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Investment Policies

Basic Policies

Global One Real Estate Investment Corporation ("GOR") manages and operates its portfolio properties consisting primarily of real estate and other assets (real estate, leasehold rights to real estate or surface rights or beneficial interests of trusts in which only these assets are entrusted among the assets as set forth in Article 105 paragraph 1 of the Ordinance for Enforcement of the Law concerning Investment Trusts and Investment Corporations of Japan) for investment purposes. GOR manages the assets held by GOR ("Assets under Management") from a medium- to long-term viewpoint with the aim of achieving steady growth of the Assets under Management and securing a stable income from them.

Investment Posture

  1. GOR primarily invests in real estate (comprising office buildings and parcels of land on which such buildings are situated), securities backed by such real estate, trust beneficial interests in such real estate, and other types of assets. Target regions include three major metropolitan areas in Japan (the Tokyo Metropolitan Area, the Chubu Area, and the Kinki Area) as well as other major cities with populations of over 500,000 that are identified as government-designated cities.
  2. In selecting real estate to be included in its Portfolio Properties, GOR focuses on market competitiveness and endurance in the mid-to-long term. GOR also performs comprehensive analyses, taking into account the following factors:
    1. (a) General factors - the economic climate, real estate market trends, interest rate movement, tax systems, etc.
    2. (b) Regional factors - the environment of the region, current and future outlook of the region associated with urban planning situations, etc.
    3. (c) Individual factors - the building size, specifications, level of management and maintenance, seismic resistance, title and tenancy, surrounding environment, soil conditions, etc.
  3. GOR's asset manager, Global Alliance Realty Co., Ltd. ("GAR"), has more detailed investment standards, as shown below, that are stipulated by location, use, and size as well as by the possible inclusion of development projects and those conditions that arise when a development project is involved. Please note that GAR may invest in properties that are not categorized under the following criteria if GAR judges it is reasonable to do so. Such judgments are made based on a comprehensive analysis of the real estate market position, location, and tenant, etc.

    (I) Location and Property Type

    GAR focuses primarily on office buildings. Office buildings are generally considered strong and stable income-generating assets with higher marketability than other real estate. Target property locations range from metropolises to major local cities in order to mitigate risks (for example, seismic disasters or other attributes specific to the local market) arising from geographical concentrations. At this moment, GAR does not specify numerical targets concerning geographical dispersion and will not specify these in the immediate future.

    Wards and cities located in three major metropolitan areas Tokyo 23 Wards, Yokohama City, Kawasaki City, Chiba City, Saitama City, Nagoya City, Osaka City, Kyoto City, Kobe City, etc.
    Major cities with populations over 500,000 as government-designated cities Sapporo City, Sendai City, Hiroshima City, Fukuoka City, Kitakyushu City, etc.

    (II) Size of property

    While GOR does not specifically set forth the size of investment properties in its Articles of Incorporation, GAR has set forth more precise guidelines in its corporate rules.

    Building size Total floor area of 6,600 sqm or more (approx. 2,000 tsubo) with a floor space of 660 sqm or more (approx. 200 tsubo), regardless of type and/or percentage of ownership.
    Investment amount Basically purchase price of 2.5 billion yen or more (excluding taxes or acquisition expenses).

    (III) Investment in development projects

    There are no specific rules in the Articles of Incorporation concerning investments in real estate development as GOR does not intend to acquire land for development in order to undertake this development on its own. GAR, in the meantime, has more specific standards regarding an inclusion of development projects or related conditions if a development project is involved. That is, if the development project is being undertaken by a third party and if it is judged that a stable rent income is expected from the project (e.g., a preliminary lease agreement has already been executed with a prospective tenant), the development project can be included in GAR's investment targets based on the condition that in order to eliminate a risk of incompletion, the conveyance shall occur after the completion of the building or its construction.

  4. Before making an investment decision, GOR performs due diligence to confirm the investment value of the target property. Due diligence includes information on financial performance, an engineering survey, and a legal investigation.
  5. GOR manages and operates the operating assets so that the total value of specified real estate (defined as real estate, leasehold, or surface rights, and trust beneficial interests in the aforementioned real estate ownership, leasehold, or surface rights) accounts for 75% or more of the total value of GOR-owned specified assets.
  6. GOR gives the highest priority to maximizing investment returns for unit holders. GOR does not make investments that are in favor of a specific third party.

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