Customer-Oriented Business Conduct-Related Initiatives in FY2021

April 21, 2022

Our initiatives in FY2021 with regard to our Basic Policy on Customer-Oriented Business Conduct (“the Policy”) are described below.

In order to clarify the correspondence between the Policy and the Financial Services Agency’s Principles for Customer-Oriented Business Conduct (published March 30, 2017; revised January 15, 2021), we partially revised the wording and made additions to it in December 2021, but there were no changes to the basic contents. Going forward, we will strive to pursue business conduct in alignment with the Policy.

1. Pursuit of the best interests of our customers

In addition to handling asset management for the real estate investment fund (J-REIT) NTT UD REIT Investment Corporation (NUD) and the unlisted real estate investment fund (private REIT) NTT Urban Development Private REIT, Inc. (NUPR), we handle business such as management of other private real estate funds.

As a member of the NTT Urban Development Group, when conducting these business activities, with the aim of upholding the company’s corporate philosophy, “Integrity and Innovation,” we always adopt the customer’s perspective and conduct our day-to-day operations in an honest, fair manner while viewing customer profits as our top priority.

Furthermore, as real estate asset management professionals, we seek to deploy employees and officers with specialized qualifications in order to always maintain a high degree of expertise and professional ethics. We also recommend that personnel acquire specialized qualifications, with the company bearing the cost of acquiring and maintaining them.

The key specialized qualifications that had been acquired as of the end of FY2021 were as follows:

Real Estate Broker 31 (54.4% of officers and employees)
Real Estate Securitization Master 16 (28.1% of officers and employees)
Real Estate Appraiser 2 (3.5% of officers and employees)
First-Class Architect 1 (1.8% of officers and employees)
Building Manager 15 (26.3% of officers and employees)
  • Including employees who have passed the exam.

We aim to maximize customers’ interests, and with stable medium- to long-term growth in mind, we have set the dividend per unit as one of our KPIs and are striving to increase it. Customers may consult dividend information for NUD at the website shown below. NUPR unitholders may see information from the following site by using their personal ID and password.

2. Appropriate management of conflicts of interest

We comply with the Stakeholder Transaction Rules, and in the event of a transaction in our business that could cause a conflict of interest, we make decisions via the appropriate processes, as stipulated in the Rules.

In FY2021, 11 stakeholder transactions were reviewed by the Compliance Committee, which includes external experts, and brought before the senior decision-making institutions after receiving the Committee’s approval.

3. Clarification of fees, etc.

Service fees borne directly or indirectly by customers primarily include acquisition fees, interim fees, and sale fees. The details of our approach and fee levels are indicated in NUD’s Articles of Incorporation, securities reports, etc., while the specific figures paid are indicated in asset management reports, etc. We also make this information clear by disclosing it on the following sites.

4. Clear provision of important information

We provide important information such as schemes, returns, risks, and management status related to the financial products and services we offer via platforms such as our website, using timely and easy-to-understand descriptions, graphics, etc. Moreover, through opportunities such as financial briefings, we establish venues for direct communication with customers and provide them with information.

In FY2021, activities to provide information about the investment corporation were as follows.

1. News releases, etc.

Information about financial results, etc. 17
Information about property management, etc. 28
Information about financing, etc. 36
Other 19
Information about financial results, etc. 10
Information about property management, etc. 15
Information about financing, etc. 2
Other 3

For detailed information, refer to the following websites.

5. Provision of services suitable for customers

The main products that we provide to our customers are J-REITs, private REITs, and private real estate funds, etc.

Compared with direct investment in real estate, J-REITs enable everyone to invest with very small amounts, and since they are listed on securities exchanges, these investment products may be transacted in the same manner as shares.

Private REITs are investment products offered only to qualified institutional investors. We strive to provide services based on customers’ need for stable, long-term investments that will not be impacted by the price volatility of listed markets.

Private real estate funds, etc. are investment products aimed primarily at professional investors. Given that the product characteristics differ for each fund, we strive to provide information that will enable customers to make suitable investment decisions.

Buying and selling of all the above investment products is conducted via securities companies and the like, and after sharing the above characteristics with customers, we provide them with services based on their asset status, transaction experience, knowledge, purpose, and needs.

6. Appropriate motivational framework for officers and employees

Believing that it is necessary to maintain a high degree of professional ethics in order to fulfill our social responsibilities and public mission as a financial operator, we provide regular training for our officers and employees. Furthermore, we seek to develop their skills by improving their expertise through external training, etc. and encouraging them to acquire external qualifications.

We conducted the following training in FY2021.

  • Compliance training for all employees (4 sessions)
  • E-learning on corporate ethics and other topics for all employees (1 session)
  • Other in-house training, etc. (6 sessions)

The stance of maximizing customer interests and maintaining compliance is reflected in our personnel evaluations of officers and employees.