Internal Growth Policy

In the selection of tenants, efforts shall be made to select prime tenants by utilizing property management companies, along with considering appropriate leasing terms and conditions, etc. based on identifying market trends through such means as regularly obtaining market reports from external organizations.
Conclusions of lease agreements with tenants shall be comprehensively determined by Tokyu REIM, which has been entrusted with investment management by TOKYU REIT, by conducting an investigation of creditworthiness and for any affiliation with antisocial forces and by taking into consideration the rent level, deposit amount, lease agreement period, type of contract and other leasing terms and conditions, etc. in accordance with internal rules, etc., including the investment management plans that are decided at meetings of Tokyu REIM’s Board of Directors. In addition, regarding creditworthiness, tenants’ financial situation, corporate size, capital relationship, etc. shall be considered and, in the case of retail properties, whether the business type/category matches the location and property size and whether it is in harmony with other tenants shall also be taken into consideration.
Furthermore, a condition shall be that leasing terms and conditions exceed the contract terms and conditions provided in the investment management plans. In addition, in cases where taking into the consideration market trends, tenants’ creditworthiness, contract area, vacancy rate, etc. General Manager, Portfolio Management concludes reasonably that contracting is deemed to be ideal even if the terms and conditions fall short of the contract terms and conditions stated in the investment management plans, the decision shall be made by resolution of Tokyu REIM’s Board of Directors after going through the process similar to that for formulation and amendment of the plans.
In addition, cases of property leasing to related parties shall be based on appropriate leasing terms and conditions and require prior approval of TOKYU REIT’s Board of Directors.

With an aim to maximize asset value from a medium- to long-term perspective, TOKYU REIT shall conduct appropriate risk management while striving to maintain/improve market competitiveness of the property.

（a）Leasing operations

In an aim to maximize the cash flows of each property from a medium- to long-term perspective, TOKYU REIT shall strive to enhance tenant satisfaction by implementing the following.

• Tenant marketing by assessing market trends
• Duly ascertaining tenant needs by establishing trust relationships with tenants

（b）Management operations

TOKYU REIT shall strive to reduce real estate management cost, etc. and maintain/enhance asset value by conducting appropriate and efficient management operations.

（c）Repairs and maintenance/capital expenditure

TOKYU REIT shall conduct repairs and maintenance, or expend capital after having prepared an appropriate efficient repair and maintenance plan for each property

（d）Selection of property management companies

In principle, TOKYU REIT shall select property management companies from Tokyu Corporation taking into account their strength in tenant marketing, which is based on their familiarity with local areas, and their information network with respect to tenants, as well as cost reductions due to economies of scale. However, TOKYU REIT shall not be hindered from selecting companies other than Tokyu Corporation as the property management company, depending on the respective property’s characteristics, continuity of management, or other factors.
In the said case, PM outsourcing terms and conditions with Tokyu Corporation, etc. and other related parties shall be pursuant to Rules on Related-Party Transactions.

（e）Renewal of property management contracts

1. Performance checks shall regularly be conducted by the asset management company. In the event the company does not meet criteria set forth by the asset management company, the contract shall not be renewed.
2. With regards to the rates of fees at the time of renewal, their adequacy is verified in advance by comprehensively taking into account their operations, marketability of the fee, etc. In the said case, PM contract renewal terms and conditions and such with Tokyu Corporation, etc. and other related parties shall be pursuant to Rules on Related-Party Transactions.

（f）Placement of insurance such as non-life insurance

In order to avert the risk of buildings receiving damage as a result of disasters, accidents, etc., earnings decreasing, or receiving requests for indemnity from a third party, TOKYU REIT shall, in principle, place fire insurance, rent insurance and liability insurance on real estate it owns.Earthquake insurance enrollment shall be determined by comprehensively taking into account the insurance premium, deductible, cash reserve, etc.

TOKYU REIT has established an “Environmental Policy” and recognizes the importance of environmental consideration in its property investment and management. Based on the awareness of social corporate responsibility, TOKYU REIT continues to work towards reducing environmental impact and helping transition to a sustainable society.

A.Implementation of Environmentally-friendly Operation

1. Reduce Energy Consumption and Green House Gas (“GHG”) Emissions
2. Reduce Water Consumption and Waste
3. Pursue Health, Safety and Well-Being

B.Management Structure to Ensure Environmental Consideration

1. Management Structure as a Responsible Corporation
2. Collaboration with our stakeholders

Please refer to this page, about more information on TOKYU REIT’s Environmental Certification.