Financing Policy

(1) Basic policy

TOKYU REIT’s financing policy is based on stability, flexibility and efficiency. TOKYU REIT aims to maximize unitholders' interests by reducing funding costs, enhancing external growth and minimizing expenses.

A.Stability

Maintaining a low level of loan-to-value (LTV) (refer to “(2) Financial strategy B. vii” below) to secure a sound financial condition.
Long-term, fixed-rate debt financing taking into consideration the characteristics of TOKYU REIT’s assets. Securing multiple funding sources and diversifying repayment dates to reduce financing risks.

B.Flexibility

Establishing a financing system to additionally acquire properties in a timely manner

C.Efficiency

Efficient cash management
Securing inexpensive procurement rates based on stable management

(2)Financial strategy

A.Equity financing

  1. Additional issuance of new investment units
    TOKYU REIT will additionally issue investment units in a flexible manner by accurately grasping the market condition and taking into account the dilution of investment units (reduced share of interest due to additional issuance of new investment units), with an aim to achieve long-term stable growth of assets.
  2. Acquisition and retirement of treasury investment units
    TOKYU REIT may acquire or retire treasury investment units with an aim to improve capital efficiency and pursue unitholder return.
    Upon acquisition and retirement of treasury investment units, TOKYU REIT will assess the level of investment unit price, status of cash on hand, financial status, market environment, etc. and determine whether the acquisition or retirement should be conducted from the viewpoint of improving unitholder value over the medium to long term.

B.Debt financing (borrowing of funds, issuance of investment corporation bonds, etc.)

  1. TOKYU REIT may efficiently combine short-term financing focusing on flexibility and long-term stable financing.
  2. TOKYU REIT may establish commitment lines and conduct borrowings.
  3. TOKYU REIT may set collateral on assets under management.
  4. TOKYU REIT may issue investment corporation bonds and diversify funding sources with an aim to achieve stable financing.
  5. TOKYU REIT may manage the rights pertaining to financial futures transactions and derivative transactions with an aim to hedge the risks of interest rate fluctuation arising from loans, etc.
  6. TOKYU REIT may conduct repayment, redemption or retirement by purchase of loans or investment corporation bonds of which repayment dates or redemption dates have not arrived, with an aim to improve capital efficiency and financial soundness, etc.
  7. “LTV” is the ratio of the outstanding amount of debt and investment corporation bonds to the total assets and the upper limit is set at 60%. However, it may temporarily exceed the upper limit due to the acquisition of properties and fluctuation of appraised value.

C.Cash management (cash and deposits, etc.)

TOKYU REIT will conduct efficient and appropriate cash management by accurately grasping the demand and supply of funds.

TOKYU REIT