Mitsui Fudosan Logistics Park Inc. (MFLP-REIT)

Securities Code3471

Table of Contents
1. Start of Logistics REIT by Mitsui Fudosan
1-1. IPO Summary…… P32-1. Financial Highlights…… P5

2-2. 1st Fiscal Period P/L…… P6

2-3. 2nd Fiscal Period Earnings Forecast…… P7

2-4. Distribution Trends…… P8

3. Basic Strategy of MFLP-REIT…… P103-2. Mitsui Fudosan’s
Logistics Facilities Business and Logistics REIT…… P11
3-3. Growth Strategy of MFLP-REIT

5-1. Logistics Market Overview…… P31

6. Appendix

2. Financial Summary

3-1. Basic Strategy of MFLP-REIT

5. Logistics Market Overview• Statement of Income and Balance Sheet…… P36• Individual Property Income Statement…… P37• Period-End Appraisal Summary…… P38• Initiatives for ESG…… P39• Interest Rate Market Data…… P41• Status of Interest-Bearing Debt…… P42• Investment Unit Price Trends…… P43• Status of Unitholders…… P44…… P12

4. Characteristics of MFLP-REIT
4-1. Portfolio…… P144-1-1. Location
4-1-2. Quality
4-1-3. Balance…… P15…… P17…… P194-2. External Growth…… P214-3. Internal Growth…… P244-4. Financial Strategy…… P274-5. Unitholder Relations…… P291

1. Start of Logistics REIT by Mitsui Fudosan2

1-1 IPO Summary
Start of J-REIT focused on logistics facilities
by one of Japan’s most prominent developers Mitsui Fudosan
IPO overview
Launch dateJuly 1, 2016

Issue price

Listing dateAugust 2, 2016

Amount of issue60,156 million yen

Number of investment units
offered222,800 units

Amount paid in

58,050 million yen

Number of investment units
issued and outstanding

224,000 units

Portfolio

9 properties
75,510 million yen (acquisition price basis)

Market response

Investment unit price trends

Mitsui Fudosan Logistics Park Inc. (3471): Sustainable growth capitalizing on sponsor’s capability anticipated(excerpt from DealWatch, Thomson Reuters)

(円)
(yen)
350,000

270,000 yen

Investment unit price
投資口価格（終値）(closing price)

TSE REIT Index
東証REIT指数（指数化）(indexed)

330,000

Investors voiced anticipation for external growth due to its strong sponsor pipeline, and properties acquired
upon listing were also evaluated highly for being relatively new and located in favorable areas. The expectation
for further demand increase in logistics facilities against the backdrop of expanding e-commerce seemed tohave been another factor for gathering support as well.
70% of investment units was allocated to general investors and 30% to institutional investors. Demand of“around 8 times from general investors, around 25 times from institutional investors and overall
around 13 times” was gathered for these allocations. IPO price was set with the upper limit ofpreliminary price range.

310,000

The Nikkei Veritas

290,000

IPO issue price: 270,000 yen
270,000

250,000“Nikkei Veritas
Deal of the Year 2016”
Best Equity Finance

The 1st Prize*Excerpt from Nikkei Veritas(December 25, 2016 issue)* The starting point is the price of the first trade at IPO.
* The TSE REIT Index is indexed to the August 2, 2016 opening price.

32. Financial Summary(1st fiscal period: from March 4, 2016 to January 31, 2017)4

2-1. Financial Highlights(total amount of acquisition price)

Appraisal value
at end of period(as at January 31, 2017)

Ratio of investment area ofassets held

9 properties

9 properties

Tokyo metropolitan area

75.5 billion yen

78.4 billion yen

93.9%

Balance ofinterest-bearing debt
at end of period

LTV ratio *2
at end of period

Averageborrowing interest rate
at end of period

Asset sizeat end of period

Asset

100%

Credit rating(JCR)

End of 1st fiscal period:

Debt

20.0 billion yen

Actual24.5%

End of 2nd fiscal period:

Forecast

EquityOccupancy rate *1
at end of period

21.8%

Distribution per unit *3

NAV per unit *4

5,198 yen
2nd fiscal period: Forecast 5,190 yen

278,517 yen

1st fiscal period:

Actual0.26%

AA(Stable)*1: “Occupancy rate at end of period” is the occupancy rate on a contract basis.
*2: LTV ratio at end of period = Balance of interest-bearing debt ÷ Total assets*3: Including distributions in excess of earnings*4: NAV per unit = (Net assets + Unrealized gain on appraisal basis) ÷ Number of investment units issued and outstanding
For the figures of each item, please refer to “6. Appendix.”5

2-2. 1st Fiscal Period (Ended January 31, 2017) P/L
Announced
Aug. 2, 2016

Announced
Sept. 13, 2016

1st period
Forecast

1st period
Forecast(a)

1st period
Actual(b)

Difference(b)-(a)

2,345

2,345

2,383

+37

(Unit: million yen)

Main breakdown of difference
Operating revenue

Operating revenue
Operating expenses
Of which, Depreciation

Operating income
Non-operating expenses

1,121

1,125

1,075

-50

569

569

553

-16

1,224

1,219

1,307

+88

259

212

196

-16

Ordinary income

965

1,007

1,111

+104

Profit (Net income)

964

1,006

1,110

+104

Increase inphotovoltaic power generation facilities rent revenue+19

Increase inrent and common area maintenance charges revenue+16

Increase in other operating revenue+2

Operating expenses
Decrease in outsourcing fees

-18

Decrease in other expenses related to rent business-17

Decrease in depreciation-16

Increase in other operating expenses+1

Non-operating expenses
Decrease in investment unit issuance related expenses-12

Decrease in other non-operating expenses-4<Reference>
Formula for
distribution per unit based on FFO

Distribution per unit (DPU) (yen)

4,794

4,923

5,198

+275

Of which,
Distribution of earnings per unit (EPU) (yen)

4,306

4,491

4,955

+464

FFO

=

Profit(Net income)+Depreciation

…①

488

432

243

-189

Source offunds for
distribution

=

① FFO

×

70%

…②

̶

Distribution
per unit=② Source offunds for
distribution÷

Number ofinvestment units
issued andoutstanding

Of which,
Distribution in excess of earnings per unit (yen)Distribution in excess of earnings
expressed as a percentage of depreciation

19.2%

16.9%

9.8%

6

2-3. 2nd Fiscal Period (Ending July 31, 2017) Earnings Forecast(Unit: million yen)

Operating revenue

1st period 2nd period
ActualForecast Difference(a)(b)(b)-(a)
2,383

2,531

+148

Main breakdown of difference

Operating revenue
Increase due to full-period
operation of all 9 properties, etc.

Operating expenses
Of which, Depreciation

1,075

1,400

+324

553

560

＋6

Increase in photovoltaic power
generation facilities rent revenue<Reference>
3rd period
Forecast
2,520

+111

1,385
+37

560

Operating expenses
Operating income
Non-operating expenses

1,307

1,131

-176

196

30

-166

Ordinary income

1,111

1,101

-10

Profit (Net income)

1,110

1,100

-9

1,135

Increase due to expensing of
fixed asset tax, city planning tax, etc.

+249

Increase due to full-period
operation of all 9 properties, etc.

+26

Increase in other operating expenses

+49

29
1,106

Non-operating expenses
Absence of investment unit
issuance related expenses-104

Absence oforganization related expenses

-56

1,105

Decrease in other non-operating expenses -6

Distribution per unit (DPU) (yen)

5,198

5,190

-8

5,207

Of which,
Distribution of earnings per unit (EPU) (yen)

4,955

4,913

-42

4,936

Of which,
Distribution in excess of earnings per unit (yen)

243

277

+34

271

Distribution in excess of earnings
expressed as a percentage of depreciation

9.8%

11.0%

－

10.8%

7

2-4. Distribution Trends
For the 1st fiscal period,
achieved distribution per unit of 5,198 yen, which is 275 yen higher than the forecast announced on September 13
For the 2nd fiscal period,
distribution per unit is projected to be 5,190 yen, which is 8 yen lower than the 1st fiscal period distribution per unit
While distribution of earnings per unit (EPU) is 100% distribution of the profit increase or decrease,
distribution per unit (DPU) is limited to distribution of 70% of FFO including the profit increase or decrease, etc.
Increase in
distributionof earnings+464 yen
Decrease in
distribution
in excessof earnings-56 yenDistribution

4,794 yen

Distribution
in excessof earnings
488 yenDistribution
in excessof earnings
432 yenDistribution

5,198 yen
Distribution
in excessof earnings
243 yenDistribution
4,923 yen

Increase in
distributionof earnings+185 yen[Revision of earnings forecast]
Increase in operating expenses -22 yen
Decrease in non-operating expenses, etc.
+207 yen(Of which, Decrease in interest expenses+135 yen)

Decrease in
distribution
in excessof earnings-189 yen[Increase in profit]
Increase in operating revenue +167 yen
Decrease in operating expenses +225 yen
Decrease in non-operating expenses, etc.
+72 yenDecrease in
distributionof earnings-42 yenIncrease in
distribution
in excessof earnings+34 yen[Decrease in profit]
Increase in operating revenue+664 yen
Increase in operating expenses -1,450 yen(Of which, Increase in fixed
asset tax and city planning tax -1,111 yen)
Decrease in non-operating expenses, etc.
+744 yen

Distribution

5,190 yen
Distribution
in excessof earnings
277 yenDistributionof earnings
4,306 yen

Distributionof earnings
4,491 yen

Distributionof earnings
4,955 yen

Distributionof earnings
4,913 yenAug. 2
forecast

Sept. 13
forecast

1st fiscal period
Actual

2nd fiscal period
Forecast8

3. Basic Strategy of MFLP-REIT

9

3-1. Basic Strategy of MFLP-REIT
MFLP-REIT has established a strategic partnership in the logistics facilities business withcomprehensive developer Mitsui Fudosan under which it seeks to maximize unitholder value
Mitsui Fudosan assumes mainly the role of “development” and MFLP-REIT assumes mainly the role of “holding”

Holding

Strategic
partnership

Development

Properties developed by Mitsui Fudosan

Properties held by MFLP-REITManagement* The photos above are only of properties defined in the“Right of first look and preferential negotiation agreement.”103-2. Mitsui Fudosan’s Logistics Facilities Business and Logistics REIT
Trajectory of growth of Mitsui Fudosan’s logistics facilities business(thousand m2)

1,500

Cumulative total investment size

Cumulative total of total floor area of properties(to be) developed/operated by Mitsui Fudosan(construction completion time basis)

22 facilities 300.0 billion yen (*)
Transition from
Logistics Properties Department to“Logistics Properties Business Division”
at Mitsui Fudosan

1,000

500
Establishment of“Logistics Properties Department”
in Retail Properties Divisionat Mitsui Fudosan

0

FY2012

平成24年度FY2013
平成25年度FY2014
平成26年度FY2015平成27年度FY2016(planned)

平成28年度（予定）FY2017(planned)

平成29年度（予定）FY2018(planned)

平成30年度（予定）(*) “Cumulative total investment size” is based on materials released on March 24, 2016 by Mitsui Fudosan.
For details, please refer to “About major properties developed/operated by Mitsui Fudosan” on p. 45 of this presentation material.

Mitsui Fudosan medium-term business plan “Innovation 2017 Stage II” growth strategy

123Create neighborhoods
Evolve theoffice building business

Further develop theretail facility business4

Expand thelogistics facility
business

7

Implement a model forjoint value creation
with investors

Establish logistics REIT

5
6
8

Strengthen thecompetitiveness of the
housing business
Expand the hotel andresort businessDramatic growth in theoverseas business* Source: Mitsui Fudosan Group’s medium-term business plan “Innovation 2017 Stage II” announced by Mitsui Fudosan on May 14, 201511

3-3. Growth Strategy of MFLP-REIT
Stable growth through utilization of“Right of first look and preferential negotiation agreement” and leverage
MFLP-REIT aims to achieve asset size of 200.0 billion yen on an acquisition price basis by fiscal 2020.
The aim is stable distributions growth accompanied by steady external growth through utilization of leverage.
9 properties 800,000 m2 *1
Properties defined in“Right of first look and preferential negotiation agreement”

MFLP Hino

MFLP Hiratsuka

MFLP Komaki

MFLP Inazawa
Medium-term target asset size

MFLP Sakai (80%) *2

200.0 bn yen

MFIP Inzai (80%) *2

Asset size
MFLP Ibaraki

MFLP Fukuoka I(81%) *2

MFLP Atsugi II

External growth throughsuch means as utilization ofAsset size
bn yen“Right of first look andpreferential negotiationagreement” concluded with
9 properties
2
Mitsui Fudosan
350,000 m

75.5

IPO

LTV

End of
1st fiscal period(Actual)

24.5%

FY2020End of
2nd fiscal period(Forecast)

21.8%*1: The floor area subject to the “Right of first look and preferential negotiation agreement” (after taking into consideration the quasi co-ownership interest).
*2: The percentage figure in parentheses is the percentage of quasi co-ownership interest subject to the “Right of first look and preferential negotiation agreement.”

Medium- to long-term stabilized LTV level

40% to 50% range
Borrowing capacity at up to LTV ratio of 50%
from end of 2nd fiscal period (Forecast):

43.9 bn yen

124. Characteristics of MFLP-REIT
4-1. Portfolio
4-1-1. Location
4-1-2. Quality
4-1-3. Balance

4-2. External Growth4-3. Internal Growth4-4. Financial Strategy
4-5. Unitholder Relations13

4-1. Portfolio (List)
Stable portfolio with investment focused on MFLPs—leading-edge logistics facilities developedby Mitsui Fudosan—mainly in the Tokyo metropolitan area and of relatively young building age
Total acquired assets

Stabilized (2nd fiscal period forecast)
NOI yield *1

Average building age *2

Average occupancy rate *3
at end of 1st fiscal period

9 properties / 75.5 bn yen

5.3% (after depreciation: 3.8%)

3.2 years

100%

Category

Logistics
facilities

Propertyno.

Property nameAppraisal value
at end of
1st fiscal period(million yen)

Ichikawa, Chiba

15,50015,800

Building
age *2(years)Occupancy
rate *3(%)(52,509)

3.0

100

Total floor area *4(m2)
105,0191

GLP/MFLP Ichikawa Shiohama

2

MFLP Kuki

Kuki, Saitama

12,50013,20073,153

2.6

100

3

MFLP Yokohama Daikoku

Yokohama, Kanagawa

10,10010,300100,530

7.8

100

4

MFLP Yashio

Yashio, Saitama

9,650

9,990

40,728

2.9

100

5

MFLP Atsugi

Aiko, Kanagawa

7,810

8,120

40,942

1.9

100

6

MFLP Funabashi Nishiura

Funabashi, Chiba

6,970

7,210

30,947

2.0

100

7

MFLP Kashiwa

Kashiwa, Chiba

6,300

6,570

31,242

1.2

100

8

MFLP Sakai

Sakai, Osaka

4,500

4,810

2.4

100

-

73,33076,0003.2

100

Inzai, Chiba

2,180

2,400

2.9

Not disclosed

-

2,180

2,400

2.9

Not disclosed-

75,51078,4003.2

100(50% quasi co-ownership interest)(50% quasi co-ownership interest)(20% quasi co-ownership interest)

Subtotal or Average
Industrial
real estate

Location

Acquisition price(million yen)

9

MFIP Inzai(20% quasi co-ownership interest)

Subtotal or Average
Total or Average(50,265)

125,127(25,025)547,691(344,814)

40,478(8,095)40,478(8,095)588,170(352,910)*1: Stabilized NOI yield is the figure arrived at when the NOI assumed in the forecast of performance for the 2nd fiscal period is divided by acquisition price.
*2: “Building age” is the building age from the date of new construction of the main building in the register to January 31, 2017, rounded to one decimal place. “Subtotal” and “Total” are the weighted averages based on acquisition price.
*3: “Occupancy rate” is the occupancy rate on the basis of contracts entered as at January 31, 2017.
*4: “Total floor area” figures in parentheses are those after taking into consideration the ownership interest.

14

4-1-1 Location 1
Acquired assets

Tohoku Expressway

Metropolitan Inter-City Expressway(Ken-O Expressway)

Rampway MFLP Facilities
MFLP Kuki
Tsukuba Chuo IC
Shiraoka Shobu IC

Slope MFLP Facilities

Kuki ICBox MFLP Facilities

MFLP Facilities

Tsurugashima IC

Right of first look and preferential
negotiation properties defined in
the rights of first look andpreferential negotiation agreement

Kanetsu Expressway

Kashiwa IC
Gaikan Misato Nishi IC
Kawagoe
Project(tentative name)Tokyo Gaikan Expressway(Gaikan Expressway)

Oizumi JCT

Box MFLP Facilities

Hachioji IC

Hachioji JCT

CentralCircular Route

Ohashi JCT

Chuo Expressway

Tomei JCT(tentative name)Oi JCT

Kanagawa
Prefecture

Shin-Tomei
Expressway

MFLP Hiratsuka

Takaya JCT(tentative name)
Kasai JCT
Chidoricho IC
MFLP Funabashi I

Kioyo Road

Higashi-Kanto Expressway

MFLP Ibaraki

Osaka
Prefecture
MFLP Sakai

Haneda Airport
Daisan Keihin Road
MFLP Inazawa

MFLP Atsugi
Wangan Line

Tateyama
Expressway

Tomei Expressway

MFLP Komaki

Aichi
Prefecture

Daikoku Futo IC

MFLP Yokohama Daikoku

Ebina JCT
Ebina Minami JCT

MFLP Hiratsuka II

Wangan Ichikawa IC

Tokyo Rail Gate EAST

Box MFLP Facilities
MFLP Atsugi II
Atsugi IC

MFIP Inzai

Misato Minami IC

GLP⋅MFLP
Ichikawa Shiohama

Tokyo
Prefecture
Sagamihara Aikawa IC

Mitsui Fudosan’s strategicarea

Misato JCT

MFLP Funabashi Nishiura

Chuo JCT(tentative name)

MFLP Hino

Rampway MFLP Facilities

Access point

Soka ICMFLP Yashio

Slope MFLP Facilities

Slope MFLP Facilities

Joban Expressway
National Route16

MFLP Kashiwa

Rampway MFLP Facilities

Properties developed by
Mitsui Fudosan

Tsukuba JCT

SaitamaPrefecture

Okegawa Kitamoto IC

Kisarazu JCT
MFLP Fukuoka I

Samukawa Kita IC
Fujisawa IC

Kamariya JCT

Fukuoka
Prefecture

Kisarazu Higashi IC15

4-1-1. Location (2)Geographically diversified portfolio
Location offering excellent access to transport nodes
Location taking into consideration convenience in terms of commuting to work for employees
Access (distance) tonearest expressway interchange

Investment areaTokyo
metropolitanarea

Kansai area

6.1%

93.9%

Within 5km,
but 3km or more
13.2%

Tokyo
metropolitanarea
andKansai area

Within 1km
24.2%

Access (time) tonearest train station
By bus(30 min. or less,but more than 20 min.)10.7%

Withinwalking distance(20 min. or less)
43.8%

Within 5km

20 min. or less

100%

89.3%

100

%

Ken-O
Expressway

27.7%
National
Route 16

8.6%

Shuto Expressway
Wangan Line
Tokyo-Gaikan
Expressway

44.4%

13.2%

Within 3km,
but 1km or more
62.6%

By bus(20 min. or less)
45.5%* The pie graphs above are the figures calculated on an acquisition price basis.

16

4-1-2. Quality (1)MFLP-REIT invests in leading-edge logistics facilities that meet mainly the following standard specifications

Leading-edge logistics facilities

Leading-edge logistics facilities
offer high operational efficiency
Storage space
Effective ceiling heightAt least 5.5 m

Large-sized site

[Total floor area]

At least

Equipped with seismic isolation, quake-resistance,
emergency power generation, etc.

Column spacing
At least 10 m
Floor load capacity
At least 1.5 tons/m2

MFLP Sakai

Adoption of seismic isolation

Driveway width
At least 12 to 14 m
MFLP Kuki

Truck berthEffective ceiling heightAt least 4.5 m

High performance

At least 10 m

[Effective ceiling height] At least[Floor load capacity]

Effective ceiling heightAt least 5.2 m

10,000 m2

Disaster prevention[Column spacing]

Driveway

5.5 m

Depth
At least 13 m
MFLP Sakai

Office space

MFLP Sakai

Emergency power generator

At least 1.5 tons/m2* An MFLP facility or each portfolio asset is not necessarily equipped with all of the abovementioned
standard specifications and features.

MFLP Kuki

MFLP Kashiwa

174-1-2. Quality (2)MFLP-REIT focuses on “leading-edge logistics facilities with Mitsui Fudosan quality”
realized by applying Mitsui Fudosan's know-how as a comprehensive developer
Mitsui Fudosan quality＆ Worker＆ Investor＆ Tenant＆ Community＆ EarthSpecific examples of Mitsui Fudosan Quality (Image) *＆ Tenant＆ Worker

Tenant company
Staffing
company

MFLP Sakai
Cafeteria, shops

Parcel pickup
lockers

Bicycle rentals

LaLaport discount tickets

Commuter shuttles

Car sharing

Staffing company
on-site service＆ Earth＆ Community
Space forexchange

BCP measures

Childcare facilities

Solar panels

LED lights

MFLP Hino* An MFLP facility or each portfolio asset is not necessarily equipped with all of the abovementioned standard specifications and features. Some of the specific examples include also those of properties not held by MFLP-REIT.

18

4-1-3. Balance (1)Securing growth and stability by building a balanced portfolio through acquisitionof MFLPs developed in consideration of land characteristics and tenant needs

Logistics
needs

Shipping needs

Tenanttype

Multi-tenant type

Logistics facilities

Industrial real estate

Investment ratio: At least 80%

Investment ratio: Less than 20%
Storage needs

Data center, etc.

Single tenant type

Mainly long-term BTS type
MFIP

Rampway type MFLP

Slope type MFLP

Box type MFLP

(Mitsui Fudosan Industrial Park)

GLP/MFLP Ichikawa Shiohama

MFLP Kuki

MFLP Yashio

MFIP Inzai

MFLP Sakai

MFLP Atsugi

MFLP Funabashi Nishiura

Investment ratio
by property type

MFLP Yokohama Daikoku

MFLP Kashiwa

Data center
2.9%
Rampway typeBox type
39.9%
30.4%

Slope type
26.9%

* Acquisition price
basis

19

4-1-3. Balance (2)Type of logistics facilities developed/operated by Mitsui Fudosan
Rampway type MFLP Can house multiple tenants and highly capable ofSlope type MFLP

Box type MFLP Type in between rampway type and box type Can meet storage needs and single tenant use needs

meeting both sorting/distribution and storage needs

Solar panel

Solar panel
Solar panel
Rampway (downbound)

Truck berth
Vertical conveyor
Rampway (upbound)Rampway (downbound)

Driveway

Storage area

Vertical conveyor

Truck berthSlope (to first floor)

Vertical conveyor
Driveway

Storagearea

Truck berth

Storage area
Centralpassageway

Rampway(upbound)Rampway
Slope (to upper floors)

Truck berth Type suitable for large-sized sites

 Type suitable for medium-sized sites

 Equipped with rampways allowing trucks to Equipped with slopes allowing trucks to directly

directly access each floor

access some floors
 Other floors accessible by vertical conveyor, etc.

Truck berth Type suitable for relatively small- and medium-sized sites
 Trucks can access truck berths on first floor Other floors accessible by vertical conveyor, etc.

20

4-2. External Growth (1)External growth utilizing the growth potential and extensive pipeline of
Mitsui Fudosan’s logistics facilities business
Furtherdevelopment of
Mitsui Fudosan’slogistics business

Mitsui Fudosan

Mitsui Fudosan’s
CRE strategies
Properties defined in“Right of first look and preferential negotiation agreement”
9 properties 800,000 m2
Construction completed:
Construction started:
430,000 m2 *3
370,000 m2 *3
Already partly
acquired by
MFLP-REIT

Mitsui Fudosan’slogistics business
22 facilities
300.0 bn yen *1(as at March 2016)

MFLP Hino

MFLP Inazawa

MFLP Fukuoka I(81%) *2

MFLP Ibaraki

MFLP Sakai(80%) *2

NEW
MFIP Inzai(80%) *2

MFLP Hiratsuka

MFLP Komaki

MFLP-REIT

Continuous acquisition of
stably-operating
properties
Asset size

Expansion ofproperties defined in“Right of first look andpreferential negotiationagreement”

MFLP Atsugi II

Continuous acquisition of
stably-operating
Medium-term target asset size
properties

200.0 bn yen

75.5 bn yen
IPO

FY2020*1: Based on materials released on March 24, 2016 by Mitsui Fudosan. For details, please refer to “About major properties developed/operated by Mitsui Fudosan” on p. 45 of this presentation material.
*2: The percentage figure in parentheses is the percentage of quasi co-ownership interest subject to the “Right of first look and preferential negotiation agreement.”*3: The floor area subject to the “Right of first look and preferential negotiation agreement” (after taking into consideration the quasi co-ownership interest).

21

4-2. External Growth (2)Mitsui Fudosan’s major development/operation track record
Fiscal year ofcompletion *2

FY2013

FY2015FY2016

100,530m2●（50%）－

GLP/MFLP Ichikawa Shiohama

Ichikawa, Chiba

105,019m2●（50%）－MFLP Yashio

Yashio, Saitama

40,728m2●－

MFLP Kuki

Kuki, Saitama

73,153m2●－

MFLP Sakai

Sakai, Osaka

125,127m2●（20%）●（80%）MFLP Funabashi Nishiura

Funabashi, Chiba

30,947m2●－

MFLP Atsugi

Aiko, Kanagawa

40,942m2●－

MFIP Inzai

Inzai, Chiba

40,478m2●（20%）●（80%）MFLP Hino

Hino, Tokyo

204,805m2－●

MFLP Kashiwa

Kashiwa, Chiba

31,242m2●－

MFLP Funabashi I

Funabashi, Chiba

198,390m2－－

MFLP Fukuoka I

Kasuya, Fukuoka

32,477m2－●（81%）MFLP Hiratsuka

Hiratsuka, Kanagawa

33,106m2－●

Komaki, Aichi

42,514m2－●

MFLP Inazawa

Inazawa, Aichi

73,364m2－●

MFLP Ibaraki

Ibaraki, Osaka

241,952m2－●

Isehara, Kanagawa

54,812m2

－

●

－

－

－

－

MFLP Hiratsuka II

Hiratsuka, Kanagawa

FY2021

Tokyo Rail Gate EAST *5

Shinagawa, Tokyo

Approx.161,000m2

Kawagoe Project

Kawagoe, Saitama

TBD

Propertydeveloped/operatedby Mitsui Fudosan

Presentation of list of
properties defined in“Right of first look andpreferential negotiationagreement”

Prioritized provision of
information upon sale

Preferential
negotiation period

NEW

Acquisition of property
by MFLP-REIT

MFLP-REIT

FY2018

Approx. 43,400m2

TBD

Property defined in “Right ofAcquisition by MFLP-REIT *3 first look and preferential
negotiation agreement” *4

Yokohama, Kanagawa

MFLP Atsugi II

*1:
*2:
*3:
*4:
*5:

Total floor area

MFLP Yokohama Daikoku

MFLP Komaki

FY2017

Location

Flow regarding
provision of right offirst look information

Mitsui Fudosan

FY2014

Propertydeveloped/operated*1－

For Mitsui Fudosan’s major development/operation track record, please refer to “About major properties developed/operated by Mitsui Fudosan” on p. 45 of this presentation material.
In the case of MFLP Yokohama Daikoku, it is the fiscal year in which the property began to be under its operation. The fiscal year of completion of the property is fiscal 2009.
The percentage figure in parentheses is the percentage of quasi co-ownership interest in the portfolio asset.
The percentage figure in parentheses is the percentage of quasi co-ownership interest subject to the “Right of first look and preferential negotiation agreement.”
Tokyo Rail Gate EAST is a project for which Mitsui Fudosan is entrusted with the development work and performs the development plan planning, tenant leasing, etc. and,after construction completion, the master leasing, etc. There are no plans to acquire the property at this point in time.

22

4-2. External Growth (3)Property acquisition utilizing the comprehensive strengths of comprehensive real estate company Mitsui Fudosan

Acquiring properties throughproposal of corporate real estate (CRE) strategies, etc.
by Mitsui Fudosan
Mitsui Fudosan stimulates the potential needs of client firms in thearea of real estate and offers advisory services on CRE strategies,
such as providing solutions for real estate development and sales
that meet the needs of its client firms.
By seeking close cooperation with Mitsui Fudosan, MFLP-REIT
believes that it can achieve external growth as well as the further
diversification and stabilization of its portfolio.

Client firm’s various CRE needs
Re-establishment ofcorporate logistics

Utilization ofidle land

Acquiring logistics facilities developed by third parties
In addition to acquiring facilities developed by Mitsui Fudosan,
MFLP-REIT plans to aggressively acquire logistics facilities developedby third parties. In doing so, it will use the Mitsui Fudosan Group’s
network as well as the Asset Management Company’s channels.

Investing in overseas real estate
MFLP-REIT makes it possible to acquire overseas real estatepursuant to the Articles of Incorporation to meet medium- to long-term
global needs.

Proposal of
CRE strategies

Trimming down ofbalance sheet

Sale ofreal estate, etc.
Development ofcorporate infrastructure

Establishment ofoverseas sites

23

4-3. Internal Growth (1)Stable management utilizing the platform (business foundation) and client network of the Mitsui Fudosan Group

Utilizing the Mitsui Fudosan Group’s know-how in property management operations
In principle, MFLP-REIT entrusts the property management of portfolio assets to the Mitsui Fudosan Group.

Effectively utilizing the Mitsui Fudosan Group’s client network in leasing
MFLP-REIT believes that it can stably manage its portfolio by utilizing the broad and strong network that the Mitsui Fudosan Group has developed.

Existing relationships with more than 80% of tenant in portfolio assets

3PL operator

Lease agreement

End userOwner oflogistics facility

Lease agreement

Logistics firm
(3PL operator, etc.)

Logistics
agencyagreement

End userCan directly approach logistics firms andend users regardless of contract type

Retail tenant, E-commerce

Fully leveraging the Mitsui Fudosan Group’s broad client network
Office building business
Client network:
Approx. 3,000 firms *Retail facility business
Client network:
Approx. 2,300 firms *Strong relationships withleading 3PL operators* As at March 201624

4-3. Internal Growth (2)Concrete examples of utilizing the platform (business foundation)and client network of the Mitsui Fudosan Group
Concrete examples in 1st fiscal period

Property management
 Increased amount of rent
upon re-tenanting
 Reduced electricity charges
through revision ofelectricity supply agreement

Leasing
Occupancy rate
End of
End of
End ofAug. 2016 ：99.5% → Oct. 2016 ：98.9% → Jan. 2017 ：100%

 Short-term leasing of section vacated by tenant
to another existing tenant Lease-up of section vacated by tenant

Case example of Mitsui Fudosan at properties defined in “Right of first look and preferential negotiation agreement”
Utilization of client network
Mitsui Fudosan
introduces to logistics firm

Leaseagreement

Logistics firm
(3PL operator, etc.)

Entrustmentof operations,etc.

End userEnd user secured by logistics firm
End user

Advantages
 Enhanced
occupancy rate

Advantages

Win-win Increased entrustment with
operations from end user
 Greater efficiency oflogistics operations

End userEnd user

Advantages

Win-win Move into
MFLPs (leading-edge
logistics facilities)25

4-3. Internal Growth (3)Aiming for steady internal growth while maintaining relationships with tenants overthe medium to long term through provision of solutions-based asset management
Status of tenants and lease agreements of portfolio assets
Hitachi Transport System

FOREVER 21,
and others

Challenges facing logistics firms

H&M
Suzue Corporation
Sagawa Global Logistics
NIPPON EXPRESS

Key points of future asset management plans

Sun Toshi
TatemonoLabor shortage

DAIWA Co.

End user

Tenantdiversification

Addressing
BCP, etc.

Increasing
the efficiency
of operations

Domestic major apparelDomestic 3PL

MFLP-REIT
Rakuten

Logistics firm

KOKUBU

E-LogiT(3PL operator, etc.)* Expressed as a percentage by tenant on the basis of leased area as stated in lease agreements
for buildings of portfolio assets as of January 31, 2017, and does not include lease agreements
for shops, vending machines, photovoltaic power generation facilities and parking lots.

Sense offuture rises indelivery costs

End user

Responding toautomation

Less than 1 year

4.0%
23.2%
1 year or more,
but less than 3 years

32.2%

Remaininglease contract
periodAverage 4.0 years
Ratio offixed-term building
lease contracts
100%

36.6%

7 years or more

5 years or more,
but less than 7 years

4.0%

Concrete examples of solutions-based asset managementby Mitsui Fudosan Group Consulting support to help tenant companies secure staff
 Matching of 3PL operators and end users
 Establishment of comfortable environment for thoseworking within facilities (further upgrading of amenities,
grant of incentives at Mitsui Fudosan retail properties, etc.)
 Proposal of capital investment within warehouses

3 years or more,
but less than 5 years* Leased area basis

26

4-4. Financial Strategy (1)Financial management with an emphasis on stability
MFLP-REIT will aim to establish a stable bank formation centered on funding from major domestic financial institutions.
In addition, plans are to engage in debt financing with due consideration of also
such factors as lengthening of borrowing periods and staggering of maturities.
NipponStatus ofdebt financing
Total interest-bearing debt

Average time to maturity

Average borrowing interest rate

20.0 billion yen

6.4 years

0.26%* As at January 31, 2017

Interest-bearing debt maturity ladder

Life
Insurance
The
Bank of Company
Fukuoka

5.0
6.5% %

MizuhoTrust &
Banking

6.5%(million yen)

5000

4,600

4000
3000

10.5

3,000
2,400

2,200

2000

2,400
2,000

Mitsubishi UFJ
Trust andBanking
Corporation

1,900
1,500

2nd
FP
ending2017/07

～
～

1000
0

Development
Bank ofJapan

Sumitomo
Mitsui
Banking
Corporation

22.5%

Status ofborrowings

%

All 8
financial institutions’total amount11.0 20.0 billion yen 22.5
%

%

15.5%

Sumitomo
Mitsui
Trust
Bank

Mizuho
Bank
14th
13th
FP
FP
endingending2023/01 2023/07

15th
FP
ending2024/01

16th
17th
FP
FP
endingending2024/07 2025/01

18th
19th
FP
FP
endingending2025/07 2026/01

20th
21st
FP
FP
ending ending
2026/07 2027/01* FP：fiscal period

Status of LTV
End of 1st fiscal period

End of 2nd fiscal period (Forecast)Medium- to long-term stabilized level

24.5%

21.8%

40% to 50% range

Credit rating assignment* As at January 31, 2017

Credit rating agency

Rating details

Remarks

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating: AA-

Rating outlook: Stable27

4-4. Financial Strategy (2)Efficient cash management
Based on the characteristics of logistics facilities, such as the ratio of building value to land value being typically high, MFLP-REIT intends
to make cash distributions, including distributions in excess of earnings, on an ongoing basis each term from a perspective of securing
stable distribution levels while managing cash efficiently.
Diagram of distributions in excess of earnings based on FFO

Leasingbusiness
expenses,
SG&A, etc.

Key points of cash distribution in excess of earnings

Level of distribution
Pay distributions
based on a threshold of
70% of FFO

For the time being, we intend to pay distributions (including distributions in excess ofearnings) calculated at an amount equivalent to approximately 70% of FFO (excluding
gain or loss on sale of real estate, etc.) for the relevant fiscal period on an ongoing basis
each term, in principle.

FFO

Securing long-term building maintenance expenditures
Rentalrevenue

Depreciation

Distributions in excess of earnings will be paid to the extent that an amount can beretained that is more than double the six-month average of capital expenditures statedin the engineering report for each operating period.

Distributions
in excessof earnings

Profit ＊(Net income)Distributionsof earnings

Targeted at
70%* Gain or loss on sale of real estate, etc. is not included in “Profit (Net income)” in the above chart.

Securing financial stability
Distributions in excess of earnings will not be made if appraisal LTV ratio* exceeds 60%
for each operating period.

* Appraisal LTV ratio =Interest-bearing debt ÷ (Total assets - Book value of portfolio real estate, etc. + Appraisal value)28

4-5. Unitholder Relations
Maximization of unitholder value through establishment of strong relationship of trust with unitholders

Asset management fee structure consistent with the interests of unitholders
The aim is to keep the interests of MFLP-REIT’s unitholders consistent with the interests of the Asset Management Company.

Asset
management
fee I

Total assets × 0.1% (maximum)

Asset
management
fee II

Operating income (before deduction of asset management fees and depreciation) × 5.5% (maximum)

Asset
management
fee III

Pre-tax earnings (before deduction of asset management fees) × Pre-tax EPU (before deduction of asset management fees)
× 0.001% (maximum)

Same-boat investment in MFLP-REIT by Mitsui Fudosan
MFLP-REIT receives 12.9% investment in capital from Mitsui Fudosan. (As at January 31, 2017)
Receiving certain investment in capital leads toalignment of the interests of MFLP-REIT’s unitholders and Mitsui Fudosan and asset management that pursues mutually greater interests.

12.9%

29

5. Logistics Market Overview

30

5-1. Logistics Market Overview (1)Continued robust supply-demand balance, and vacancy rate
New supply

Greater Tokyo area
(thousand m2)
2,000

Forecast
15%

1,500

10%

Net absorption

Vacancy rate

Vacancy rate(logistics facilities 1 year old or older)(thousand m2)
750

8%
6%

500

4.1%

250

1.9%

4%

1,000
5%

500
0

0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (year)

2%

0

0%
Q1

Q2

Q3

Q4

Q1

Q2

2015

Greater Osaka area
(thousand m2)
2,000

1,500

Forecast
15%

10%

Q3

Q4

2016

(thousand m2)
750

8%

6.7%
6%

500

4%

1,000
5%

500
0

0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (year)250

1.2% 2%

0

0%
Q1

Q2

Q3

Q4

Q1

2015

Q2

Q3

Q4

2016

(Note 1) Source: CBRE K.K. (including forecast figures)(Note 2) The survey is of rental logistics facilities that are held by real estate investment companies, real estate development companies, etc. and have total floor area of 5,000 m2 or more.

31

5-1. Logistics Market Overview (2)Supply-demand balance and vacancy rate by submarket
Greater Osaka area

Greater Tokyo area
Tohoku/Ken-O
Expwy area

MFLP Ibaraki
Metropolitan Inter-City Expressway(Ken-O Expressway)

Tohoku Expressway

Osaka
Prefecture

MFLP Kuki
Shiraoka Shobu IC

Okegawa Kitamoto IC

Osakainland area

Tsukuba Chuo IC

Kuki IC

Kan-Etsu/Ken-O
Expwy area

National Route 16
area

Tsukuba JCT

Saitama National Route16

Prefecture

Joban Expressway

MFLP Sakai

Tsurugashima JCT

MFLP Kashiwa

Kanetsu Expressway

KawagoeTokyo Gaikan Expressway
Project(Gaikan Expressway)(tentative name)

Oizumi JCT

Hachioji IC
Hachioji JCT

Chuo Expressway
MFLP Hino

MFLP Atsugi II

MFLP Atsugi：Net absorption in 2015 and 2016

Wangan Ichikawa IC

Kasai JCT

Higashi-Kanto Expressway= 100 thousand ㎡

Kioyo Road

Chidoricho IC
MFLP Funabashi I

GLP⋅MFLPOi JCT
Ichikawa Shiohama

Chiba
Prefecture：Vacancy rate 0–5%
：Vacancy rate 5–10%

TokyoTokyo
Rail Gate EAST
Greaterbay KeihinareaRoad
DaisanSagamihara Aikawa IC

Kanagawa
Prefecture

Ohashi JCT：New supply in 2015 and 2016

MFLP Funabashi
Nishiura

Takaya JCT(tentative name)Tomei JCT(tentative name)

MFIP Inzai

Misato Minami IC

Central Circular
Route

Chuo JCT(tentative name)

Osaka bay /Kobe area

Misato JCT

Tokyo-Gaikan
Expwy area

Tokyo
Prefecture

Narita area

Gaikan Misato Nishi IC
Soka ICMFLP Yashio

Hachioji area

Kashiwa IC

Haneda Airport

Chiba
inland area

Wangan Line

：Vacancy rate 10%–
* As at December 2016

Tomei Expressway
Daikoku Futo IC
Atsugi IC

Shin-Tomei
Expressway
MFLP Hiratsuka II
MFLP Hiratsuka

MFLP Yokohama Daikoku

Ebina JCT
Ebina Minami JCT
Samukawa Kita IC

Kanagawa
inland area

: Submarket areas
Kisarazu JCT
Kisarazu Higashi IC：Mitsui Fudosan’s strategic areas(Note 1) Source: CBRE K.K. (numerical figures only)(Note 2) The survey is of rental logistics facilities that are held by real estate investment companies, real estate development companies, etc. and have total floor area of 5,000 m2 or more.

32

5-1. Logistics Market Overview (3)Japan’s logistics facilities stock

Mounting demand due to 3PL businessand e-commerce market size expansion

Stock of logistics facilities in 2015
Logistics facilities over 40 years old
Approx. 24.2%

Analysis of Japan’s logistics facilities stock

Expanding 3PL market and e-commerce market(million m2)

600

25.0%

500

20.0%

400

15.0%

300
10.0%

200

5.0%

100
0

(100 million yen)

Leading-edge logistics facilities
Approx. 3.1%

140,000

25,000120,000

20,000100,000
80,00015,00060,00010,00040,0005,000

20,0000

0.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015（年）(year)
Estimate for logistics facilities
Estimate for logistics facilities
Leading-edge logistics facilities
築40年以上の推計値
築40年未満の推計値
先進的物流施設
40 years old or older
less than 40 years old
築40年以上のシェア
先進的物流施設シェア
Share of logistics facilities
Share of leading-edge logistics facilities

2006

2008

2009

2010

2011

2012

Net sales of e-commerce
Eコマース売上高(左軸)(left axis)

40 years old or older* Estimates by CBRE K.K. based on “Building Starts” (Ministry of Land, Infrastructure, Transport and Tourism) and“Summary Report on Prices, etc. of Fixed Assets” (Ministry of Internal Affairs and Communications).
For details, please refer to “About analysis of Japan’s logistics facilities stock” on p. 45 of this presentationmaterial.

2007

02015 (year)* The figures compiled by CBRE K.K. based on the August 2015 issue of “Monthly Logistics Business (LOGI-BIZ)”
and the Ministry of Economy, Trade and Industry’s “FY2014 Research on Infrastructure Development in Japan'sInformation-based Economy Society (E-Commerce Market Survey)” (May 2015).

Tenants / End users of logistics facilities

25,000

Manufacturing(thousand m2)

2014

Net sales of 3PL operators
3PL事業者売上高（右軸）(right axis)Long-term data on building starts of logistics facilities (nationwide)

Other

Logistics

3%

3%

20,0009%

Other
Wholesale

Logistics

10%

15,0004%

Retail36%

72%
Manufacturing10,000Retail

12%

5,000
2015

2010

2005

2000

1995

1990

1985

1980

1975

1970

1965

1960

0

2013

Share by
入居テナントのtenants’
業種別シェアbusiness type42%

Share by

エンドユーザーのend users’
business type
業種別シェアWholesale(year)

10%

Source: CBRE K.K.

Source: CBRE K.K.

* The figures calculated as the sum total of the floor area of structures with “warehouse” as the use category
and “steel-framed structure,” “reinforced concrete structure” or “steel-framed reinforced concrete structure” asthe structure type.

* The survey is of rental logistics facilities that are held by real estate investment companies, real estatedevelopment companies, etc. and have total floor area of 5,000 m2 or more as of December 31, 2016.

33

5-1. Logistics Market Overview (4)[Reference] Specific examples of broader demand for leading-edge logistics(including properties defined under “Right of first look and preferential negotiation agreement”)
Rise of Omni channel in commerce business operators

Capturing logistics demand
generated from diversification of drug store businessConventional

Selling only medicine

Trends inrecent years

More diversified items other than medicine,such as fresh food and drinks→ Necessity for large-scale base-type logistics facilities
with a certain amount of inventory

Actual store
Commerce business
operator

Consumer
Logistics base

Attracting delivery bases of convenience stores
Case example of logistics bases consolidation andsubdivision within a logistics facility, and attracting delivery center
equipped with store-by-store sorting function and chiller
Convenience store

Integration of logistics bases
Benefits ofintegration

Wholesaler

・Reducing shipping time and cost・Increasing production lines by space efficiency
・Improving work efficiency through consolidation to one floor・Reducing required manpower, etc.

Manufacturer
Wholesaler
Manufacturer

Store

Consolidation of logistics bases

Consolidation of separately locatedwarehouse for parts, assembly plant andwarehouse for finished products into one base

Convenience store
After
consolidation

Warehouse forfinishedproducts

Manufacturer
Delivery center
Manufacturer

Store

After
integration

Transport

MFLP

Transport

Conventional

Assemblyplant

Transport

Wholesaler

Transport

Warehousefor parts

Wholesaler

Retail stores/consumers

Conventional34

6. Appendix

35

1st Fiscal Period Statement of Income and Balance Sheet
Statement of income

Balance sheet(Unit: million yen)

Item
Operating revenue
Lease business revenue
Other lease business revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody and administrative service fees
Directors’ compensations
Other operating expenses
Operating income
Non-operating expenses
Interest expenses
Deferred organization expenses
Investment unit issuance expenses
Other offering costs associated with issuance of investment units
Other
Ordinary income
Profit before income taxes
Income taxes
Profit (Net Income)Unappropriated retained earnings(Unit: million yen)

Item

Actual

2,383
2,308
74

1,075
801
219
13
9
30

1,307
196
24
56
47
56
11

1,111
1,111
1
1,110
1,110

Current assets
Cash and deposits
Cash and deposits in trust
Consumption taxes receivable
Other current assets
Non-current assets
Property, plant and equipment
Investments and other assets
Total assets
Current liabilities
Operating accounts payable
Short-term borrowings
Accounts payable – other
Income taxes payable
Advances received
Non-current liabilities
Long-term borrowings
Tenant leasehold and security deposits in trust
Total liabilities
Total unitholders’ equity
Unitholders’ capital
Surplus
Total net assets
Total liabilities and net assets

Actual

6,204
1,066
2,018
3,076
43

75,49475,472
21

81,698
3,796
131
3,000
262
1
400

18,441
17,0001,441

22,23859,46058,3501,110

59,46081,69836

1st Fiscal Period Individual Property Income Statement(Unit: million yen)
GLP/MFLP
Ichikawa
Shiohama

MFLP
Kuki

MFLP
Yokohama
Daikoku

MFLP
YashioMFLP
Atsugi

MFLP
Funabashi
Nishiura

MFLP
Kashiwa

MFLP
Sakai

MFIP
Inzai

Portfolio
total

153 days

183 days

183 days

183 days

183 days

183 days

183 days

183 days

183 days-

Lease businessrevenue

367

433

308

156

2,308

Other
lease businessrevenue

15

28

14

7

74

Total

383

462

322

164

2,383

Outsourcing
expenses

28

31

30

Utility expenses

9

19

13

7

56

Repair expenses

0

5

27

0

36

Other expenses

1

2

1

0

10

106

167

159

-

-

-

-

63

-

247

Depreciation

67

108

86

63

64

50

49

43

19

553

Operating income (loss)
from real estate leasing

276

294

163

224

180

152

140

101

48

1,582

344

402

250

287

245

203

189

144

67

2,135

Number of days ofasset management

Operatingrevenuefromreal estateleasing

Operatingexpensesfromreal estateleasing

Total

Not
disclosed *Notdisclosed *Notdisclosed *Notdisclosed *11

Notdisclosed *144

NOI from real estate leasing[Operating income (loss) fromreal estate leasing + Depreciation]* Not disclosed, because consent has not been obtained from the lessee.

37Period-End Appraisal Summary (1)(Unit: million yen)

Acquisitiondate

Acquisition
priceBook value
at end of
1st fiscal
periodTime ofpropertyacquisition

End of
1st fiscal period(End of Jan. 2017)

Main factors ofchangeChangeAppraisal
value

CR *２

Appraisal
value

CR *２

Appraisalvalue *1

CR *２

CR *２

GLP/MFLP
Ichikawa Shiohama

2016/0915,50015,523

15,5004.5%

15,800

4.4%

+300

-0.1

○

MFLP Kuki

2016/08

12,50012,46912,5005.2%

13,200

4.9%

+700

-0.3

○

MFLP
Yokohama Daikoku

2016/08

10,10010,082

10,1004.8%

10,300

4.7%

+200

-0.1

○

MFLP Yashio

2016/08

9,650

9,643

9,650

4.9%

9,990

4.7%

+340

-0.2

○

MFLP Atsugi

2016/08

7,810

7,806

7,810

5.0%

8,120

4.8%

+310

-0.2

○

MFLP
Funabashi Nishiura

2016/08

6,970

6,958

6,970

5.0%

7,210

4.8%

+240

-0.2

○

MFLP Kashiwa

2016/08

6,300

6,299

6,300

4.9%

6,570

4.7%

+270

-0.2

○

MFLP Sakai

2016/08

4,500

4,489

4,500

5.1%

4,810

4.8%

+310

-0.3

○

MFIP Inzai

2016/08

2,180

2,200

2,180

5.4%

2,400

4.9%

+220

-0.5

○

Total

-

75,51075,47275,510

4.9%

78,4004.7%+2,890-0.2-*1: The amount of difference between appraisal value at end of 1st fiscal period andappraisal price at time of acquisition (= acquisition price).
*2: CR = Capitalization rate based on direct capitalization method (NCF basis)Amount of difference = Unrealized gain
2,927 million yen

Other

-

38

Initiatives for ESG– Environmental Principles and Initiatives for Environment/Society
Environmental policies of Mitsui Fudosan Group
Mitsui Fudosan Group seeks reduction of environmental load,
diversified collaboration/cooperation with various entities, improvement ofpeace of mind, safety and comfort as well as securement of sustainability.








MFLP-REIT has put forth efforts on reducing CO2 emissions through energy saving while
promoting efficient use of energy at facilities it owns by introducing LED lights, installing
solar panels on the roof and such.

Coexistence with the community
Proactive making appeals totenants and owners
Partnerships and cooperation withdesign companies, construction
companies, energy companies,
manufactures, etc.
Strengthening partnerships andcooperation with the local area,
public administration, or research
institutions such as universities, etc.

Solar panels••

CO2 reduction(including supporting the use of low
carbon transportation)

Initiatives for reducing environmental load

LED lights

Improvement safety security
Preservation and utilizationof the natural environment(preservation of biodiversity)

Water conservation
Reduction of hazardous materials
Resource conservation andwaste reduction••

Preservation and utilizationof landscape and streetscape
Improve health and comfort

MFLP Sakai

MFLP Kashiwa

Eco-friendly green buildings
MFLP-REIT has acquired certification of CASBEE Rank A or higher for the following
7 properties out of 9 properties it owns upon their new construction.
Furthermore, MFLP Sakai received Osaka Eco-friendly Construction Award.
As such, MFLP-REIT proactively incorporates environmentally conscious green buildings.
Property nameEvaluation upon new construction/Award
history

GLP/MFLP Ichikawa Shiohama

CASBEE (New construction) Rank A *1

MFLP Kuki

CASBEE (New construction) Rank A

MFLP Yashio

CASBEE (New construction) Rank A

MFLP Atsugi

CASBEE Kanagawa Rank A *2

MFLP Funabashi Nishiura

CASBEE (New construction) Rank A

MFLP Kashiwa

CASBEE (New construction) Rank A

Initiatives for tenants and local communities
Utilizing the know-how of Mitsui Fudosan, the sponsor,
the properties owned by MFLP-REIT promote initiatives to offer healthy, pleasant andsafe environment by giving consideration to stakeholders such as occupying tenants,
facility users, surrounding environment and local communities.

Cafeteria, shops

Implemented beautification activities (cleaning)

CASBEE (New construction) Rank S
MFLP Sakai

FY2015 Osaka Eco-friendly Construction
Award (Commerce, other category)Commuter shuttle*1: Certification for GLP/MFLP Ichikawa Shiohama expired on December 31, 2016.
*2: CASBEE Kanagawa is not certified by a third-party but an assessment based on self-reporting.

Designated as a tsunami evacuation building(MFLP Sakai)

39

Initiatives for ESG– Initiatives for Governance with Consideration for Unitholders’ Interests
MFLP-REIT and the Asset Management Company are working to establish proper governance through the following measures in order to build a solid relationship oftrust that aligns interests of unitholders and interests of MFLP-REIT and the Asset Management Company while giving sufficient consideration to unitholders’ rights.

Rules concerning conflicts of interestin asset management
The acquisition and transfer of assets by MFLP-REIT from related partiesare decided by the Asset Management Company via a transparent
decision-making process.

*2

Asset management with emphasis placed onrelationship of trust with unitholders
Asset management fee structure
consistent with the interests of unitholders
The aim is to keep the interests of MFLP-REIT’s unitholders andthe interests of the Asset Management Company consistent.
Assetmanagement
fee I

Total assets × 0.1% (maximum)

Asset
management
fee II

Operating income (before deduction of asset management feesand depreciation) × 5.5% (maximum)

Asset
management
fee III

Pre-tax earnings (before deduction of asset management fees)
× Pre-tax EPU (before deduction of asset management fees)
× 0.001% (maximum)

Same-boat investment in MFLP-REIT by Mitsui Fudosan(As at January 31, 2017)

MFLP-REIT receives 12.9% investment in capital from Mitsui Fudosan.
Receiving certain investment in capital leads toalignment of the interests of MFLP-REIT’s unitholders and Mitsui Fudosan
and asset management that pursues mutually greater interests.

Timely and proper information disclosure andsecurement of transparency*1: The above chart shows the decision-making flow when a transaction involves a
related party, which requires the approval of MFLP-REIT’s Board of Directors
under Article 201-2 of the Act on Investment Trusts and Investment Corporations.
*2: If a transaction prescribed in Article 201-2 of the Act on Investment Trusts andInvestment Corporations falls under the criteria for insignificance, the approval of
MFLP-REIT’s Board of Directors shall be omitted.

MFLP-REIT strives to make timely and proper disclosure of informationnecessary for unitholders to make investment decisions. Upon disclosure,
MFLP-REIT promotes prompt and transparent information disclosure tosecure fairness and equality, and also promotes disclosure of not only
financial information but also non-financial information concerning ESG.

40

Interest Rate Market Data
10-year Japanese government bond yield and benchmark interest rate trends
(%)

2.5

2

1.5

1

0.5

0

-0.5
2007/1/31

2008/1/31

2009/1/31

2010/1/31

2011/1/31
10-yearJapanese
国債10年物
government
bond yield

2012/1/31
1-monthJapanese yen
1ヶ月円Tibor
TIBOR

2013/1/31

2014/1/31

2015/1/31

2016/1/31

2017/1/31

10-yearswap rate

10年SWAPレート

41

Status of Interest-Bearing Debt
Short-term borrowings* Repayment methods are all bullet repayments.
AmountLenderShort-termborrowings

Borrowing date

Maturity date *Borrowing period

Sumitomo Mitsui Banking Corporation

1,000

0.1%

2016/08/31

2017/02/28

6 months

Sumitomo Mitsui Trust Bank, Limited

1,000

0.1%

2017/01/31

2017/02/28

1 monthMizuho Bank, Ltd.

1,000

0.1%

2017/01/31

2017/02/28

1 monthTotal short-term borrowings

3,000

Long-term borrowings*1: Long-term borrowings are all borrowings at fixed interest rates.
*2: Repayment methods are all bullet repayments.
AmountLenderSumitomo Mitsui Trust Bank, Limited

Borrowing date

Maturity date *２

Borrowing period

2,000

0.2713%

2016/09/01

2022/09/01

6 years

1,500

0.4213%

2016/09/01

2026/09/01

10 years

2,000

0.3050%2016/09/01

2023/09/01

7 years

1,500

0.3813%

2016/09/01

2025/09/01

9 years400

0.1425%

2016/08/02

2022/08/02

6 years

1,700

0.2113%

2016/08/02

2024/08/02

8 years

2,200

0.1826%

2016/09/01

2023/03/01

6.5 years

600

0.3237%

2016/09/01

2024/03/01

7.5 years

700

0.3425%

2016/09/01

2024/09/02

8 years

Development Bank of Japan Inc.

2,100

0.3125%

2016/08/02

2026/08/03

10 yearsMizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Mizuho Trust & Banking Co., Ltd.

The Bank of Fukuoka, Ltd.

1,300

0.2169%2016/08/02

2024/02/02

7.5 years

Nippon Life Insurance Company

1,000

0.3125%

2016/08/02

2026/08/03

10 years

Total long-term borrowings

17,000Commitment lines
LenderRemarks

UnsecuredNon-guaranteed(As of January 31, 2017)

Interest rate *１(million yen)

Sumitomo Mitsui Banking Corporation

Long-term
borrowings

Interest rate

(million yen)

(As of January 31, 2017)

Remarks

UnsecuredNon-guaranteed(As of January 31, 2017)
AmountBalance of borrowings(million yen)(million yen)Contract start date

Contract deadline

Sumitomo Mitsui Banking Corporation

3,000

0

2016/08/02

2019/08/01

Sumitomo Mitsui Trust Bank, Limited

3,000

0

2016/09/01

2019/08/31

Remarks
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed

42

Investment Unit Price Trends
Investment unit price strong since IPO(yen)
350,000

投資口価格（終値）
Investment unit price (closing price)

東証REIT指数（指数化）
TSE REIT Index (indexed)

340,000

330,000

320,000

310,000

300,000

290,000

280,000

IPO issue price: 270,000 yen
270,000

260,000

250,000
2016/07/31
2016/08/02

2016/08/31

2016/09/30

2016/10/31

2016/11/30

2016/12/31

2017/01/31* The starting point is the price of the first trade at IPO.
* The TSE REIT Index is indexed to the August 2, 2016 opening price.

43

Status of Unitholders
Status of unitholders at end of 1st fiscal period (end of January 2017)
Number of unitholders and number of investment units by type of unitholder
End of 1st fiscal period (End of January 2017)
Number ofunitholders

% of
total

Number ofinvestment units

Individuals/Other

% of
total

Individuals/Other

5,767

93.0%

21,092

9.4%

Financial institutions

126

2.0%

130,247

58.1%

Other Japanese corporations

189

3.0%

37,666

16.8%

Non-Japanese

103

1.7%

33,586

15.0%

Securities companies

16

0.3%

1,409

0.6%

Total

6,201

100.0%

224,000

100.0%

Number ofinvestment
units
Total:
224,000 units

Financial institutions

Other Japanese corporations

Non-Japanese

Securities companies

Major unitholders at end of 1st fiscal period
Number ofinvestment units

% of
total

Japan Trustee Services Bank, Ltd. (trust account)40,16817.9%

Mitsui Fudosan Co., Ltd.

28,900

12.9%

The Master Trust Bank of Japan, Ltd. (trust account)

26,377

11.8%

Trust & Custody Services Bank, Ltd. (securities investment trust account)

13,822

6.2%

The Nomura Trust and Banking Co., Ltd. (investment trust account)

7,629

3.4%

JPMorgan Chase Bank 385632

6,113

2.7%

123,009

54.9%

Total

Individuals/Other

Number ofunitholders
Total:
6,201 unitholders

Financial institutions

Other Japanese corporations

Non-Japanese

Securities companies

44Notes on Matters Stated in this Document[About major properties developed/operated by Mitsui Fudosan]
Descriptions of major properties developed/operated by Mitsui Fudosan in this document are based on materials released on March 24, 2016 by Mitsui Fudosan.
“22 facilities 300.0 billion yen” includes 12 properties under development or scheduled to be developed as of the date and their (planned) investment amounts.
Properties scheduled to be developed include those targeted or planned by the Mitsui Fudosan Group as of the release date, and are subject to change orcancellation. Furthermore, there are no details concerning the timing of completion of the aforementioned investments that had been finalized as of the release
date. Nor does MFLP-REIT guarantee or promise that the plans be materialized. Although “22 facilities 300.0 billion yen” includes “Tokyo Rail Gate EAST,”
Mitsui Fudosan has no plans to acquire the property as of March 17, 2017.
[About analysis of Japan’s logistics facilities stock]*1: The “Analysis of Japan’s logistics facilities stock” graph is of estimates by CBRE K.K. based on the Policy Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism’s “Building Starts” and the Ministry of Internal Affairs and Communications’ “Summary Report on Prices, etc. of Fixed Assets.”*2: In the “Analysis of Japan’s logistics facilities stock” graph, “Leading-edge logistics facilities” is the figure of each year’s sum total of the total floor area ofleading-edge logistics facilities (refers to rental logistics facilities that have total floor area of at least 10,000 m2 and, in principle, ceiling height of at least
5.5 m, floor load capacity of at least 1.5 tons/m2 and column spacing of at least 10 m).
*3: In the “Analysis of Japan’s logistics facilities stock” graph, “Estimate for logistics facilities 40 years old or older” is the figure of each year’s overall stock
estimate (as defined in note 5; the same shall apply hereinafter) minus the sum total of the floor area of which construction was started within the past 40
years.
*4: “Estimate for logistics facilities less than 40 years old” is the figure of the overall stock estimate minus the floor area of “Estimate for logistics facilities 40
years old or older” and “Leading-edge logistics facilities.”*5: The overall stock estimate is the sum total of “Estimate for logistics facilities 40 years old or older,” “Estimate for logistics facilities less than 40 years old”
and “Leading-edge logistics facilities.”*6: In the “Analysis of Japan’s logistics facilities stock” graph, “Share of leading-edge logistics facilities” is each fiscal year’s “Leading-edge logistics facilities”
expressed as a percentage of the overall stock estimate (total floor area basis).
*7: In the “Analysis of Japan’s logistics facilities stock” graph, “Share of logistics facilities 40 years old or older” is each fiscal year’s “Estimate for logistics
facilities 40 years old or older” expressed as a percentage of the overall stock estimate (total floor area basis).
*8: “Total floor area” is compiled based on data on construction starts. In addition, estimates are on the basis of the time of construction completion being that
construction is deemed to be completed after one year has elapsed from construction start. Accordingly, total floor area may not match the floor area on thebuilding confirmation certificate, construction completion drawing or register.

45

Disclaimer
This document is provided solely for informational purpose with regard to Mitsui Fudosan Logistics Park Inc. (MFLP-REIT) and is not intended to serve as an
inducement or solicitation to trade in any product offered by MFLP-REIT.

Purchase, sale and such of MFLP’s investment units entail the risk of incurring a loss due to fluctuations of the investment unit price.
Please consult with a securities company regarding the purchase of MFLP-REIT's investment units or investment corporation bonds. Information presented on thisdocument should not be interpreted, unless otherwise specified, as constituting disclosure documents or asset management report required under Financial
Instruments and Exchange Act or the Act on Investment Trusts and Investment Corporations.
Concerning the information provided in this document, although MFLP-REIT and Mitsui Fudosan Logistics REIT Management Co., Ltd. make every effort to provide
correct information, its accuracy, adequacy or completeness are not guaranteed regardless of the information being prepared by MFLP-REIT and Mitsui Fudosan
Logistics REIT Management Co., Ltd. or being received from third-parties.
Among the information provided in this document, statements other than those pertaining to facts in the past or present are forward-looking statements presented by
MFLP-REIT or Mitsui Fudosan Logistics REIT Management Co., Ltd. according to assumptions or judgement based on information available on the date of thisdocument (the date if specified otherwise in the document). Forward-looking statements are based on assumptions such as the investment policy of MFLP-REIT,
applicable laws and regulations, market environment, interest rate environment, business practice and other facts as of the preparation date of this document, anddo not reflect or consider changes in situations after the preparation date. Forward looking statements include, explicit or implied, uncertainties of existing risks,
unknown risks and other factors, and may materially differ from actual performance, business results, financial status and such of MFLP-REIT.
The content of this document is subject to change or repeal without prior notice. MFLP-REIT and Mitsui Fudosan Logistics REIT Management Co., Ltd. are under noobligation to update or publicly disclose the content of this document (including forward-looking statements).
Duplication or reproduction of any content presented in this document without the prior consent of MFLP-REIT or Mitsui Fudosan Logistics REIT Management Co.,
Ltd. is strictly prohibited.
The document is prepared solely for use by residents of Japan and is not intended for use by non-residents of Japan.