Nomura Real Estate : Announcement concerning receipt of recommendation for corrective action and direction from the relevant Labour Standard Inspection Office regarding discretionary working hours for managerial employees

December 26, 2017

To whom it may concern

Nomura Real Estate Development Co., Ltd. 1-26-2, Nishi-Shinjuku, Shinjuku-ku, Tokyo

Representative: Seiichi Miyajima, President and Representative Director Contact: Naoko Usami, General Manager of Corporate Communications Dept.

Announcement concerning receipt of recommendation for corrective action and direction from the relevant Labor Standard Inspection Office regarding discretionary working system for management-related work

Nomura Real Estate Development Co., Ltd. (the "Company") hereby announces that on December 25, 2017 it has received from the relevant Labor Standard Inspection Office ("LSIO") in charge of the headquarter and 4 local offices of the Company (Kansai Regional Office, Nagoya Branch, Sendai Branch and Fukuoka Branch) certain recommendation for corrective action and direction in respect of treatment of the rules regarding discretionary working system for management-related work (the "Rules") that were applied to certain employees in the Company.

This recommendation for corrective action and direction from the LSIO is in relation to the decision of the LSIO for the following matters: (i) as the concept of so-called "deemed working hours" that is adopted under the Rules was not applicable to certain employees that were subject to the Rules, there has been certain overtime works undertaken by those employees beyond what is separately agreed under the labor-management agreement regarding overtime working hours, and (ii) as a result, the Company had not been paying salaries to those employees for such overtime working hours.

The Company, after receiving this recommendation for corrective action and direction from the LSIO, confirms that it shall closely investigate the working hours of those affected employees, and is committed to take all necessary actions in relation to this matter. In this connection, the Company has already decided to abandon the Rules, and will implement this in a swift manner.

The Company is taking this recommendation for corrective action and direction from the LSIO seriously. The Company shall make efforts to manage its employment matters in an appropriate manner, and will also aim to shorten the overall working hours of its employees.