1. Formulating Asset Management Plans
Top REIT Asset Management Co., Ltd. (TRAM) establishes three-year medium-term plans based on its investment management guidelines and in consideration of economic forecasts for the medium-term. These plans reflect asset management issues and policies, portfolio asset size, plans to acquire new properties and plans for managing Top REIT’s property portfolio.
This is further broken down into annual management plans that consider the prevalent environmental factors on a yearly basis. These plans include the annual management policy, acquisition and disposition plan, portfolio management plan, financing plans and dividend plan.
2. Selecting and Assessing Property Managers
TRAM selects property managers for individual buildings after considering the location, use, tenant attributes and other factors related to the building’s management. In making a selection, TRAM also analyzes the management conditions, past performance, organization, compensation level, potential for conflict of interest and other factors directly related to each candidate. If TRAM decides that the best possible property manager for the individual property is a member of a sponsor’s group, the selection will be made after carrying out necessary procedures in relation to TRAM's rules regarding transactions between its interested parties and Top REIT.
TRAM will take steps to secure suitable tenants utilizing property managers in light of market trends, tenant trends and other factors. The selection of tenants is based on a comprehensive judgment of factors that include: rent levels, length of contract period, deposit, business type, tenant structure and rental space requested.
3. Maintenance and Capital Investment Policy
Top REIT conducts maintenance and capital investment based on the asset management plan to ensure optimal use of facilities by tenants and customers. These efforts are key factors that affect portfolio revenues.
4. Proactive Insurance Policy
Top REIT takes out non-life insurance (against fire, liability, loss of profits, etc.), earthquake insurance and other types of insurance in order to avoid risks related to natural disasters, accidents or other events that cause damage to its buildings and reduce its revenue, as well as risks related to liabilities to third parties accrued from accidents involving bodily injury and/or property damage.
- a. Non-life insurance
Top REIT decides whether to take out insurance after considering specific conditions, including the size of assets under management, asset types, and environmental factors surrounding the properties. - b. Earthquake insurance
Top REIT decides whether to take out insurance after conducting comparative studies on the possibility of earthquake occurrence, the expected impact of an earthquake on individual properties and the entire portfolio based on the possibility, and the impact of insurance premiums and other burdens on revenues and profits.
5. Disposition Policy
Top REIT principally acquires properties from a medium to long-term perspective but there are exceptions based on decisions after taking into consideration the following.
- a. Long-term real estate market
- b. Revenue forecasts
- c. Variation in asset values and forecasts
- d. Future potential and stability of locations in which portfolio assets are situated
- e. Risk of aging and deteriorating facilities and the accompanying cost forecasts for improving them
- f. Structure of the portfolio
