April 25, 2019
Nomura Real Estate Holdings, Inc.
1-26-2, Nishi-Shinjuku, Shinjuku-ku, Tokyo(Stock code: 3231, TSE First Section)
Representative: Eiji Kutsukake, President and Representative Director
Contact: Kensuke Ueha, General Manager
Corporate Communications Dept.
Tel: +81-3-3348-8117

Notice of the Mid- to Long-term Business Plan
Prepared by the Nomura Real Estate Group
Nomura Real Estate Holdings, Inc. announces that it has recently formulated the new Mid- to Longterm Business Plan, New Value, Real Value (referred to as “the current business plan”), for the period
from FY20/3 through FY28/3.
Background and Purpose of this Plan
The Group formulated a mid- to long-term business plan, Creating Value through Change(referred to as “the previous business plan”), in November 2015, for the period from FY17/3
through FY25/3. The plan was promoted with the goal of achieving ¥700.0 billion in operating
revenue, ¥85.0 billion in operating profit, and mid- to long-term indicators of ROA 5% ormore, ROE at the 10% level, shareholders’ equity ratio at the 30% level, and a dividend payout
ratio of approximately 30%.
In terms of actual results, operating revenue was ¥668.5 billion and operating profit was¥79.1 billion for FY19/3, falling short of our target, with an ROA of 4.7% and an ROE of8.9%.
However, we have maintained our shareholders’ equity ratio at the targeted 30% level andachieved a dividend payout ratio of over 30% in FY19/3, through continuous increases in theamount of dividends per share. Furthermore, we acquired treasury shares and achieved a total
return ratio of 50.6% in FY18/3 and 41.4% in FY19/3.
Moreover, we have steadily expanded our business within each business unit and have built
the basis for future growth in terms of our overseas business and strategic investment (M&A,1capital alliances), both of which have been positioned as initiatives to accelerate company
growth.
Regarding Mid- to Long-term business conditions surrounding the Group, there are social issues
such as the progress of a super-aging society, a declining population, and a labor shortage in Japan.
In addition, the increase in the number of single and dual-income households, the diversificationof lifestyles and workstyles, and the evolution of digital technologies are expected to become
increasingly prominent.
Furthermore, we recognize the need to focus on robust economic growth overseas, especially in
Asian countries, as well as the increase in inbound trade.
Based on this recognition of the environment and the achievements and challenges of the previousplan, we have formulated the current business plan to further create value for society and realize
sustainable profit growth while maintaining high asset and capital efficiency.
The current plan has been divided into three phases and aims to realize a gradual growth.
Phase 1:
Phase 2:Phase 3:

FY20/3 through FY22/3
FY23/3 through FY25/3
FY26/3 through FY28/3

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Summary of the Mid- to Long-term Business Plan
—New Value, Real Value—(from FY20/3 to FY28/3)
I.

Group Initiatives for Value Creation
1.

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

2.

Value Creation Themes for the Current Business Plan
(1) Realization of enriched lifestyles and workstyles
 Realize enriched lifestyles and workstyles by providing products and services that are one
step ahead of customer needs.
 Extend the value we have created through our distinguished marketing and positioning, suchas PROUD, PMO, and OUKAS, to new business fields.
(2) Multifunctional urban development toward exceptional convenience, comfort, and safety
 Provide exceptional convenience, comfort, and safety to lifestyles through multifunctional
urban development.
 Promote multifunctional urban development in various areas and schemes such as urban
compact towns, station-front redevelopment.
(3) Urban development and community building concerning the future of the global environment
and local communities Create sustainable cities and communities that are environmentally friendly and that growtogether with local communities.
 Utilize digital technology to create a more convenient and comfortable future.
(4) Global expansion of high-quality products and services
 Globally expand high-quality products and services cultivated in Japan, mainly in Asia.
 Thoroughly implement concepts incorporating the needs of overseas markets and develop
businesses with local partners that cater to the lifestyles and workstyles of each country.

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II.

Management Indicators
1.

Profit Plan
Phase 1（FY22/3）
Business profit*

Phase 2
（FY25/3）¥85.0 billion

Phase 3
（FY28/3）¥100.0 billion¥120.0–140.0 billion*In consideration of profit from overseas business and amortization related to M&A, we haveestablished “business profit” as an indicator for profit targets.
Business profit = operating profit + share of profit (loss) of entities accounted for using equity
method + amortization of intangible assets associated with corporate acquisitions（By business unit）
Phase 1（FY22/3）

Phase 2（FY25/3）

Residential
Development¥30.0 billion¥36.0 billion

Commercial
Real Estate¥33.0 billion¥36.0 billion

Investment
Management¥9.0 billion¥12.0 billion¥11.0 billion¥14.0 billion¥8.0 billion¥9.0 billion

Property
Brokerage &CRE
Property &Facility
Management

2. Financial and Capital Policies (Mid- to long-term policies)<Asset efficiency>
ROA<Capital efficiency>
ROE

5% or more

10% or more

<Shareholder returns>
Total return ratio
approximately 40-50%(Phase 1)

FY19/3Phase 1

ROA

4.7%

4–5% range

5% or more

ROE

8.9%

8–9% range

10% or more

4Phase 2

Phase 3

III. Business Portfolio Strategy
 Achieve a portfolio that balances high asset efficiency and profit stability by utilizing thecharacteristics of each business.
(1) Property sales business
Develop housing sales and property development businesses actively in Japan andoverseas, increase development profit, and achieve a high ROA.
(2) Leasing businessBuild a highly competitive leasing property portfolio and stabilize leasing profit via
superior leasing property development and strategic property replacement.
(3) Service & Management
Expand business through M&A and strategic partnerships in addition to current businessgrowth, and increase profit not affected by asset risk and achieve a high ROA.
(4) Overseas businessAs a growth driver under the current business plan, we will develop overseas businesses
by utilizing the expertise we have acquired in Japan. We will also expand the overseas
business profit ratio to 15–20% in FY28/3.
IV．Investment Plan New investment amount of ¥5.5 trillion under this plan (over a period of nine years).
 Control net increase in total assets to ¥640 billion by focusing on asset efficiency andincreasing asset turnover.
(Billions of yen)Phase 1

Phase 2Phase 3

Total for thetarget period

Domestic

1,600.01,800.01,800.0

5,200.0

Overseas

50.0

100.0

150.0

300.0

Total

1,650.0

1,900.0

1,950.0

5,500.0

Total assets

2,000.0

2,200.02,400.0―＋240.0+440.0+640.0―Total
investment

Net increase in total assets（compared with 19/3）

For details regarding our Mid- to Long-Term Business Plan, please follow this link.

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