Value Creation Process
The Group will continue to realize high growth and high shareholder returns through the achievement of the Mid- to Longterm Business Plan based on the strengths it has amassed. By realizing high asset and capital efficiency and by promoting
sustainability initiatives, we aim to realize the Nomura Real Estate Group 2030 Vision and Sustainability Policy, as well as theGroup Vision.

Our Group Vision
Mid- to Long-term Business Plan

Be a “Life & Time Developer,” as never seen before

Nomura Real Estate Group 2030 Vision

To beFY 2031/3 Targets
Proﬁt

Our Vision

Asset and capital efﬁciency

Business proﬁt¥180.0 billion

ROAROE

510%%or moreor more

Shareholder returns

Dividend
payout ratio

40% levelor more

Realizing High Proﬁt Growth / High Asset and Capital Efﬁciency / High Shareholder Returns

Actions
Our Challenges
and Strategies

Mid- toLong-term
Business Plan

Proﬁt targets, Financial targets,
Shareholder Returns Policy

Financial Strategy

p. 34

p. 35

Awareness of the business environment• Shrinking workforce, declining
birthrate and demographic aging

Market-in approach

Strengths
Our Current
Strengths and Core

Strengths ofthe Nomura Real
Estate Group

Commitment to quality

pp. 16–19

A history of real estate-related businesses spanning more than 60 years

BaseThe Foundation ofOur Activities

14

Nomura Real Estate Holdings, Inc.

Action guidelines“What We Value”

Corporate Governance

Client-ﬁrst approachpp. 66-73

pp. 2-3

Creating new value basedon original ideas
Risk Management

pp. 76-79

Introduction

Our Vision(To be)Our Current Strengths and Core(Strengths)

Our Challenges and Strategies(Actions)

The Foundation of Our Activities(Base)

Data, etc.

“New Value, Real Value”
Promotion of sustainability
Sustainability Policy (vision of 2050)

Earth Pride

Climate change and natural environment• Priority issues (materiality) for 2030

Society and employees• Key performance indicators (KPIs)• Priority issues (materiality) for 2030

• Key performance indicators (KPIs)

Reduction of CO2 emissions

Female manager andjunior manager ratio(Compared to FY2020/3)

Scope 1& 2:
Reduce by
Decarbonization

Biodiversity

35

Circular design%

Scope 3:
Reduce by

35

Diversity & inclusion

Childcare leave
utilization rate by
men and women

Human rights%

20%

100%

Implementation of sustainability activities through businessDX Strategy

Human Resources Strategy

Sustainability Strategy

Strategies by Business Unit

pp. 36-37

pp. 38-39

pp. 40-47

pp. 48-59• Diversification of lifestyles and workstyles• Evolution of digital technologythat is established in the Group

Open-minded approach to
new ideas and businesses

Business assets

Internal Controls, Compliance• Heightened awareness of sustainability, etc.

Business collaboration andvalue creation within the Group

Our approach to connect
closely with individuals,

Always being a challenger

Strategic
investments

Acknowledging our growth with society

p. 80

pp. 20-21

Working with vigor and achieving wellness

Information Disclosure

pp. 80-81

Integrated Report 202315Strengths of the Nomura Real Estate GroupThe strengths based on “our approach to connect closely with individuals,” that is established in the Group, comprise amarket-in approach; business collaboration and value creation within the Group; commitment to quality; and open-minded
approach to new ideas and businesses. These strengths are demonstrated by our real estate development and real estaterelated services businesses.

Market-in approach
Develop real estate, provide real estate-related services, and implement sustainability initiativesbased on the needs of customers and markets
It has been 20 years since the launch of the PROUD series, Nomura Real Estate Development’s residential brand. Since then, ouremployees, the operators of the business, have been the primary force working to bring sales activities in-house. Specifically, thebusiness operator employees identify market needs from direct engagement with customers and swiftly incorporate this data into
land acquisitions and product planning.
The competitive advantages of such practices are laterally rolled out across the organization, with the representative example
being the application of the above approach of the residential business to PMO, medium-sized high-grade office. While striving
lease properties to tenants, the leasing team soon realized that there was a lack of properties that were meeting customer needs
or market expectations. We therefore created product concepts with both the land acquisition team and the product planningteam to better capitalize on this opening in the market.
A specific example demonstrating our strengths
A market needs-based integrated development, sales, and management system in the residential business
Main business processes in the residential businessLand acquisition

Product planning

Sales• Identify market needs from the customer perspective by bringing sales in-house• Manage properties after sales and obtain opinions from residents throughafter-sales services• Incorporate relevant data to departments, including land acquisition and productplanning, and utilize it in development

Construction

Facility management

Develop and sell housingthat surpass customer
expectations, garnering
market plaudits(p. 21. External Evaluations)

PMO, medium-sized high-grade office, was developed in light of social issues and tenant needs
Social issues and tenant needs

Development of PMO• Small and medium-sized buildings
built to outdated earthquakeresistant designs need to be rebuilt(social issue)• There are few high-quality small andmedium-sized buildings.
(social issue)• Companies want to rent buildings
with functions similar to and as
high-quality as those of highperformance large-scale buildings.
(need)• Companies want to rent entire
floors to ensure security. (need)• Medium size, but with the same functionality, comfort anddesign as large-scale buildings• Highly independent designs that assume single-tenant
occupancy for each floor in principle• Use of a robust structure, ensuring a stable businessenvironment for tenants• Offering unique services, such as seminars and social events
for tenants
Create new added value
by addressing social
issues and tenant needs

PMO Nihonbashi Honcho

16

Nomura Real Estate Holdings, Inc.

Introduction

Our Vision(To be)Our Current Strengths and Core(Strengths)

Our Challenges and Strategies(Actions)

The Foundation of Our Activities(Base)

Data, etc.

Business collaboration and value
creation within the Group
Create new value through the value chain within the Group
Reflecting our high added value development capabilities, we do not focus on owning leasing assets and instead secure shareholder
returns by realizing unrealized gains through sales. This revolving business model is a major pillar of the Group’s growth.
Our circulating leasing value chain realizes mutual growth for the Group as well as REITs and funds managed by the Group. The
leasing value chain plays a major role in this business model and could be called a major strength. We stably supply prime properties
developed by the Group to managed funds, and the Group is able to acquire and increase the value of properties owned by thefunds. By sharing management know-how, we help enhance the asset value of properties.

A specific example demonstrating our strengths
The Leasing Value Chain that realizes the mutual growth of the Group and the Group REITs, etc.
Leasing Value Chain• Enhancing Group-wide value (maintaining and strengthening developed property brands, enhancing asset value)• Mutual growth through the acquisition and sale of developed properties

Property acquisition andsupply pipeline(stably supplying prime properties to managed funds)

Management pipeline

Managed funds(strengthening brand value and enhancing the asset
value of owned properties)

Private funds

Sales premised on redevelopment(providing development opportunities to the Group)

Main profitable real estate the Group develops
and sells

Record of the Group’s sales to REITs
and private funds (cumulative)

86

properties¥478.7billionIntegrated Report 2023

17Strengths of the Nomura Real Estate Group

Commitment to quality
Commit to the quality of real estate development and services we provide
The Group has many first-class licensed architects in-house (304 as of April 1, 2023) and has put in place a high-quality
manufacturing system over many years, establishing an in-house licensed first-class architect office and offices specializing inquality management, product planning, and after-sales services. We have demonstrated our commitment to quality in various
different ways, such as being the first in the industry to create housing complex structure design standards and applying them tocondominiums the Group supplies across Japan.
This attitude is true of not just our real estate development but also our real estate-related services. Our ongoing steady provisionof high-quality services in the management of condominiums have garnered us the No. 1 spot in condominium management
ratings* for 14 consecutive years.
Utilizing the strengths we have cultivated in Japan, we are bringing to bear the Group’s unique value creation in the overseas business.
A specific example demonstrating our strengths
Expanding the commitment to quality cultivated in Japan to overseas markets
Quality management in Japan

Overseas initiatives• Implementing thorough inspection systems for structures,construction, and equipment through the quality management
office, an expert group comprising architects holding firstclass licenses and others• Completing design standards and a manual compiling theexpert knowledge gained over more than 60 years to shareand pass down experiences and know-how• Based on know-how cultivated in Japan, we undertake
Design KAIZEN* and Workplace KAIZEN, which help enhance
design quality and avoid construction defects* Improvement, refinement• These efforts significantly improve customer evaluation andhelp gain the trust of the local partner companies with which
we pursue overseas business, leading to greaterbusiness opportunities

Design standards anda manual

Our commitment to ensuring the quality of products and services, by pursuing such issues as supervision, design,and comfort in construction processes, has led to plaudits from external sources(PROUD CITY Kichijoji

p. 21 External Evaluations)

Nomura Real Estate Otemachi North Building

Received the Good Design Award for the 21stconsecutive year

* “SumaiSurfin” Property Management Company Customer Satisfaction Survey ranking

18

Nomura Real Estate Holdings, Inc.

PROUD SEASON Seijo Court

Condominium management ratingNo. 1 for 14th consecutive year*

Introduction

Our Vision(To be)Our Current Strengths and Core(Strengths)

Our Challenges and Strategies(Actions)

The Foundation of Our Activities(Base)

Data, etc.

Open-minded approach to new ideas
and businesses
Continue challenges by expanding the areas of value creation to a wider range of asset types
and services in Japan and overseas
The Group entered the residential development business with the aim of addressing the social issue of the post-war housing shortage and has continued striving to address changes in the business environment and take on various businesses.
We entered the real estate fund business early on and have steadily expanded our assets and services, including shared offices
and serviced offices adapted to workstyle changes, restaurant buildings that bring together unique restauranteurs, hotels, fitnesssites, and logistics facilities.
Our in-house systems, including the award system the Nomura Real Estate Group Award, which supports new endeavors, andthe new business idea incubation system NEXPLORER, significantly help nourish the spirit of ambition that is engrained in the Group.

A specific example demonstrating our strengths
Diversifying offices, such as H1T and H1O
Due to diversifying workstyles, office formats are changing. With an eye on the evolving workstyles of this new era, we offer a diverse
office portfolio achieved through the development of H1T and H1O in addition to traditional large-scale offices and the medium-sizedhigh-grade office brand PMO.

Changes in the business environment• Diversifying workstyles (accelerating since the pandemic)• Development of ICT• Changes in the value placed on offices• Technological revolution of AI and IoT

Providing diverse workplaces
H1T• Highly convenient, comfortable shared offices that serveas the third workplace after home and work sites• With diverse seating arrangements and spaces, they areeasily adapted to suit the user’s purpose

H1T Shinjuku West Exit

H1O
• Small offices that ensure high security and comfort witha full suite of common facilities• In addition to visitor reception services, individual room
management is possible using IoT

H1O Shibuya Jinnan

Integrated Report 202319

Strengths of the Nomura Real Estate GroupKey Components of Business Assets Supporting Our Strengths
The Nomura Real Estate Group’s hard-earned strengths are clearly shown in the robustness of its business assets.

Financial capital

31.0

%

Shareholders’ equity ratio:

1.7

D/E ratio:

times

Manufactured capitalLand bank in the domestic
housing sales business:trillion

Land bank in the overseasbusiness(total project cost (our share)):billionAssets under management(AUM):

m2

Number of housing undermanagement:

1.7
920.0
697,000

approx. ¥Land bank in the domestic
properties for sale business:

approx. ¥Net lettable area
(office and retail facilities):

approx.

630.0
1.9
189,000

approx. ¥billion

approx. ¥approx.

trillionunits

Human capital

7,695
33.0

Number of Consolidated employees:%

Female employee ratio:

304
13.9

Number of in-house first-classlicensed architects:
Female manager and juniormanager ratio*1:%

Intellectual capital, natural capital, etc.

Expertise in real estatedevelopment:

More than60years

Superior product planning and design capabilities enabling us toreceive the Good Design Award for 21st consecutive year and earnother commendationsExpertise in asset management:

More thanLevel of participation in residential
redevelopment projects:

20years

Industry-leading*2

Customer base

Number of Nomura Real Estate Groupapprox.
Customer Club members:

Number of tenants:

Number of H1T members:More than

152,000

2,000
400,000

3companies*

approx.

Number of MEGALOS members:

approx.

Number of institutional investors
through domestic asset management(excluding listed REITs):

Number of nomu.com members:

approx.

114,000

296
263,000

Note: Data are for the fiscal year ended March 2023 or as of March 31, 2023. Notwithstanding the foregoing, the number of first-class licensed architects and the number of nomu.com members
are as of April 1, 2023 and January 31, 2023, respectively.
*1 Female manager and junior manager ratio = (The number of women in managerial positions + The number of female managerial candidates) / (The overall number of managerial positions + The
overall number of managerial candidates)*2 Source: Based on in-house research*3 The total number of tenants occupying properties that the Group owns and conducts property management for.

20Nomura Real Estate Holdings, Inc.Introduction

Our Vision(To be)Our Current Strengths and Core(Strengths)

Our Challenges and Strategies(Actions)

The Foundation of Our Activities(Base)

Data, etc.

Creation of financial and non-financial value backed by business assets
Financial data

Operating revenue:

Non-financial data

654.7

¥105.1¥Business profit:

Cumulative number of housing
units supplied:billion

185,000

approx.

Cumulative number of properties developed for sale
Rental housing:
Offices:billionRetail facilities:

5.1

Logistics facilities:%ROA:

86478.7

unitsunits
units
units

properties

Sales to REITs and private funds:%¥billion

Progress in reduction of CO2 emissions:

47.6

%

Total return ratio:

132
81
38
47

Cumulative number of Leasing Value Chain transactions:

10.1

ROE:

units

Note: Data are for the fiscal year ended March 2023 or as of March 31, 2023
* Total of Category 1 and 11 emissions from Group facilities certified under SBT

Scope 1& 2:

Reduced by approx.

Scope 3*:

Reduced by approx.

35
41% (Compared to FY20/3)% (Compared to FY20/3)

External Evaluations
The Nomura Real Estate Group’s activities give it a strength highly appreciated by various stakeholders.
ESG ratings: Included in all the six ESG stock indices adopted by the GPIF for domestic stock investment

Condominium brandNo. 1 for 16th

consecutive year*1

Rate of receiving environmental
certification in the properties
developed for sale(Commercial Real EstateBusiness Unit):

Annual number of users of a real estate
brokerage company website

7 million

More thanfor
the 7th consecutive year*5

100%

JCR:

A+ / R&I: AGRESB rating for GroupREITs*4

5 Star, Sector Leader*2

Condominium management ratingNo. 1Credit ratings*3for the14th consecutive year*6

Received theGood Design Award for the

21st consecutive year

*1 We counted the number of years in which PROUD ranked first among competitor brands in the highest number of evaluation categories in the Condominium Brand Survey conducted byNikkei, Inc.
*2 Including those scheduled to be received*3 as of the end of August 2023
*4 Based on the 2022 GRESB Real Estate Assessment. We were named Sector Leader in this assessment, with our listed and private REITs commended in “Asia Comprehensive Category (listed)”
and the “Asia Comprehensive Category (listed and unlisted),” respectively.
*5 Calculated by the Nomura Real Estate Group using Google Analytics (universal analytics property). Calculation period: January 1, 2016 to December 31, 2022
*6 Ranking based on “SumaiSurfin” Property Management Company Customer Satisfaction Survey
Integrated Report 2023

21