TOKYU REIT and Tokyu REIM regard excellent governance as a source of competitiveness and a factor that contributes to the enhancement of unitholder value. TOKYU REIT implements steady operations pressing ahead with designing and developing governance that is fully satisfactory in terms of global standards as well so that investment securities issued by TOKYU REIT will be sought after by all types of investors both in Japan and abroad as global products.
Development and Operation of a Process that Ensures Highly Workable Governance
◆Measures Against Conflict of Interest
Tokyu REIM has established “Related-Party Transaction Rules,” which comprise basic rules and individual rules, as voluntary rules and implements measures against conflict of interest for transactions with related parties
（Note）“Related Parties” is a collective term for “Tokyu Corporation and its subsidiaries,” “Affiliates of Tokyu Corporation except Tokyu Corporation's subsidiaries,” and “Tokyu Fudosan Holdings Corporation and its subsidiaries.”
1. “Tokyu Corporation and its subsidiaries” refers to any entity that falls under the following (1) to (3):
(1) Tokyu Corporation
(2) A consolidated subsidiary of Tokyu Corporation
(3) A tokutei mokuteki kaisha (TMK) or special purpose entity (SPE) that was established based on the intention of Tokyu Corporation or a consolidated subsidiary of Tokyu Corporation and where the share of investment by undisclosed associations or other investment shares in that entity by the respective company exceeds 50%.
2. “Affiliates of Tokyu Corporation except Tokyu Corporation’s subsidiaries” refers to affiliates within the scope of consolidation of Tokyu Corporation.
3. “Tokyu Fudosan Holdings Corporation and its subsidiaries” refers to any entity that falls under the following (1) to (3):
(1) Tokyu Fudosan Holdings Corporation (“Tokyu Fudosan Holdings”)
(2) A consolidated subsidiary of Tokyu Fudosan Holdings
(3) A tokutei mokuteki kaisha (TMK) or special purpose company (SPC) that was established based on the intention of Tokyu Fudosan Holdings or a consolidated subsidiary of Tokyu Fudosan Holdings and where the share of investment by undisclosed associations or other investment shares in that entity by the respective company exceeds 50%.
◆Investment Management Fee
(Note) Standard cash flow here shall be the amount derived by subtracting an amount equivalent to 50% each of profit or loss from the sale of specified assets and profit or loss from the valuation of specified assets from the net income before income taxes, plus depreciation and amortization of deferred assets.
※ Apart from the above, TOKYU REIT pays predetermined fees, etc. to an asset custodian, general administrators, property management companies and an independent auditor, among others.
※ The above fees are all booked as expenses. TOKYU REIT does not adopt an acquisition incentive fee, which is capitalized on the balance sheet.
Promotion of Compliance and Risk Management
Recognizing its social responsibility and pubic mission as a listed real estate investment trust corporation, TOKYU REIT has established its own “Compliance Policy” and designs and develops governance with the aim of securing the confidence of investors and other stakeholders through compliance with ethics, laws and regulations, market rules (including global regulations applicable to TOKYU REIT), guidelines of the competent authorities, internal rules of TOKYU REIT, etc., in other words, thorough implementation of compliance.
Tokyu REIM has established “Tokyu REIM Code of Conduct,” “Basic Policy for Compliance,” “Compliance Rules,” “Tokyu REIM Compliance Manual,” “Compliance Program” and other internal rules, and implements thorough compliance of ethics, laws and regulations, market rules (including global regulations applicable to Tokyu REIM), etc., particularly focusing on proper management of information on corporations and personal information, securement of credibility on disclosure of financial reports and such.
In accurately understanding the various risks related to investment trust management existing both internally and externally in order to manage/maximize TOKYU REIT’s unitholder value, Tokyu REIM recognizes that it is indispensable to manage risks through rational and optimal means from a company-wide viewpoint and has established and implements its own “Basic Policy for Risk Management” and “Risk Management Rules.”
＜Annual Risk Management Cycle＞
Recognizing that occurrence of natural disasters, accidents, and other risks has a material impact on its business operation and execution of management of TOKYU REIT’s assets due to economic loss, loss of credibility, significant obstacles in business operation, etc. caused by such risks, Tokyu REIM has established and operates its own “Basic Policy for Risk Management” and “Risk Management Rules” to minimize damage upon occurrence of risks and continuously fulfill its social responsibility and public mission as a company.
・Establishment of Risk Management Committee
・Establishment of BCP and preparation of risk management manual
・Preparation of stockpile, medicine, etc.
・Execution of large-scale earthquake drills and safety confirmation drills
Large-scale earthquake drill (2019)
Tokyu REIM has established and operates its own “Basic Policy on Information Security” to ensure protection of information assets and their proper use.
・Establishment of an appropriate structure for system risk management
・Development of safety measures to deter/prevent unauthorized access, unauthorized acquisition of information, information leakage, etc.