Portfolio Development Policy

NIPPON REIT endeavors to develop a comprehensive portfolio of properties focused on income growth and stability, aiming to maximize unitholder value.

Develop a Comprehensive Portfolio Comprising Office Buildings, Residential Properties and Retail Facilities as Major Investment Targets

(Note 1)	“Investment ratio by asset type for the entire portfolio” refers to the figure obtained by dividing the total acquisition price of the investment assets of respective types by the total acquisition price of all the investment assets.
(Note 2)	“Investment ratio by area for each asset type” refers to the figure obtained by dividing the total acquisition price of the investment assets of respective types in respective areas by the total acquisition price of investment assets of respective types in all areas.
(Note 3)	“6 Central Wards of Tokyo” refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya and Shinagawa Wards.
(Note 4)	“3 Major Metropolitan Areas” refers to the Tokyo economic bloc, Osaka economic bloc and Nagoya economic bloc.
(Note 5)	“Ordinance-Designated Cities, etc.” refers to the ordinance-designated cities located in areas other than the 3 Major Metropolitan Areas (Sapporo, Sendai, Niigata, Shizuoka, Hamamatsu, Okayama, Hiroshima, Fukuoka, Kitakyushu and Kumamoto) and cities that are prefectural capitals.
(Note 6)	”The entire investment target areas” of retail facilities and other properties include the peripheral areas of the each investment target area shown above.

Office buildings: Centering on the 6
Central Wards of Tokyo; Concentration of companies; Growth potential

NIPPON REIT's understanding of investment characteristics

●	Income growth is expected in the economic expansion phases, as tenant demand and rent levels are relatively prone to changes in accordance with business cycles
●	Liquidity is secured at a certain level, as the investment market has a relatively large size
●	6 Central Wards of Tokyo: solid tenant demand is expected, given the high concentration of companies

Residential properties: Centering on the 3
Metropolitan Areas; Concentration of population; Stability

NIPPON REIT's understanding of investment characteristics

●	Rental demand and rent levels are expected to remain relatively stable without being influenced by business cycles
●	3 Major Metropolitan Areas: Demand for rental residential properties at a certain level is anticipated, given the high concentration of population

Retail facilities: Urban retail; Growth potential; Retail properties in community life in close contact; Stability

NIPPON REIT's understanding of investment characteristics

Urban retail facilities

●	Relatively high profitability is expected, as they are located in the center of cities where brisk consumption activities are anticipated against the backdrop of population inflow
●	More replacement tenants are expected to be available

Retail properties in community life in close contact

●	Stable income can be expected based on long-term fixed rent contracts with major tenants
●	Solid tenant demand is anticipated in response to stable needs closely connected to the community lives

Other properties: Securing diverse investment oppotunities in light of changes in the social environment; Adaptability