Financial Report

2018

For the Year Ended March 31, 2018

Management’s Discussion and Analysis 

1Consolidated Balance Sheet 

13Consolidated Statement of Income 

15Consolidated Statement of Comprehensive Income 

16Consolidated Statement of Changes in Net Assets 

17Consolidated Statement of Cash Flows 

18

Notes to Consolidated Financial Statements 

19

Independent Auditors’ Report 52

Management’s Discussion and Analysis

Trends in the Real Estate Industry

Tokyo metropolitan area, supported by solid demand for offices

been classified under the Leasing Business Unit to promote

In the real estate industry, the housing sales market saw sales

accompanying corporate business expansion, and the rent levelbusiness in conjunction with the Leasing Business.

prices continue to increase primarily in the Tokyo metropolitan area

continuing to rise gradually.

Construction of facilities including the PMO Shibuya officebuilding (Shibuya-ku, Tokyo), the GEMS Ebisu retail facility(Shibuya-ku, Tokyo), and the Landport Takatsuki logistics facility(Takatsuki-shi, Osaka) has been completed.

while supply volume reached a low level due to intensified competi-

The office building vacancy rate in the five wards of centraltion for the purchase of land, and there was a strengthened trend

Tokyo declined by 0.80 percentage points as of March 31, 2018,

Operating revenue in the Residential Development Unit totaledof polarization characterized by a gap in contract rates due to theimproving to 2.8%. Average rent levels in the five wards of central¥358,745 million, which represents an increase of 8.8% year on

convenience of certain regions and properties.

Tokyo as of March 31, 2018 increased by 969 yen per tsubo toyear, and operating profit totaled ¥24,516 million, a decrease of

Operating revenue in the Investment Management Unit totaled

19,699 yen compared to March 31, 2017.

11.8% year on year, resulting in an increase in operating revenue¥9,378 million, which represents a decrease of 2.9% year on year,

and a decrease in operating profit compared with the previous

and operating profit totaled ¥5,911 million, a decrease of 1.7%,

fiscal year.

resulting in decreases in both revenue and operating profit

Condominium sales in the Tokyo region increased by 0.4%

Residential Development Unit

In the real estate investment market, although the fund procure-year-on-year to 35,898 units in the calendar year 2017. The contract

Investment Management Unit

number for the first month on newly marketed condominium units

ment environment is favorable backed by low interest rates andin 2017 decreased by 0.7 percentage points year-on-year to 68.1%

persistently high real estate prices, the competition for property

and it underperformed the benchmark of 70%.

acquisition continues to be intensified due to strong demand forthe number of housing unit sales in the housing sales businessproperty acquisition among investors.

increased. In regards to housing sales, 5,865 units were recorded

in asset acquisition fees recorded in the previous fiscal year

In the office market, the business environment is strong primarily

compared with the previous fiscal year.
This was mainly due to the repercussion from the disappearance

Expected yields on A-class office buildings in the Marunouchi/

as sales (an increase of 298 units year on year), including PROUD

associated with the merger between Nomura Real Estate Master

Otemachi area decreased by 0.1 percentage points year-on-year to

CITY Musashino-Mitaka (Musashino-shi, Tokyo), PROUD TOWER

Fund, Inc. and TOP REIT, Inc.

3.5% as of March 31, 2018.

Nagoya Sakae (Naka-ku, Nagoya-shi, Aichi) for condominiums, anddue to vacancy rates remaining at a low level, particularly in theCondominium Supply and Contract Rates in the Tokyo Metropolitan Area
(calendar year)

This was mainly due to a decrease in gross margin ratio, while

Assets under management have steadily expanded and totaled

PROUD SEASON Kunitachi-Shikinomachi (Kokubunji-shi, Tokyo) for¥1,285,903 million (an increase of ¥25,838 million compared withdetached houses.

the end of the previous fiscal year) as of the end of the fiscal year

(Units)(%)

Analysis of Operating Results

60,00090

In this business environment, the Nomura Real Estate Group80(the “Group”) posted the following consolidated performance forcompleted housing inventories totaled 457 units (a decrease of 197

70

the fiscal year under review: Operating revenue of ¥623,762 million,

units compared with the end of the previous fiscal year) and the

between Nomura Real Estate Development Co., Ltd. and Nomura

60

which represents an increase of 9.5% year on year; operating profit

number of contracted but not recorded housing units totaled 2,831

Real Estate Master Fund, Inc., representing 10 properties and a0of ¥76,660 million, a decrease of 0.8%; ordinary profit of ¥68,033

units (an increase of 52 units compared with the end of the previoustransaction value of ¥48,010 million, in accordance with the Basicmillion, a decrease of 1.3%; and profit attributable to owners offiscal year).

Agreement on the Leasing Value Chain concluded in May 2015.

45,00035,89830,00068.1%

15,000
0

2013

2014

Condominium Supply (left axis)

2015

2016

2017

Contract Rates (right axis)(CY)

Source: Real Estate Economic Institute Co., Ltd.

Vacancy Rates and Rent Levels in the Five Wards of Tokyo(as of March 31)

As of the end of the fiscal year under review, the number ofparent of ¥46,029 million, a decrease of 2.1%.

19,69910.0

18,0008.0

16,0006.0

14,000

4.0

2.8%

0

2014
Rent Levels (left axis)

2015

2016

2017

2018

Vacancy Rates (right axis)0This year our ROA was 4.6% and ROE was 9.4%. Thoseto actively engage in the development business overseas. Thisscores has been lower than the fiscal year ended March 31, 2017,

includes a new entry into the housing sales business in Thailand

Operating revenue in the Property Brokerage & CRE* Unit totaled

but they are still maintaining high level.

following on from China, Vietnam and the Philippines.

¥35,703 million, which represents an increase of 2.5% year on year,

An overview of segment achievements is given below:

2,000

5

1,688.66

1,600

4

3.5%

Operating revenue for each business unit includes internal sales

branches while the number of transactions and total transaction

fractions, total figures may not match.

increases in both revenue and operating profit compared withvalue in property brokerage increased.

From the third quarter of the fiscal year under review, Nomura(Millions of yen)

2

50,000400

1TSE REIT Index (left axis)

Expected Yields (right axis)

2017

2018

0

0

2014

Operating Income (left axis)

2015
ROA (right axis)

2016

2017
2018
(Years ended March 31)* ROA = (Operating Income + Non-operating Income) / End-period Total Assets

Nomura Real Estate Holdings, Inc.

4
2

2013

(CY)

Source: Changes in TSE REIT Index: Bloomberg
Changes in Expected Yield: Japan Real Estate Institute “The Japanese Real Estate
Investor Survey”* Expected yields for A-class office buildings in Marunouchi and Otemachi are shown

4.6%

6

25,00002016

This was mainly due to an increase in leasing revenue from

876,660Financial Report 2018

stores: Omiya Center (Omiya-ku, Saitama-shi, Saitama) and

newly-built properties such as Yokohama Nomura Building

Tachikawa Center (Tachikawa-shi, Tokyo) in April 2017 and(Nishi-ku, Yokohama-shi, Kanagawa) in the Leasing Business,

Hatanodai Center (Shinagawa-ku, Tokyo), Komagome Centeras well as an increase in revenues from the sales in profitable(Toshima-ku, Tokyo), and Abeno Center (Abeno-ku, Osaka-shi,properties and land for business.

Osaka) in October 2017, and the total number of branch stores

The vacancy rate as of the end of the fiscal year under review

is 78. We are also actively rolling out new services that utilize ICT,

has remained at a low level of 0.7% (a decrease of 0.1 percentage

such as website content “VR Home Staging” and “Condominium

points compared with the end of the previous fiscal year).

Data Plus.”
In the wholesale business, we are steadily increasing transaction

In addition, we established Nomura Real Estate Hotels Co., Ltd.
in October 2017 and launched a new hotel brand “NOHGA HOTEL,”

value by offering proposals for effective real estate utilization tofor which the Group will provide product development and services.

Japanese companies, and meeting inbound investment needs,

NOHGA HOTEL UENO (Taito-ku, Tokyo), the first hotel, is scheduled

particularly of investors from Asia.

to open in the fall of 2018.

1

In the retail business, we opened the following new branch

the previous fiscal year.

(%)

100,000

800

2015

This was mainly due to an increase in expenses for new

which represents an increase of 17.3% year on year, and operating
profit totaled ¥35,232 million, an increase of 8.2%, resulting in

75,0000

profit compared with the previous fiscal year.

and transfer amount among business units. Due to the rounding of

3

1,200

2014

Operating revenue in the Leasing Unit totaled ¥134,941 million,

Changes in Operating Income and ROA*

(Points)(%)

in an increase in operating revenue and a decrease in operating

Leasing Unit

Real Estate Hotels Co., Ltd., established in October 2017, has

Changes in TSE REIT Index (as of March 31) and Expected Yield*(as of April 1)

Property Brokerage & CRE Unit

operating profit totaled ¥8,452 million, a decrease of 7.4%, resulting
Operating Results by Segment(CY)

Source: Miki Shoji Co., Ltd.

In addition, the Company conducted replacement of assets

In the overseas business, the Company has also continued(Yen)(%)
20,000under review.

* CRE: Corporate Real Estate

Nomura Real Estate Holdings, Inc.

2

Financial Report 2018

Property & Facility Management Unit

from the end of the previous fiscal year), and the number of condo-

Major operating-related indices for each business are shown in the table below.

Operating revenue in the Property & Facility Management Unit

miniums under management was 173,705 units (up 4,706).

(As of March 31)

totaled ¥101,087 million, which represents an increase of 5.6%
year on year, and operating profit totaled ¥7,076 million, an

Other Unit

increase of 2.0%, resulting in increases in both revenue andOperating revenue in the Other Unit totaled ¥107 million, which

operating profit compared with the previous fiscal year.

represents an increase of 1.3% year on year, and operating loss

This was mainly due to an increase in revenue of property andtotaled ¥10 million (the previous fiscal year was operating loss offacility management with the increase in the number of properties¥30 million).

under management, as well as an increase in revenue fromconstruction orders for various reasons, including providing theAnalysis of Financial Position

large-scale repair work service “re:Premium,” which supplies long-

Assetsterm guarantees for “PROUD,” Nomura Real Estate Development

Total assets were ¥1,673,692 million, which represents an increaseCo., Ltd.’s condominium brand.

of ¥80,599 million compared to the end of the previous fiscal year.

In the fitness club business, we opened fitness clubs appropriateThis was mainly due to increases in land (increased by ¥42,878

for the local community and target markets, such as a MEGALOS_

million) and inventories (increased by ¥22,108 million)

Shirokanedai (Minato-ku, Tokyo), a city-center type club located in2014

Residential Development Unit:
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)
Leasing Unit:
Vacancy rate
Investment Management Unit:
Outstanding assets under management (millions of yen)
Property Brokerage & CRE Unit:
Brokerage: Number of transactions
Brokerage: Total transaction value (millions of yen)
Property & Facility Management Unit:
Buildings under management
Condominiums under management (units)
Members of MEGALOS

a prime location and providing stylish atmosphere, and MEGALOS_

Liabilities

Reflet Kawaramachi Sanjo 24 (Nakagyo-ku, Kyoto-shi, Kyoto), theTotal liabilities were ¥1,158,710 million, which represents an

first women-only, around-the-clock fitness club in the Kansai area.

increase of ¥59,429 million compared to the end of the previous

In the senior business, we also opened OUKAS Funabashi

fiscal year. This was mainly due to increases in bonds payable(Funabashi-shi, Chiba) in October 2017.

(increased by ¥70,000million) and long-term loans payable

Changes in Interest-bearing Liabilities

In addition, as of the end of the fiscal year under review, the­(increased by ¥11,700 million), while deposits received (decreased(Millions of yen)number of buildings under management was 723 buildings (up 21

by ¥10,652 million) and current portion of bonds (decreased by

900,000

2017

2018

6,162
859
21.1
87
2

5,363
643
21.9
134
215

4,885
682
21.7
252
402

5,258
607
19.1
239
218

2.9

4.5

2.2

0.8

0.7

1,132,246

1,123,188

1,074,481

1,260,064

1,285,903

7,437
672,774

7,174
710,980

7,710
713,5748,272
745,147

8,561
800,739703
147,516
141,564729
155,706
140,395

705
163,036
144,263

702
168,999
140,743723
173,705
139,836

Net Assets
Net assets were ¥514,982 million, which represents an increaseof ¥21,169 million compared to the end of the previous fiscal year.

877,800

This was mainly due to an increase in retained earnings­(increased by ¥32,594 million), offset by purchasing treasury

600,000(Billions of yen)

2016

5,491
718
21.7
31
0

¥10,000 million) decreased.

Key Factors of Changes in Operating Profit by Business Unit (Compared to FY17/3)

2015

shares (decreased by ¥10,001 million).

300,000

0

2013
Residential
Development

Investment
Management
Leasing– 0.1

Property &Facility
Management

Property
Brokerage
& CRE

– 3.2

Others

+0.1

– 0.6

+0.0

Adjustments

2014

2015

2016

2017

2018
(As of March 31)

Cash Flows from Investing Activities

Changes in Net Assets and Shareholders’ Equity Ratios+0.6

Net cash used in investment activities amounted to ¥51,637 million+2.6(Millions of yen)

(%)

600,000

60

514,982• Increase in expenses for new branches.
400,000

77.2

Cash Flows from Financing Activities
Net cash provided by financing activities totaled by ¥43,787 million

200,000

20

0

0(a year-on-year decrease of ¥32,788 million). This was mainly due
to the implementation of funds procurement through long-term

76.6
2013
Net Assets (left axis)• Decrease in gross profit
margin in housing sales.

the purchase of property, plant and equipment and intangible assets.

40

30.0%
• Increase in leasing revenue.
• Increase in sales of property development
and land for business(a year-on-year increase of ¥2,921 million). This was mainly due to

2014

2015

2016

2017

Shareholders’ Equity Ratios (right axis)

2018(As of March 31)

loans payable and issuance of bonds, while there was the purchaseof treasury shares and cash dividend paid.

Cash Flows
Cash Flows from Operating Activities
Net cash provided by operating activities was ¥21,498 million(a year-on-year increase of ¥53,388 million). This was mainly due toFY17/3
ActualFY18/3
ActualNomura Real Estate Holdings, Inc.

3

Financial Report 2018

an increase in inventories and the payments of income taxes, while
profit before income taxes of ¥67,722 million was recorded.

Nomura Real Estate Holdings, Inc.

4

Financial Report 2018

Facilities Situation

Business Unit (Millions of yen)In the fiscal year ended March 31, 2018, we invested a total

Residential Development
Leasing
Investment Management
Property Brokerage and CRE
Property and Facility Management
Other
Subtotal
Adjustments
Totalamount of ¥73,575 million, including the acquisition of Morisia
Tsudanuma (Narashino City, Chiba).

2017

2018

Change¥   427
56,224
22
649
1,754
0
59,0791,295
60,374¥   675
69,151
26
527
2,081
2
72,464
1,111
73,575¥   247
12,926
4
(122)
326
2
13,385(184)
13,200Nomura Real Estate
Development Co., Ltd.

Nomura Real Estate
Development Co., Ltd.

Business
Segment

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

Landport Takatsuki(Takatsuki-shi, Osaka)

Leasing

Leasing

Property Name (location)

Nomura Real Estate
Development Co., Ltd.

Morisia Tsudanuma 1(Narashino-shi, Chiba)

Nomura Real Estate
Development Co., Ltd.

Kameido 6chome Project(tentative name) 1, 2
(Koto-ku, Tokyo)

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

Business
Segment

Wako Building(Minato-ku, Tokyo)
Soto-Kanda 3chome Project(tentative name)(Chiyoda-ku, Tokyo)

Nomura Real Estate
Development Co., Ltd.

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

MainlyFebruary 1990

70,81729,495

14,584967

45,047

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

OfficeSteel-framed construction,
15 floors above ground

98,428March 2013

9,764

14,911

22,245490

37,647

Shinjuku Mirai
Development

MIRRAZA Shinjuku 2(Shinjuku-ku, Tokyo)

Retail facility

Steel-framed construction (partially steelframed reinforced concrete), 3 floors below
ground, 10 floors above ground

7,628

August 2010

781

2,741

32,132

15

34,889Nomura Real Estate
Development

Nihonbashi Muromachi
Nomura Building(Chuo-ku, Tokyo)

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

44,989September 2010

2,737

14,336

19,227328

33,893

Nomura Real Estate
Development

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

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

58,755January 2017

6,721

19,658

8,809

532

29,001

Nomura Real Estate
Development

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

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

26,748March 1982

3,184

1,810

22,67714

24,50318,004

Nomura Real Estate
Development

NOF Nihonbashi
Honcho Building(Chuo-ku, Tokyo)

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

29,430April 1961

3,196

2,051

21,116—23,167

Land: 24,822

17,497

Nomura Real Estate
Development

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

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

58,512

May 1978

4,639

5,833

16,303

196

22,333

Building: 3,171
Land: 621

7,289

Nomura Real Estate
Development

Landport Takatsuki(Takatsuki-shi, Osaka)

Logistics
facility

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

70,529June 201735,276

10,000

10,247360

20,608

Land: 663

3,980
Midosuji Mirai
Development

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

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

20,420February 2009

1,939

3,684

15,70724

19,416

Nomura Real Estate
Development

Morisia Tsudanuma 2(Narashino-shi, Chiba)

Retail facility

Steel-framed reinforced concrete construction (partially reinforced concrete),
3 floors below ground, 12 floors above
ground, 1 other building

97,699MainlyOctober 1978

19,194

1,973

16,037

7

18,017

Nomura Real Estate
Development

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

Land slated
for building
construction

24,822—

17,497—

17,497

Nomura Real Estate
Development

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

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

5,730

4,397

11,68573

16,156

Toranomon
Real Estate

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

Land slated
for building
construction

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

3,289

October 1973

1,099

56

15,1201

15,179Nomura Real Estate
Development

Nomura Fudosan
Shibadaimon Building(Minato-ku, Tokyo)

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

15,700April 2010

2,447

3,794

10,65076

14,521

NREG TOSHIBABUILDINGLAZONA Kawasaki Plaza 3, 5
(Saiwai-ku, Kawasaki-shi,
Kanagawa)

Retail facility

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

98,254September 2006

72,013

13,986—468

14,455

Nomura Real Estate
Development

Otemachi Nomura Building 2, 3
Office(Chiyoda-ku, Tokyo)

Steel-framed construction (partially steelframed reinforced concrete), 5 floors below
ground, 27 floors above ground

9,815

February 1994

749

1,260

12,5849

13,853Completion

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

Building: 12,026
Land: 1,595

Logistics
facility

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

Building: 70,529
Land: 35,276

April 2017

June 2017

Acquisition Price(Millions of yen)

7,715

20,886

Area (m2)

Leasing

Retailfacility

Steel-framed reinforced concrete construction
Building: 97,699(partially reinforced concrete), 3 floors below ground,
Land: 19,194
12 floors above ground, 1 other building

LeasingLand slated
for building
construction

Leasing

OfficeLeasingLand slated
for building
construction

Acquisition Price(Millions of yen)

Use

Construction, Size, Details of Facilities etc.

Area (m2)

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

Building: 4,241
Land: 886

Acquisition Price(Millions of yen)

6,947

We sold the following properties in the fiscal year ended March 31, 2018:

Nomura Real Estate
Development Co., Ltd.

Nomura Real Estate
Development Co., Ltd.

Business
Segment

Use

Construction, Size, Details of Facilities etc.

Area (m2)

Nomura Fudosan Musashikosugi
Building N 1, 2(Nakahara-ku, Kawasaki-shi,
Kanagawa)

Leasing

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

Building: 18,905
Land: 3,537

Nomura Fudosan Musashikosugi
Building S 1, 2(Nakahara-ku, Kawasaki-shi,
Kanagawa)

Leasing

Property Name (location)

Selling Price(Millions of yen)

16,138
OfficeSteel-framed construction, 1 floor below ground,
6 floors above ground

Notes: 1. Includes the trust beneficial right.
2. Refers to calculated area sold in the fiscal year ended March 31, 2018 including both total floor space and land area.

Nomura Real Estate Holdings, Inc.

5

Financial Report 2018

Total

Steel-framed construction (partially steelframed reinforced concrete), 2 floors below
245,200
ground, 21 floors above ground,
11 other buildings

Note: Excludes the construction in progress accounts.

Company Name

Other

OfficeConstruction, Size, Details of Facilities etc.

LeasingLand

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

Use

Business
Segment

Book Value (Millions of yen)
Facility

Nomura Real Estate
Development

The following land held for development was reclassified as non-current assets in the fiscal year ended March 31, 2018.
Property Name (location)

Completion ofArea of
Total Floor
Construction or
Property
Area (m2) (Time of Acquisition)(m2)

33,921 ¥14,637 ¥129,809 ¥   268

Notes: 1. Includes the trust beneficial right.
2. “Land area” refers to total area during the planning stage.

Company Name

Size of Construction or Details of Facility, etc.

March 1984

Area (m2)—Use

158,732

Construction, Size, Details of Facilities etc.

Steel-framed reinforced concrete construction,
1 floor below ground, 8 floors above ground,
1 other building

Property Name (location)

OfficeUse—

Company Name

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

We acquired the following properties in the fiscal year ended March 31, 2018:
Company Name

1) Leasing Unit

NREG TOSHIBABUILDING

ended March 31, 2018.
Property Name (location)

Major facilities and equipment by unit for the Nomura Real Estate Group and its consolidated subsidiaries are as follows.

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

The following facilities, for which construction was still in progress at the end of the previous fiscal year, were completed in the fiscal year

Company Name

Major Facilities and Equipment

Building: 6,555
Land: 2,559—

Nomura Real Estate Holdings, Inc.

— (December 2017)

6

Financial Report 2018

¥144,714

Company Name

Property Name (location)

NREG TOSHIBABUILDING

Toshiba Hamamatsucho
Building (Minato-ku, Tokyo)

Nomura Real Estate
Development

Nomura Real Estate
Development

Use

Size of Construction or Details of Facility, etc.

Completion ofArea of
Total Floor
Construction or
Property
Area (m2) (Time of Acquisition)(m2)Book Value (Millions of yen)
Facility

Land

Other

Total

OfficeSteel-framed reinforced concrete
construction, 8 floors above ground

13,482

July 1974

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

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

13,359November 1973

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

Retail facility

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

43,509January 2013

5,797

5,813

4,649

347

10,810Nomura Real Estate Minamigyotoku SC 2
Development(Ichikawa-shi, Chiba)

Retail facility

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

35,612

April 2000

16,503

5,144

4,942

13

10,070

NREG TOSHIBABUILDING

Fuchu Toshiba Building(Fuchu-shi, Tokyo)

OfficeSteel-framed reinforced concrete
construction (partially reinforced concrete),
1 floor below ground, 8 floors above
ground, 1 other building

32,299April 1993

8,290

3,722

5,247

18

8,987

NREG TOSHIBABUILDING

Shinyokohama Toshiba BuildTraining
ing (Kohoku-ku,
facility
Yokohama-shi, Kanagawa)

28,822MainlyJune 1969

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

2,907 ¥   361 ¥ 10,956 ¥     01,37615,829576

3,093

10,553

5,660

0

33

¥ 11,318

11,1308,788

Nomura Real Estate Iidabashi Plano Stage Building 3
OfficeDevelopment(Chiyoda-ku, Tokyo)

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

Nihonkouku Tamachi
Nomura Real Estate
Building 2, 6
Development(Minato-ku, Tokyo)

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

17,531January 1984

4,134

0

7,820

—

7,820

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

OfficeSteel-framed construction, 1 floor below
ground, 10 floors above ground

12,026

April 2017

1,595

4,189

3,306

102

7,597

Logistics
facility

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

March 2014

27,866

3,805

3,109

432

7,348

Nomura Real Estate Wako Building
Development(Minato-ku, Tokyo)

OfficeSteel-framed reinforced concrete construction, 1 floor below ground, 8 floors
above ground

3,171

April 1971

621

569

6,716

—

7,285

NREG TOSHIBABUILDING

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

OfficeSteel-framed construction (partially steelframed reinforced concrete and reinforced
concrete), 2 floors below ground,
40 floors above ground

43,093

March 1993

8,325

2,445

4,585

101

7,132

NREG TOSHIBABUILDING

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

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

15,220

NREG TOSHIBABUILDING

NREG Kawasaki Logistics
Center (Kawasaki-ku,
Kawasaki-shi, Kanagawa)

Kanda Nishikicho 1chome
Nomura Real Estate
Project (tentative name)
Development(Chiyoda-ku, Tokyo)

NREG TOSHIBABUILDING

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

3,958

February 2009

785

1,607

6,401

1

8,010

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

4,241

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

21,007

October 1965

MainlyFebruary 1986

1,307

886

1,005

40

5,989

6,904

5

—

7,000

April 1974

2,366

553

5,768

35

6,357

6,753

January 1982

1,220

2,979

3,182

3

6,165

NREG TOSHIBABUILDING

Residential

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

26,352January 1992

20,590

4,249

1,516

40

5,806

Nomura Real Estate Toranomon Central Building
Development(Minato-ku, Tokyo)

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

4,431

August 1977

548

746

4,999

0

5,747

Nomura Fudosan
Nomura Real Estate
Nishishinjuku Building
Development(Shinjuku-ku, Tokyo)

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

6,000

March 2010

1,078

1,533

4,115

46

5,695

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

20,648March 1991

3,501

2,456

3,073

29

5,559

Nomura Real Estate Holdings, Inc.

7

Nomura Real Estate PMO Yaesu DoriDevelopment(Chuo-ku, Tokyo)

Size of Construction or Details of Facility, etc.

Completion ofArea of
Total Floor
Construction or
Property
Area (m2) (Time of Acquisition)(m2)

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

25,103

April 1976

2,256

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

7,074

May 2013

Nomura Real Estate PMO Nihonbashi Muromachi 3
OfficeDevelopment(Chuo-ku, Tokyo)

Steel-framed construction (partially steelframed reinforced concrete),
1 floor below ground, 9 floors above

5,333

Nomura Fudosan
Nomura Real Estate
Tameike Building
Development(Minato-ku, Tokyo)

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

6,478

Soto-kanda 3chome Project
Nomura Real Estate(tentative name)
Development(Chiyoda-ku, Tokyo)

Land slated
for building
construction

NREG TOSHIBABUILDING

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

NREG TOSHIBABUILDING——

Book Value (Millions of yen)
Facility

Land

911

Other

Total

4,413

2

5,327

931

¥1,356 ¥  3,840¥   20¥  5,217

January 2013

701

1,026

3,716

12

4,756

July 1959

690

200

4,393

    —

  4,593(March 2018)

663

—

3,980

—

3,980

Steel-framed construction (partially steelframed reinforced concrete), 2 floors below
ground, 17 floors above ground

23,711

July 1993

4,597

1,944

1,918

21

3,884

Toshiba Manseibashi Building 5
Office(Chiyoda-ku, Tokyo)

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

5,319

September 1961

681

240

3,551

0

3,792

NREG TOSHIBABUILDING

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

OfficeSteel-framed construction (partially steelframed reinforced concrete and reinforced
concrete), 1 floor below ground, 8 floors
above ground

6,716

October 1993

1,249

983

2,700

3

3,687

NREG TOSHIBABUILDING

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

Hotel

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

16,179April 1975

1,731

641

2,817

5

3,464

OfficeNotes: 1. “Facility” represents building accounts, “land” represents land and lease accounts, and “others” represents structures; machinery; tools, appliances, and fixtures; vehicles
and delivery equipment; and leased asset accounts. “Total” represents the sum of lease accounts and tangible fixed assets excluding construction in progress accounts.
2. Includes the trust beneficial right.
3. Refers to calculated area owned including both total floor space and land area.
4. “Land area” refers to total area during the planning stage.
5. Land area includes leased land.
6. Transferred from non-current assets to land held for development in June 2018.

Company Name

Property Name (location)

Rentable Area (m2)

Nomura Real Estate Development

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

17,298

Nomura Real Estate Development

AKS Building (Chiyoda-ku, Tokyo)

7,5162) Property and Facility Management Unit

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

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

Fukuoka Tenjin Center
Nomura Real Estate
Building 2, 3 (Chuo-ku,
Development
Fukuoka-shi, Fukuoka)

Use

6,944

OfficeNREG TOSHIBABUILDING

Property Name (location)

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

Nomura Fudosan
Nomura Real Estate
Ichigaya Building
Development(Chiyoda-ku, Tokyo)
Creare Toshiba Fuchu(Fuchu-shi, Tokyo)

Company Name

Financial Report 2018

Company Name

Nomura Real Estate
Life & Sports

Property Name (location)

Megaros Souka and other43 facilities(Souka-shi, Saitama andothers)

Use

Size of Construction or Details of Facility, etc.

Fitness Club

Reinforced concrete construction,
3 floors, 1 other building and fitness clubCompletion ofArea of
Total Floor
Construction or
Property
Area (m2) (Time of Acquisition)(m2)

Facility

Land

Other

Total

15,321¥8,293¥—¥1,116¥9,410June 2002

15,430Book Value (Millions of yen)

Notes: 1. “Facility” represents building accounts, “land” represents land accounts, and “others” represents structures; machinery; tools, appliances, and fixtures; vehicles and delivery
equipment; and leased asset accounts. “Total” represents tangible fixed assets excluding construction in progress accounts.
2. “Total floor area” represents the total owned area of Megalos Kashiwa, Megalos Chikusa 24, and Megalos Saginuma. “Area of property” represents the leased land area ofthe three preceding facilities. “Size of construction or details of facility, etc.” and “completion of construction of (time of acquisition)” are in reference to Megalos Kashiwa.

Nomura Real Estate Holdings, Inc.

8

Financial Report 2018

Facilities Establishment and Renovation

Basic Policy Concerning Profit Distribution and Dividends

Changes in Dividend Payments

In the fiscal year ended March 31, 2018, we were scheduled to establish and renovate the following facilities. However, there is no major

for the fiscal years ended March 31, 2018 and 2019

(yen)

­expansion or removal of facilities.

The Company’s basic policy regarding the distribution of profits is1) Establishment of major facilities

70.0

to aim for a payout ratio of approximately 30% over the medium

Property Name(location)

Company Name

80

Business
Segment

Planned aggregate investment(Millions of yen)
Use

Size of Construction or Details of Facility, etc.

Total

Steel-framed concrete construction(partially steel-framed reinforced concrete
construction), 4 floors below,
24 floors above ground¥35,300

Schedule

Amount Paid Sources of funding

Start

Completion

FY18/3

FY21/375.0

60

to long term in accordance with business performance, compre40

hensively considering factors including the operating environmentand capital investment plans, and taking retained earnings

20

Nomura Real Estate
Development

Toranomon Station-Front
Redevelopment (tentativename) (Minato-ku, Tokyo)

Nomura Real Estate
Development

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

Leasing

OfficeSteel-framed construction, 1 floor below
ground, 10 floors above ground

11,5306,956

Loans payable
and own funds

FY19/3

FY21/3soundness, and share price level, etc.

Nomura Real Estate
Development

Soto-Kanda 3chome Project(tentative name)(Chiyoda-ku, Tokyo)

Leasing

Hotel

Steel-framed construction,
10 floors above ground

6,550

3,980

Loans payable
and own funds

FY19/3

FY21/3

year ended March 31, 2018, the Company has set a year-end

Consolidated Performance Outlook for the fiscal year ending

dividend per share for the fiscal year ended March 31, 2018 of ¥35

March 31, 2019 (announced on April 27, 2018)

as forecasted. Combined with the second quarter-end dividend

We expect to post operating revenue of ¥700,000 million, operating

already paid, the annual dividend per share will be ¥70. During the

profit of ¥81,000 million, ordinary profit of ¥72,000 million, andfiscal year under review, 3,954,700 treasury shares were purchased

profit attributable to owners of parent of ¥47,000 million for theat a total cost of ¥9,999 million.

fiscal year ending March 31, 2019.

NREG TOSHIBABUILDING CO., Ltd.

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

Leasing

Leasing

OfficeOfficeSteel-framed concrete construction(partially steel-framed reinforced concrete
construction), 3 floors below,
11 floors above ground

4,600¥14,609

2,157

Loans payable
and own funds

Loans payable
and own funds

As for treasury share purchases, the decision whether to do so

2013

2014

2015

2016

2017

2018

2019
(Forecast)(Years ended / ending March 31)

Based on these policies, concerning dividends for the fiscal

FY18/3

FY20/3We intend to increase our dividend by a further ¥5 in the fiscal
Planned aggregate investment(Millions of yen)Company Name0will be made taking into comprehensive consideration financial

2) Renovation of major facility

Nomura Real Estate Development

into consideration.

Property Name

Existing buildings

Business Segment

Leasing

year ending March 31, 2019 making our total forecast annual

Total

Amount Paid

Construction Period

Note¥3,700—April 2018 – March 2019

Construction for facility renovation

dividend ¥75 per share.

Key Factors of Changes by Segment from FY18/3 (Actual) to FY19/3 (Forecast)

Residential
Development

Leasing

Investment
Management

– 0.2

+0.0

(Billions of yen)

Property
Brokerage& CRE

Property &Facility
Management

OthersAdjustments

+0.4

+0.0

+0.0

+2.0

+1.9

• An increase of brokeragecommission revenue.

81.0

76.6

• Increase in the numberof housing units sales.

FY18/3

Nomura Real Estate Holdings, Inc.

9

Financial Report 2018

FY19/3

Nomura Real Estate Holdings, Inc.

10

Financial Report 2018

Risks Affecting the Business of Nomura Real Estate Group(3) Licenses and permits for major businesses(7) Personal information(10) Concentration of revenues in fourth quarter

We believe that the following matters related to the Group’s busi-

The Group obtains licenses and permits, such as real estate

In the course of carrying out its operations, the various businesses

In the Residential Development Unit, which accounts for more thanness, accounting and other conditions could have a material

brokerage and construction licenses, when carrying out businessof the Group handle large quantities of personal information.

50% of the group’s revenues, housing sales are registered as sales

impact on the decision-making of investors.

activities. Currently, there are no reasons for any of these licenses

The Group endeavors to comply with various laws and regulations

when properties are handed over to the customers. In many cases,

It should be noted that matters concerning the future in thisor permits to be cancelled. However, in the future, if such licenses

pertaining to personal information, such as the Law Concerning

however, the completion and handover occur in February or Marchdocument have been determined based on information available

or permits are cancelled for whatever reason, this could adversely

Protection of Personal Information, and also handle information inof each year, in accordance with the requirements of customers

to the Group as of March 31, 2018.

affect the Group’s business performance.

the proper manner. Moreover, Group companies have produced

taking up residence. For this reason, a large proportion of thevarious documents, such as “Information Security Provisions,”

group’s revenues is concentrated in the fourth quarter of eachfiscal year.

(1) Trends in the real estate market(4) Impact of interest-bearing debt

“Rules for Handling Specific Personal Information” and “Guidelines

The Group’s performance for the fiscal year ended March 31, 2018

The balance of interest-bearing debt at March 31, 2018 wasfor Handling Information.” In these ways, the Group strives to train

resulted in increased income compared with the previous fiscal year.

¥877,800 million, which represents an increase of ¥67,700 million

and educate employees and protect the interests of customers.

(11) Capital relationship with other affiliates

In regard to the economic outlook, gradual recovery is expected

year on year (equivalent to 52.5% of total assets, increased by 1.6

In the event of external leakage of personal information due to

The Company’s other affiliates are Nomura Holdings, Inc. As of

to continue on the back of improvements in the employment andpercentage points year on year). When raising funds by borrowing,

unforeseen circumstances, however, confidence in the Group could

March 31, 2018, Nomura Holdings owned 34.4% of the Company’s

income environments as well as solid domestic and overseas econ-

the Group attempts to deal with the risk of a short-term rise in

be lost, leading to a decrease in sales and the incurrence ofshares. This holding percentage could change in the event of a saleomies, although it is necessary to pay attention to the uncertainty ofinterest rates mainly by taking out long-term, fixed-rate loans.

expenses to pay compensation for damages. This could have anof the Company’s shares by Nomura Land and Building or a capital

adverse impact on the Group’s business performance.

increase of the Company.

the overseas economy and trends in the financial and capital markets.
In the future, certain events could still cause a decline in­purchasing sentiment among customers of the Residential

However, an increase in borrowing costs due to a rise in market
interest rates could have a negative impact on the Group’s businessperformance and financial condition.

(8) Soil pollution
Under the Soil Contamination Countermeasures law, owners ofDevelopment Business, the Property Brokerage & CRE Business,and other businesses. These events include the current economic(5) M&A

land are obliged to evaluate and report on the soil pollution status­slowdown, an associated deterioration in corporate earnings,

The Company has positioned M&A as an important strategy forof their properties with respect to the presence of specific harmful

a decline in consumer spending, a rise in interest rates, or an

long-term growth, and aims at boosting Group enterprise value

substances, and also to take measures to remove such polluting

excess supply in the real estate market. This may lead to falls in

by implementing M&A that can be expected to generate synergies

substances. When considering purchases of land for businessselling prices, increases in inventories, a decline in purchasing sen-while making the most of the advantages offered by the holdinguse, the Group conducts historical and pollution assessments

timent, or losses on valuation of inventories. For the Leasing

company system. However, in the event of changes in the operatingin advance.

Business and the Investment Management Business, moreover,environment, the expected growth of the acquired company, or thesuch events could also spark declines in office rents, increases insynergy expected from the acquisition, may not be realized. Thisvacancy rates, falls in asset values, or drops in profit ratios, and an

could have an adverse impact on the Group’s businessaccompanying valuation loss on assets owned by the Group.

performance.

If the presence of pollution is confirmed, the Group either cancels
the acquisition or engages specialists to remove such pollution.
However, it is possible that the aforementioned assessments
fail to confirm the full extent of soil pollution, or that the seller isunable to fulfill his or her guarantee against defects even if soil

In addition, declining investment unit prices and weakening
demand for investment funds are possibilities in the REIT market.

(6) Natural disasters

pollution is detected. Detection of soil pollution on land purchased

Such events could have an adverse impact on the Group’s

Natural disasters, such as earthquakes and wind and floodby the Group, therefore, could lead to changes in the Group’sbusiness performance.

damage, as well as sudden accidents, could lead to damage ororiginal business schedules or to the incurrence of the additional­destruction of real estate owned or managed by the Group. Suchexpenses, which could have a negative impact on its business(2) Changes to real estate-related legislation or the tax system

incidents could have a negative impact on the Group’s businessperformance or financial condition.

A number of laws and regulations apply to the various businesses

performance and financial condition.

of the Group, which will be subject to new regulations as it expands(9) Asbestos

its operational scope in the future. Going forward, the Group may

Some of the buildings owned by the Group have been sprayed withface new obligations and expense burdens if the Building Standards

materials that include asbestos. The Group has engaged third-party

Law, the Building Lots and Buildings Transaction Business Law, theorganizations to assess such buildings. According to the results

Financial Instruments and Exchange Law, or other real e­ staterelatedof those assessments, the said materials are showing no signs oflaws are revised, or if new legislation is implemented. Such events

agerelated degradation and are in stable condition. In the future,

could adversely affect the Group’s business performance.

however, it is possible that asbestos may be scattered if age-relateddegradation occurs. Such an event could require removal or

Furthermore, if revisions to the tax system that impact the Real
Estate Development Business are implemented, this could lead tocontainment of the asbestos in question, resulting in the incurrence

an increase in expenses for holding, acquisition, and sales ofof additional costs that could have an adverse effect on the Group’s

assets, or a decline in the purchasing sentiment of customers.

business performance or financial condition.

It could also prompt a change in the facility strategies of companies
and revisions of their investment plans. Such events could have an
adverse impact on the Group’s business performance.

Nomura Real Estate Holdings, Inc.

11

Financial Report 2018

Nomura Real Estate Holdings, Inc.

12

Financial Report 2018

Consolidated Balance Sheet
Nomura Real Estate Holdings, Inc. and its subsidiaries
March 31, 2017 and 2018

(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)

AssetsCurrent Assets
Cash and deposits (Notes 2(3) and 3)
Notes and accounts receivable–trade
Securities (Notes 3 and 4)
Real estate for sale (Note 6)
Real estate for sale in process
Land held for development
Equity investments (Notes 3 and 4)
Deferred tax assets (Note 11)
Other
Allowance for doubtful accounts
Total current assets

Non-Current Assets
Property, plant and equipment   Buildings and structures (Notes 6 and 15)   Accumulated depreciation    Buildings and structures, net   Land (Notes 6 and 15)  Other   Accumulated depreciation   Other, net  Total property, plant and equipment
Intangible assets

2017

2018

2018

¥   47,701
16,535—
120,385249,663
199,8122,567
5,555
42,123(37)
684,306¥   52,347
17,3089,000
102,884
261,278
228,326
9,612
6,911
36,917(39)
724,547$   492,726
162,91484,713
968,418
2,459,324
2,149,158
90,47565,056
347,489(369)
6,819,909

394,607(152,718)
241,888549,671
26,053(8,787)
17,265808,825
10,985Investments and other assets   Investment securities (Notes 3 and 4)   Lease and guarantee deposits (Note 3)   Deferred tax assets (Note 11)  Other   Allowance for doubtful accounts   Total investments and other assets
Total non-current assets
Total Assets

46,252
21,73814,9925,992(0)88,975
908,786¥1,593,093

403,011(163,985)
239,026
592,550
26,576(9,778)
16,797
848,374
12,36442,362
23,131
14,5258,387(0)88,406
949,145¥1,673,692

3,793,409(1,543,535)
2,249,873
5,577,466
250,156(92,044)
158,112
7,985,451
116,384

398,743
217,728
136,72178,950(3)
832,140
8,933,977$15,753,886(Millions of yen)

Liabilities
Current Liabilities   Notes and accounts payable–trade   Short-term loans payable (Notes 3, 5 and 6)   Current portion of bonds (Notes 3, 5 and 6)   Income taxes payable (Note 11)  Deposits received   Deferred tax liabilities (Note 11)   Provision for bonuses   Provision for directors’ bonuses   Provision for loss on business liquidation  Other   Total current liabilities

2017

2018

2018

¥   35,612
106,300
10,00016,052
29,459
20
7,516
639
47
50,149255,799¥   41,696
102,300—
14,99318,807
18
7,679
590
36
48,073
234,194$   392,473
962,914—141,125
177,026
173
72,2885,558
339
452,495
2,204,395

Non-Current Liabilities   Bonds payable (Notes 3, 5 and 6)   Long-term loans payable (Notes 3, 5 and 6)   Lease and guarantee deposits received (Note 6)   Deferred tax liabilities (Note 11)   Deferred tax liabilities for land revaluation   Provision for loss on subleasing business   Net defined benefit liability (Note 7)  Other   Total non-current liabilities
Total Liabilities

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

140,000
635,500
60,24160,4033,900
102
18,375
5,991
924,515
1,158,710

1,317,771
5,981,739
567,035
568,553
36,709967
172,965
56,3958,702,138
10,906,533

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

117,072
110,316
275,299(10,004)
492,683

1,101,965
1,038,369
2,591,294(94,169)
4,637,459

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

4,516
262
7,860
(225)
(3,605)8,807
2,424
11,067514,982¥1,673,692

42,513
2,466
73,991(2,126)(33,940)
82,904
22,818104,170
4,847,353$15,753,886

Net Assets
Shareholders’ Equity (Note 12)   Capital stock   Capital surplus   Retained earnings  Treasury shares  Total shareholders’ equity
Accumulated Other Comprehensive Income   Valuation difference on available-for-sale securities   Deferred gains or losses on hedges   Revaluation reserve for land   Foreign currency translation adjustment   Remeasurements of defined benefit plans (Note 7)   Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total Net Assets
Total Liabilities and Net Assets
See notes to consolidated financial statements.

See notes to consolidated financial statements.

Nomura Real Estate Holdings, Inc.

13

Financial Report 2018

(Thousands of
U.S. dollars)(Note 1)

Nomura Real Estate Holdings, Inc.

14

Financial Report 2018

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2017 and 2018

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2017 and 2018

(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)

Operating Revenues and Expenses 

2017

2018

2018

Operating Revenue¥569,680¥623,762$5,871,253

Operating Cost

392,438

441,708

4,157,645

Operating Gross Profit

177,241

182,053

1,713,608

Selling, General and Administrative Expenses

99,970105,393

992,028

Operating Profit

77,271

76,660721,580

Non-Operating Income
Interest income

52

45

432

Dividend income

252

75

708

Share of profit of entities accounted for using equity method

83

25

243

Interest on refund

—

162

1,532

Gain on transfer of right to request purchase of shares

—

112

1,055

Other

310

351

3,304

Total non-operating income

698

773

7,277

(Millions of yen)
2017

¥46,666$439,253

1,282
(36)
(0)
19
(616)

(3,430)
142
(0)
(33)
523

(32,288)
1,339
(0)
(315)
4,926

(0)
648

(254)
(3,052)(2,398)(28,735)

Comprehensive Income (Note 19)¥48,175¥43,613$410,517¥47,654521¥42,976636$404,524
5,992

7,539

7,334

69,041

Other

1,477

2,065

19,442

See notes to consolidated financial statements.

Total non-operating expenses

9,017

9,400

88,483

68,952

68,033640,373

Gain on sales of non-current assets

946

3,311

31,169Gain on sales of investment securities

—

455

4,286

Total extraordinary income

946

3,766

35,455

Impairment loss (Note 10)

254

3,614

34,026

Loss on building reconstruction

337

462

4,357

Total extraordinary losses

591

4,077

38,383

Profit before Income Taxes

69,30767,722

637,445

Income Taxes–Current

22,957

23,811

224,129

Income Taxes–Deferred(1,177)(2,755)(25,937)

Total Income Taxes (Note 11)21,78021,055

198,192

Profit47,527

46,666439,253

Extraordinary Income

Extraordinary Losses

Profit Attributable to Non-Controlling Interests
Profit Attributable to Owners of Parent

521

636

5,991

¥ 47,005¥ 46,029$  433,262

See notes to consolidated financial statements.

Nomura Real Estate Holdings, Inc.

15

Financial Report 20182018

¥47,527

Interest expenses

Ordinary Profit

2018

ProfitOther Comprehensive Income (Note 19)
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans Share of other comprehensive income of entities accounted
for using the equity method   Total other comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

Non-Operating Expenses(Thousands of
U.S. dollars)(Note 1)

Nomura Real Estate Holdings, Inc.

16

Financial Report 2018

Consolidated Statement of Changes in Net Assets

Consolidated Statement of Cash Flows

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2017 and 2018

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2017 and 2018

(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)
Shareholders’ Equity

Accumulated other comprehensive income(Millions of yen)

Total
Valuation
Foreignaccumulated
Share
difference on
Deferred Revaluation currency Remeasurements
otheravailable-for- gains/losses reservetranslationof definedcomprehensive acquisitionrightssale securities on hedges
for land adjustments
benefit plansincomeNumberof shares
issuedCapitalstock

CapitalsurplusRetainedearnings

Treasury
stock

Total
shareholders’equityBalance at April 1, 2016

191,679,601¥116,598¥109,842¥207,203 ¥     (3)433,642¥ 6,664¥155¥7,861¥  43¥(3,513)

11,212

Noncontrollinginterests

Total
net assets¥1,685¥ 9,868¥  456,408

Issuance of new shares

198,200

180

180

—

—

361

—

—

—

—

—

—

—

—

361

Dividends from surplus

—

—

—

(11,504)—(11,504)

—

—

—

—

—

—

—

—

(11,504)

Profit attributable toowners of parent

—

—

—

47,005—47,005

—

—

—

—

—

—

—

—

47,005Purchases of treasury shares

—

—

—

—

(0)

(0)

—

—

—

—

—

—

—

—

(0)

Reversal of revaluation
reserve for land

—

—

—

0

—

0

—

—

—

—

—

—

—

—

0

Net changes of items otherthan shareholders’ equity

—

—

—

—

—

1,282

(36)

(0)

19

(616)

648

301

593

1,543
¥  975,177

Balance at March 31, 2017

191,877,801¥116,779¥110,023

469,503¥ 7,947¥119¥7,860¥  62¥(4,129)

11,860¥1,986¥10,462

Issuance of new shares

277,400

293

293¥242,704 ¥     (3)
—

—

586

—

—

—

—

—

—

—

—

1,172

Dividends from surplus

—

—

—

(13,435)—(13,435)

—

—

—

—

—

—

—

—

(26,870)

Profit attributable toowners of parent

—

—

—

46,029—46,029

—

—

—

—

—

—

—

—

92,059Purchases of treasury shares

—

—

—

—

(10,001)(10,001)

—

—

—

—

—

—

—

—

(20,002)

Net changes of items otherthan shareholders’ equity

—

—

—

—

—

—

(3,430)

142

(0)

(288)

523

(3,053)437

604(5,063)

Balance at March 31, 2018

192,155,201¥117,072¥110,316¥275,299 ¥(10,004)¥492,683¥ 4,516¥262¥7,860¥(225)¥(3,605)¥8,807¥2,424¥11,067¥1,016,474

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 (profit) loss of entities accounted for using equity method
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on business liquidation
Increase (decrease) in provision for loss on subleasing business
Increase (decrease) in net defined benefit liability
Interest and 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

2017

2018

2018

¥ 69,307
16,877
254
(946)
—
(83)
(1)
(13)
(55)
912
(304)
7,539
(1,157)(73,977)(1,748)(15,546)(158)(2,244)(1,346)285(9,332)(21,495)(31,889)¥ 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)
21,498$ 637,445
177,190
34,026(31,169)(4,286)
(243)
15
(112)
(1,459)(5,228)(1,141)
69,041(7,246)(272,438)(66,308)
57,275(100,264)
42,983528,080894(88,722)(237,897)
202,354(1,499)1,410(61,300)
12,066(1,018)964(12,448)
6,124
1,142
(54,558)(4,439)3,491(71,665)
19,589(1,148)1,240(3,153)
4,189
258(51,637)(41,785)
32,859(674,566)
184,391(10,806)
11,679(29,680)
39,4302,433(486,044)

(500)
(148)
160,000(91,300)
19,869—88
98(0)(11,504)(26)
76,575(25)(9,897)57,591(11,500)(149)
80,000(60,800)
69,360(10,000)
391—(10,048)(13,435)(31)
43,7870
13,64847,699(108,245)(1,402)753,012(572,289)
652,870(94,126)
3,682—(94,587)(126,460)(298)
412,1540
128,465448,9744——¥ 47,699¥ 61,347$ 577,439(Thousands of U.S. dollars) (Note 1)
Shareholders’ Equity

Balance at March 31, 2017

Capitalstock

Capitalsurplus

Accumulated other comprehensive income

Treasury
stock

Total
shareholders’equity$2,284,493 $    (34)

Retainedearnings

Total
Valuation
Foreignaccumulated
Share
difference on
Deferred Revaluation currency Remeasurements
otheravailable-for- gains/losses reservetranslationof definedcomprehensive acquisitionrightssale securities on hedges
for land adjustments
benefit plansincomeNoncontrollinginterests

Total
net assets$9,179,006$1,099,205$1,035,609$4,419,274$ 74,803$1,126$73,992$  586$(38,867)$111,641$18,698$ 98,475

Issuance of new shares

2,759

2,759

—

—

5,519

—

—

—

—

—

—

—

—

11,039Dividends from surplus——(126,460)—(126,460)

—

—

—

—

—

—

—

—

(252,920)

Profit attributable toowners of parent——

433,262—433,262

—

—

—

—

—

—

—

—

866,524

Purchases of treasury shares

—

—

—

(94,135)(94,135)

—

—

—

—

—

—

—

—

(188,271)

Net changes of items otherthan shareholders’ equity

—

—

—

—

—

(32,289)

1,339

(0)

(2,713)

4,926(28,737)

4,120

5,694

(47,660)

Balance at March 31, 2018

$1,101,965$1,038,369$2,591,294 $(94,169)$4,637,459$ 42,513$2,466$73,991$(2,126)$(33,940)$ 82,904$22,818$104,170$9,567,717

See notes to consolidated financial statements.
Note: The number of issued shares outstanding increased by 198,200 shares and 277,400 shares in the years ended March 31, 2017 and 2018, respectively, due to the exercise ofstock options.

Cash Flows from Investing Activities
Purchase of investment securities
Proceeds from sales and liquidation of investment securities
Purchase of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment and intangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Repayments of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received
Other, net
Net cash provided by (used in) investing activities
Cash Flows from Financing Activities
Net increase (decrease) in short-term loans payable
Repayments of finance lease obligations
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from issuance of common shares
Proceeds from share issuance to non-controlling shareholders
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of Exchange Rate Change on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Increase (Decrease) in Cash and Cash Equivalents Resulting
from Change of Scope of Consolidation
Cash and Cash Equivalents at End of Period
See notes to consolidated financial statements.

Nomura Real Estate Holdings, Inc.

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Financial Report 2018

Nomura Real Estate Holdings, Inc.

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Financial Report 2018

Notes to Consolidated Financial Statements
Nomura Real Estate Holdings, Inc. and its subsidiaries
March 31, 2017 and 2018

1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Nomura Real Estate Holdings, Inc. (the “Company”) and its subsid­
iaries (collectively, the “Group”) have been prepared in accordance with the provisions set forth in the Financial Instruments
and Exchange Act of Japan and its related accounting regulations, and accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects as to the application and disclosure requirements of International
Financial Reporting Standards.
The accompanying consolidated financial statements have been compiled from the consolidated financial statements of
the Company prepared in accordance with Japanese GAAP, and translated into English for the benefit of readers outside
Japan. In addition, the notes to the consolidated financial statements include information which may not be required underJapanese GAAP but is presented herein as additional information.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers using
the prevailing exchange rate at March 31, 2018 of ¥106.24=U.S.$1. The approximate rate of exchange prevailing at June 26,2018 was ¥109.57=U.S.$1. These translations should not be construed as representations that the Japanese yen amounts
have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

(5) Inventories
Inventories are mainly stated at cost, determined by the specific identification cost method (the amounts of inventories in theaccompanying Consolidated Balance Sheet are computed based on the write-down method reflecting decreased profitability).
Write-downs of inventories as a result of a decrease in profitability for the years ended March 31, 2017 and 2018 were¥166 million and ¥496 million ($4,676 thousand), respectively, and recognized in operating cost.
(6) Short-term Investments and Investment Securities
Held-to-maturity debt securities are stated at amortized cost by the straight-line method.
Available-for-sale securities with market value are stated at fair market value based on market quotations at the balance
sheet date.
Unrealized gains and losses are reported, net of the applicable taxes, as a separate component of Net Assets. Cost of
securities sold is determined by the moving-average method. Available-for-sale securities without market value are stated atcost by the moving-average method.
(7) Property and Equipment (except for leased assets)
Depreciation of property and equipment is computed mainly by the straight-line method.
Estimated useful lives used in the computation of depreciation are generally as follows:

2. Significant Accounting Policies

	  Buildings and structures 2 to 65 years(1) Principles of Consolidation and Accounting for Investments in Affiliates(8) Software (except for leased assets)

The accompanying consolidated financial statements include the accounts of the Group that the Company controls directly or

Costs of software for internal use are amortized using the straight-line method over an estimated useful life of five years.

indirectly. Investments in companies over which the Company exercises significant influence in terms of their operating andfinancial policies have been accounted for using the equity method.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit
included in the assets resulting from transactions among the consolidated companies has also been eliminated.

(9) Leased Assets
Leased assets are depreciated using the straight-line method, assuming the lease period to be the useful life and the residual
value to be zero.
Finance leases, other than those that transfer ownership, that started on or before March 31, 2008, are accounted for as
operating leases.

(2) Foreign Currency Translation
All current and non-current accounts denominated in foreign currencies are translated into Japanese yen at the spot
exchange rates in effect at the consolidated balance sheet date. Differences arising from such translation are recognized as(10) Amortization of Goodwill

gain or loss.

Goodwill is amortized using the straight-line method over a period of 14 to 20 years.

The asset and liability accounts of the overseas subsidiaries and affiliates are translated into Japanese yen at theexchange rates prevailing at the respective balance sheet dates of the subsidiaries and affiliates and the revenue and expense(11) Allowance for Doubtful Accounts

accounts are translated into Japanese yen at the average rates of exchange for the year. Differences arising from such trans-

In order to prepare for possible bad debt losses on notes and accounts receivable and loans, allowance for doubtful accounts

lation are presented as “Foreign currency translation adjustments” in Net Assets.

are provided at an amount calculated on the basis of a historical bad debt ratio for a certain reference period for normal
claims, plus an estimated uncollectible amount determined on the basis of individual assessments for specific claims withpotential losses.

(3) Cash and Cash Equivalents
In preparing the Consolidated Statement of Cash Flows, cash on hand, readily-available deposits and short-term, highly
liquid investments with a maturity of three months or less at the time of purchase and with an insignificant risk of market(12) Income Taxes

value fluctuation are considered to be cash and cash equivalents.

Current income taxes are stated at the estimated amount payable during each fiscal year for corporation, enterprise and

A reconciliation between cash and deposits in the Consolidated Balance Sheet and cash and cash equivalents is

inhabitants’ taxes in the Consolidated Statement of Income.
The tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and­presented in Note 12.

income tax purposes is recognized as deferred income taxes.
(4) Recognition of Revenues and Related Costs
The percentage-of-completion method is applied when the outcome of the construction activity during the fiscal year is(13) Provision for Retirement Benefits

deemed certain in the course of the activity (percentage of completion is calculated by dividing the related cost incurred by

To calculate retirement benefit obligations, the estimated amount of retirement benefits attributable to the fiscal year isthe estimated total cost), otherwise the completed-contract method is applied.

­determined based on the benefit formula method.
Prior service costs are amortized as incurred by the straight-line method over 10 years, which is within the average
number of remaining service years of the eligible employees.
Actuarial gains and losses are amortized in the following fiscal year in which the gain or loss is recognized by the straightline method mainly over 10 years, which is within the average number of remaining service years of the eligible employees.

Nomura Real Estate Holdings, Inc.

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Financial Report 2018

Nomura Real Estate Holdings, Inc.

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Financial Report 2018

(14) Per Share Information
Basic profit attributable to owners of parent per share is computed by dividing the profit attributable to owners of parent­available for distribution to shareholders of common stock by the weighted-average number of shares of common stock­outstanding during each fiscal year. Diluted profit attributable to owners of parent per share is computed by dividing the profit
attributable to owners of parent available for distribution to the shareholders by the weighted-average number of shares ofcommon stock outstanding during each fiscal year assuming full conversion of convertible bonds and full execution of warrants.
Net assets per share as of March 31, 2017 and 2018 were ¥2,508.73 and ¥2,664.70 ($25.08), respectively.
	Profit attributable to owners of parent per share for the years ended March 31, 2017 and 2018 was ¥245.10 and ¥240.89($2.27), respectively.
	Diluted profit attributable to owners of parent per share for the years ended March 31, 2017 and 2018 was ¥244.06 and¥239.52 ($2.25), respectively.

3. Financial Instruments(1) Policies on Financial Instruments
It is the policy of the Group to limit its fund management to safe and highly liquid deposits while raising funds primarily throughloans from financial institutions and the issuance of corporate bonds. Derivatives are utilized for hedging against the risks
described below not for speculative purposes.
(2) Details of Financial Instruments and Risks
Securities comprise safe and highly liquid negotiable deposits held for the purpose of managing t­emporary surplus funds.
Equity investments and investment securities primarily consist of stocks, investment units, and others held for the purposeof business promotion, all of which are exposed to market price fluctuation and issuer credit risk. Currency swaps andforward exchange contracts are used to hedge risks from exchange rate fluctuations on securities in foreign currencies.

(15) Land Revaluation
Under the “Law Concerning Revaluation Reserve for Land” promulgated on March 31, 1998, the Company revalued its land
held for business use. The tax amount for the difference between the appraisal value and the carrying amount is accounted
for as “Deferred tax liabilities for land revaluation” in Non-current Liabilities and the difference net of such tax amount isrecorded as “Revaluation reserve for land” in Net Assets.
Method of revaluation:

Interest rate swaps are used to hedge risks arising from fluctuations in interest rates on long-term borrowings.
Derivative transactions used by the Company are as follows:
Hedging instruments
Interest rate swap contracts
Currency swaps and foreign exchange forward contracts

Hedged items
Borrowings
Securities denominated in foreign currencies

The value of land is determined based on a reasonable adjustment to the assessed value of the fixed assets as stipulated in

The Group evaluates hedge effectiveness by comparing the cumulative changes in market fluctuations or in cash flows of

Item 3, Article 2 of the “Enforcement Ordinance Concerning Land Revaluation” (Ordinance No. 119 enacted on March 31,

the Hedged items to the corresponding changes in the hedging derivative instruments. However, the Group does not evaluate1998). Date of revaluation: March 31, 2002

hedge effectiveness of interest rate swaps for which the Group applies the exceptional treatment.

At March 31, 2017 and 2018, market value was not less than book value after revaluation.

(3) Policies and Systems for Risk Management
The Company regularly checks the market value of equity investments and investment securities, as well as the financial(16) Derivative Financial Instruments­conditions of their issuers.

Net assets and liabilities arising from derivative financial instruments are measured at fair value, with any changes in unrealized

The Finance Department conducts execution of derivative transactions and risk management based on the risk manage-

gain or loss credited or charged to income. Hedging transactions are accounted for using deferral hedge accounting, which

ment policies and operational plan determined by the Director in charge of Finance. The Finance Department also reports

requires the unrealized gains or losses to be deferred as assets or liabilities until the losses or gains on the underlying hedged

the status of transactions and risk information to the Director on a regular basis. The consolidated subsidiaries conduct

items are recognized.

execution of derivative transactions and risk management in accordance with internal policies. The Company considers there

For interest rate swaps that meet certain hedging criteria, the Group applies exceptional treatment where the Group does
not record these instruments at fair value but charges or credits the net cash flows from these instruments to the interest
arising from the hedged borrowings and corporate bonds. However, for currency swaps that meet certain hedging criteria,

is no substantial credit risk associated with these transactions because of the transactions being conducted only with highly
creditworthy financial institutions.
Based on the reports from each division of the Group, the Finance Department of the Company creates and updates

the currency swap contracts (the “Contracts”) and the securities denominated in foreign currencies (the “Hedged items”)

cash flow plans in a timely manner, managing liquidity risk through such methods as ensuring that a specific amount ofare accounted for in the following manner:on-hand liquidity is always available.

(a) If the Contracts are executed to hedge an existing the Hedged items,
	  (i) the difference, if any, between:(4) Supplemental Information on Fair Values	   • the Japanese yen amount of the Hedged items translated using the spot rate at the inception date of

The fair values of financial instruments are based on their market prices. The fair values of financial instruments with no

the Contracts and­available market prices are determined by using prices calculated in a reasonable manner. However, as various factors are	   • the book value of the Hedged items is recognized in the Consolidated Statement of Income in the period which
includes the inception date, andincorporated into these calculations, the resulting values may vary if different assumptions are provided. The contract amountshown in Note 14. Derivative Financial Instruments does not represent the market risk regarding the derivative transactions.

	  (ii) the discount or premium on the Contracts (that is, the difference between:	   • the Japanese yen amount of the Contracts translated using the contracted swap rate and	   • the Japanese yen amount of the Contracts translated using the spot rate at the inception date of the Contracts)
is recognized over the term of the Contracts.
(b) If the Contracts are executed to hedge a future transaction denominated in a foreign currency, the swap transaction will be recorded using the contracted swap rate, and no gains or losses on the Contracts are recognized.

Nomura Real Estate Holdings, Inc.

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Nomura Real Estate Holdings, Inc.

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Financial Report 2018

(5) Fair Values of Financial Instruments(3) Investment securities

The book values, fair values and differences of financial instruments as of March 31, 2017 and 2018 are as follows. Items for

For stocks and investment units, fair values are determined mainly at the price quoted on an exchange. For investment

which fair value is extremely difficult to determine have not been included.

trusts, fair values are determined at an amount reasonably calculated based on a reasonable estimate of the management. Please see Note 4. Securities for information on those securities in (2) and (3).

Book value
2017

Fair value

Difference(Millions of yen)

(Millions of yen)

(Millions of yen)

¥ 47,701—
42,497
90,19845,50080,000684,600
810,100¥   (206)¥ 47,701—
42,54490,24545,50080,890697,963824,353¥   (206)¥        —
—
47
47
—
890
13,363
14,253¥        —(1) Cash and deposits(2) Securities(3) Investment securities 1
Total assets(1) Short-term loans payable 2(2) Bonds payable 3(3) Long-term loans payable 2
Total liabilities
Derivative transactions 4

Liabilities(1) Short-term loans payable
As these instruments are settled within a short term and their book values approximate fair values, their book values are
deemed as their fair values.
(2) Bonds payable
Market prices of the bonds issued by the Company.
(3) Long-term loans payable
For long-term loans payable, fair value is determined by discounting the total amount of principal and interest at theassumed interest rate on new loans of the same type. Long-term loans with floating interest rates are hedged by interest
rate swaps subject to the exceptional treatment, and, therefore, the fair value is determined by discounting the total

Notes: 1. Includes government bonds, etc. presented as lease and guarantee deposits on the Consolidated Balance Sheet.
2. Current portion of long-term loans payable is included in (3) Long-term loans payable.
3. Bonds scheduled to be redeemed within the year are included under “(2) Bonds.”
 or derivative transactions, stated values are the net amounts of receivables and payables arising from the transactions. Figures in parentheses are
4. F
liability amounts.

amount of interest and principal together with cash flow generated by the interest rate swap at the interest rate assumed
in a reasonable manner for new loans of the same type.
Derivatives
Please see Note 14. Derivative Financial Instruments for information on derivative transactions.

Book value
2018

Fair value

Difference(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥ 52,347
9,000
37,20598,55334,000140,000
703,800
877,800¥   (525)$  492,726
84,713
350,205
927,645
320,030
1,317,771
6,624,623
8,262,424$   (4,947)¥ 52,347
9,000
37,244
98,592
34,000141,428
717,255
892,684¥   (525)$  492,726
84,713
350,572
928,012
320,030
1,331,218
6,751,276
8,402,525$   (4,947)¥        —
—
39
39
—
1,428
13,455
14,884¥        —$        —
—
367
367
—
13,447
126,653
140,101$        —(1) Cash and deposits(2) Securities(3) Investment securities 1
Total assets(1) Short-term loans payable 2(2) Bonds payable(3) Long-term loans payable 2
Total liabilities
Derivative transactions 3

Notes: 1. Includes government bonds, etc. presented as lease and guarantee deposits on the Consolidated Balance Sheet.
2. Current portion of long-term loans payable is included in (3) Long-term loans payable.
3.	For derivative transactions, stated values are the net amounts of receivables and payables arising from the transactions. Figures in parentheses areliability amounts.

3. Financial instruments for which fair value is extremely difficult to determineBook value
2017(Millions of yen)

Unlisted stocks¥7,765

Book value
2018(Millions of yen)(Thousands of U.S. dollars)

Unlisted stocks¥16,266$153,109

Notes: 1.	Financial instruments for which there is no fair value and for which the fair value is extremely difficult to determine are not included in (3) Investment
securities.
2. Includes unlisted stocks, etc., recorded under “equity investments.”

4. Redemption schedule for financial assets with maturities
Within 1 year

Notes:
1. Investments in non-consolidated subsidiaries and affiliates are as follows:
Investment securities (stocks, etc.)¥1,406 million as of March 31, 2017
¥5,538 million ($52,131 thousand) as of March 31, 2018
2. Method of measuring the fair value of financial instruments
Assets(1) Cash and deposits
As these instruments are settled within a short term and their book values approximate fair values, their book values are
deemed as their fair values.
(2) Securities
As these instruments, primarily comprising negotiable deposits, are settled within a short term and their book values

2017

Cash and deposits Securities andinvestment securities Held-to-maturity
debt securities  (1) Government andmunicipal bonds, etc.
   (2) Corporate bonds Available-for-sale securities
with maturities   (1) Debt securities  (2) Others
Total

1–5 years

5–10 years(Millions of yen)

(Millions of yen)

(Millions of yen)

¥47,661

¥  —

¥  —

¥—

15

478

942

—

—

—

—

—

2
—
¥47,679

10
—
¥488

—
—
¥942

—
—
¥—

approximate fair values, their book values are deemed as their fair values.

Nomura Real Estate Holdings, Inc.

23

Financial Report 2018

Over 10 years(Millions of yen)

Nomura Real Estate Holdings, Inc.

24

Financial Report 2018

Within 1 year
2018

Cash and deposits Securities andinvestment securities Held-to-maturity
debt securities   (1) Government andmunicipal bonds, etc.
   (2) Corporate bonds Available-for-sale securities
with maturities   (1) Debt securities  (2) Others
Total

1–5 years

5–10 years

Over 10 years(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)¥52,298 $492,263¥ —$       —¥ —$       —¥—$—

(Millionsof yen)(1) Held-to-maturity Debt Securities with Fair Value
38

359

614

5,785

838

7,888

—

—

—

—

—

—

—

—

—

—

2
24
9,000
84,713¥61,338 $577,361

7
—
¥622

Within 1 year

Short-term loans payable
Bonds payable
Long-term loans payable
Total

73
—
$5,858

—
—
¥838

—
—
$7,888——¥—1-2 years——$—(Millions of yen)

(Millions of yen)

¥ 45,500
10,00060,800¥116,300¥    ——
68,300¥68,300¥    ——
53,500¥53,500

4-5 years(Millions of yen)

(Millions of yen)¥    —
20,00050,000¥70,000¥         —10,00055,000¥65,000¥         —40,000397,000¥437,000

Short-term loans payable
Bonds payable
Long-term loans payableTotal

1-2 years

Short-term loans payable
Bonds payable
Long-term loans payable
Total(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥ 34,000—
68,300¥102,300$320,030—
642,884$962,914¥    ——
53,500¥53,500$      —
—503,577$503,577¥    —
20,00050,000¥70,000$       —188,253
470,633$658,886

Over 5 years(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥    —
10,00055,000¥65,000$       —94,127
517,696$611,822¥         —10,00068,000¥78,000$     —
94,127640,060$734,187¥         —100,000
409,000¥509,000$        —941,265
3,849,774$4,791,039

Nomura Real Estate Holdings, Inc.

25

Financial Report 2018

Fair value

Difference¥1,322——
1,322¥1,369
—
—
1,369

¥47
—
—
47

120
—
—
120
¥1,442120——
120¥1,489

(0)
—
—
(0)
¥47

(Thousands of U.S. dollars)Book value

Fair value

Difference¥1,431——
1,431¥1,470
—
—
1,470

65
—
—
65
¥1,49765——
65¥1,536

Securities whose fair value exceeds book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Securities whose fair value does not exceed book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Total

Book value

Book value

Fair value

Difference

¥39
—
—
39

$13,474——
13,474$13,842——
13,842

$368
—
—
368

(0)
—
—
(0)
¥39

620
—
—
620
$14,095

619
—
—
619
$14,462

(0)
—
—
(0)
$367

2-3 years(Thousands of
U.S. dollars)

4-5 years

Securities whose fair value exceeds book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Securities whose fair value does not exceed book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Total(Millions of yen)

(Millions of yen)

3-4 years(Millions of yen)
2017

2018

Over 5 years(Millions of yen)

Within 1 year2018

2-3 years(Millions of yen)

3-4 years

Short-term loans payable
Bonds payable
Long-term loans payable
Total

The following tables summarize the acquisition cost, book value and fair value of securities held by the Group as of March 31,2017 and 2018.

5. Repayment schedule for bonds payable and long-term loans payable at March 31, 2017 and 20182017

4. Securities(2) Available-for-sale Securities with Fair Value(Millions of yen)
2017

Securities whose book value exceeds acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Securities whose book value does not exceed acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Total

Nomura Real Estate Holdings, Inc.

26

Financial Report 2018

Book value

Acquisition cost

Difference¥ 1,850¥ 1,006¥   843———
39,12940,980———28,371
29,378———10,758
11,601

0

0

(0)

—
13
—
61
74
¥41,054

—
13
—
65
78
¥29,457

—
—
—
(4)
(4)
¥11,597(Millions of yen)
2018

Securities whose book value exceeds
acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Securities whose book value does not exceed
acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Total(Thousands of U.S. dollars)Book value

Acquisition cost

DifferenceBook value

Acquisition cost

Difference¥ 1,921¥ 1,007¥  914$ 18,088$  9,480$ 8,608———
33,70635,628———28,16529,172

—
—
—
5,540
6,455

—
—
—
317,265
335,354———
265,112274,592———
52,152
60,761(Thousands of
U.S. dollars)

Short-term loans payable
Total

2017

2018

2018

¥45,500¥45,500¥34,000¥34,000$320,030$320,030

Short-term loans payable as of March 31, 2017 and 2018 mainly consisted of borrowings from banks with a weighted
—

—

—

—

—

—

—
10
—
9,069
9,080
¥44,708

—
10
—
9,073
9,083
¥38,256

—
—
—
(3)
(3)
¥6,451—
97—
85,37285,470$420,824—97—
85,40585,503$360,095

—
—
—
(33)
(33)
$60,728

The table below presents sales of available-for-sale securities and corresponding aggregate gains and aggregate losses forthe years ended March 31, 2017 and 2018.
2017(Millions of yen)SalesamountType(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Total

Aggregate
gains

Aggregate
losses¥ 6¥      0¥      0

—
—
—
73
¥80

—
—
—
6
¥      7———2¥      2

2018(Millions of yen)

(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Total

Short-term loans payable as of March 31, 2017 and 2018 are summarized as follows:(Millions of yen)

(3) Sales of Available-for-sale Securities

Type

5. Short-term Loans Payable and Long-term Loans Payable(Thousands of U.S. dollars)

SalesamountAggregate
gains

Aggregate
lossesSalesamount¥3,222¥455¥118$30,327$4,286$1,118————¥3,222

—
—
—
—
¥455

—
—
—
—
¥118

—
—
—
—
$30,327————$4,286———$1,118

Nomura Real Estate Holdings, Inc.

27

Financial Report 2018

Aggregate
gains

Aggregate
lossesaverage interest rate of 0.2% in 2017 and 0.2% in 2018.
Long-term loans payable and bonds payable as of March 31, 2017 and 2018 are summarized as follows:(Thousands of
U.S. dollars)(Millions of yen)Unsecured bonds (2.1%), due 2017
Unsecured bonds (2.0%), due 2020
Unsecured bonds (0.8%), due 2024
Unsecured bonds (0.9%), due 2025
Unsecured bonds (0.4%), due 2021
Unsecured bonds (0.8%), due 2026
Unsecured bonds (0.2%), due 2021
Unsecured bonds (1.0%), due 2036
Unsecured bonds (0.2%), due 2022
Unsecured bonds (1.0%), due 2037
First deferred interest payment clause/unsecured bonds withearly redemption clause (with subordination agreement)
Second deferred interest payment clause/unsecured bonds withearly redemption clause (with subordination agreement)
Long-term loans payable 1
Unsecured
Lease obligations 2
SubtotalLess amounts due within one year

2017

2018

2018

¥ 10,000
10,00010,00010,00010,00010,00010,00010,000——¥     —
10,00010,00010,00010,00010,00010,00010,00010,00010,000$             —94,126
94,126
94,126
94,126
94,126
94,126
94,126
94,126
94,126—30,000282,379—

20,000188,253684,600
1,336
765,936(70,927)¥695,009

703,800
1,551
845,351(68,150)¥777,201

6,624,623
14,608
7,957,002(641,478)$7,315,524

Notes: 1. L ong-term loans payable as of March 31, 2017 and 2018 mainly consisted of borrowings from domestic Japanese banks and life insurance companies
with weighted-average interest rates of 0.5% in 2017 and 0.5% in 2018.
2. T he weighted-average interest rate for lease obligations is not shown because for some consolidated subsidiaries the lease obligations recorded in theConsolidated Balance Sheet are the amounts before deducting the interest equivalents included in the total lease commitments.

Nomura Real Estate Holdings, Inc.

28

Financial Report 2018

The following table shows the maturities of long-term loans payable subsequent to March 31, 2018
Years ending March 31(Millions of yen)(Thousands of
U.S. dollars)

2019
2020
2021
2022
2023 and thereafter¥ 53,500
50,00055,00068,000409,000¥635,500$  503,576
470,632
517,695
640,060
3,849,774$5,981,739

7. Retirement Benefits(1) Outline of Retirement Benefit Plans
The Company does not have a retirement benefit plan. As defined benefit plans, certain subsidiaries have the lump-sum
pension plan and the defined benefit corporate pension plan, and defined contribution pension plans. In certain cases,­additional retirement benefit payments may be made. For the lump-sum pension plan and the defined benefit corporate
pension plan used by certain subsidiaries, net defined benefit liability and retirement benefit expenses are calculated by­simplified method.
(2) Defined Benefit Plan

The following table shows the maturities of lease obligations subsequent to March 31, 2018.
Years ending March 31(Millions of yen)(Thousands of
U.S. dollars)

2019
2020
2021
2022
2023 and thereafter¥  121
104
102
106
967
¥1,402$ 1,146
980
960
1,004
9,110
$13,202

6. Pledged Assets and Secured Liabilities

A reconciliation of the changes in retirement benefit obligations for the fiscal years ended March 31, 2017 and 2018 (excluding
plans applying a simplified method)

2017

2018

2018

¥32,420¥34,907$328,570

Service cost

1,702

1,776

16,720Interest cost

153

164

1,549

Actuarial gain or loss

1,384

254

2,396

Retirement benefit payments

(752)

(787)

(7,407)¥34,907¥36,315$341,829

Retirement benefit obligations at the beginning of the year

Retirement benefit obligations at the end of the year

Pledged assets and secured liabilities at March 31, 2017 and 2018 are summarized as follows:

A reconciliation of the changes in balance of plan assets for the fiscal years ended March 31, 2017 and 2018 (excluding plans
applying a simplified method)(1) Pledged Assets and Secured Liabilities(Thousands of
U.S. dollars)(Millions of yen)
2017

2018

2018

Pledged assets:
Buildings and structures

¥190

¥179

$1,693¥190¥179$1,693

Secured liabilities:
Lease and guarantee deposits received
Total

37

30

291

¥ 37

¥ 30

$  291(2) As of March 31, 2017, investment securities in the amount of ¥10 million are pledged as collateral for trade payables and a
portion of liabilities of investee companies, respectively.
As of March 31, 2018, investment securities in the amount of ¥10 million ($94 thousand) are pledged as collateral for(Millions of yen)

Fair value of plan assets at the beginning of the year
Expected return on plan assets
Actuarial gain or loss
Employer contributions
Retirement benefit payments
Fair value of plan assets at the end of the year

2017

2018

2018

¥18,024
306
410
1,610
(363)
¥19,988$169,654
2,884
3,859
15,160(3,417)$188,142

A reconciliation of the changes in balance of net defined benefit liability applying a simplified method for the fiscal years ended
March 31, 2017 and 2018
(Millions of yen)

Net defined benefit liability at the beginning of the year
Retirement benefit expenses
Retirement benefit payments
Contributions to plan
Net defined benefit liability at the end of the year

29

Financial Report 2018

(Thousands of
U.S. dollars)¥16,541
330
(12)
1,553
(388)
¥18,024

trade payables and a portion of liabilities of investee companies, respectively.

Nomura Real Estate Holdings, Inc.

(Thousands of
U.S. dollars)(Millions of yen)

Nomura Real Estate Holdings, Inc.

30

Financial Report 2018

(Thousands of
U.S. dollars)

2017

2018

2018

¥2,139
317
(386)
(22)
¥2,048¥2,048
280
(257)
(23)
¥2,048$19,277
2,641(2,421)(219)$19,278

A reconciliation of retirement benefit obligations as well as plan assets at March 31, 2017 and 2018, and net defined benefit

Composition of plan assets by major classifications

liability on the Consolidated Balance Sheet(Millions of yen)

Funded retirement benefit obligations
Fair value of plan assets
Subtotal
Unfunded retirement benefit obligations
Net liabilities on the Consolidated Balance Sheet
Net defined benefit liability
Net liabilities on the Consolidated Balance Sheet(Thousands of
U.S. dollars)

2017

2018

2018

¥ 24,663(18,153)
6,509
12,422¥ 18,931
18,931¥ 18,931¥ 25,651(20,118)
5,532
12,842¥ 18,375
18,375¥ 18,375$ 241,447(189,368)
52,078120,886$ 172,965
172,965$ 172,965

Note: It includes the plans applying a simplified method.

ClaimsEquityOther
Total(Millions of yen)

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain or loss
Amortization of prior service cost
Retirement benefit expenses calculated by a simplified method
Other
Retirement benefit expenses for defined benefit plan

2017

2018

¥1,702
153
(330)
905
(395)
317
12
¥2,364¥1,776
164
(306)
994
(395)
280
2
¥2,516

2018

48%
24%
27%
100%

47%
23%
30%
100%

The expected long-term rate of return on plan assets has been estimated based on the current and projected allocationof plan assets and the current and expected long-term rate of return on diverse assets which comprise plan assets.
Assumptions used in accounting for the retirement benefit plans are summarized as follows (represented by a weighted average):
Discount rate
Expected rate of return on plan assets
Expected salary increase rate

Breakdown of retirement benefit expenses

2017

2017

2018

0.2~0.5%
2.0%
2.2~7.5%

0.2~0.5%
1.7%
2.2~7.5%(Thousands of
U.S. dollars)
2018$16,720
1,549(2,884)9,359(3,723)
2,641
21$23,684(3) Defined Contribution Plan
The required contributions to the defined contribution plans of consolidated subsidiaries for the fiscal years ended March 31,2017 and 2018 are ¥571 million and ¥608 million ($5,729 thousand).

8. Reclassification of Assets
As a result of revising the holding purpose of assets, the following amounts have been transferred from land held for development tonon-current assets during the fiscal year ended March 31, 2018.
Transfer during the year

Breakdown of items recorded in the Consolidated Statement of Comprehensive Income as remeasurements of defined benefit(Millions of yen)plans, before tax(Millions of yen)

Prior service cost
Actuarial gain or loss
Total

2017

2018

¥(395)(492)¥(887)¥ (395)1,149¥  754(Thousands of
U.S. dollars)

Non-current assets from land held for development(Thousands of
U.S. dollars)

2017

2018

2018

¥—

¥6,959$65,5032018$ (3,723)
10,822$ 7,098

9. Gain on Sales of Property and Equipment
The breakdown of gain on sales of property and equipment for the fiscal years ended March 31, 2017 and 2018 is as follows:
Gain on sales

Breakdown of items recorded in the Consolidated Balance Sheet as remeasurements of defined benefit plans, before tax(Millions of yen)

Unrecognized prior service cost
Unrecognized actuarial gain or loss
Total

Nomura Real Estate Holdings, Inc.

31

Financial Report 2018

(Millions of yen)(Thousands of
U.S. dollars)

2017

2018

2018

¥ 1,384(7,334)¥(5,949)¥   989(6,184)¥(5,195)$   9,309(58,215)$(48,905)

Land
Buildings
Total

Nomura Real Estate Holdings, Inc.

32

Financial Report 2018

(Thousands of
U.S. dollars)

2017

2018

2018

¥ (263)
1,209¥  946¥2,938372¥3,311$27,6623,507$31,169

10. Impairment Loss

The table below presents an itemized breakdown of deferred tax assets and liabilities as of March 31, 2017 and 2018:­Significant components of the Company’s deferred tax assets and liabilities

The Group recognized impairment loss on the following groups of assets for the fiscal years ended March 31, 2017 and 2018:2017

Primary use

Type

Assets of the Group are grouped into the smallest unit that generates identifiable cash flows that are largely independent ofcash flows from other assets or groups of assets. The headquarters building and certain other assets are considered to beshared assets.
As a result, with respect to two groups of assets etc., comprising those the Group plans to dispose of, the carrying
amount has been reduced to the recoverable amount and the amount of reduction has been recognized in extraordinary
losses as impairment loss of ¥254 million for the fiscal year ended March 31, 2017. The impairment loss consists of ¥238
million of buildings and ¥15 million of other.
The recoverable amount of these groups of assets is measured at the value in use and the value in use is assessed by
setting the recoverable value at zero based on an expected negative future cash flow.
Primary use

2018Leased assets(3 locations in total)

Type

Location

Buildings

Yokohama-shi, Kanagawa and other locations

Assets of the Group are grouped into the smallest unit that generates cash flows that are largely independent of cash flows
from other assets or groups of assets. The headquarters building and certain other assets are considered to be sharedassets.
As a result, with respect to three groups of assets etc., comprising those whose profitability has dropped significantly
due mainly to the changes of usage, decline in rent level or the deterioration of the market conditions, the carrying amount
has been reduced to the recoverable amount and the amount of reduction has been recognized in extraordinary losses as
impairment loss of ¥3,614 million for the fiscal year ended March 31, 2018. The impairment loss consists of ¥3,614 millionof buildings.
The recoverable amount of these groups of assets is measured at the net realizable value and the net realizable value isdetermined based on the appraisal value provided by real estate appraisers.

Deferred tax assets:
Unrealized profits
Net defined benefit liability
Impairment loss
Provision for bonuses
Inventory write-downs
Excess of depreciation
Revaluation of assets on consolidation
Provision for loss on subleasing business
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Revaluation of assets on consolidation
Reserve for deferred income taxes
Other
Total deferred tax liabilities
Net deferred tax liabilities(Thousands of
U.S. dollars)

2017

2018

2018

¥ 12,939
5,963
3,923
2,236
1,566
666
440
79
4,949
32,766(3,284)29,481¥ 12,456
5,639
5,150
2,208
1,522
776
446
31
6,502
34,733(3,321)
31,412$ 117,251
53,08048,476
20,78814,328
7,307
4,201
296
61,208326,938(31,260)
295,677(49,854)(18,218)(4,474)(72,546)¥(43,064)(49,400)(18,066)(2,929)(70,397)¥(38,984)(464,993)(170,058)(27,575)(662,626)$(366,949)

Location

Buildings
Chuo-ku, Tokyo and other locations
Property, plant and equipment-others

Leased assets(2 locations in total)(Millions of yen)

12. Shareholders’ Equity
Under the Companies Act of Japan (the “Act”), all funds obtained through the issuance of common stock must be treatedas common stock and, by resolution of the board of directors, an amount equivalent to less than half of those funds may
be appropriated to the capital reserve (a component of capital surplus).
The Act provides that an amount equal to 10% of the amount to be distributed as distributions of capital surplus (otherthan the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal
reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the capital stock account.
As of March 31, 2018, the Group’s capital reserve amounted to ¥110,316 million ($1,038,369 thousand), and no legal
reserve was recorded.

11. Income Taxes
The statutory tax rate in Japan for the Company and its domestic subsidiaries was 30.9% for the fiscal years ended March
31, 2017 and 2018.

13. Supplementary Cash Flow Information
A reconciliation of cash and deposits in the Consolidated Balance Sheet and cash and cash equivalents in the Consolidated

Significant differences between the statutory tax rate and the effective tax rate

Statement of Cash Flows is as follows:(Millions of yen)

Fiscal year ended March 31, 2017
The note has been omitted because the difference between the statutory tax rate and the effective tax rate is less than 5% of
the statutory tax rate.
Fiscal year ended March 31, 2018

Cash and deposits
Securities
Time deposits with maturities of more than three months
Cash and cash equivalents

The note has been omitted because the difference between the statutory tax rate and the effective tax rate is less than 5% of
the statutory tax rate.

Nomura Real Estate Holdings, Inc.

33

Financial Report 2018

Nomura Real Estate Holdings, Inc.

34

Financial Report 2018

(Thousands of
U.S. dollars)

2017

2018

2018

¥47,701—(2)¥47,699¥52,347
9,000—¥61,347$492,726
84,713—$577,439

14. Derivative Financial Instruments(b) Interest rate-related derivatives
2017
Hedge accounting
method(1) Derivatives to which Hedge Accounting is not Applied
There are no derivative transactions to which hedge accounting is not applied.

Exceptional treatment forinterest rate swaps(2) Derivatives to which Hedge Accounting is Applied

2017
Hedge accounting
methodDeferral hedge
accounting

Deferral hedge
accounting

Deferral hedge
accounting

Type of derivatives

Currency swaps
Receipts in yen / Payments in U.S.
dollars
Forward exchange
contract
Sell U.S. dollars /Buy yen”
Forward exchange
contract
Sell Chinese Yuan /Buy U.S. dollars(Millionsof yen)(Millionsof yen)(Millionsof yen)Securities denominated inforeign currencies¥1,094¥  983¥(99)

Securities denominated inforeign currencies¥3,576

Deferral hedge
accounting
Deferral hedge
accounting

Deferral hedge
accounting

Deferral hedge
accounting
Total

Interest rate swaps Long-term debt
Receive floating rate/
Pay fixed rate

¥327,500¥278,500(Note)¥327,500¥278,500—

Type of derivatives

Securities denominated inforeign currencies¥1,135¥1,135¥  12¥5,807¥3,278¥(206)¥1,158Hedge accounting
methodExceptional treatment forinterest rate swaps¥(119)

Contract amountdue after one year

Contract amount

Fair value

Major hedged
items(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)Interest rate swaps Long-term debt
Receive floating rate/
Pay fixed rate¥283,500$2,668,486¥240,000$2,259,036(Note)¥283,500$2,668,486¥240,000$2,259,036—

Type of derivatives

Total(Thousands of
U.S. dollars)Note: The fair value of the interest rate swaps which qualify for exceptional treatment for interest rate swaps is considered to be included in the fair value of the longterm debt.

15. Leases
Details of significant lease transactions are as follows:
The table below presents the future lease payments and receipts of operating leases subsequent to March 31, 2017and 2018.

Contract amountdue after one year

Contract amount2018

Fair value

Major hedged
items(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)

Currency swaps
Securities
Receipts in yen / denominated in Payments in U.S.
foreign currencies
dollars
Currency swaps
Securities
Receipts in yen / denominated inPayments in Thai baht foreign currencies
Forward exchange
Securities
contract denominated in
Sell U.S. dollars /foreign currencies
Buy yen
Forward exchange
Securities
contract denominated in
Sell Chinese Yuan /foreign currencies
Buy U.S. dollars
Non-deliverable forward
Sell Philippine peso /Buy yen¥1,326$ 12,487¥1,215$11,440¥ (18)$   (172)Type of derivatives(Millionsof yen)2018

Note: The fair value is determined based on the quoted price obtained from the counterparty financial institutions to the derivatives transactions.

Deferral hedge
accounting(Millionsof yen)Fair value

Major hedged
items

Total

Hedge accounting
method(Millionsof yen)Note: The fair value of the interest rate swaps which qualify for exceptional treatment for interest rate swaps is considered to be included in the fair value of the longterm debt.

Contract amountdue after one year

Contract amount

Fair value

Major hedged
items

Total

(a) Currency-related derivatives

Contract amountdue after one year

Contract amount¥7,400¥3,710$ 69,655$ 34,930¥6,280¥  991$59,117$ 9,331¥(312)¥ (51)$(2,940)$   (487)(Millions of yen)
Operating leases

Future lease payments:
Due within 1 year
Due after 1 year
Total
Future lease receipts:
Due within 1 year
Due after 1 year
Total

2017

2018

2018

¥  3,178
15,127¥ 18,305¥  3,166
13,946¥ 17,113$   29,805
131,275$   161,080¥ 24,260
96,798¥121,059¥ 26,392
90,622¥117,014$   248,422
852,995$1,101,417

Note: The note on finance leases has been omitted due to a lack of materiality.

¥1,075$ 10,124¥1,075$10,124¥(142)$(1,345)¥  209$  1,971¥    –$     –¥   0$    (1)¥13,722$129,168¥9,563$90,013¥(525)$(4,947)

Note: The fair value is determined based on the quoted price obtained from the counterparty financial institutions to the derivatives transactions.

Nomura Real Estate Holdings, Inc.

35

Financial Report 2018

Nomura Real Estate Holdings, Inc.

36

(Thousands of
U.S. dollars)

Financial Report 2018

16. Real Estate for Rent

17. Segment Information

Some of the Company’s subsidiaries own rental office buildings and rental facilities (including land) in Tokyo and other regions.
Some rental office buildings are regarded as properties including the portion used as rental properties since they are usedby the Company and certain consolidated subsidiaries.

(1) Segment Summary
The reportable segments of the Group comprise those business units for which separate financial information is available, andwhich are subject to a regular review conducted by the Company’s Board of Directors in order to determine the allocation of

The book values in the Consolidated Balance Sheet, changes during the fiscal years ended March 31, 2017 and 2018,
and fair values of real estate, of which some portions are used as rental property, are as follows:management resources and evaluate their performance.
With the Company as a pure holding company, the Group consists of business companies and divisions, such as Nomura
Real Estate Development Co., Ltd. The business companies (or business divisions within Nomura Real Estate Development)(1) Changes in Fair Value of Rental and Other Properties during the Fiscal Years Ended March 31, 2017 and 2018
Book value 1
March 31, 20162017

Rental properties
Other properties used
as rental properties 3

Fair value 2

Increase/Decrease

March 31, 2017

March 31, 2017

(Millionsof yen)(Millionsof yen)(Millionsof yen)(Millionsof yen)¥738,003¥28,969¥766,973¥892,524

25,999123

26,12254,500formulate comprehensive strategies on respective products and services handled by them and conduct business activities
based on such strategies.
Therefore, business segments of the Group are distinguished by products and services, primarily by business companies(or by business divisions within Nomura Real Estate Development).
(2) Methods for Calculating Net Sales, Income (loss), Assets, Liabilities and Other Items by Reportable Segment
The accounting method for reportable segments is almost equivalent to that specified in “Significant Accounting Policies.”
Reportable segment income is presented based on operating income. Intersegment sales and transfer amounts areBook value 1
March 31, 20172018

Rental properties
Other properties
Used as rental properties 3(Millionsof yen)Fair value 2

Increase/Decrease

March 31, 2018

(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)¥766,973 $7,219,249¥27,505$258,898

(96)

(903)

26,122245,885(Millionsof yen)March 31, 2018

(Thousands of
U.S. dollars)¥794,478 $7,478,147
26,026­presented based on market prices.

(Millionsof yen)(Thousands of
U.S. dollars)¥946,597 $8,909,988

244,982

55,820525,414

Notes: 1.	Book values in the Consolidated Balance Sheet are the amounts determined by deducting accumulated depreciation from the acquisition cost.
2.	Fair values as of March 31, 2017 and 2018 are determined by the Group (including adjustments based on certain indexes) based primarily on their values
according to real estate appraisal standards. However, if there have been no fluctuations in appraisal values or indexes considered to appropriately reflectmarket values, the Group uses the appraisal values or amounts derived from the indexes of the recent appraisal or acquisition from third parties as the fairvalues at March 31, 2017 and 2018.
3. In the above table, other properties used as rental properties includes portions used by the Company and certain consolidated subsidiaries.

(2) Operating Profit and Other Information on Rental Properties in the Fiscal Years Ended March 31, 2017 and 2018
Operating profit
2017

Rental properties
Other properties used as rental properties 1(Millions of yen)

(Millions of yen)

¥27,787
902

¥354
—

Operating profit
2018

Rental properties
Other properties used as rental properties 1

Others (gains (losses) on sale of property, etc.) 2

Others (gains (losses) on sale of property, etc.) 2(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥30,409
1,058$286,232
9,963¥(761)—$(7,171)—

Notes: 1.	As real estate of which some portions are used as rental property includes portions used by the Company and certain consolidated subsidiaries for­providing services as well as management and administration, operating income for this type of real estate is not recorded.
2. Others include gain on sales of non-current assets (¥946 million) and loss on building reconstruction (¥337 million) in the fiscal year ended March 31,
2017, and gain on sales of non-current assets (¥3,311 million ($31,169 thousand) and impairment loss (¥3,614 million ($34,026 thousand)) in the fiscal
year ended March 31, 2018.

Nomura Real Estate Holdings, Inc.

37

Financial Report 2018

Nomura Real Estate Holdings, Inc.

38

Financial Report 2018

Results by segment for the fiscal years ended March 31, 2017 and 2018 were as follows:(Thousands of U.S. dollars)

Results by segment for the fiscal year ended March 31, 2017

Leasing

Investment
Management

Property
Brokerage& CRE

Property &Facility
Management

Other 1

Subtotal

Eliminations
or Corporate 2  External customers  Inter-segment  Subtotal

Operating revenue:  Inter-segment¥329,303¥112,477¥ 9,662¥32,299¥85,831¥106¥  569,680¥     —¥  569,680

484

2,532

—

2,520

9,933

0

15,470(15,470)—  Subtotal

329,787

115,009

9,662

34,82095,764

106585,151(15,470)569,680   Segment income (loss)

27,78732,567

6,016

9,124

6,939

(30)

82,404(5,132)

77,271450,698

993,985

35,64922,87356,529929

1,560,666

32,427

1,593,093

Segment assets
Other items
Depreciation
Amortization of goodwill Investment in affiliates
accounted for using
equity method Increase in property, plant and equipment
and intangible assets¥    264¥ 14,139¥    27¥   378¥ 1,481¥  5¥   16,296¥    580¥      16,877

—

235

—

—

29

—

264

—

264

2,525

930

—

—

518

—

3,974

—

3,974

¥    427¥ 56,224¥    22¥   649¥ 1,754

Other 1

Subtotal

Eliminations
or Corporate 2

Total 3

$ 5,871,253

Leasing

Investment
Management$3,367,602$1,247,187$ 88,278$315,522$851,652$1,011$5,871,253$       —9,14822,9700

20,542

99,846

1

152,509(152,509)—

3,376,750

1,270,158

88,278336,065

951,498

1,012

6,023,763(152,509)

5,871,253

Operating revenue:

Total 3Operating revenue andoperating income  External customers

Property &Facility
Management

Residential
Development

Operating revenue andoperating income(Millions of yen)
Residential
Development

Property
Brokerage
& CRE

¥  —

¥   59,079¥  1,295¥      60,374

Notes: 1. T he “Other” category, which represents operating segments that are not included in reportable segments, includes other businesses.
2. (1) The deduction of ¥5,132 million shown in the eliminations or corporate column for segment income (loss) includes an addition of ¥1,388 million for theelimination of inter-segment transactions and a deduction of ¥6,521 million for corporate expenses not allocated to reportable segments. These corporate expenses mainly consist of general and administrative expenses not attributable to reportable segments.
	  (2) The addition of ¥32,427 million shown in the eliminations or corporate column for segment assets includes a deduction of ¥48,080 million for the elimination of inter-segment transactions and an addition of ¥80,507 million for corporate assets not allocated to reportable segments.
3. The segment income (loss) is reconciled to the operating income stated in the consolidated financial statements.

   Segment income (loss)
Segment assets

230,761

331,634

55,646

79,55566,607(100)

764,105(42,525)

721,580

4,225,967

9,989,911

327,943

161,720585,359

8,669

15,299,572

454,31315,753,886$    3,388$  148,805$    277$  4,110$ 14,218$   46$  170,846$   6,344$   177,190

Other items
Depreciation
Amortization of goodwill

—

2,217

—

—

275

—

2,493

—

2,493

 Investment in affiliates accounted for using
equity method

92,50245,268

—

—

4,836

—

142,607—

142,607 Increase in property, plant and equipment
and intangible assets$    6,356$  650,896$    250$  4,963$ 19,587$   28$  682,083$  10,457$   692,540

Notes: 1. T he “Other” category, which represents operating segments that are not included in reportable segments, includes other businesses.
 he deduction of ¥4,517 million ($42,525 thousand) shown in the eliminations or corporate column for segment income (loss) includes an addition of
2. (1) T¥2,601 million ($24,484 thousand) for the elimination of inter-segment transactions and a deduction of ¥7,119 million ($67,010 thousand) for corporate
expenses not allocated to reportable segments. These corporate expenses mainly consist of general and administrative expenses not attributable toreportable segments.
 he addition of ¥48,266 million ($454,313 thousand) shown in the eliminations or corporate column for segment assets includes a deduction of	  (2) T¥41,686 million ($392,383 thousand) for the elimination of inter-segment transactions and an addition of ¥89,953 million ($846,696 thousand) for­corporate assets not allocated to reportable segments.
3. The segment income (loss) is reconciled to the operating income stated in the consolidated financial statements.

Impairment loss on non-current assets by reportable segments for the years ended March 31, 2017 and 2018 is summarized
as follows:

Results by segment for the fiscal year ended March 31, 2018

(Millions of yen)

(Millions of yen)

Leasing

Investment
Management

Property
Brokerage& CRE

Property &Facility
Management

Other 1¥357,774¥  132,501¥ 9,378¥33,521¥ 90,479

971

2,440

—

2,182

358,745

134,941

9,378

35,703

Residential
Development

Subtotal

Eliminations
or Corporate 2

Total 3¥107¥   623,762¥    —¥   623,762

10,607

0

16,202(16,202)—

101,087

107

639,964(16,202)623,7622017

Impairment loss

Operating revenue andoperating income

Residential
Development

Leasing¥—¥254

Investment
Management¥—

Operating revenue:  External customers  Inter-segment  Subtotal   Segment income (loss)
Segment assets

24,51635,232

5,911

8,452

7,076

(10)

81,178(4,517)76,660448,966

1,061,328

34,84017,181

62,188921

1,625,426

48,266

1,673,692¥    359¥   15,809¥    29¥   436¥  1,510¥  4¥   18,150¥    674¥   18,824

Amortization of goodwill

—

235

—

—

29

—

264

—

264

¥—

Property &Facility
Management

¥—

Total

¥254

(Millions of yen)

2018

Impairment loss

Residential
Development

Leasing¥—¥3,614

Other items
Depreciation

Property
Brokerage& CRE

Investment
Management¥—

Property
Brokerage
& CRE

¥—

Property &Facility
Management

¥—

Total

¥3,614(Thousands of U.S. dollars) Investment in affiliates
accounted for using
equity method

9,827

4,809

—

—

513

—

15,150—15,150 Increase in property, plant and equipment
and intangible assets¥    675¥   69,151¥    26¥   527¥  2,081¥  2¥   72,464¥ 1,111¥   73,575

2018

Impairment loss

Nomura Real Estate Holdings, Inc.

39

Financial Report 2018

Residential
Development$—

Leasing

Investment
Management

Property
Brokerage& CRE

Property &Facility
Management

Total$34,026

$—

$—

$—

$34,026

Nomura Real Estate Holdings, Inc.

40

Financial Report 2018

The following table presents the amortization and balance of goodwill as of and for the years ended March 31, 2017 and2018 by reportable segments:(Millions of yen)

2017

Amortization
Balance at March 31, 2017

Residential
Development¥—¥—

The amount of recycling and amount of income tax effects associated with other comprehensive income for the years ended

Leasing

Investment
Management

Property
Brokerage &CREProperty &Facility
Management

Total¥  235¥2,768

¥—
¥—

¥—
¥—

¥ 29
¥175

¥  264¥2,943(Millions of yen)

2018

Amortization
Balance at March 31, 2018

Residential
Development¥—¥—

Leasing

Investment
Management

Property
Brokerage &CREProperty &Facility
Management

Total¥  235¥2,532

¥—
¥—

¥—
¥—

¥ 29
¥146

¥  264¥2,679(Thousands of U.S. dollars)

2018

Amortization
Balance at March 31, 2018

Residential
Development$—$—

Leasing

Investment
Management

Property
Brokerage &CREProperty &Facility
Management

Total$ 2,217$23,838

$—
$—

$—
$—

$  275$1,378$ 2,493$25,216

18. Contingent Liabilities
Contingent liabilities as of March 31, 2017 and 2018 are as follows:(Millions of yen)

Guarantees for home loans of house purchasers from banks and other
Guarantees for loans to co-owners of EBS building

19. Consolidated Statement of Comprehensive Income(Thousands of
U.S. dollars)

2017

2018

2018

¥64,277
537¥64,815¥78,107466¥78,574$735,203
4,390$739,594

March 31, 2017 and 2018 are as follows:

2017

2018

2018

¥ 1,712
135
1,847
(565)
1,282

¥(5,205)262(4,942)
1,512(3,430)$(48,997)
2,471(46,525)
14,237(32,288)

80
(133)
(52)
16
(36)

409
(204)
205
(62)
142

3,852
(1,922)
1,930
(590)
1,339

Revaluation reserve for land:
Income tax effect

(0)

(0)

(0)

Foreign currency translation adjustment:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effectForeign currency translation adjustment

19
—
19
—
19

(33)
—
(33)
—
(33)

(315)
—
(315)
—
(315)

Remeasurements of defined benefit plans:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effectRemeasurements of defined benefit plans(1,387)
500
(887)
271
(616)

162
591
754
(230)
523

1,530
5,568
7,098
(2,172)
4,926

0
—
0
(0)

(381)
—
(381)
126

(3,589)—(3,589)1,191(0)¥  648(254)¥(3,052)(2,398)$(28,975)

Valuation difference on available-for-sale securities:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effect
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effect
Deferred gains or losses on hedges

Share of other comprehensive income of affiliates accounted
for using the equity method:Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effect Share of other comprehensive income of affiliates accounted
for using the equity method
Total other comprehensive income

Nomura Real Estate Holdings, Inc.

41

Financial Report 2018

(Thousands of
U.S. dollars)(Millions of yen)

Nomura Real Estate Holdings, Inc.

42

Financial Report 2018

20. Schedule of Asset Retirement Obligations

Nomura Real Estate Holdings, Inc.
FY2011A presentation of this schedule is omitted pursuant to the provisions of Article 92-2 of the Consolidated Financial Statements

Recipients

Regulations as the amount of asset retirement obligations is not more than 1% of the total amount of liabilities and net assets

2nd issue of stock options

3rd issue of stock options

Directors and executive  officers of the Company’s
subsidiaries (57 persons)

Directors of the Company(6 persons)
Directors and executive  officers of the Company’s
subsidiaries (57 persons)
Employees of the Company’s
subsidiaries (152 persons)Common stock:
66,700 shares

Common stock:
227,800 shares

as of March 31, 2017 and 2018.

21. Stock Options

Type/number of shares reserved (Note)

In accordance with the Act on November 30, 2007, the Group granted certain stock options to certain directors, executive

Grant date

officers and employees of the Group.

Vesting conditions

Information regarding the Group’s stock option plans is summarized as follows:

August 23, 2011

August 23, 2011

No conditions attached

No conditions attachedService period

No period specified

No period specified

Exercisable period

August 23, 2012 –August 22, 2017

August 23, 2013 –August 22, 2018

1. Amount and account title of costs related to stock options(Thousands of
U.S. dollars)(Millions of yen)

Selling, general and administrative expenses

2017

2018

2018

¥616

¥653

$6,154

Nomura Real Estate Holdings, Inc.
FY2012

Recipients

2. Amount of gain on non-exercise of stock options

2017

2018

2018

¥42

¥20

$196
Type/number of shares
reserved (Note)

3. Description

Grant date

Nomura Real Estate Holdings, Inc.

Vesting conditions
3rd issue of stock options

Recipients

Directors of the Company(7 persons)
Directors and executive officers of the Company’s subsidiaries(57 persons)
Employees of the Company’s
subsidiaries (147 persons)Type/number of shares reserved (Note)

Common stock:
226,400 shares

Grant date

2nd issue of stock options

3rd issue of stock options

Directors and executive  officers of the Company’s
subsidiaries (64 persons)

Directors of the Company(5 persons)
Directors and executive  officers of the Company’s
subsidiaries (64 persons)
Employees of the Company’s
subsidiaries (152 persons)Common stock:
31,500 shares

Common stock:
188,900 shares

Common stock:242,700shares(Thousands of
U.S. dollars)(Millions of yen)

FY2010

1st issue of stock options

Directors of the Company(5 persons)August 23, 2012

August 23, 2012

August 23, 2012

No conditions attached

No conditions attached

No conditions attachedService period

No period specified

No period specified

No period specified

Exercisable period

August 23, 2014 –August22,2019

August 23, 2014 –August 22, 2019

August 23, 2014 –August 22, 2019

Nomura Real Estate Holdings, Inc.
FY2013

Recipients

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Directors of the Company(4 persons)

Directors and executive  officers of the Company’s
subsidiaries (74 persons)

Directors of the Company(4 persons)
Directors and executive  officers of the Company’s
subsidiaries (74 persons)
Employees of the Company’s
subsidiaries (170 persons)Common stock:
20,200 shares

Common stock:143,300 shares

Common stock:333,300 shares

August 23, 2010

Vesting conditions

No conditions attachedService period

No period specified

Exercisable period

August 23, 2012 –August 22, 2017

Type/number of shares
reserved (Note)
Grant date
Vesting conditions
Service period
Exercisable period

Nomura Real Estate Holdings, Inc.

43

Financial Report 2018

July 23, 2013

July 23, 2013

July 23, 2013

No conditions attached

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 23, 2015 –July 22, 2020

July 23, 2015 –July 22, 2020

July 23, 2015 –July 22, 2020

Nomura Real Estate Holdings, Inc.

44

Financial Report 2018

Nomura Real Estate Holdings, Inc.
FY2014

Recipients

Nomura Real Estate Holdings, Inc.
1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Directors of the Company(6 persons)

Directors and executive  officers of the Company’s
subsidiaries (72 persons)

Directors of the Company(6 persons)
Directors and executive  officers of the Company’s
subsidiaries (72 persons)
Employees of the Company’s
subsidiaries (187 persons)Common stock:40,700 shares

Common stock:
194,400 shares

Common stock:352,300 shares

Type/number of shares
reserved (Note)
Grant date

Type/number of shares
reserved (Note)
Grant date
Vesting conditions
Service period

July 23, 2014

July 23, 2014

July 23, 2014

No conditions attached

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 23, 2016 –July 22, 2021

July 23, 2016 –July 22, 2021

July 23, 2016 –July 22, 2021

Exercisable period

Nomura Real Estate Holdings, Inc.

FY2017

Recipients

Vesting conditions

3rd issue of stock options

4th issue of stock options

5th issue of stock options

FY2018

Recipients

Directors of  the Company(6 persons)

Directors and executive officersof the Company’s
subsidiaries(76 persons)

Directors of  the Company(6 persons)
Directors and executive officersof the Company’s
subsidiaries(76 persons)
Employees of  the Company’s
subsidiaries(199 persons)

Directors of  the Company’s
subsidiaries(3 persons)

Directors of  the Company’s
subsidiaries(3 persons)
Employees of  the Company’s
subsidiaries(20 persons)

Recipients

Common stock:35,700 shares

Common stock:
157,500 shares

Common stock:
380,900 shares

Common stock:
4,000 shares

Common stock:
24,000 shares

Grant dateJuly 23, 2015

July 23, 2015

July 23, 2015

October 14, 2015

October 14, 2015

Vesting conditions

No conditions
attached

No conditions
attached

No conditions
attached

No conditions
attached

No conditions
attached

No period specified

No period specified

No period specified

No period specified

No period specified

July 23, 2018 –July 22, 2023

July 23, 2018 –July 22, 2023

July 23, 2018 –July 22, 2023

October 14, 2018 –October 13, 2023

October 14, 2018 –October 13, 2023

Nomura Real Estate Holdings, Inc.

Type/number of shares
reserved (Note)
Grant date
Vesting conditions
Service period
Exercisable period

Common stock:
228,300 shares

Common stock:456,400 shares

July 21, 2017

July 21, 2017

July 21, 2017

No conditions attached

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 21, 2020 –July 20, 2025

July 21, 2020 –July 20, 2025

July 21, 2020 –July 20, 2025

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Directors of the Company(6 persons)

Directors and executive  officers of the Company’s
subsidiaries (83 persons)

Directors of the Company(6 persons)
Directors and executive officers of the Company’s subsidiaries(83 persons)
Employees of the Company’s
subsidiaries (226 persons)Common stock:
56,700 shares

Common stock:250,300 shares

July 22, 2016

July 22, 2016

July 22, 2016

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 23, 2019 –July 22, 2024

July 23, 2019 –July 22, 2024

July 23, 2019 –July 22, 2024

45

Financial Report 2018

Grant date
Vesting conditions
Service period

1st issue of stock options

2nd issue of stock options

Directors of the Company(5 persons)

Directors and executive officers of the Company’s subsidiaries(36 persons)Common stock:
10,700 shares

Common stock:
49,400 shares

July 19, 2018

July 19, 2018

No conditions attached

No conditions attached

No period specified

No period specified

July 19, 2021 –July 18, 2026

July 19, 2021 –July 18, 2026

Notes: Described in terms of the number of shares.

4. Scale of offer and status of changes(1) Number of stock options
Nomura Real Estate Holdings, Inc.
FY2010

3rd issue of stock options

Non-vested: (shares)
Previous fiscal year end—

Granted—Forfeited—

Vested:—End of the year—

Vested: (shares)
Previous fiscal year end

31,300

Vested:—Exercised25,600Forfeited

5,700

End of the year—

Common stock:421,800 shares

No conditions attached

Nomura Real Estate Holdings, Inc.

Type/number of shares reserved (Note)

Exercisable period

Type/number of shares reserved(Note)

Recipients

Common stock:39,800 shares

Nomura Real Estate Holdings, Inc.
2nd issue of stock options

FY2016

3rd issue of stock options

Directors of the Company(6 persons)
Directors and executive
officers of the Company’s
subsidiaries (90 persons)
Employees of the Company’s
subsidiaries (241 persons)

Exercisable period

1st issue of stock options

Exercisable period

2nd issue of stock options

Directors and executive
officers of the Company’s
subsidiaries (90 persons)Service period

FY2015Service period

1st issue of stock options

Directors of the Company(6 persons)Nomura Real Estate Holdings, Inc.

46

Financial Report 2018

Nomura Real Estate Holdings, Inc.

Nomura Real Estate Holdings, Inc.

FY2011

2nd issue of stock options

3rd issue of stock options

Non-vested: (shares)

FY2014

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Non-vested: (shares)

Previous fiscal year end——

Previous fiscal year end

—

—

—

Granted——Granted———Forfeited——

Forfeited———

Vested:——Vested:———End of the year——

End of the year

—

—

—

34,700117,400

343,200

—

—

—

4,800

13,30091,300

Vested: (shares)

Vested: (shares)

Previous fiscal year end

Previous fiscal year end

3,500

71,500——Exercised

3,500

42,500Exercised

Forfeited——

Forfeited

End of the year—

29,000

Vested:Nomura Real Estate Holdings, Inc.
FY2012

2nd issue of stock options

3rd issue of stock options

—

—

—

Granted———Forfeited———

Vested:———End of the year

—

—

—

8,400

49,300104,200

Vested:———Exercised—

11,00036,300

Vested: (shares)
Previous fiscal year end

Forfeited
End of the year

—

—

—

8,400

38,30067,900Nomura Real Estate Holdings, Inc.
1st issue of stock options

2nd issue of stock options

3rd issue of stock options—

14,600104,100

237,300

Previous fiscal year end

—

—

—

Granted———Forfeited———

Vested:———End of the year

—

—

—

6,400

61,900279,000

Vested:———Exercised—

23,60025,500Forfeited——

19,2006,400

38,300234,300

Vested: (shares)

Nomura Real Estate Holdings, Inc.

47

Financial Report 2018

2nd issue ofstock options

3rd issue of stock
options

4th issue ofstock options

5th issue ofstock options

Non-vested: (shares)
Previous fiscal year end——

360,500—

23,000Granted

—

—

—

—

—

Forfeited

—

—

2,200

—

—

Vested:

—

—

8,000

—

—

End of the year——

350,300—

23,000—

Vested: (shares)
Previous fiscal year end

35,700157,500

17,8004,000

Vested:

—

—

8,000

—

—

Exercised

—

—

—

—

—

Forfeited
End of the year

—

—

—

—

—

35,700157,500

25,8004,000—

Nomura Real Estate Holdings, Inc.
FY2016

Non-vested: (shares)

End of the year—
29,900

1st issue ofstock options

FY2015Previous fiscal year end

Previous fiscal year end

End of the year

Nomura Real Estate Holdings, Inc.
1st issue of stock options

Non-vested: (shares)

FY2013

Vested:1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Previous fiscal year end——

Granted———Forfeited

—

—

2,200

Vested:

—

—

4,600

End of the year——

410,000

Non-vested: (shares)
416,800

Vested: (shares)
Previous fiscal year end

56,700250,300

3,000

Vested:

—

—

4,600

Exercised———

Forfeited———

56,700250,300

7,600

End of the year

Nomura Real Estate Holdings, Inc.

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Financial Report 2018

Nomura Real Estate Holdings, Inc.
FY2017

Nomura Real Estate Holdings, Inc.
1st issue of stock options

2nd issue of stock options

3rd issue of stock options

1st issue ofstock options

FY2015

Non-vested: (shares)
Previous fiscal year end
Granted———39,800228,300

456,400

Forfeited———

Vested:39,800228,300

1,000

—

—

455,400———

39,800228,300

1,000

—

—

—

End of the year
Vested: (shares)
Previous fiscal year end
Vested:Exercised
Forfeited
End of the year

—

—

—

39,800228,300

1,000

2nd issue ofstock options

3rd issue ofstock options

4th issue ofstock options

5th issue ofstock options

Exercise price (¥)

1

1

2,741

1

Average price upon exercise (¥)

—

—

—

—

—

2,260

2,260

516

2,085

536

Fair value on grant date (¥)

2,355

Nomura Real Estate Holdings, Inc.
FY2016

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Exercise price (¥)

1

1

Average price upon exercise (¥)

—

—

—

1,593

1,593

377

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Fair value on grant date (¥)

1,927

Nomura Real Estate Holdings, Inc.
FY2017(2) Unit price data
Nomura Real Estate Holdings, Inc.
FY2010

3rd issue of stock options

Exercise price (¥)

1,194

Average price upon exercise (¥)

2,215

Fair value on grant date (¥)

Exercise price (¥)

1

1

Average price upon exercise (¥)

—

—

—

1,839

1,839

399

Fair value on grant date (¥)

2,400

437

5. Method for estimating per share fair value of stock options
The per share fair value of the stock options granted during the fiscal year ended March 31, 2017 (FY2016) was estimatedNomura Real Estate Holdings, Inc.
FY2011

2nd issue of stock options

Exercise price (¥)

3rd issue of stock options

1

1,457

Average price upon exercise (¥)

2,163

2,371

Fair value on grant date (¥)

1,045

315

as follows:(1) Valuation technique used: Black-Scholes method(2) Main base data and estimation methods
Nomura Real Estate Holdings, Inc.

Nomura Real Estate Holdings, Inc.
FY2012

1st issue of stock options

Exercise price (¥)
Average price upon exercise (¥)
Fair value on grant date (¥)

2nd issue of stock options

3rd issue of stock options

1

1

1,451

—

2,345

2,449

1,283

1,283

454

1st issue of stock options

Exercise price (¥)
Average price upon exercise (¥)
Fair value on grant date (¥)

2nd issue of stock options

3rd issue of stock options

1

1

2,429

—

2,378

2,724

2,297

2,297

675

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Nomura Real Estate Holdings, Inc.
FY2014

Exercise price (¥)

Nomura Real Estate Holdings, Inc.
2nd issue of FY2017 stock options

Nomura Real Estate Holdings, Inc.
3rd issue of FY2017 stock options

Expected volatility of theshare price (Note 1)

33.35%

33.35%

33.35%

Expected remaining life of
the option (Note 2)

5.5 years

5.5 years

5.5 years¥70 ($0.66)
per share¥70 ($0.66)
per share¥70 ($0.66)
per share

0.00%

0.00%

0.00%

Expected dividend(Note 3)

Nomura Real Estate Holdings, Inc.
FY2013

Nomura Real Estate Holdings, Inc.
1st issue of FY2017 stock options

1

1

2,016

Average price upon exercise (¥)

2,422

2,339

2,560

Fair value on grant date (¥)

1,718

1,718

371

Nomura Real Estate Holdings, Inc.

49

Financial Report 2018

Risk-free interest rate
(Note 4)

Notes: 1. Calculated based on the actual stock price for five years and six months (from January 2012 to July 2017).
2.	Calculated with an assumption that the stock option is exercised at the middle of the exercise period as the Company does not have sufficient data for amore precise estimation.
3. Based on the expected dividend for the fiscal year ended March 31, 2018 at the grant date.
4.	Based on the yield of Japanese government bonds for the period equivalent to the expected remaining life of the option.

6. Estimation of the number of vested options
The estimation of the number of vested options is made based on the actual number of forfeited options due to difficulty inreasonably estimating future forfeitures.

Nomura Real Estate Holdings, Inc.

50

Financial Report 2018

Independent Auditors’ Report

22. Subsequent Events(a) Share Acquisition Rights
The Company has resolved to issue share acquisition rights as stock options at the meeting of its Board of Directors held on
June 26, 2018.
1. Share acquisition rights with exercise price of ¥1 per share(1) Recipients
Directors of the Company: 5 persons
Directors and executive officers of the Company’s subsidiaries: 36 persons(2) Type and number of shares subject to the share acquisition rights
Common stock: 60,100 shares
The number of shares issuable under each share acquisition right shall be 100 shares.
(3) Exercise price¥1 per share(4) Allotment dateJuly 19, 2018(5) Exercise period of the share acquisition rights
July 19, 2021–July 18, 2026
(6) Conditions for assignment of the stock acquisition rights
Assignment of the stock acquisition rights to third parties requires the resolution approved by the Company’s Board of
Directors.

Nomura Real Estate Holdings, Inc.

51

Financial Report 2018

Nomura Real Estate Holdings, Inc.

52

Financial Report 2018