Portfolio Building Policy

marimo REIT aims to secure both “relatively high investment yield” and “stable earnings” by building a portfolio of mainly residential and retail properties centering on regional areas, and also comprehensively investing in hotel, office, logistics, healthcare and parking properties to realize contribution to its basic principle of “regional revitalization.”

Investment Criteria for “Residential” Properties

Investment
areas

・	Invest mainly in regional cities and also in the Tokyo metropolitan area

Investment
criteria

・	Properties that are expected to have relatively stable leasing demand and rent level not susceptible to economic conditions, have promising occupancy rate stability, and also can maintain competitiveness in comparison with neighboring competitive properties in light of the building specifications and rent settings being commensurate with the location conditions and area

Investment
targets

Single

Exclusive area
per unit of
less than 35㎡

Distance from the nearest station (or major bus stop ^{(Note 1)}) of within a 10-minute walk as a guide. However, not limited to this in the case of locations that are expected to be able to secure stable occupancy being within commuting distance of a university or other educational facility, etc. (within a 10-minute bicycle ride ^{(Note 2)}).

Compact

Exclusive area
per unit of
35㎡ or more,
but less than 50㎡

Distance from the nearest station (or major bus stop) of within a 15-minute walk as a guide. However, not limited to this in the case of locations that are expected to be regions with good living environment and high convenience in terms of daily living, such as there being supermarkets or other retail properties with potential for regional contribution in the neighborhood.

Family

Exclusive area
per unit of
50㎡ or more

marimo REIT invests in residential properties ranging widely from single type to family type ^{(Note 3)}.

(Note 1)	“Major bus stop” refers to a bus stop with regular bus service throughout the day and used for commuting to work or school on a daily basis.
(Note 2)	The time required by bicycle is calculated by the time when traveling at a speed of 250 m per minute (rounded up to the specified unit).
(Note 3)	The type of property shall be determined based on which range of exclusive area per unit that the most number of units fall under out of the three ranges: (i) less than 35㎡, (ii) 35㎡ or more, but less than 50㎡, and (iii) 50㎡ or more.

Investment Criteria for “Retail” Properties

Investment
areas

・	Invest mainly in regional areas and also in the Tokyo metropolitan area

Investment
criteria

・	Properties in locations rated highly based on trade area analysis
・	Properties with potential for regional contribution (facilities necessary for daily living and contribute to convenience for local residents) and also promising management stability and asset value
・	Properties that have major tenants from which stable revenue is expected based on lease agreements of the fixed rent type in principle and linked to convenience in terms of daily living for local residents, and properties that have major tenants closely related to daily living in the region and expected to have stable purchase demand

Investment
targets

Retail properties with potential for regional contribution

Specialty stores (SS)

Neighborhood shopping centers (NSC)

Regional shopping centers (RSC)

・	Retail properties that have various specialty stores, such as supermarket, drug store, convenience store and fitness center

・	Such specialty stores as electronics retail store
・	Medium-scale shopping centers that have several various specialty stores

・	Large-scale shopping centers that have numerous specialty stores (generally 100 tenants or more)

Location based on trade area analysis

Location with high population density of 10,000 people or more in trade area population within 1 km trade area

Location with high population density of 50,000 people or more in trade area population within 5 km trade area

Location with high population density of 200,000 people or more in trade area population within 10 km trade area

Investment Criteria for “Hotel” Properties

Investment
areas

・	Investments will be made in regional cities and other areas. (The Tokyo metropolitan area is excluded from the investment scope.)

Investment
criteria

・	Properties located in areas with strong expected lodging demand, such as key transportation hubs including major train stations, airports, tourist destinations, business districts, downtown areas, and terminal stations.
・	Properties capable of securing stable income under long-term lease agreements with either fixed rent or variable rent ^{(Note 1)}, taking into account the creditworthiness and operating performance of the hotel operator.
・	While priority will be given to accommodation-focused hotels that are able to maintain relatively stable earnings even during economic downturns, the Investment Corporation will also seek diversification of hotel-related real estate. Accordingly, investments will be made in full-service hotels with highly recognized brands, where growth can be expected through strong brand awareness, in addition to enhanced income stability.

Investment
targets

(ⅰ)

Accommodation-Focused Hotels (including Shared-Use Mixed-Use Hotels ^{(Note 2)})
Hotels located in high-traffic areas with strong customer demand, such as near major train stations, airports, tourist destinations, business districts, and downtown areas.

(ⅱ)

Full-Service Hotels
Hotels located in high-traffic areas such as near major train stations, airports, tourist destinations, business districts, and downtown areas, situated in regional cities and suburban urban areas, and equipped with ancillary facilities in addition to accommodation facilities, including restaurants and other food and beverage facilities, as well as banquet halls and meeting and conference facilities.

(Note 1)	As a general rule, the portion of variable rent may be set at up to 30% of the total rent. Such variable rent shall be calculated based on factors such as sales or GOP (Gross Operating Profit, meaning, in principle, the amount remaining after deducting hotel operating expenses from hotel revenues) for the most recent one-year period immediately prior to the decision to acquire the property or the execution of the lease agreement. However, for properties with an operating history of less than one year, the variable rent shall be calculated based on projected sales, projected GOP, or similar indicators.
(Note 2)	A “Shared-Use Mixed-Use Hotel” refers to a hotel that provides not only hotel spaces and facilities, but also a platform for sharing ideas, knowledge, lifestyles, and values among a diverse range of hotel users.

(Note 1)

As a general rule, the portion of variable rent may be set at up to 30% of the total rent. Such variable rent shall be calculated based on factors such as sales or GOP (Gross Operating Profit, meaning, in principle, the amount remaining after deducting hotel operating expenses from hotel revenues) for the most recent one-year period immediately prior to the decision to acquire the property or the execution of the lease agreement.
However, for properties with an operating history of less than one year, the variable rent shall be calculated based on projected sales, projected GOP, or similar indicators.

(Note 2)

A “Shared-Use Mixed-Use Hotel” refers to a hotel that provides not only hotel spaces and facilities, but also a platform for sharing ideas, knowledge, lifestyles, and values among a diverse range of hotel users.

Investment Criteria for “Office” Properties

Investment
areas

・	Investments will be made in regional cities. (Other regions and the Tokyo metropolitan area are excluded from the investment scope.)

Investment
criteria

・	Properties located within a five-minute walk from the nearest train station, or located in a business district.
・	Properties situated in areas with a high concentration of corporate activity, offering stable tenant demand and a certain level of market liquidity.
・	Grade B or higher properties, defined as buildings with a gross floor area of at least 1,653 square meters (approximately 500 tsubo) and a standard floor (a typical floor from the second floor upward) exclusive floor area of at least 165 square meters (approximately 50 tsubo).
*	Only properties that meet all three of the above criteria are eligible.

Investment Criteria for “Logistics” Properties

Investment
areas

・	Investments focus mainly on regional areas and also include the Tokyo metropolitan area.

Investment
criteria

・	Properties located in sites evaluated as logistics hubs, with proximity and accessibility to consumption and production areas, as well as convenient access for commuting.
・	Facilities with standard building specifications (including floor load capacity, ceiling height, column spacing, and air-conditioning and lighting systems), where stable operations and asset value can be expected, taking into account location conditions and the competitive environment in the surrounding area.
・	With respect to major tenants, properties for which stable income and long-term tenant retention can be expected, after considering the status of lease agreements, rent levels, and contract structures.

Investment
targets

BTS
(Build-to-Suit)

Logistics facilities built to meet the needs of a specific tenant, while ensuring sufficient versatility to accommodate future tenant changes.

Multi-tenant type

Versatile logistics facilities located in prime logistics areas, suitable for multiple tenants and various industries, with optimal scale, grade, and specifications for the location.

Last-mile type

Logistics facilities designed for the delivery of goods from the final distribution point to end users.

Investment Criteria for “Healthcare” Properties

Investment
areas

・	Investments focus mainly on regional areas and also include the Tokyo metropolitan area.

Investment
criteria

・	Properties located in areas evaluated as healthcare hubs, taking into account factors such as the size of the elderly population, convenience of daily living, and ease of securing a workforce.
・	Properties consisting of facilities with standard building specifications, for which stable operations and asset value can be expected, after considering location conditions and the competitive environment in the surrounding area.
・	With respect to major tenants, properties for which stable income and long-term tenant retention can be expected, after taking into consideration the status of lease agreements, rent levels, and contract structures.

Investment
targets

Assisted Living Facility
with Nursing Care

Facilities for elderly persons defined under Article 29 of the Act on Social Welfare for the Elderly, which are designated to provide “Long-Term Care Services for Residents of Specified Facilities” and satisfy the required standards for the provision of nursing care services.

Residential Fee-Based Home
for the Elderly

Facilities for elderly persons as stipulated in Article 29 of the Act on Social Welfare for the Elderly, where residents, as a general rule, receive nursing care services through external care service providers.

Service-Added Housing
for the Elderly

The term refers to “Service-Added Housing for the Elderly” as stipulated in Article 5 of the Act on Securing Stable Housing for the Elderly. With respect to nursing care services, residents shall, as a general rule, use care services provided by external service providers.

Related Links: Portfolio Map; Portfolio List; Portfolio Data