The basic strategy is efficient financial operations using Sumitomo Corporation’s high creditworthiness. The Investment Corporation controls LTV, taking growth into consideration. It enhances unitholder value through efficient cash management.
Robust Financial Operation and LTV Control
SLR will execute flexible financial strategies, placing priority on stable profits in the medium to long term, steady growth in assets under management and the stability of asset management.
|Equity finance||SLR will flexibly issue additional units of investment equity for the long-term, stable growth of assets under management, comprehensively considering financial market trends, the economic environment, the timing for acquiring new assets to manage, the Investment Corporation’s capital structure and the impact on the existing unitholders, among other factors. The Investment Corporation will also fully consider the dilution of units of investment equity.|
|Debt finance||SLR aims to build an optimal combination of banks based on good relationships with major financial institutions. It also aims to achieve unsecured and unguaranteed borrowings, striking a balance between long-term and short-term borrowings, between fixed interest rates and floating rates, and among repayment dates.|
|LTV||SLR controls LTV , taking the maintenance of capital reserves and growth into consideration. In principle, the Investment Corporation will usually keep LTV between 35% and 45%.|
Cash Management: Policy on Use of Depreciation
Taking characteristics of logistics properties, of which capital expenditure is limited due to the lower percentage of equipment possession while depreciation expenses are high due to the higher percentage, in general, of building possession compared with other types of assets, SLR aims to maximize the unitholder value by allocating earning surplus under certain rule in order to maintain a stable level of distributions.
In addition to earnings, the Investment Corporation aims to distribute amounts equivalent to 30% of depreciation. In principle, it will distribute these amounts each accounting period.