Tokyo Tatemono Investment Advisors

Initiative on "Basic Philosophy"

Private REITs offer qualified institutional investors investment opportunities that enable them to earn stable returns over the medium to long term. On the other hand, private funds primarily provide specific investors (including qualified institutional investors) with custom-made real estate investment products tailored to their individual investment needs. For all financial instruments, we provide financial instruments that meet our customers' investment needs and organically utilize our resources to realize the best interests of our customers by establishing and implementing a system in accordance with our product governance policy.

Initiative on "System Development"

In order to achieve high investment performance in each phase of the life cycle of financial instruments, we have established and implemented a system that includes various regulations and operational procedures, thereby ensuring thorough quality control in each process.

We have established a system in which the Compliance Department pre-verifies decision-making and subsequent quality control for each project, while the Internal Audit Department checks whether decision-making at the time of creation and prescribed procedures thereafter are being properly implemented, and requests each department to make improvements as necessary.

*When making important decisions, the Compliance Committee invites an external lawyer, and the Investment Strategy Committee invites an external real estate appraiser to ensure appropriateness. In fund evaluations, from a sustainability perspective, our private REIT (Tokyo Tatemono Private REIT, Inc.) has continuously obtained the GRESB Real Estate rating. In addition to these, we hold a Risk Management Committee on a quarterly basis from the perspective of risk management related to the creation and management of financial instruments, and a Sustainability Promotion Committee on a quarterly basis from the perspective of improving product quality related to sustainability. Through these meetings, we put into practice the PDCA cycle of product governance.

Initiative on "Response When Creating Financial Instruments"

For private REITs, we examine the risk and return of the entire portfolio, assuming that our customers are qualified institutional investors who prefer stable returns over the medium to long term. We fully share the characteristics of the product with the sales companies of our investment units and share information with them, such as exchanging opinions on the optimal attribute composition of the expected unitholders.

For private funds, we exchange opinions with potential future investors to anticipate their specific investment needs, design products to meet those needs, and share these with our sales companies.

When selecting real estate for investment, we conduct thorough due diligence, including examining past track records.

*We will confirm as much as possible about the asset status, transaction experience, knowledge, transaction objectives and needs of potential investors, and identify their attributes. We strive to provide the best sales method for our customers.

Initiative on "Response After Creating Financial Instruments"

We formulate individual investment plans for each product for each business reporting period, and compare these with investment performance to verify risk, return, etc. If there is a significant discrepancy, we will consider various improvement measures to improve performance and implement them in a planned manner, taking into account the real estate market conditions (both sales and rentals), etc.

For private REITs, sales companies regularly report to us on the overall market situation, the status of investor sales, opinions received separately from customers, and individual needs, and we exchange opinions with sales companies on each occasion regarding how to respond to customers' investment needs thereafter. Similarly, when reporting on the performance of private funds on a regular basis to customers, we exchange opinions directly with customers or, as necessary, in cooperation with sales companies, and use the feedback we receive to improve operations and product design in the future.

*If a customer who has already invested wishes to transfer a financial instrument to a third party during the investment period, we will, whenever possible, ask them directly or in cooperation with the sales company about the reason and verify whether it is due to the customer's specific circumstances or changes in the product characteristics after the product is created. The verification results will be shared with sales companies as necessary and used to improve future operational plans and product quality.

Initiative on "Providing Easy-to-Understand Information to Customers"

For private REITs, we work with sales companies to provide customers with easy-to-understand explanations of the product features and our management structure through product brochures and other means. We have also set up a dedicated website (*) for unitholders to provide them with the latest information, including product quality and performance.

*Dedicated customer website:　https://ttp-reit.com/

As private funds are custom-made financial instruments for each customer, we generally communicate face-to-face. We provide sales companies with materials for exchanging opinions with potential customers during product design, and work with sales companies as needed to directly explain product features and other details to customers in an easy-to-understand manner. Please note that we plan to expand on the information on operational systems, etc. in the above discussion materials in the future.

Whether it is a private REIT or a private fund, we will carefully respond to any questions our customers may have after the financial instrument has been created.