Managing Conflicts of Interests
Policies regarding related party transactions
1. Related party transaction
When ADR acquires/disposes assets from related parties, procedures are required in accordance with the Asset Manager's bylaws.
Please also refer to the "Flow of Decision-Making for Asset Acquisition and Disposal."
2. Definition of the related party
- a． Related parties defined under Article 15-(2)-1 of the Investment Trust Law
- b． Directors/Officers of the asset managing company and all its shareholders with voting rights.
- c． SPCs that are majority held by persons stated under a. and b. and thus may have significant influence on the company.
3. Scope of transactions
- a． Acquisition from Related Party
We must not acquire properties for more than the appraised value as set forth in an appraisal report prepared by a qualified real estate appraiser, who is not a related party. An approval from ADR directors’ board must be obtained prior to the transaction.
- b． Acquisition through Related Party
Broker fees must be within the range specified in the Building Lots and Building Transaction Business Law and should be based on standard rates and the level of difficulty of the transaction.
- c． Disposition
We must not sell properties for less than the appraised value as set forth in an appraisal report prepared by a qualified real estate appraiser, who is not a related party. An approval from ADR directors’ board must be obtained prior to the transaction.
- d． Real Estate Leasing
When leasing a property to a related party, the terms must be appropriate and determined based on market price and conditions.
- e． Real Estate Agency Business such as Trading and Leasing Properties
Commissions must be within the range specified in the Building Lots and Building Transaction Business Law and should be based on market standard rents and the level of difficulty in handling.
- f． Property Management Business
As for PM selection, it should be considered based on corporate performances and creditworthiness, while PM fees should be based on bidding prices, market rates, services provided and workload.
- g． Placing Construction Orders
Construction orders should be placed at an appropriate price determined with reference to an estimate provided by a qualified third party in addition to corporate performances and creditworthiness.
- h． Other
All transactions are subject to the policy herein except one-time and consecutive transactions with an amount of less than JPY 10 million and annual JPY 30 million respectively.
4. Procedures on the transactions
Please refer to the diagram below for transaction approval procedure.
5. Notice on the transactions with potential conflicts of
In order to avoid an asset managing company conducting from any inappropriate transactions that may have conflict of interest with an entity described in the above 2., the asset managing company must prepare a brief letter describing the transaction detail and give notice to ADR on the acquisition/disposition with potential conflict of interest.
6. Investigation by third party
When ADR acquires/disposes any specified assets, an investigation must be conducted by an auditor to certify whether the transaction is proper and is comparable to those offered in the market.