Samty Residential Investment Corporation

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  3. Investment Strategy

Investment Strategy

Investing in accommodation facilities and other facilities, primarily in the residential asset class

The portfolio will include more than 80% residential assets and operating facilities (hotel and healthcare properties) of less than 20%

Note: Based on the acquisition price.

Samty Residential Investment Corporation will invest primarily in residential properties. The scope of investment targets will include hotel and healthcare facilities that deliver a similar living environment as residential assets and that are expected to deliver stable cash flows through leasebacks to the operating company. Initially, Samty Residential Investment Corporation will focus only on residential properties and then acquire operating facilities (hotel and healthcare properties) only after a prudent and holistic review of its portfolio size and diversification.

Total return of real estate investments in diversified asset classes
Source: Prepared by Sumitomo Mitsui Trust Research Institute Co., Ltd. based on the ARES J-REIT Property Index.

Rent income from residential properties is relatively less sensitive to economic conditions and trends compared to that of other asset classes such as offices and commercial facilities. Because of the low volatility (standard deviation) in rent levels, residential properties have comparatively lower risk as well.

Emphasis on single and compact type properties

Emphasis on single and compact type properties

Samty Residential Investment Corporation will focus on acquiring single and compact type properties (defined above) based on the growing trend of single-person households in Japan caused by people getting married later, an increase in the number of women working, and Japan's rising senior population.

Percentage of change in family households (nationwide: five-year comparisons)

Source: Prepared by Sumitomo Mitsui Trust Research Institute Co., Ltd. based on the national census carried out by Japan's Ministry of Internal Affairs and Communications.

Investing primarily in major regional cities

The geographic investment areas of Samty Residential Investment Corporation are presented below. The target is to have residential properties in regional cities account for around 70% of the portfolio based on the acquisition price. From the standpoint of expanding the portfolio and achieving diversification, around 30% of the portfolio will comprise residential properties in the greater Tokyo area.

Investing primarily in major regional cities

Note: Based on the acquisition price. The above is the target investment mix. The actual portfolio composition may vary.
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