External Growth Strategy
Strategy of Vigorously Selective Investments Focusing on Quality for Each Asset Type
JPR makes vigorously selective investments in high-quality properties. It screens from a wide variety of choices ranging from large-scale office properties with a total floor space of 30,000m2 or more to medium-sized office properties with a total floor space of around 3,000m2, which can be consistently competitive against properties of asset types and categories that differ in terms of areas, sizes and use, etc.
For office properties, certain time lags arise in the impact of the leasing market conditions, depending on the differences in terms of the size and grade, etc. As such, the diversification effect is expected for a portfolio comprising office properties with a wide variety of sizes. Moreover, although large-scale office properties are relatively more advantageous in terms of market competitiveness, they have lower liquidity in the transaction market. As such, if they are set as the sole investment target, the possibility of obtaining opportunities for external growth will be rather limited.
JPR will work on vigorously selective investments with a focus on the quality of properties, intending to secure the diversification effect and the opportunities for external growth, so that it can build a portfolio that should realize stable growth over a long term.
Major Investment Standards*
|Office properties||Focus on locations, specifications and renovation potential, etc. that secure high stability of earnings
|Retail properties||Focus on such locations as the front of terminal stations in highly bustling areas, where relatively high profitability can be expected, and tenant replaceability, among other factors
|Earthquake resistance||Properties must meet the new earthquake resistance standards, etc.
|Tenants||Focus on diversification status and replaceability
|Investment judgment benchmarks||Focus on NOI yields
*For details of this matter, please refer to the “Investment Policies” and “Investment Targets” based on JPR’s Articles of Incorporation.
Implementation of Due Diligence
Judge Whether Properties are Appropriate for Acquisition
Upon judging whether to acquire properties, JPR takes due diligence procedures to properly evaluate the asset value.
The due diligence procedures evaluate the building performance and earthquake risks of the subject real estate, and check a variety of aspects such as abidance to laws and regulations, risk analyses and appropriateness of the price. Major investigation items are as follows.
- Real estate appraisals
- Office market surveys
- Surveys on lands and buildings
- Investigations on titles and rights
- Investigations on contracts
- Engineering reports including environmental surveys
- Due diligence advisory surveys
- On-site investigations of properties by employees in charge based on the check sheet
- Earthquake risk evaluations
- Surveys of commerce
- Earthquake resistance diagnoses
- Credit checks of tenants, etc.