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Investment Strategy

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  2. Features of SHR
  3. Investment Strategy

Priority investment in Prime Properties
centering on "Strategic Location" and "High Quality"

Prime Properties

Based on the fundamental recognition that there is a growing need for real estate located at sites suited for "bases for sustainable living" for residents or sites suited for "sustainable bases of operation" of tenant companies and needs for real estate with high, basic functionality as residences, such as comfort and safety, and functionality desired by tenant companies, SHR designates high quality residential and commercial properties, etc. located at strategic locations "Prime Properties" and prioritize investments in Prime Properties.

« Concepts of Strategic Location and High Quality »

Strategic Location High Quality
Residential Properties Sites suited for "bases for sustainable living" for residents As residences, provide high basic functionality, such as comfort and safety, and give due consideration to the environment as a societal request to make comprehensive determinations regarding buildings suited to the neighborhoods and the like
Commercial Properties Sites suited for "sustainable bases of operation" of tenant companies In addition to the functionality wanted by tenant companies, give consideration to the environment as a societal request establish specifications suitable for BCP sites to make comprehensive determinations regarding buildings suited to the neighborhoods and the like

SHR selects Prime Properties through a comprehensive assessment by focusing on an analysis of the below 6 factors.

« 6 Factors of Prime Properties »

Portfolio Development Policy

Investment Ratio by Asset Type

SHR positions and invests in residences, which form "the bases of living" for residents, and office buildings, which form "the basis of operation for businesses", as the core assets of portfolio, and engages in investment in hotels with growth prospects; by doing so SHR will aim to build a portfolio characterized by both high stability and high quality.
Investment ratios by asset category and medium- to long-term investment ratio targets are shown in the table below.

Asset Type Type Examples of
Specific Asset Types
Portfolio
Development Policy
(acquisition price basis)
Medium- to Long-
Term target
Investment ratio(Note)
Residential Properties
Residence
Core Assets
Residences
Student dormitories Company housing
30% -55 Approx.45
Office building Office buildings
Data centers
30% -55 Approx.45
Commercial Properties Hotel Hotels
Service apartments
0% -30 Approx.10
Retail property, etc. Retail properties
Senior properties (Housing for the elderly with services, Fee-based homes for the aged, and Daycare centers)
0% -10 Approx.0% -10
(Note) Target investment ratios for the portfolio are stated as medium- to long-term target investment ratio. It is not guaranteed or promised that those targets will be achieved, and the actual investment ratios may differ substantially from the targets.

Investment Ratio by Area

SHR has set priority investment areas in light of the characteristics of each asset category, as shown in the following chart. SHR considers Greater Tokyo as its priority investment area for residential properties, with a particular focus on the 23 wards of Tokyo, where it foresees ample leasing demand and a supply of superior properties, and the Three Major Metropolitan Areas as its priority investment areas for commercial properties with a particular focus on the three largest cities (the 23 wards of Tokyo, Osaka and Nagoya) where it believes it can achieve stable investment results against a backdrop of robust demand by tenants for bases of business operations. Regarding overseas real estate investment, although investments in residential properties and commercial properties are allowed, SHR will maintain a cautious stance in the near future.

« Investment Ratio for Residential Properties by Geographical Area »

Asset Category Specific Area Investment Ratio
(acquisition price basis)
Greater Tokyo
«priority investment area»
(1) Tokyo
(2) Kanagawa Prefecture
(3) Chiba Prefecture
(4) Saitama Prefecture
At least 70%
Major cities throughout Japan, etc. (1) Designated cities, etc. (Note 1)
(2) Commutable areas of (1) above (Note 2)
Less than 30%
(Note 1) "Designated cities, etc." means cities outside of Greater Tokyo which fall under government designated cities, heartland cities, cities which were specially designated cities at the time of the abolishment of the former Specially Designated Cities System or seats of prefectural governments.
(Note 2) "Commutable area" means the region within 30 minutes' commuting distance from a particular city.

« Investment Ratio for Commercial Properties by Geographical Area »

Asset Category Specific Area Investment Ratio
(acquisition price basis)
Three Major Metropolitan Areas
«priority investment area»
(1) Greater Tokyo
(2) Osaka Area
(3) Nagoya Area
At least 80%
Other All of Japan outside of the Three Major Metropolitan Areas Less than 20%

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