Financial Policies
Basic Financial Policy
LaSalle Japan’ s basic financial policy is to manage assets efficiently and stably to ensure their steady growth.
Debt Financing (Securing Stability)
- A real estate investment trust is a financial product and its profitability varies significantly depending on interest rate movements. LaSalle Japan’ s asset management company, LaSalle Investment Advisors, believes that taking advantage of the current low interest rate environment in Japan is one of the key factors in maximizing unitholder value.
- LaSalle Japan, while taking advantage of the current low interest rate environment, secures repayment measures to flexibly respond to interest rate rises. Debt financing (i.e. the borrowing or issuance of corporate bonds, same hereinafter) takes into consideration maturity and lender diversification, short- or long-term balances, and fixed or floating interest rates.
- To achieve low financing costs, LaSalle Japan makes every effort to select the most appropriate method, based on the abovementioned Basic Financial Policy, by negotiating terms and conditions-including interest rates, borrowing periods and with or without collatera-with multiple qualified institutional investors (as defined under Article 2, Paragraph 3, Item 1 of the Financial Instruments and Exchange Law, and limited to those listed under Article 22-19, Paragraph 1 of the Special Taxation Measures Law Enforcement Order, same hereinafter).
- The proceeds from debt financing are used for the acquisition or repair of investment assets, repayment of debt, etc.
- The ratio of LaSalle Japan’s interest-bearing liabilities (the aggregate amount of loans and corporation bonds, same hereinafter) to its total assets (hereinafter referred to as LTV [loan-to-value]) shall not exceed 70%, and the maximum amount of interest-bearing liabilities shall be \1 trillion, provided, however, that the LTV can temporarily exceed the limit due to the acquisition of properties and changes in appraisal values, etc.
Equity Finance (Maximizing Efficiency)
LaSalle Investment Advisors believes that managing assets at an appropriate LTV leads to efficient utilization of capital from unitholders and therefore to maximization of unitholder value. LaSalle Japan shall appropriately issue additional investment units after comprehensively considering trends in the capital markets, macroeconomic conditions, property acquisition timing and other factors in addition to giving full attention to the issue of unit dilution (a decline in earnings per unit due to lowering the proportion of existing unitholders caused by an additional issue).
Information Management and Disclosure Policy
Information obtained for LaSalle Japan in the course of asset management business is considered confidential and properly treated in compliance with rules on confidential information handling and insider trading stipulated by LaSalle Investment Advisors. The disclosure of information on LaSalle Japan shall be properly made in accordance with content and form requirements set by the Investment Trust and Investment Corporation Law, the Financial Instruments and Exchange Law, the Tokyo Stock Exchange and the Investment Trusts Association of Japan, etc. Besides the disclosure of financial and management information, LaSalle Japan shall voluntarily disclose further information deemed useful for making decisions to invest in LaSalle Japan.