Nomura Real Estate Holdings, Inc.
Briefing session of FY20/3 financial results,
held on May 12th, 2020
Q&A Summary
Q. What is your view of the impact of the COVID-19 on overall management(business performance and shareholder returns)?
A. We are examining carefully the impact of the COVID-19. The situation is quite
different from the financial crisis, but the impact on the economy is expected tobe severe. Once we have assessed the impact, we will decide on our earnings
forecasts, and total return to stakeholders and investment policies for thefuture.
Q. Your company business model is characterized by its ability to generate
sustainable development profits over the medium to long term. Therefore, I
assume your company would be possible to maintain a certain level ofshareholder return even if profits fluctuate in a single fiscal year. In addition, I
would like to ask your policy of the acquisition of treasury shares in FY21/3,
although the cash dividend for FY21/3 was announced to be unchanged. Is it
possible to consider an acquisition of treasury shares based on financial
stability, including shareholders' equity ratio and other factors?
A. Our business model is to generate value through development and realize
profits by selling them. Therefore, we can generate profits in the medium tolong term and maintain shareholder returns while growing our business. The
amount of total shareholder returns including the acquisition of treasury sharesis determined by the amount of profit, not by the mechanical calculation basedon shareholder’s equity. However, as we indicated in our dividend forecast for
FY21/3, our policy is to keep shareholder returns stable even if profits fluctuatein the short term.
Q. If housing sales were to suspend operations for several months due to theCOVID-19, would it be possible to achieve the annual contract plan? Are there
any changes in the sales situation through the website?

A. Approximately 2,000 units had been contracted as of the beginning of this fiscal
year that will be recorded in FY21/3. Before the impact of the COVID-19
appeared, we had expected to sell approximately 4,000 units in FY 21/3. Thereis a good chance that we can make up for the delay even if we suspend
operations for two to three months. The responses to web advertising were thesame as the previous year.
Q. Has the impact of the COVID-19 affected sales activities in housing sales? Are
there any effects from the suspension of construction work by generalcontractors?
A. Before we voluntarily stopped sales activities in April, sales of newly supplied
housings, especially highly convenient ones were strong in March. As for therisk of construction, the completion schedule is not delayed at this time.
Q. I would like to know about the price outlook for new condominiums.
A. The decline in stock prices has affected the prices of some high-priced
housings. If the price of secondhand condominiums were to decline, that would
have an impact on new condominiums. At present, both new and secondhand
condominiums are at high prices, therefore the price is balanced.
Q. Is the demand for new condominiums getting smaller in suburban areas andlarger in urban areas?
A: In general, you can view it that way. However, since real estate is highly
individualized, it cannot be categorically stated. For example, the condominium
we developed in Kichijoji in FY20/3 is in suburban Tokyo area, which requires
bus commuting to access the station. Although, the sales were strong due tothe higher customer evaluation for the convenience of mixed-use development.
There is still a strong demand for convenient housings, including those locatedin the center of the city or near train stations. However, as more and more
people look for ways to work from home, there may be additional demands
such as a larger floor plan and a private room suitable for working from home.
We would like to consider our future strategy, including such matters.
Q. What is your policy on acquiring land for condominiums in the future?
A. Since we have not been able to operate land purchase activity as usual,
April, we don’t think it is appropriate timing tosince

inform our future policy yet.

During the financial crisis, the number of land buyers decreased and prices fell,so we aggressively acquired lands. We would be willing to buy lands
aggressively if the situation is similar this time around, but we haven't caught
any sign of the situation change yet.
Q. What is your medium to long term outlook for the prices of property developed
for sales?
A. It is difficult to describe the medium to long term trend at this point, but theimpact of the COVID-19 on hotels and retail facilities is currently significant. On
the other hand, office and logistic facilities remain firm. One of the important
indicators is the degree of economic recovery in the Post-Corona Phase.
Another is the stock market situation including REIT, which has an impact onour sales. During the financial crisis, financial instability led to long-term
concerns, but the current market fluctuations were not caused by financialinstability. We will keep a close watch on the market, recognizing that thesituation is different from the past.
Q. What are your plans for property development for sales in FY21/3? Also, were
there fewer properties reclassified from non-current assets to inventories at theend of FY20/3 compared to the end of FY19/3?
A. We will carefully examine the situation of each property, including the CAP rate
and price due to the impact of the COVID-19, and determine our policy. Theamount reclassified from non-current assets to inventories at the end ofFY20/3 was less than at the end of FY19/3. However, we did not sell all theproperties that were reclassified at the end of FY19/3. The amount of property
for sales on our balance sheet at the end of FY20/3 is worth approximately 150
billion yen for the properties which have been completed and worth
approximately 150 billion yen for the properties under development.
Q. What is the status of your company’s leasing office properties, including theleasing status of TOKYO TORANOMON GLOBAL SQUARE and whether there has
been a request for a reduction of the rent due to the COVID-19?
A. The contract for TOKYO TORANOMON GLOBAL SQUARE is on track to its
completion of construction in June of this year. In office buildings, there has
been no significant movement to reduce the rent. In retail facilities, we arereducing or exempting rent and deferring payments at facilities that havevoluntarily suspended operations in response to a request for voluntary
restraint by prefectures based on the national declaration of a state ofemergency.
Q. Will the impact of the COVID-19 change the needs of the office building in thefuture?
A. The demand for large buildings remains strong. Looking ahead, we will closely
monitor the changes in demand in office caused by the impact on the economy
and employment. In addition to large buildings, we will respond to the need ofcustomers through the development of offices that can meet a variety of work
styles, including medium-sized PMO, H¹O for service offices, and H¹T forshared offices.
Q. What is the impact of the COVID-19 on Lothbury's business environment andearnings?
A. Lothbury mainly manages open-end funds, which are expected to generate
stable income.
Q. Are there any signs of increased M & A activity due to market disruption causedby the COVID-19? Do you strongly aim to grow through alliances with othercompanies?
A. First of all, we think it is important to solidify our business strategy for thisfiscal year. At the same time, we are always exploring various possibilities forstrategic M & A. We are fully prepared for the opportunity ahead. Afterassessing the impact of the new coronavirus infection, we will closely examine
the business fields that will grow in the future.