Japan Real Estate Investment Corporation

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  2. Strength of JRE
  3. External Growth Policy

External Growth Policy

JRE aims to boost earning capabilities and its stable profitability by acquiring assets targeted for asset investment in price ranges that are considered to be the most beneficial to the interest of JRE at the relevant point in time.

Acquisition policy

The policy to acquire assets targeted for asset investment for external growth is as follows.

■ Asset type of JRE's portfolio

In principal, JRE invests primarily office buildings.
Even if the buildings are mainly used as office, some of them are used as commercial facility too. In addition, some regions’ ordinance requires to add residential units when constructing office buildings. Hence the buildings that JRE acquires may include such buildings.

■ Geographic diversification

JRE will carry out investment maintaining its portfolio so that 70% or over of the portfolio properties are located within the Tokyo metropolitan area (Tokyo, Kanagawa prefecture, Chiba prefecture and Saitama prefecture) with the remaining 30% or below located in other major cities considering geographic diversification in order to maintain cash flow to minimize damage from earthquake and slowdown in office market.

Tokyo metropolitan area Tokyo, Kanagawa prefecture, Chiba prefecture and Saitama prefecture 70% or over
Other major cities Sapporo, Sendai, Nagoya, Osaka, Kobe, Hiroshima, Fukuoka, etc. 30% or below

■ Criteria for selection of assets targeted for asset investment

Size of building Total floor area 3,000m2 or more
Earthquake resistance Adaptation to new earthquake resistance standards (Earthquake Resistant Design Standard under Building Standard Law enforced in 1981) or equivalent structure
Others Location, Structure, Facility (Ceiling height, OA floor, Area per floor, Electric capacity etc.) and details of rights etc. are taken into consideration comprehensively.

Disposal policy

Under JRE’s basic principal, JRE will carry out medium- to long-term investment. Thus short-term investment for the purpose of capital gain will not be carried out .

Disposal of property will be determined from an overall perspective by considering revenue projection, change in asset value, potentiality and stability of location, portfolio mix, risk of deterioration and obsolescence of property, and cost caused by such risks.

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