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Strong Potential Regardless of Properties’ Age

Properties with strong potential regardless of the properties’ age Properties with strong potential regardless of
the properties’ age

Older buildings are generally seen as requiring heavy repair costs, but we believe that even for older buildings, latent profitability can be discovered by setting appropriate rent levels and carrying out efficient renovations. We make investments based on the following policy, with a focus not simply on the properties’ age.

Factors to Assess in Making Investment Decisions
We make sure that at least one of the following three conditions applies to a property we are considering for investment.
In addition to conditions including area, location and accessibility, the property’s maintenance and repairs on a daily basis as well as its facilities’ updates have been appropriately conducted, and stable and firm rental demand can be expected after the acquisition
With generally stable asset value and opportunities to sell the property anticipated in advance, the flexible sale of the property in order to replace portfolio assets is an option in response to the investment performance
Acquired using sourcing support from Tosei, etc., value has already been added to the property by refurbishing and renovating it, in addition to any deficiencies in property management and/or any physical depreciation of the building has already been addressed and improved, and the property can be expected to provide investment performance equal to that of the two types of properties discussed above
Policy for Investments in Older Properties
We carefully study each of the followings when making a decision on investing in an older property.
After making sure that a reasonable investment yield for the investment risk based on the age of the property can be obtained, we perform a proper assessment which includes a consideration of the possibility for adding value to the property through refurbishments and renovations, etc.
We develop a medium- to long-term asset management plan according to the property conditions, and make the acquisition upon an evaluation of the older property having included the details of the asset management plan into the property’s assessment (depending on the property conditions, we may factor in refurbishment and renovation works, etc.)
For older residential properties in particular, we set appropriate rent levels, predict future occupancy rates, etc. We target properties with a scale that will allow for flexible replacement of our portfolio.
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