CRE Logistics REIT, Inc.
Announcement of Financial Results for the 16th Fiscal Period (Ended June 30, 2024)
August 16, 2024

Event Summary[Company Name]

CRE Logistics REIT, Inc.

[Company ID]

3487-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Announcement of Financial Results for the 16th Fiscal Period (Ended June30, 2024)[Fiscal Period]

The 16th Fiscal Period (January 2024 to June 2024)[Date]

August 16, 2024

[Number of Pages]

24[Time]

16:00 – 16:42(Total: 42 minutes, Presentation: 23 minutes, Q&A: 19 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers][Analyst Names]*

1
Tsuyoshi Ito

President

Hiroshi Torii
Yosuke Ohata
Kouki Ozawa

SMBC Nikko Securities
Mizuho Securities
SBI SECURITIES*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or
whose questions were read by moderator/company representatives.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
1

Presentation
Moderator: Thank you very much for your patience. This is the announcement of financial results for the 16th
fiscal period of CRE Logistics REIT, Inc.
Thank you very much for taking time out of your busy schedule to join us today. We would also like to express
our sincere appreciation for your ongoing support for the management of the fund.
Today, we will have an explanation from Tsuyoshi Ito, President of CRE REIT Advisers, Inc., followed by aquestion-and-answer session. We will ask you to indicate your intention to ask a question, unmute you, andthen ask you to speak up. The event will be live-streamed, and we ask for your patience in the event that thecommunication environment may be unstable at times.
For those attending by telephone, please also refer to the financial results presentation materials available on
our website.
Now Mr. Ito will begin his explanation.
Ito: My name is Ito of CRE REIT Advisers. Thank you very much for watching today's earnings presentation of
CRE Logistics REIT.
The fund was able to close its 16th fiscal period at the end of June. We would like to express our deepest
gratitude to everyone involved for their support.
Prior to the explanation, I would like to report one point. A large typhoon approached the Kanto area today,
but no damage has occurred to facilities owned by the fund at this time.
I will now begin my explanation in accordance with the materials on the screen.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
2See table of contents on page one.
The fund has resolved and disclosed various measures today, and I would like to explain the purpose of thesemeasures in chapter one, highlights.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
3

I will now begin on page two with an explanation of chapter one, highlights.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
4

Please see the summary on page three.
First, we resolved to sell LogiSquare Kuki II in order to realize unrealized gains and secure the necessary funds
to implement future measures. This is the second building that the fund has resolved to sell since its listing.
Gain on sale of JPY570 million will be returned to unitholders over three fiscal periods from the current fiscal
period, to the fiscal period after next. The fund intends to flexibly utilize approximately JPY1.9 billion, whichis equivalent to the book value of the property, together with cash in hand equivalent to depreciation
expenses that accumulate every fiscal period, for returns to unitholders, property acquisitions, and otherpurposes.
Second, we reiterate our clear sponsor commitment. CRE, the sponsor of the fund, disclosed today that it will
acquire additional investment units of the fund. In addition, bridge schemes have been formed for the twopipeline properties to ensure a three-year management period.
Third, NOI for the entire portfolio is on an increasing trend due to a recovery in occupancy rates and rent
increases. At LogiSquare Sayama Hidaka, one tenant moved out, leaving a vacancy, but early leasing activities
were successful in attracting a tenant ahead of schedule. Portfolio NOI continues to increase due to rent
increases at other facilities and strategic capital expenditures.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
5

I would now like to explain the distribution results starting on page four.
The upper half of the chart shows the comparison with the fiscal period ended December 31, 2023.
In the net rental revenues, there was a factor for a decrease in dividends. The most significant factor in thedecrease was the expense of property tax and city planning tax for the two properties acquired in the 14th
fiscal period, LogiSquare Shiroi and LogiSquare Hirakata, which are listed at the bottom of the main factors
section.
This is something that always occurs with the acquisition of a property, and although there is no cost burdenof property tax and city planning tax in 2023 when the property is acquired, the following year, i.e. fromJanuary 1 of this year, there is a burden of property tax and city planning tax by the fund.
The second major factor is vacancy at the time of re-tenanting. Specifically, at LogiSquare Sayama Hidaka, one
tenant moved out at the end of April, resulting in a certain amount of vacancy in May and June.
Third, there is the stripping out of temporary rent increases due to individual circumstances. At one of ourfacilities, a tenant who had been renting at a premium to market rent was able to successfully vacate at theend of March after two contract extensions. Since April 1, we were able to attract a new tenant without any
downtime, and the rent under the lease agreement with the new tenant is comparable to the market rent,
which is a factor that reduces the rent and reduces the dividend compared to the previous market rent, which
was relatively higher than the previous rent.
Since the asset management fee structure of the fund has elements that are linked to the level of profits of
the investment corporation, these factors for the decrease in dividends causes the decreases in asset
management fees, or the factors for the increase in dividends.
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
6

As a result, for the fiscal period ended June 30, 2024, we reduced the dividend by JPY166, compared to thefiscal period ended December 31, 2023, to JPY3,654.
The bottom half of page four shows the comparison to the budget.
With regard to LogiSquare Sayama Hidaka, we succeeded in attracting tenants ahead of schedule, which led
to an increase in occupancy, a factor that increased dividends. However, as a result of attracting tenants aheadof schedule, brokerage fees, or leasing costs, were incurred ahead of schedule, which also led to a decreasein dividends.
As a result of appropriate cost control, repair expenses were lower than planned, and most of the reserve
funds that had been set aside for precautionary purposes were unused. As a result, the Company landed at
JPY3,654, an increase of JPY35 compared to the earnings forecast.

Next, on page five, I would like to explain the forecasted cash distribution.
We have revised our forecast for the fiscal period ending December 31, 2024 upward by JPY87 from the
JPY3,654 we disclosed six months ago. The largest factor in the comparison for the period ended June 30,2024 was the sale of properties. The sale of a 30% interest in LogiSquare Kuki II generated an increase individends.
In terms of profit and loss from the leasing business, steady progress in leasing and rent increases, as well asa temporary decrease in leasing costs, have enabled us to firmly secure an increase in dividends. The upwardrevision of operating results is reflected in an increase in management fees and dividend reduction factors, aswell as an increase in interest expenses as a result of refinancing, reflecting higher market interest rate.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
7

Finally, with regard to distributions in excess of earnings, the fund has been paying out an amount equivalent
to 30% of depreciation expenses as a return to unitholders. However, in the three fiscal periods in which gains
on sales are recorded, priority will be given to building up the cash reserves necessary to implement future
measures, and distributions in excess of earnings will be reduced to an amount equivalent to 20% ofdepreciation expenses.
As a result, for the fiscal period ending December 31, 2024, we are again announcing our earnings forecast of
JPY3,741, an increase of JPY87 compared to the fiscal period ended June 30, 2024.
The first factor for dividend increase in the fiscal period ending June 30, 2025 is the sale of 37.5% interest in
LogiSquare Kuki II, which creates an additional factor for dividend increase, in addition to the sale of 30%
interest in the fiscal period ending December 31, 2024. Cumulatively, 67.5% of Kuki II will be sold, which will
result in a decrease in NOI and a reduction in dividends due to the sale.
On the other hand, increased occupancy at LogiSquare Sayama Hidaka and higher rents at other facilities
continued to produce an increase in income from rental operations. Since the maturity of long-term debt will
arrive in January 2025, we have factored in a considerable increase in interest expenses due to refinancing
and expect to see a reduction in dividends.
As a result, we have announced a new earnings forecast for the fiscal period ending June 30, 2025, increasing
the dividend by another JPY41, to JPY3,782.

Continued on page six, we will realize unrealized gains from the sale of properties and secure the necessary
cash reserves for future measures.
The leftmost bar graph illustrates the book value and gain on sale of LogiSquare Kuki II.
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
8

As for Kuki II, as indicated in the bar graph on the right, 30%, 37.5%, and 32.5% will be sold sequentially fromthis fiscal period onward. The gain on sale will be distributed to unitholders as a dividend each time it isreceived.
Apart from these items, the fund has recorded depreciation expenses of approximately JPY760 million per
fiscal period. As for distributions in excess of earnings, as explained earlier, in the three fiscal periods in whichgains on sales are recorded, they will be reduced to an amount equivalent to 20% of depreciation expenses.
Since the facilities owned by the fund consist of recently constructed facilities, only a limited amount of capital
expenditures will be incurred.
As a result, the accumulation of cash in hand, which is commensurate with depreciation and amortization, is
expected to build up sequentially as shown in the light-blue bar graph. Over the three fiscal periods throughDecember 31, 2025, we expect to accumulate approximately JPY3.4 billion in cash reserves, in addition to the
cash reserves we currently have, and we will carefully consider how to utilize this cash.
The effect of the DPU, if the measures were implemented with the expenditure of JPY1 billion, is shown on
the left side, in the blue box.

Continued on page seven, we reiterate our clear sponsor commitment.
As disclosed today, CRE, the sponsor, will acquire additional investment units of the fund. We expect thatpurchases will begin in order from next week onward.
As indicated on the right side of this page, we previously held preferential negotiation rights for LogiSquare
Ichinomiya. Furthermore, we have received preferential negotiation rights for LogiSquare Narita, which wascompleted at the end of May, and tenants moved in and lease contracts started on June 1. The bridge scheme
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
9for Ichinomiya was formed in July and for Narita, in September, as announced today, and a three-year
management period was secured.
We will consider acquiring these two properties at the appropriate time and in the appropriate manner, basedon changes in the market environment, and the results of conversations and communications withinstitutional investors,.

Continuing on page eight, I will explain about early leasing and rent revisions.
As shown on the left side of the page, with regard to LogiSquare Sayama Hidaka, the tenant that had occupied
the 7,400 tsubo floor moved to another facility and moved out at the end of April due to an increase in cargovolume.
Due to the vacancy of 7,400 tsubo, the occupancy rate of Sayama Hidaka was expected to fall to about 65%,
as stated in 1, but as stated in 2, we were able to limit the decline in occupancy rate to about 75% without
any downtime, namely as a result of attracting a new tenant on May 1 in one of the parcels.
Since June, as noted in 3, existing tenants have increased floor space in the building in response to increased
cargo volume, and as a result, the occupancy rate at Sayama Hidaka has recovered to 84% as of the end ofJune, the end of the most recent fiscal period. Since the beginning of this fiscal period, we have attracted a
new tenant for one more parcel on August 1, bringing the current occupancy rate of Sayama Hidaka to 93.5%,
with only one parcel, approximately 1,400 tsubo, remaining vacant.
As for the remaining parcels, we have received concrete inquiries from major logistics companies, and we willcomplete rent negotiations as soon as possible in order to return the occupancy rate of Sayama Hidaka to
100%, or in other words, to 100% of the entire portfolio.
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
10

As shown on the right side of the page, we have achieved high rent increase rates. In the fiscal period ended
June 30, 2024, the most recent fiscal period, several lease contracts expired. The gray-highlighted bars
indicate that free rent was given to tenants when attracting new tenants, but rents under the old and newlease contracts were maintained.
The fund records an average rent for lease agreements that include free rent. In that sense, it is a reductionin the renewed rent, but the nominal rent remains unchanged.
In addition, the light-green bar graph at the very top of the June 2024 period, this is one of the last vacantparcels in Sayama Hidaka, which we introduced earlier.
In the fiscal period ending December 31, 2024, one lease contract will expire, and a new lease contract has
already been signed with no free rent, no downtime, and a 9.1% rent increase. In the fiscal period ending June30, 2025, four lease contracts will expire. For three of them, we have already exchanged written agreementson terms and conditions involving rent increases.
For the remaining one, the green bar graph at the very top, the existing tenant wishes to continue to use thefacility, and after six months of negotiations for an increase in rent, an agreement has already been reached
on a verbal basis on the increased rent and a new lease agreement has also been finalized. The tenantcompany is currently in the process of approving the internal approval process and expects to conclude thedocument by the end of the month.

Continuing on page nine, I would like to present some specific examples of strategic capital expenditures.
The blue frame in the upper right corner of page nine is an excerpt from page 13 of the 15th fiscal period
financial results presentation.
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
11Specifically, at LogiSquare Hirakata, we received a request from a tenant to install an air-conditioning system,with the aim of improving the working environment in warehouse. The fund is willing to accept such requests
because we will strengthen tenant relations and also enhance tenants' adherence to the facility.
We have invested JPY94 million to install air-conditioning equipment, but we cannot afford not to see a returnon this investment. After carefully explaining to the tenant companies and obtaining their full understandingthat depreciation and its maintenance costs would be incurred if the tenants themselves installed airconditioning equipment, we secured JPY11 million per year in rent additions and NOI increases, and a 12.6%
investment yield.
We have received several such requests for other facilities as well, and we intend to continue to actively
respond to these requests as a measure to strengthen tenant relations.

Continued on page 10, NOI for the entire portfolio is on an increasing trend due to a recovery in occupancy
rates and rent increases.
The NOI of the fund's portfolio temporarily decreased significantly to JPY3,590 million in the period ended
June 30, 2024. The factor is due to a tenant moving out of Sayama Hidaka. However, tenant leasing for Sayama
Hidaka is progressing smoothly, and we have succeeded in attracting tenants partially ahead of schedule.
If LogiSquare Kuki II had not been sold and 21 properties had been continuously held and managed, the NOI
recovery would have accumulated to JPY3,656 million in the fiscal period ending June 30, 2025, as shown inthe dotted blue bar graph. However, in reality, we have resolved to sell LogiSquare Kuki II, and as shown in
the gray bar graph, the recovery of NOI is expected to be limited to JPY3,619 million at first.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
12

In addition, four lease contracts will be revised in the fiscal period ending June 30, 2025, and the lease
contracts will be revised to increase the rent sequentially during the fiscal period. These four contracts willcontribute to the full period for six months, from July 1 to December 31, 2025, and we expect to accumulate
an additional JPY10 million in benefits.
Going forward, we intend to further continue the upward trend in NOI through strategic capital expenditures,as described on page nine, or through increased rent revision on lease agreements that will expire in due
course at other facilities.

Continuing on page 11, we will try to keep ALM controls in line with inflation.
Since the area of lease contracts that will expire or the amount of debt repayment varies in each fiscal period,
the increase in rent may not necessarily exceed the increase in debt cost in all the period, but overall, theincrease in debt cost is expected to be absorbed by the increase in rent.
The average lease contract term for facilities owned by the fund is 7.4 years, which is longer than the averagedebt term. However, as indicated in the blue box, the current standard lease contract for logistics facilities isabout five years, then the average lease term is expected to gradually become shorter.
Going forward, we will work to match the duration of our assets and liabilities as closely as possible toaccommodate both inflation and deflation.
Based on the premise that the increase in NOI from higher rents can fully absorb the increase in interest
expenses and debt costs, we will not unnecessarily reduce debt costs through variable borrowings, but will
firmly avoid the risk of rising interest rates and in principle, promote long-term borrowings at fixed interest
rates.
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
13

Please refer to page 12.
As shown in the pie chart, the fund's current interest-bearing debt is approximately JPY70.8 billion. Assuming
a 0.5% increase in the interest rate on interest expense in the future, interest expense would increase byapproximately JPY350 million. Since the annual rental income of the fund is approximately JPY9 billion, if we
can increase the rent by 4%, the increase in interest expense will be secured. As we mentioned on page eight,
we believe that a 4% rent increase is well within our ability to achieve this goal, based on past performanceand future projections.
As for LTV management, we will continue to target 43% to 45%, the same as in the past.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
14

Finally, from page 13 onward, we will explain our ESG initiatives.
As shown in the pie chart on the upper right, the fund has been actively introducing solar power generation,and the two most recently acquired properties, LogiSquare Shiroi and Hirakata, also have this selfconsumption scheme in place.
As the bar graph on the lower right shows, we generate renewables equivalent to 70% of the total electricity
use in our portfolio.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
15

As you can see on the upper left of page 14, all of our facilities are green buildings, so the percentage of green
financing is gradually increasing as we refinance all of our normal loans to green loans when they come due.
In addition, as shown in the upper right corner, we were able to show a decrease in greenhouse gas emissions
on a per-unit basis in the most recent fiscal year. We will continue to move forward, one step at a time, towardachieving our long-term goal for FY2030.
This concludes my explanation.
If you have any questions or comments, please do not hesitate to contact us.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
16

Question & Answer

Moderator [M]: We will now move on to the question-and-answer session.
We have now received questions from two people.
First of all, Mr. Torii, please ask your question.
Torii [Q]: This is Torii from SMBC Nikko Securities. Thank you. I would like to ask you two questions.
This time, you've announced the sale of a property, but on the other hand, could you tell us how you plan to
use the proceeds from this sale or how you intend to utilize them going forward? I would like to hear fromyou if you have a plan on how you plan to use the sale proceeds to boost profitability, whether it be property
acquisition, debt repayment, or acquisition of your own investment units.
Secondly, and this is related to the above, I think the sponsor has announced that it will acquire a maximumof 0.4% of the investment units. I would like to ask you about the background of the acquisition of investment
units by the sponsor, not the direct effect on the profitability per unit of the acquisition of its own investment
units, but the background of the acquisition by the sponsor, not the acquisition of its own investment units.
These are my two questions.
Ito [A]: Thanks. We will respond to your questions in order.
First, regarding how the funds from the sale of the property will be used, as you can see on page six, we willhold one-on-one meetings with institutional investors next week as part of our IR activities for financial results,
so we will carefully explain the aims of our measures and receive their opinions. We would like to make a final
decision after carefully assessing what measures the capital market requires.
In any case, we obtained cash by selling the profitable LogiSquare Kuki II, but cash does not generate returns
from interest on deposits alone, so we must be sure to utilize it for some measure that will lead to an increasein DPU.
As shown on page six, we now have the financial resources and backing to implement measures of JPY1 billion
per fiscal period, and we will use this to make decisions on acquisition of our own investment units andproperties and we will be sure to capture the positive effects of the DPU.
First, after exchanging opinions with institutional investors, which will begin next week, we would like to makea careful decision since the funds are limited and precious.
The second point, this means the acquisition of additional investment units by CRE, as to why the acquisitionis separate from the acquisition of the company's own investment units, we have heard that after discussions
with CRE, the sponsor has decided that the current unit price of the fund is undervalued and that theacquisition is the right level to be made.
In addition, given the current environment, we have been offered the decision to acquire additional
investment units from the perspective of further strengthening our sponsor commitment and clearlycommunicating our stance toward CRE Logistics Fund Investment Corporation as a sponsor in an easy-tounderstand manner.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
17

Regarding this matter, it is purely a decision based on CRE. From the perspective of the investment
corporation, of course, we are in a position that welcomes additional acquisitions. Therefore, we have beenworking in collaboration with the sponsor to carefully consider this.
This does not mean that we will decide not to purchase our own investment units, and we will make theappropriate decision as an investment corporation on our own.
That is all from me.
Torii [M]: Thank you very much.
Moderator [M]: Thank you for your questions.
The next person, please.
Ohata [Q]: This is Ohata from Mizuho Securities. I have two questions.
This question somewhat ties into the previous one, but it also involves the sponsor's perspective from CRE. If
possible, could you provide some comments on this? Specifically, could you explain what concrete benefits
there are from an increased sponsor commitment?
There have been other cases recently, for example, where a sponsor has given up managing your company
and is seeking to merge with another REIT, but I am not sure if it is our understanding that increased
commitment is not an option in the immediate future.
As for other developments, if you make a commitment at a discount but the evaluation continues to be
unfavorable, for example, you may seek a way to delist the company, or something like that. I would like to
ask the first point in this regard.
The second point is about the logistics facilities and rental market in the Tokyo metropolitan area. I am notsure if it is correct to say that your company's view remains the same, in that vacancies will gradually decline
as supply peaks out starting in 2024. I get the impression that the business aspect is a bit weak for the vacancy
rate to come down, but at what pace and at what timing do you expect the vacancy rate to come down in the
future? Please give explanations regarding this area.
Ito [A]: Thank you. We will respond to your questions in order.
First, regarding the benefits of strengthening our commitment, it's true that even if the sponsor makes
additional acquisitions, it doesn't necessarily mean an increase in DPU, and there may be concerns about CRE
acting unilaterally. However, I've heard that the sponsor made the decision for the additional acquisition,
purely because the current investment unit price is undervalued. The sponsor also wants to clearly
demonstrate its continued commitment to the healthy growth of the investment corporation moving forward.
In addition, the recovery of our investment unit price will lead to the implementation of future public offeringsand property acquisitions, which in turn will enable us to sell CRE's development properties in a healthymanner. Of course, CRE is also considering this cannot realize soon through additional acquisitions with thisamount , but we wanted to make our commitment in an easy-to-understand manner, in order to take the firststep toward this goal.
Additionally, there was a recent case of a merger between logistics REITs. With the strengthened commitment,
regarding if this means that CRE intends to continue operating independently without exploring mergers or
considering delisting, I can confirm that, as of now, we are not considering delisting or similar actions. We will

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
18continue to make every effort we can and continue our efforts to recover the unit price, and return the fundto a healthy state, first of all.
Regarding mergers and similar actions, there is nothing specific that we can mention at this time. However,considering the recent case, there is a possibility that something could happen in the capital market. As forus, we will, of course, continue to monitor such developments closely. As we have consistently stated, ourposition remains that we should openly consider any decisions that could lead to maximizing unitholder value.
Strengthening the sponsor's commitment does not exclude this approach. We intend to maintain a neutral
stance, continuing to make diligent efforts and remaining open to discussions moving forward.

Your second question regarding market conditions, as shown on page 23 of the document, first of all, in 2022
and 2023, there was a large-scale new supply of more than 1,100,000 tsubo in the Tokyo metropolitan area,
but this has already peaked out. With the skyrocketing cost of construction, developers may be forced toexercise caution in developing new facilities.
On the other hand, tenant demand is very strong. The dark-blue bar graph shows the total demand, which
actually exceeded 1,000,000 tsubo for the first time in two years, but tenant demand remained at the samelevel.
As for what is happening now, tenant demand is currently moving toward new supply that was not filled in
2022 and 2023. Therefore, pre-leasing of newly developed properties in 2024 is being delayed. Tenants arestill moving toward newer buildings that can be previewed and have been completed in the last year or two,and are deciding to move in.
We often hear comments that the vacancy rate is not coming down, and that it has remained high, but webelieve that what is happening now is that newly developed facilities are forced to set asking rents that are
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
19relatively higher than market rents because of the construction costs. As long as they maintain that higher
asking rent for the newly developed facilities, we see that it will be difficult to fill the space.
From the perspective of the fund, which holds an existing portfolio, it is relatively easy to leverage the asking
rents and proceed with rent increase negotiations. Even if facilities with high asking rents do not fill up easily,
as long as the rent is set appropriately, they will be occupied. Therefore, we are not too concerned about thevacancy rate not decreasing due to these high asking rent facilities remaining unoccupied.
There is absolutely no prospect of construction costs coming down in the future, so I suspect that this situation
will continue for a bit. While tenant demand is strong, new supply will decrease, and we expect supply anddemand to tighten in the future.
That is all from me.
Ohata [M]: Thank you very much.
Ito [M]: Thank you.
Moderator [M]: Next, Mr. Ozawa, please go ahead.
Ozawa [Q]: My name is Ozawa from SBI SECURITIES. I would like to ask you two questions.
The first point is that there are two properties in the form of bridges this time around, and I wonder what theyield perspective will be in this area. I know it's strange to say that it's from a yield perspective, but there is athree-year investment period, and basically, at some point, the book value will decrease due to depreciation,
et cetera. I'm wondering if there is much difference from the past. I'm sorry, I understand that it depends onthe circumstances, such as how much they were purchased by the leasing company, but I would like to know
if you can give us some sense of the yield from your perspective.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
20

The second point is about the sponsor's pipeline. As seen on page 39 of the materials, there are recent updates,
and the sponsor is currently executing a midterm plan. Last year, the midterm plan was revised upward, andthey are also developing several large-scale properties. It seems like the number of properties is steadily
increasing. Although CRE Logistics REIT is not currently in a position to make continuous purchases throughPO, the sponsor still needs to generate capital gains to achieve the targets of their midterm plan. While thecurrent situation involves a bridge scheme from a leasing company, I wonder if the leasing company still has
the capacity to continue providing such bridge financing.
Since it is up to the sponsor to decide, it may be possible to sell the developed properties to an outside party.
I would like to ask about how the sponsors will digest these areas, which may be something you would ask
the sponsors, but I would like to ask about how we should look at this, including the bridge's extra capacity.
Thank you.
Ito [A]: Thanks. We will respond to your questions in order.
First, regarding the yield perspective of the two properties involved in the bridge scheme and the outlook
over the next three years, both properties are expected to have yields in the low 4% range. The Ichinomiya
property has a slightly lower yield but is rated higher in terms of quality. On the other hand, the Narita
property has a somewhat higher yield perspective. For now, both properties are included in the bridge scheme,with yields in the low 4% range.
As Mr. Ozawa mentioned earlier, as the period of time goes on, the book value can be lowered a little, in otherwords, the yield will increase. For us, we got a long adjustment period of three years, so the further ahead wego, the more it will go up as a yield a little bit. In this context, we will carefully assess changes in the market

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
21

environment and proceed with careful consideration of the acquisition. If it stays in the low to mid-4% range
over the next three years, it will be easier for me to acquire it.
The second point is how to sell and exit the CRE development properties and this arrangement as a sponsor.
First of all, we can clearly state that the fund holds preferential negotiating rights for these two properties.
Of course, the sponsor, the private fund management company, and ourselves, are exchanging informationand sharing information on the market environment, et cetera, and are carefully working on the arrangements,
but we have received a report that a separate initiative to establish a private fund has started.
Fortunately, institutional investors' appetite for investment in logistics facilities has not yet been impaired atall, so it is relatively easy to raise equity capital for high-quality logistics facilities developed by CRE.
As for the fund, hopefully, we will continue to acquire such high-quality facilities to generate the effect ofincreased distributions, but as Mr. Ozawa pointed out, the current market environment makes it difficult toacquire assets through public offerings. We recognize that, in this environment, our first priority should be toincorporate the assets into private funds and to realize the sale of CRE properties. Therefore, we believe thatthe first thing we can do is to make an effort to recover the investment unit price and restore the condition
to a level that will allow us to carry out a public offering.
In response to your question, we have been informed of CRE's policy to sell the property through theformation of a private fund and for the Group to expand AUM, whether through private placement or public
offering, and to make a solid contribution to the consolidated management.
I have responded to your two questions.
Ozawa [M]: I understand. Thank you.
Ito [M]: Thank you.
Moderator [M]: Does anyone have any questions?
It appears that all questions have been answered, so we will conclude today's briefing.
Thank you very much for joining us today.
Ito [M]: Thank you.
Moderator [M]: See you.
[END]______________
Document Notes
1.
2.
3.
4.

SupportJapan
TollfreePortions of the document where the audio is unclear are marked with [inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
22

Disclaimer
SCRIPTS Asia reserves the right to edit or modify, at its sole discretion and at any time, the contents of thisdocument and any related materials, and in such case SCRIPTS Asia shall have no obligation to provide
notification of such edits or modifications to any party. This event transcript is based on sources SCRIPTS Asia
believes to be reliable, but the accuracy of this transcript is not guaranteed by us and this transcript does not
purport to be a complete or error-free statement or summary of the available data. Accordingly, SCRIPTS Asia
does not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of theinformation contained in this event transcript. This event transcript is published solely for information
purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an
offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.
In the public meetings and conference calls upon which SCRIPTS Asia’s event transcripts are based, companies
may make projections or other forward-looking statements regarding a variety of matters. Such forwardlooking statements are based upon current expectations and involve risks and uncertainties. Actual results
may differ materially from those stated in any forward-looking statement based on a number of importantfactors and risks, which are more specifically identified in the applicable company’s most recent public
securities filings. Although the companies may indicate and believe that the assumptions underlying theforward-looking statements are accurate and reasonable, any of the assumptions could prove inaccurate orincorrect and, therefore, there can be no assurance that the anticipated outcome described in any forwardlooking statements will be realized.
THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE
PUBLIC MEETING OR CONFERENCE CALL. ALTHOUGH SCRIPTS ASIA ENDEAVORS TO PROVIDE ACCURATE
TRANSCRIPTIONS, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE
TRANSCRIPTIONS. IN NO WAY DOES SCRIPTS ASIA OR THE APPLICABLE COMPANY ASSUME ANYRESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BY ANY PARTY BASED UPON ANY EVENT
TRANSCRIPT OR OTHER CONTENT PROVIDED BY SCRIPTS ASIA. USERS ARE ADVISED TO REVIEW THE
APPLICABLE COMPANY'S PUBLIC SECURITIES FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER
DECISIONS. THIS EVENT TRANSCRIPT IS PROVIDED ON AN "AS IS" BASIS. SCRIPTS ASIA DISCLAIMS ANY AND
ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWAREERRORS OR DEFECTS, AND ACCURACY, COMPLETENESS, AND NON-INFRINGEMENT.
None of SCRIPTS Asia’s content (including event transcript content) or any part thereof may be modified,
reproduced or distributed in any form by any means, or stored in a database or retrieval system, without theprior written permission of SCRIPTS Asia. SCRIPTS Asia’s content may not be used for any unlawful or
unauthorized purposes.
The content of this document may be edited or revised by SCRIPTS Asia at any time without notice.
Copyright © 2024 SCRIPTS Asia K.K. (“SCRIPTS Asia”), except where explicitly indicated otherwise. All rights
reserved.

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
23