Customer-Oriented Business Operation Policy

As the asset management company entrusted with the asset management operations of Sekisui House Reit, Inc., Sekisui House Asset Management, Ltd. ("SHAM") has adopted the Principles for Customer-Oriented Business Conduct (published on March 30, 2017 and revised on January 15, 2021) formulated by the Financial Services Agency. SHAM's action policies (the "Policies") are as follows.

Note: SHAM engages solely in investment management related to the asset management operations of Sekisui House Reit, Inc. and the Policies do not include any policies on the sale and recommendation of financial instruments and services, etc. or the structures of financial instruments, which correspond to Principle 5 (Notes 1, 2 and 4) and Principle 6 (Notes 1, 2, 3 and 4) of the Principles.

Policy 1. Formulation and Publication, Etc. of Policies for Customer-Oriented Business Conduct

The Sekisui House Group, which includes SHAM, has set "love of humanity" as its fundamental philosophy, "truth and trust" as its stance, "superior quality and leading technology" as its objective and "comfortable housing and ecologically sound communities" as its business focus in its corporate philosophy.
"love of humanity," the fundamental philosophy, means "doing all things in good faith and with a spirit of service, desiring happiness for others and treating their joy as our own, with the awareness that each and every human being has irreplaceable value." Accordingly, the Sekisui House Group is committed to creating "comfortable housing and ecologically sound communities" through the provision of "superior quality and leading technology" based on its principle of "truth and trust" rooted in this "love of humanity."
As a member of the Sekisui House Group, SHAM will formulate and publish policies for the realization of customer-oriented business conduct, or business conduct oriented to Sekisui House Reit and its unitholders, based on the corporate philosophy above. SHAM will pursue better business conduct by regularly checking the status and the outcome of its initiatives and reviewing its policies as needed.

The status of the formulation and revision of the Policies and their publication is as follows.

Formulation of the Policies Formulated and published in October 2017.
Revision of the Policies The Policies were revised and the revised policies were published in June 2021 (the previous revision was in May 2018).

Policy 2. Pursuit of the Best Interests of Customers

As the asset management company of Sekisui House Reit, Inc. ("Sekisui House Reit"), SHAM will conduct business fairly and in good faith and will strive to pursue the best interests of Sekisui House Reit and its unitholders, aiming to ensure stable revenue and the steady growth of assets under its management in the medium and long term through asset management, taking full advantage of the real estate development and operation capabilities of Sekisui House, Ltd. ("Sekisui House"), which is the sponsor of Sekisui House Reit, and the expertise of the Sekisui House Group.
SHAM believes that thorough compliance enables business conduct to take root as a part of its corporate culture, and this is a top priority of management as SHAM actively and continuously works to ensure compliance.

Please visit the websites below for information about distributions and portfolio data, etc. regarding Sekisui House Reit.

Policy 3. Appropriate Management of Conflict of Interest

While SHAM aims to maximize unitholder value by making the best use of the diverse support of the Sekisui House Group centered around the sponsor Sekisui House for its growth strategies, SHAM will work to avoid undermining unitholder interests through the conflict of interest between the Sekisui House Group and Sekisui House Reit.
Specifically, SHAM will appropriately manage the risk of conflict of interest by building a governance system to ensure objectivity in its transactions with related parties who are defined more widely than those defined by laws and regulations, through the establishment of the Regulations on Related Party Transactions and by taking initiatives to match the interests of the unitholders of Sekisui House Reit and Sekisui House.

The websites below describe initiatives for the appropriate management of conflict of interest transactions with Sekisui House Reit.

Policy 4. Clarification of Fees

SHAM engages in all operations for asset management entrusted by Sekisui House Reit and receives management fees from Sekisui House Reit as consideration for its services. SHAM emphasizes the interests of unitholders and adopts a management fee structure linked to the investment unit price and the distributable amount per unit of Sekisui House Reit. SHAM strives to maximize unitholder value by executing asset management operations worth the consideration and appropriately provides information on the content and amount of the consideration in its securities reports and the like.
SHAM also appropriately discloses the details of the fees that Sekisui House Reit pays to outsourcing contractors for other operations in its securities reports and the like to maintain high transparency.

The websites below describe initiatives related to the clarification of the fees, etc. that Sekisui House Reit pays.

Policy 5. Easy-to-understand Provision of Important Information

SHAM will proactively disclose information that is considered to be important for the investment decisions of Sekisui House Reit. SHAM will also seek to disclose information other than that for statutory disclosure promptly, accurately and equitably in consideration of the transparency and explicitness of the information.
Also, SHAM will actively incorporate expert views, pursue the increased accuracy of the information it discloses and develop information disclosure rules and build a system for gathering and disclosing accurate and useful information so that the unitholders of Sekisui House Reit and other investors will be able to trade investment units with peace of mind.

Please see the websites below for more information on Sekisui House Reit's efforts to disclose important information.

Policy 6. Provision of Services Appropriate for Customers

SHAM will strive to accurately identify the needs of the unitholders of Sekisui House Reit and seek to achieve the sustainable growth of Sekisui House Reit and thereby maximize unitholder value by developing together with all stakeholders.
Through the management of the assets of Sekisui House Reit, SHAM will provide real estate that is safe, secure, comfortable, and high-quality social capital in harmony with a rich environment.
SHAM will actively address social issues through its ESG (environmental, social and governance) strategies.
To communicate these operational activities in an easy to understand way, SHAM will actively provide information to the unitholders of Sekisui House Reit and other investors.

Please refer to the websites below for information about asset management initiatives that consider the needs of the unitholders of Sekisui House Reit.

Policy 7. Framework for Appropriate Motivation of Employees

The Sekisui House Group to which SHAM belongs works to ensure and promote compliance through activities during Corporate Ethics Month every year and the creation of a booklet that publishes the corporate philosophy and the code of conduct. The Group also puts all its energy into creating a better work climate by implementing a governance awareness survey to all employees every year to understand the current status of their awareness of corporate ethics and the work environment, etc. and providing them with opportunities to exchange opinions in each organization. In addition, SHAM will strive to entrench its customer-oriented business conduct as the corporate culture by appropriately motivating the employees to conduct themselves always in pursuit of the best interests of Sekisui House Reit and its unitholders through in-house education and training.

Please refer to the websites below for information on in-house training and the acquisition of qualifications.