Financial Policy

Conduct Stable and Sound Financial Operations

Financial Policy

Sekisui House Reit will conduct stable and sound financial operations in order to secure stable earnings over a medium to long term and enhance unitholder value.

Equity Finance
  • Accurately grasp the financing environment and flexibly conduct equity finance while giving considerations to dilution of investment units, aiming at steady growth of the investment assets
Debt Finance
  • Reduce refinance risks and aim to strengthen the stable and sound financial base by investigating lengthening of the borrowing periods and working to diversify the repayment dates, etc., while pursuing the optimum balance of fixed-rate and floating-rate debts
  • Pursue strong and stable deals with leading domestic financial institutions, bolstered by the creditworthiness of Sekisui House. Upon conducting fund procurement through debt financing, work to diversify the procurement methods for direct and indirect financing, including issuance of investment corporation bonds
  • Set the target ceiling of LTV (loan-to-value ratio) at 60%, while intending to manage it at a conservative level with attention paid to securing funding capacity

Cash Management

Sekisui House Reit is resolved to conduct optimum cash management in order to enhance the efficiency of funds operations.
Specifically, Sekisui House Reit will allocate funds to the following subjects

  1. New real estate investments
  2. Appropriate maintenance, management and repairs of properties to enhance their competitiveness
  3. Reduction of cost of debt through repayment of interest-bearing liabilities
  4. Payment of distributions in excess of earnings

Furthermore, Sekisui House Reit has established the following three fundamental policies regarding cash management.

  • Sekisui House Reit shall always hold what is considered to be an appropriate amount of cash and deposits in order to cover expected funding needs.
  • Surplus funds shall be managed carefully by taking into account such factors as safety and liquidity, as well as market conditions and funding conditions of Sekisui House Reit.
  • The tenant leasehold and security deposits Sekisui House Reit receives from its tenants may be utilized as working funds.