Portfolio focusing on "best-in-town" facilities and Mitsui Fudosan's expertise in operation and management support

A retail facility being good or bad is influenced by a wide range of factors, such as catchment area conditions, competition trends, suitability with consumer needs, conditions of the building, etc. FRI calls properties that are comprehensively judged to be able to maintain competitiveness over the medium to long term, "best-in-town" facilities. Since FRI's portfolio focuses on "best-in-town" facilities, FRI has continued to earn the support of consumers in each local area, despite the severe environment surrounding the retail industry. Due to this, and partly due to tenants' marketing efforts, our portfolio maintains a comparatively good performance.

Consumer needs for retail facilities and the environment surrounding the retail industry undergoes constant changes. Therefore, in order to maintain competitiveness, a very high degree of expertise is required. FRI has concluded an SC management agreement with Mitsui Fudosan and outsources operation and management of all its portfolio properties (excluding land interest) to the company, which has a track record in operating a number of retail facilities located throughout Japan. This structure allows us to maintain a stable earnings structure.

A strong earnings structure based on lease contracts with long-term fixed rents

FRI's portfolio focuses on lease contracts with long-term fixed rents concluded with tenants possessing high creditworthiness. Contract terms average around 20 years, which is very long. This is one characteristic of retail facilities and is a major factor for maintaining stable cashflow in the medium to long term.

• For the present state of lease contracts, please click here.

Conservative financial operations through use of leasehold and security deposits

In terms of financing, our great strength is that we are able to conduct financial operations by using the great amount of leasehold and security deposits from tenants, which is a trait specific to retail facilities. Furthermore, by maintaining a low liabilities ratio based on leasehold and security deposits along with borrowings, FRI is carrying out conservative financial operations.

• For changes in liabilities ratio etc., please click here.