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Jul. 22, 2008

Nomura Real Estate Holdings, Inc. and Toshiba Corporation to Establish Alliance in Real Estate Business through Sale of Majority Ownership of Toshiba Building Co., Ltd.

Nomura Real Estate Holdings, Inc. (hereafter Nomura Real Estate HD) and Toshiba Corporation (hereafter Toshiba) today announced that they have reached a basic agreement on establishing an alliance in the real estate business, under which Nomura Real Estate HD will take a majority stake in Toshiba Building Co., Ltd. (hereafter Toshiba Building), currently a consolidated subsidiary of Toshiba. On completion of the transfer, Toshiba Building will become a consolidated subsidiary of Nomura Real Estate HD.

  1. Reason for the stock sale and establishing alliance
    Nomura Real Estate HD is determined to understand and address the needs of its corporate customers, in order to support them with optimized solutions and a broad range of services that assure profitable development of real-estate strategies, including brokerage services between companies, property management, and architectural design. Nomura Real Estate HD positions its Corporate Real Estate (CRE) strategy as a key strategy for future growth and is taking measures to strengthen its execution.

    Toshiba promotes continuous efforts to identify strategic business areas into which to channel major resources, in order to secure the optimum allocation and utilization of the Group's management resources. In line with this, Toshiba has reevaluated its real estate business currently conducted by Toshiba Building, and the efficient property management of Toshiba Group. Toshiba concluded that it would be best served by a strategic alliance with a leading company in the real estate field, a company with high levels of expertise and reliability in the real estate business.

    On the strength of these considerations, Nomura Real Estate HD and Toshiba have agreed to enter into a strategic alliance in the real estate business, with a view to achieving mutual benefits, by developing the capabilities of Toshiba Building and assuring that Toshiba Building can achieve sustained growth with real competitiveness.

    Nomura Real Estate Group will provide Toshiba Building with expertise in real estate financing, CRE strategy and other know-how in the real estate business. Toshiba, based on the foundations of its existing business relationship with Toshiba Building, will provide business opportunities and construct a Toshiba Group CRE strategy with Toshiba Building. Through such measures, Nomura Real Estate Group and Toshiba will secure the growth of Toshiba Building. The type of information on real estate and services that Nomura Real Estate HD and Toshiba will provide to Toshiba Building on a preferential basis will be determined once Nomura Real Estate HD and Toshiba conclude the shareholder agreement.

    As a result of this alliance, Toshiba Building, which holds profitable lease assets with many Toshiba Group companies as the main tenants, will become a group subsidiary of Nomura Real Estate HD. This will allow Nomura Real Estate HD to bring even greater stability into its business portfolio, and to build a pipeline into Toshiba Group that it will use to promote growth of its leasing and asset management businesses besides the overall group business in such areas as property management, facility management, profit-generating property development, residential development, brokerage and the like. Beyond this, Nomura Real Estate HD will position this alliance as a flagship project for its "Main Advisor on CRE" business, one aspect of the development of Nomura Real Estate Group's CRE strategy, and will promote active measures to develop future business in this area.

    Transfer of the stock will support Toshiba in its strategy of focusing on and channeling resources to core business areas. Toshiba will also be able to make use of the know-how of Nomura Real Estate Group in raising the value of the assets it holds, and to further enhance management efficiency.

    While joining Nomura Real Estate Group will allow Toshiba Building to deepen cooperation with other Nomura Real Estate Group companies, the objective is to achieve a company that is capable of autonomous development, building on the clients and know-how it has cultivated up until now on the basis of its distinctive business foundations. Going forward, Toshiba Building will seek to reinforce and make use of its existing business capabilities and its strengths as a real estate company rooted in manufacturing, to take on and cultivate CRE, and to provide Toshiba Group with an effective real estate company that supports value promotion and proactive business development.
  2. Outline of Toshiba Building Co., Ltd.
    (1) Company name: Toshiba Building Co., Ltd.
    (2) Representative director: Masahide Tsuji, President
    (3) Location: 1-8-4, Shibakoen, Minato-ku, Tokyo
    (4) Date of incorporation: December 22, 1932
    (5) Main business: Real estate development, including construction, leasing and management of office buildings, store locations, warehouses, residential complexes and employee dormitories.
    (6) Settlement of Accounts: March
    (7) Number of Employees: 126(As of May 1st, 2008)
    (8) Office Locations: Hokkaido Branch (Sapporo City), Tohoku Branch (Sendai City), Tokyo Metropolitan Branch (Minato-ku, Tokyo), Toshiba Building Branch (Minato-ku, Tokyo), Kanagawa Branch (Yokohama City), Chubu Branch (Nagoya City), Kansai Branch (Osaka City), Chugoku Branch (Hiroshima City), Shikoku Branch (Takamatsu City), Kyushu Branch (Fukuoka City)
    (9) Capital: 14.372 billion yen
    (10)Number of issued stocks: 30,544,000 shares
    (11) Stockholder composition and holding (%) Toshiba Insurance Service Corporation, 67,520 shares (0.221%)
    Toshiba Plant Systems & Services Corporation, 4,000 shares (0.013%)
    Toshiba Technical Service & Maintenance Co.,Ltd., 400 shares (0.001%)
    (as of July 22nd 2008)
    (12) Main property assets: Toshiba Headquarters Building (Shibaura, Minato-ku, Tokyo *1
    Lazona Kawasaki Plaza (Horikawa-cho, Saiwai-ku, Kawasaki) *2
    Umeda Sky Building (Oyodo-naka, Kita-ku, Osaka,) *3

    *1 Land is shared and partially owned, buildings are shared.
    *2 Land is leased, building is shared
    *3 Land is partially owned, building is shared
    (13) Subsidiaries: Toshiba Fudosan Facility Service Co. Ltd.
    Lazona Property Co., Ltd.
    (14) Trend in recent business achievements, by business years (yen)

      Fiscal year ended
    March 2007
    Fiscal year ended
    March 2008
    Sales 40,859 million 42,818 million
    Gross Profit 13,871 million 14,987 million
    Operating Profit 11,866 million 12,079 million
    Recurring Profit 10,539 million 10,379 million
    Net Income 6,243 million 81,923 million*
    Total Assets 186,454 million 266,482 million
    Pure Assets 58,129 million 134,892 million
    Dividend per share 132.90 1,743.40
    *Net Income for March 2008 reflects a special profit resulting from the sale of the Ginza Toshiba Building.
  3. Number of transferred shares, trade value and stockholder constitution before and after transfer.
    (1) Number of transferred shares: 19,853,600 shares
    (2) Transfer value: ¥80 billion (estimated price)
    Prior to the closing date, Toshiba Building plans to prepare Temporary Financial Statements and to distribute the full amount of the Distributable Amount based on such Temporary Financial Statement as a dividend. The above-mentioned transfer value was determined on the basis of consideration of carrying this out. (cf. the Distributable Amount based on the balance sheets for the fiscal term to March 2008 is ¥116.8 billion (regular dividend of ¥50.6 billion paid as of June, 2008.))
    Nomura Real Estate HD expects to raise the cash for the share purchase from cash and its equivalents that it holds and by raising funds, etc., from financial institutions. Nomura Real Estate HD will continue in its endeavors to maintain and improve its financial position.
    (3) Stockholder Constitution Before and After Transfer
      Before Transfer After Transfer
    Toshiba Corporation 30,472,080 shares(99.765%)
    Toshiba Insurance Services Corporation. 67,520 shares(0.221%)
    Toshiba Plant Systems & Services Corporation 4,000 shares(0.013%)
    Toshiba Technical Service & Maintenance Co., Ltd. 400 shares(0.001%)
    Nomura Real Estate HD 19,853,600 shares(65.00%)
    Toshiba Corporation 10,690,400 shares(35.00%)
  4. Schedule
    July 22nd, 2008: Approved by meeting of boards of directors of Nomura Real Estate HD and Toshiba.
    July 22nd, 2008: Basic agreement signed between Nomura Real Estate HD and Toshiba.
    By late November, 2008: Final agreement (stock transfer agreement and shareholder agreement) signed by Nomura Real Estate HD and Toshiba (projected).
    By the end of Dec, 2008: Stock transfer to be completed (projected).
  5. Future Outlook
    With the execution of this alliance, Toshiba Building will become a subsidiary of Nomura Real Estate HD and an affiliated company of Toshiba.
    In regard to the effect on the current term consolidated business results of Nomura Real Estate HD, notification will be made as quickly as possible once details are confirmed.
    Toshiba calculates that the partial transfer of its stock in Toshiba Building will result in a profit of ¥70 billion (pre-tax, approximation, forecast) in the current term to March 2009. In regard to the effect on the consolidated business results of the current term, notification will be made as quickly as possible once details are confirmed.

This Web site contains projections of business results, statements regarding business plans and other forward-looking statements. This information is based on certain assumptions, such as the economic environment, business policies and other factors, as of the date when each document was posted. Actual results may differ significantly from the estimates listed here.

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