Investment Policies
Real estate portfolio of mainly office buildings in major metropolitan areas that produces stable growth of income
JEI invests primarily in office buildings located in major metropolitan areas (*) and peruses to create portfolio that produces stable growth of income by acquiring properties with a strict investment criteria and a close monitoring of real estate market trends.
- (*)
- Major metropolitan areas refer to Metropolitan Tokyo and its vicinity Kanagawa, Saitama, Chiba prefectures and the other cities designated by government ordinance, etc.
[1] Over 90% of portfolio invested in office buildings
| Usage(*1) | Investment Ratio in Portfolio(*2) |
|---|---|
| Office buildings | 90% or more |
| Others (commercial facilities, housing, etc.) | 10% or less |
- (*1)
- The usage is determined based on the majority of the usage of total leasable floor space in respective real estate related properties. The total acquisition price of respective real estate related properties is accounted for in the calculation of investment ratio.
- (*2)
- Investment ratio in portfolio is the percentage of total acquisition value of real estate related assets that belong to a particular usage against the total acquisition value of the entire portfolio. There may be cases, however, in which the investment ratios by usage of real estate related assets owned by JEI temporarily deviate from the above stated ratios due to economic conditions, real estate market conditions, and other factors related to respective properties.
[2] Target investment areas - the six central wards of Tokyo and other major metropolitan areas
・Office buildings
| Target Investment Areas | Investment Ratio in Portfolio(*2) | ||
|---|---|---|---|
| Core areas | 80% or more | ||
| ■Area I | Six central wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya) | 50% or more of the core areas | |
| ■Area II | Central Osaka, central Nagoya and central Fukuoka(*1) | 50% or less of the core areas | |
| ■Area III | Tokyo other than Area I, and its vicinity | 50% or less of the core areas | |
| ■Area IV | Osaka, Nagoya and Fukuoka other than Area II, and other government-ordinance designated cities, etc. | 20% or less | |
・Properties for Other Use (Retail and residential properties, etc.)
| Retail properties | real estate located in the central districts of cities with populations of 1 million people or more at the time investment decisions are made |
|---|---|
| Residential properties | Real estate located in Tokyo |
- (*1)
- Central Osaka refers to the areas within about a 10-minute walk from JR Osaka Station, Umeda Station (Hankyu Railway, Hanshin Electric Railway, and Osaka City Subway), Yodoyabashi Station (Osaka City Subway) or Hommachi Station (Osaka City Subway), respectively. Central Nagoya refers to the areas within about a 10-minute walk from Nagoya Station (JR, Nagoya City Subway, and Nagoya Railroad), Fushimi Station (Nagoya City Subway), or Sakae Station (Nagoya City Subway and Nagoya Railroad), respectively. Central Fukuoka refers to the areas within about a 10-minute walk from Hakata Station (JR and Fukuoka City Subway), Tenjin Station (Fukuoka City Subway) and Nishitetsu Fukuoka Station (Nishi-Nippon Railroad), respectively. They are, however, not always in line with administrative districts.
- (*2)
- Investment Ratio in Portfolio is the percentage of total acquisition value of real estate related assets that belong to particular usage against the total acquisition value of the entire portfolio. There may be cases, however, in which the investment ratio by usage of real estate related assets owned by JEI temporarily deviate from the above stated ratios due to economic conditions, real estate market conditions, and other factors related to respective properties.
[3] Investment with a stringent criteria:Criteria for selecting investment properties
・Office buildings
| Item | Criteria | |
|---|---|---|
| Property scale | Total floor space to be approximately 1,000 tsubo (approx. 3,305.79 ㎡) or more, and leasable floor space for a standard floor to be approximately 100 tsubo (approx. 330.58 ㎡)or more | |
| Building age | Core areas | Less than 30 years |
| Area IV | Less than 15 years | |
| Quake resistance | Complying with the new earthquake-resistance standards (*) or meeting equivalent or superior earthquake- resistance standards | |
| Profitability | Prospect of stable revenue streams in the long run | |
| Other | Composition of tenants, environment, and other factors shall be comprehensively reviewed. | |
・Properties for Other Use (Retail and residential properties, etc.)
The criteria similar to that of office buildings shall also be applied.
- (*)
- The new earthquake-resistance standards refer to those in accordance with the Building Standard Law of Japan and related ordinance amended in 1981
[4] Other External Growth Strategies
・Building a Well-balanced Portfolio
JEI builds a portfolio that places emphasis on favorable balances of regions, property size, and types of tenants in order to respond to changes in economic situations and market volatility.
・Collaboration with sponsor companies of the Asset Management Company
JEI widely seeks investment opportunities through all possible channels, including the network of our core sponsor companies (Kowa Real Estate, Dai-ichi Mutual Life Insurance and Sekisui House), that have experiences and expertise in office development and other real estate businesses.
・Other matters (policy on holding period and investments in development projects)
JEI's basic policy on real estate investmentassets is to hold the properties for medium-to-long term after acquisition. In addition to investments in existing properties in operation, JEI may invest in development projects also after stringently selecting the investment opportunities and mitigating the risks.
