (tentative name)(Chiyoda-ku, Tokyo)

Commercial
Real Estate

OfficeSteel-framed construction, 1 floor below
ground, 10 floors above ground

11,607

7,079

Loans payable
and own funds

FY20/3

FY22/3Business Unit

Total

Amount Paid

Sources ofFunding

Schedule

Major Use

Company Name

Start

Completion

NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.
NomuraReal Estate
Development
Co., Ltd.

TOKYO TORANOMONGLOBAL SQUARE(tentative name)(Minato-ku, Tokyo)
Kyoto Kiyomizu-Gojo
Project (tentative name)(Higashiyama-ku, Kyotoshi, Kyoto)

Soto-Kanda 3-chome
Project (tentative name)(Chiyoda-ku, Tokyo)

Commercial
Real Estate

Hotel

Steel-framed construction,
10 floors above ground

6,766

4,186

Loans payable
and own funds

FY19/3

FY21/3

NREG TOSHIBABUILDING
Co., Ltd.

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

Commercial
Real Estate

Retailfacility

Steel-framed concrete construction(partially steel-framed reinforced
concrete construction), 3 floors below
ground, 11 floors above ground

4,572

2,567

Loans payable
and own funds

FY18/3

FY20/3

2) Renovation of major facilities

—

221

—

3,551

3,635

0

—

3,773

3,635

Company Name

Property NameBusiness Unit

Nomura Real Estate Development
Co., Ltd.

—

Commercial Real Estate

Planned Aggregate Investment (Millions of yen)
Total

Amount Paid
2,800

—

* Renovation of major facilities and equipment for several existing properties owned by Nomura Real Estate Development Co., Ltd.
6,716

October
1993

1,249

915

2,700

2

3,619

Construction Period

Note

April 2019–March 2020

Renovation of facilities

105

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Environmental and Human Capital Data

Additional information can be found on our website.

Environmental Data
FY18/3

FY19/3

Green Building Certification acquisition rate for newly constructedbuildings (non-residences)

100%

100%

Number of properties that have acquired Biodiversity Certification*1

Four new properties (total: 11)

Two new properties (total: 13)

CO2 emissions (Scope 1, 2) of our properties

140,000 t-CO2

143,000 t-CO2

CO2 emissions (Scope 1, 2) per floor area of our properties

0.088 t-CO2 / m2

0.089 t-CO2 / m2

Energy consumption (Scope 1, 2) per floor area of our properties

0.048 kl/m2

0.047 kl/m2

Waste discharge per floor area of our properties

4.34 kg/m2

4.87 kg/m2

FY18/3

FY19/3

Female employee ratio*

29.75%

30.76%

Female manager ratio*2

5.45%

5.58%

Female junior manager ratio*3

15.08%

16.07%

Employee turnover rate

3.85%

3.99%

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

19.66

14.07

1

0

Checkup and medical examination rate of
Nomura Real Estate Development employees

100%

100%

Absentee rate

0.38%

0.37%

95.1%

97.4%

3.81

4.04

Investor Relations

148

178

Management policy, IR library, stock information, etc.

92.59%

91.46%

4

4

1.90%

1.96%

Training hours per employee

12.53 hours

12.65 hours

Training expense per employee¥59,482¥79,985

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

Human Capital Data

2

Number of work-related injuries resulting in death

Nomura Real Estate Development Employee Satisfaction Survey
results: response rate
Nomura Real Estate Development Employee Satisfaction Survey
results: employee satisfaction level (5-point scale)Childcare leave takers
Rate of reinstatement after childcare leave
Family care leave takers*

4

Rate of employment of persons with disabilities*1 ABINC, ABINC ADVANCE, JHEP, SEGES*2 As of April 1 of each year
*3 Junior managers are candidates of promotion to manager in the near future*4 As of June 1 of each year

Company Information
Corporate overview, corporate officers and organization chart,
corporate governance, Group companies, etc.

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

Business Overview
The Group’s businesses, etc.

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

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

CSR/ESGCSR information, materiality, CSR Promotion foundation, index for ESG investors, etc.

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

Reports Issued by the Group
Integrated Reportwww.nomura-re-hd.co.jp/english/ir/ir_library/annualreport.html
CSR Reporthttps://www.nomura-re-hd.co.jp/english/csr/download/

107

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Group Company Profiles

Nomura Real Estate Holdings, Inc.

Nomura Real Estate
Development Co., Ltd.

Nomura Real Estate AssetManagement Co., Ltd.

Nomura Real Estate
Urban Net Co., Ltd.

Nomura Real Estate
Amenity Service Co., Ltd.

NREG TOSHIBA BUILDINGFACILITIES Co., Ltd.

PRIME X Co., Ltd.

First Living Assistance Co., Ltd.

Established2004

Established1957

Established2003

Established2000

Established1990

Established1972

Established2006

Established
2017

Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office8-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office8-4-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
1-1-1 Shibaura, Minato-ku, Tokyo

Head Office
6-22-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
6-26-12 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Overview of Businesses
Management of and consulting for thebusiness activities of Group companies
through the ownership of shares

Overview of Businesses
Condominium sales, detached housing sales,
corporate real estate brokerage, investment
and development, building leasing, architectural design, asset management, etc.

Overview of Businesses
Investment management, type II financial
instruments, investment advisory and agency,
real estate trading, etc.

Overview of Businesses
Resale housing brokerage, real estate
brokerage for investment and businesspurposes, consignment sales of newly built
condominiums and detached housing,insurance agency, real estate information
website operation

Overview of Businesses
Building and condominium cleaning, sales ofconsumable goods and beverages

Overview of Businesses
General management of buildings andfacilities (equipment management, security,
cleaning, office work management), etc.

Overview of Businesses
Internet advertising agency

Overview of Businesses
Home/living assistance service

Nomura Real Estate
Partners Co., Ltd.

NREG TOSHIBA BUILDING
Co., Ltd.

Nomura Real Estate
Life & Sports Co., Ltd.

Nomura Real Estate Heating andCooling Supply Co., Ltd.

Lothbury Investment
Management Limited

Tokio Property Services Pte Ltd

NOMURA REAL ESTATEASIA PTE. LTD.

NOMURA REAL ESTATEHONG KONG LIMITED

Established1977

Established1972

Established1989

Established1987

Established2010

Established1983

Established2015

Established
2016

Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
1-1-1 Shibaura, Minato-ku, Tokyo

Head Office
1-32-2 Honcho, Nakano-ku, Tokyo

Head Office
155 Bishopsgate, London EC2M 3TQ, UK

Overview of Businesses
Facility management of buildings andcondominiums, architecture and construction,
property management, cleaning, insurance
agency, renovation

Overview of Businesses
Ownership, management, trading, leasing,brokerage, agent consulting, and appraisal
for real estate; design and construction forresidential land development, building
development, repair work, etc.

Overview of Businesses
Planning and management of sports clubs
and consulting, sales and rental of ­sports
equipment, etc.

Head Office
134 Godocho, Hodogaya-ku, Yokohama-shi,
Kanagawa

Head Office
20 Kramat Lane #03-12 United House,
Singapore 228773

Head Office
10 Marina Boulevard, Marina Bay Financial
Center Tower 2 #33-6, Singapore 018983

Head Office
25th floor, C C Wu Building, 302-308
Hennessy Road, Wan Chai, Hong Kong

Overview of Businesses
Brokerage for trading and leasing of
housing, offices, and factories for Japanese
corporations based in Singapore

Overview of Businesses
Exploring real estate development opportunities, market research, and building relationships with partner companies in Southeast
Asia.

Overview of Businesses
Support services for investment in real estatein Japan by foreign investors, building
relationships with local corporations andinvestors, and exploring business
opportunities

Geo Akamatsu Co., Ltd.

Nomura Real Estate
Wellness Co., Ltd.

Nomura Real Estate
Hotels Co., Ltd.

UHM Co., Ltd.

NOMURA REAL ESTATEVIETNAM CO., LTD.

Nomura Real EstateConsulting (Beijing) Co., Ltd.

Established1968

Established2015

Established2017

Established1950

Established2019

Established
2012

Head Office8-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Head Office
1-1-16 Kanda-Misakicho, Chiyoda-ku, Tokyo

Overview of Businesses
Project management of retail facilities,
including commercial development surveys,
demand forecasts, market research,business planning, operational planning,and merchandising; property managementof retail facilities

Overview of Businesses
Development planning and management ofelderly housing with supportive services

Overview of Businesses
Planning, operation, and managementof hotels

Overview of Businesses
Management of hotels and restaurants

Head Office
11th floor, Sun Wah Tower 115 Nguyen Hue
Boulevard, HCMC, Vietnam

Head Office
Room 708, Beijing Fortune Building, 5 Dong
San Huan Bei LO, Chaoyang District Beijing,
China

Overview of Businesses
Supply of heating

Overview of Businesses
Asset management business in the
United Kingdom

Overview of Businesses
Local market surveys, identification of new
projects and partner corporations, building
business relationships with and monitoringof local partner companies, and support forGroup companies and businesses

Overview of Businesses
Consulting services for real estate, property
and facility management, corporate management consulting services

Note: Certain companies have been consolidated or changed
their trade name since being established.

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Part 1:
About the Nomura Real Estate GroupPart 2:
Enhancing Corporate Value over the Medium to Long Term

Nomura Real Estate Holdings, Inc.
Integrated Report 2019

Part 3:
Corporate and Financial Information

Corporate Information(As of March 31, 2019)

Corporate Data

Stock Information

Corporate Name:

Nomura Real Estate Holdings, Inc.

Stock Price
Yen

Common Stock:¥117,293,905,100

Representative:	Eiji Kutsukake, President andRepresentative Director

Number of Authorized
Shares:450,000,000

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

Number of
Shares Issued:	192,373,101 shares(including 6,096,664 treasury shares)

Date of Establishment:

June 1, 2004

Number of Employees:

6,980 (consolidated)

Market Listing:	First Section of
the Tokyo Stock Exchange

Fiscal Year:	From April 1 to March 31
General Meetingof Shareholders:

3,000

Minimum Trading Unit:

2,000

1,000

100 shares

Number of Shareholders: 29,476

June

15/4

Organizational Chart
Advisory Committee
Relating to Nominations
and Compensation

16/4

17/4

Number of Shareholders

10 Major Shareholders

Audit & Supervisory
Committee Dept.

40,00020,000Management
Committee

FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3

Budget Committee

No. of Shares

Shareholding(%)

Nomura Holdings, Inc.

64,777,500

34.77

Japan Trustee Services Bank, Ltd.
(Trust account)

10,571,300

5.67

The Master Trust Bank of Japan, Ltd.
(Trust account)

7,325,000

3.93

BNYMSANV AS AGENT / CLIENTS LUXUCITS NON TREATY 1

5,048,900

2.71Japan Trustee Services Bank, Ltd.
(Trust account 9)3,332,600

1.78

HSBC BANK PLC A/C CLIENTS 1

3,223,954

1.73

Nomura Real Estate Holdings Employee
Shareholding Association

2,935,682

1.57

Japan Trustee Services Bank, Ltd.
(Trust account 5)

2,572,700

1.38

STATE STREET BANK WEST CLIENT - TREATY
505234

2,386,484

1.28

Trust & Custody Services Bank, Ltd.
(Securities investment trust account)

1,965,300

1.05

Name of Shareholder

80,00060,000President

19/3

PeopleAudit & Supervisory
Committee

Board of Directors

18/4

Risk Management
Committee

ICT Planning
Committee

CSR Committee

Asset Strategy
Committee

Composition of Shareholdings
Corporate Planning
Dept.

Finance &Accounting
Dept.

Finance
Dept.

Group Internal
Audit Dept.

Group Human
Resources
Dept.

Corporate
Communications
Dept.

Group Legal &Compliance
Dept.

ICT & Innovation
Planning Dept.

Group Corporate
Administration
Dept.

Secretariat

Overseas
Planning
Dept.

FY2017/3

21.38%FY2018/3

19.57%FY2019/3

Financial institutions

34.27%

34.83%

22.25%
Other Japanese firms

35.18%
Foreign investors, etc.

Individuals and others

33.19%

11.15%

36.67%

8.90%

33.67%

8.87%

111