The investment corporation has established the following policy in order to ensure stable financial management.
- Equity finance
- With the aim of achieving long-term, stable growth, the issuance of additional investment units will be carried out flexibly, taking into consideration a multitude of factors including the timing of the acquisition of newly-acquired real estate-related assets and the possibility of utilizing the sponsor’s warehousing capabilities, LTV, the timing for the repayment of interest-bearing debt and the period remaining until repayment, as well as economic conditions, while also considering the dilution of the rights of existing investors and the resulting decline, etc. in the trading price of investment units.
- Debt finance
- When borrowing funds or issuing investment corporation bonds, the investment corporation considers the balance between financing flexibility and financial stability, and looks at the long-term ratio, fixed ratio, the diversification of repayment due dates, funding methods (borrowings, investment corporation bonds), and the establishment of commitment lines, etc.
- In principal, LTV is not to exceed 65%, taking notice of funding reserves. However, LTV may temporarily exceed 65% as a result of new investments and fluctuations in asset valuations.
Effective use of internal reserves
The investment corporation seeks to maximize per unit distributions by effectively utilizing internal reserves equivalent to the amount of depreciation and amortization.
- Enhancing the competitiveness of owned facilities by using internal reserves for renovations, repairs and capital expenditure
- Reducing interest costs by allocating internal reserves to cover a portion of the funds to repay borrowings
- Enhancing rental income by allocating internal reserves to cover a portion of the acquisition funds for newly-acquired properties
- Distribution of excess earnings
- Acquisition of treasury investment units