JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

FINANCIAL RESULTS FOR THE FISCAL PERIOD ENDED SEPTEMBER 2022
(REIT)
November 15, 2022
Japan Real Estate Investment Corporation
Tokyo Stock Exchange8952
https://www.j-re.co.jp/en/
Yutaka Yanagisawa, Executive Director
Japan Real Estate Asset Management Co., Ltd.
Shojiro Kojima, President & CEO
Masaru Motooka, Executive Officer & General Manager, Planning Department/ TEL +81-3-3211-7951
December 26, 2022
December 14, 2022

Name of Issuer:
Stock Exchange Listing:
Securities Code:
URL:
Representative:
Asset Management Company:
Representative:
Contact:
Scheduled Date of Filing Securities Report:
Scheduled Date of Dividend Payment:
Supplementary Materials for Financial
Results:
Holding of a Briefing on Financial Results:

Yes
Yes (primarily for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)

1.

Financial Results for the September 2022 period (April 1, 2022 to September 30, 2022)(Percentages represent increases/decreases compared with results for the previous fiscal period)(1) Operating Results

Operating Revenues
Period ended

September 30, 2022
March 31, 2022

Operating Profit

Profit%Millions of yen%

Millions of yen%

Millions of yen%

37,65436,453

3.3(1.2)

18,042
17,1075.5(7.0)

17,256
16,191

6.6(7.4)

16,79016,045

4.6(4.9)

Profit per Unit
Period ended

September 30, 2022
March 31, 2022

Ordinary Profit

Millions of yen

ROE

ROA

(Profit to Unitholders’Equity Ratio)(Ordinary Profit toTotal Assets Ratio)

Ordinary Profit toOperating Revenues Ratio

Yen

%

%

%

12,121
11,583

3.2
3.1

1.7
1.6

45.8
44.4

(2) Dividends
Dividend per Unit
Excluding Excess of
Earnings

Total Cash Dividends
Excluding Excess of
Earnings

Dividend in Excessof Earnings per Unit

Total Dividends in
Excess of Earnings

Yen

Millions of yen

Yen

Millions of yen%%

11,50011,40015,92915,791

-

-

94.9
98.4

3.1
3.1

Period ended

September 30, 2022
March 31, 2022
Notes 1:
2:
3:

Payout Ratio

Ratio of Dividends
to Net Assets

The payout ratio is rounded off to the first decimal place.
For the period ended September 30, 2022, the total dividends are calculated as profit, subtracting the provision of reserve for reduction entry(860 million yen).
For the period ended March 31, 2022, the total dividends are calculated as profit, subtracting the provision of reserve for reduction
entry (254 million yen).

(3) Financial Standing
Total Assets
As of

September 30, 2022
March 31,2022

Net Assets

Equity Ratio

Net Assets per Unit

Millions of yen

Millions of yen%

Yen

1,008,970
1,035,072

517,761
516,76251.3
49.9

373,778
373,057

Reference: Total unitholders’ equity is 517,761 million yen for the September 30, 2022 period and 516,762 million yen for the March 31, 2022 period.

1

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(4) Cash Flows
Cash Flows fromOperating Activities
Period ended

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash Equivalents
at End of Period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

46,78521,801(4,877)(53,733)(42,288)
14,66926,793
27,173September 30, 2022
March 31, 2022

2. Performance Forecasts for the March 2023 period (October 1, 2022 to March 31, 2023)
and the September 2023 period (April 1, 2023 to September 30, 2023)(Percentages represent projected increases/decreases compared with the results for the preceding fiscal period)
Operating Revenues
Millions of yen
Period ending
March 31, 2023
36,980
September 30, 2023
37,180Operating Profit% Millions of yen

(1.8)
0.5

16,67016,570Ordinary Profit% Millions of yen

(7.6)
(0.6)

15,81015,670

Dividend per Unit
Dividend in Excess
Excluding Excessof Earnings per Unitof Earnings

Profit% Millions of yen

(8.4)
(0.9)

15,79015,660

%

Yen

Yen

(6.0)
(0.8)

11,40011,300-

Reference: Profit per unit forecast = Profit forecast / Number of total investment units forecast for the end of the period(the March 2023 period): 11,400 yen; (the September 2023 period): 11,300 yen.

*Other(1) Changes in Accounting Policy/Changes in Accounting Estimates/Restatements
Changes in accounting policy following revisions to accounting standards, etc.:
Other changes in accounting policy:
Changes in accounting estimates:
Restatements:

None
None
None
None

(2) Number of Units Outstanding
Number of Units Outstanding at End of Period (Including Treasury Units)
As of September 30, 2022
1,385,210 units
As of March 31, 2022
1,385,210 units
Number of Treasury Units at End of Period
As of September 30, 2022
0 units
As of March 31, 2022
0 units
Note: Please refer to the notes regarding per unit information on page 24 for the number of investment units on which the calculations ofprofit per unit are based.

* The Implementation Status of Statutory Audit
At the time of disclosure of these financial results, the audit procedures for the financial statements pursuant to the Financial
Instruments and Exchange Act have not yet finished.

* Explanation regarding the appropriate use of business operations forecasts, and other special remarks
Estimates for the Company’s future operating results contained in the financial results are forward-looking statements and are basedon information currently available to the Company and certain assumptions deemed reasonable. Actual results may differ substantiallyfrom the projections depending on a number of factors. In addition, these forecasts do not guarantee the stated dividends. As forassumptions underlying performance forecasts, please refer to the table entitled “Assumptions Underlying Performance Forecasts for
the March 2023 period (October 1, 2022 to March 31, 2023) and the September 2023 period (April 1, 2023 to September 30, 2023)”
on pages 7 and 8.

2

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

1. Business Policy and Operations(1) Business Operations① Results for the Period
Japan Real Estate Investment Corporation (the “Company”) was established on May 11, 2001, following the Act on Investment
Trusts and Investment Corporations of Japan (“ITA”). The Company was listed on the real estate investment trust market of
the Tokyo Stock Exchange (“TSE”) on September 10, 2001 (Securities Code: 8952). Since its IPO, the size of the Company’s
assets (total acquisition price) has grown steadily, expanding from 92.8 billion yen to 1.09 trillion yen (Note), as of September
30, 2022. In the same period, the Company continued to grow steadily in the number of properties in its portfolio, from 20 to73 properties.
During the September 2022 period (April 1, 2022 to September 30, 2022), the Japanese economy has continued to recover,particularly in personal consumption, as socioeconomic activities began to normalize due to the easing of activity restrictions
on the spread of COVID-19 and other factors. On the other hand, the outlook remains uncertain due to the protracted situationin Ukraine, global monetary tightening, and other factors, the effects of rising prices, supply-side constraints, and fluctuations
in financial and capital markets must continue to be closely monitored.
In the office leasing market, the vacancy rate, which had been rising against the background of the spread of teleworking
associated with changes in work styles, has now generally leveled off and settled down, but the future remains uncertain, as alarge supply of new office floors is expected to come on stream in 2023. Rent levels continue to trend slightly downward.
Against the background of such leasing market trends, the Company is striving to attract new tenants through strategic leasing
activities and to further enhance the satisfaction level of existing tenants by adding value to the properties, with the aim of
securing stable income and occupancy rates for the entire portfolio.
In the real estate trading market, the environment for acquiring properties remained challenging due to the continued favorable
financing environment backed by the continuation of accommodative monetary policies, interest rate differentials withoverseas markets, and the progression of the appreciation of the U.S. dollar against the Japanese Yen in the foreign exchange
market, as well as the fierce competition for quality office buildings, which are in short supply.
Under such market conditions, the Company made sound investments under the Investment Guideline of providing stabledividends to unitholders, which was set forth at the time of the Company’s listing on the TSE and remains unchanged to date.
Accordingly, the Company provided a dividend per investment unit at 11,500 yen, which is an increase by 100 yen comparedwith the previous period.
Note : The total acquisition price includes, without reduction, the acquisition price corresponding to a portion of the site evenif, after acquisition of an acquired property, a portion of the site for that acquired property is reduced due to a transfer orother event, as long as the acquired property is owned by the Company. The total acquisition price in the subsequent
sections follows the same convention.
②

Results of Operations
a. Property Management and Acquisition and Disposition
In the office leasing market in the fiscal period under review, the occupancy rate at the end of the period was 93.9%, decreasedby 3.1% from the end of the previous period, due to the exit of some large-lot tenants and the prolonged leasing period, while
positive demand was acquired, including new contracts for improvement of location and office environments as well as floor
space expansion due to business expansion.
As for property acquisitions and dispositions, the Company disposed of Harumi Center Building (Chuo-ku, Tokyo) for 24,330
million yen on May 31, 2022.
As a result of the above, the Company’s portfolio at the end of the fiscal period under review, September 30, 2022, consistedof 73 properties, with a total acquisition price of 1.09 trillion yen. Net rentable floor area stood at 875,648 m2 with 1,499
tenants in total. (Note 1)
In addition, the Company plans to dispose of its 25% co-ownership interest in Harumi Front (Chuo-ku, Tokyo) for 9,777
million yen as of December 1, 2022. The property is planned to be disposed of in three phases, with 30% of the co-ownershipinterest to be disposed of for 11,733 million yen on April 3, 2023, and another 45% of the co-ownership interest for 17,599
million yen on January 12, 2024.
Note 1: Shibuya Cross Tower (land with leasehold interest), whose building ownership was disposed of on January 18, 2018,
is included in the above number of properties and total acquisition price, but is not included in net rentable floor area or
total number of tenants.
3

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

b. Finance Activities
According to its financial policy, the Company aims to maintain the LTV ratio (ratio of interest-bearing debt to total assets)
at 30% to 40%, and strives to maintain a sound and conservative financial profile by staggering maturities, extension ofdurations and diversification of stable lenders among other possibilities, taking into consideration the borrowing costs andexisting relationships with lenders.
Concerning new loans related to property acquisition and the refinancing of existing loans, the Company carries out loans
strategically and flexibly after giving close consideration to the above-mentioned means, as well as the possibility of
repayment with funds procured from issuing new investment units.
In the fiscal period under review, the short-term loans of 25,000 million yen borrowed to partially fund the acquisition of
Toyosu Front was repaid with the proceeds from the disposition of Harumi Center Building and some cash on hand.
Furthermore, in addition to borrowing to partially fund the repayment of existing loans, the Company also repaid theequivalent of 1,500 million yen worth of loans with cash on hand.
As a result of the above financing activities, as of September 30, 2022, the Company’s total interest-bearing debt was 423.3
billion yen, which was decreased by 26.5 billion yen compared with the end of the previous fiscal period. This amount consistsof long-term loans totaling 358.7 billion yen (including the current portion of long-term loans totaling 48.5 billion yen), shortterm loans totaling 21.7 billion yen, and investment corporation bonds totaling 42.9 billion yen. The current LTV ratio stands
at 42.0%.
The Company’s credit ratings as of September 30, 2022 were as follows:
Rating Agency

Credit Rating

S&P Global Ratings Japan Inc.

Long-term: A+; Short-term: A-1; Outlook: Stable

Moody’s Japan K.K.

Rating: A2; Outlook: Stable

Rating and Investment Information, Inc.

Rating: AA; Outlook: Stable③ Summary of Financial Results and Dividends
As a result of the above operations, in the period under review, the Company’s operating revenues increased 3.3% comparedwith the previous period, to 37.6 billion yen. On the income front, operating profit increased 5.5%, to 18.0 billion yen. After
deducting expenses for interest payments on loans and other costs, ordinary profit increased 6.6%, to 17.2 billion yen, andprofit increased 4.6%, to 16.7 billion yen.
Turning to dividends, the Company will make cash distributions using earnings based on the dividend policy outlined in
Article 32-1(2) of the Company’s Articles of Incorporation, in an amount that exceeds 90% of profit available for dividends
as required by Article 67-15 of the Special Taxation Measures Act. Based on this policy, the Company made a reduction entry
under the application of Article 65-7“Exceptions of the Taxation in case of the Replacement by Purchase of Specific Assets”
of the Special Taxation Measures Act, and secured retained earnings brought forward and decided that the total amount ofdividends is 15,929,915,000 yen for the period under review, which is a multiple of 1,385,210 －the number of units
outstanding as of September 30, 2022. Accordingly, the dividend per investment unit is 11,500 yen.
(2) Outlook① Operating Environment
The Japanese economy is expected to recover in the future as domestic demand is expected to improve with the normalizationof socioeconomic activities, although the impact of COVID-19 will remain. On the other hand, the Company believes that itis necessary to pay attention to downside risks such as global price and interest rate increases against the background of the
protracted situation in Ukraine, and to watch the effects of fluctuations in financial and capital markets very closely.
In the office leasing market, the Company will promote flexible leasing in response to market conditions, secure stableearnings over the medium to long term, and maintain and improve asset value, while keeping a close eye on trends in officedemand and the office space of choice in line with the review of work styles.
Regarding the real estate investment market, it is important to continue to be proactive in searching for new properties, keeping
collaboration with sponsors as our main focus, in order to promote more strategic replacement of our portfolio while paying
close attention to future market trends due to changes in social conditions.
a Property Management
Based on the conditions stated above, the Company will adhere to the following management policies in order to maintainand improve profitability.
4

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(i) Strengthen relationships of trust with existing tenants
The Company has contracts with numerous property management companies. Each property management company has
developed relationships of trust with their tenants through their daily diligence in managing their respective properties
over the years. The Company will work to further solidify these relationships by anticipating tenants’ needs and providing
tailored services to bolster tenant satisfaction, thereby maintaining and improving occupancy rates and raising the rent
levels.
(ii) Fill vacancies promptly
In cooperation with the property management companies mentioned above and their leasing brokers, the Company will
actively seek the most appropriate tenants for each property, based on location and features, in order to fill current andanticipated vacancies without delay. Furthermore, the Company will work to identify additional needs for floor area
among the existing tenants.
(iii) Stabilize revenues and income
With the aim of stabilizing revenues and income, the Company will endeavor to promote fixed lease agreements andsecure long-term leasing with its large-scale tenants.
(iv) Reduce management costs
The Company has introduced sound competitive principles to a number of property management companies so that they
perpetually review and improve their management systems and cost structures. Along with this, the Company endeavors
to ensure and enhance tenant satisfaction.
b Property Acquisitions and Dispositions
The Company has adopted the following policies for acquiring properties.
(i) To access property information quickly, the Company continues to enhance its property information channels whileworking to develop new channels.
(ii) In its acquisition activities, the Company continues to meticulously monitor and examine economic, physical, and legal
factors, including rights-related issues, when selecting properties. In particular, with regard to the structure of buildings,
the Company requires buildings to meet or exceed new earthquake-resistant standards, verifies the need for renovations
by capturing current conditions accurately based on engineering reports, and exclusively targets properties capable ofmaintaining a competitive edge in terms of the facilities they offer over the medium to long term.
(iii) In accordance with its acquisition policies, the Company shall maintain its portfolio so that 70% or more of the portfolio
properties are located within the Tokyo metropolitan area, with the remaining 30% or fewer located in other major cities.
Under these policies, the Company will continue to acquire highly competitive properties. At the same time, in order tofurther improve the quality of its portfolio, the Company will remain open to the replacement of portfolio properties withdue consideration at the right time.

c Financial Policies
The Company has adopted the following financial policies.
(i) In principle, the Company shall maintain an LTV ratio (including investment corporation bonds) below 65%. To ensure
an even lower interest-bearing debt ratio, the Company adopts the conservative target level of 30% to 40%.
(ii) The Company shall set the ceiling for the combined total of loans and investment corporation bonds at 1 trillion yen.
(iii) When obtaining a loan, the Company shall only negotiate with qualified institutional investors (limited to those defined
under Article 67-15 of the Special Taxation Measures Act) before executing a loan agreement.
(iv) With the purpose of maintaining liquidity at an appropriate level, the Company may establish preliminary borrowing
frameworks such as overdraft agreements and commitment line agreements as needed.
5

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(v) In financial transactions, in order to realize low financing costs, the Company aims to achieve the best execution by making
comprehensive judgments on borrowing terms and conditions, such as interest rate levels and borrowing periods.
② Performance Forecasts
The Company’s forecasts for the March 2023 period (October 1, 2022 to March 31, 2023) are as follows: operating revenues
totaling 36.9 billion yen, operating profit totaling 16.6 billion yen, ordinary profit totaling 15.8 billion yen, and profit totaling
15.7 billion yen. The Company plans to declare a per-unit cash dividend of 11,400 yen.
The Company’s forecasts for the September 2023 period (April 1, 2023 to September 30, 2023) are as follows: operating
revenues totaling 37.1 billion yen, operating profit totaling 16.5 billion yen, ordinary profit totaling 15.6 billion yen, andprofit totaling 15.6 billion yen. The Company plans to declare a per-unit cash dividend of 11,300 yen.
Regarding the assumptions underlying these forecasts, please see pages 7 and 8 entitled “Assumptions Underlying
Performance Forecasts for the March 2023 period (October 1, 2022 to March 31, 2023) and the September 2023 period(April 1, 2023 to September 30, 2023).” Operating revenues, operating profit, ordinary profit, profit, and cash dividend perunit might vary depending on changes that could occur in the market situation.

6

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Assumptions Underlying Performance Forecasts for the March 2023 period (October 1, 2022 to March 31, 2023) and theSeptember 2023 period (April 1, 2023 to September 30, 2023)
Item
Accounting
periodNumber ofproperties heldby theCompany
Number ofunits
outstanding

Assumption
・The March 2023 period: October 1, 2022 to March 31, 2023 (182 days)
・The September 2023 period: April 1, 2023 to September 30, 2023 (183 days)
・In the March 2023 period, the number of properties takes into account that the 25% co-ownership interest in
Harumi Front will be disposed of on December 1, 2022, based on 73 properties as of September 30, 2022.
・In the September 2023 period, assuming the disposition stated above is carried out, and the 30% co-ownershipinterest in Harumi Front will be disposed of on April 3, 2023 .
・The actual portfolio may differ from this assumption due to additional property acquisitions and dispositions.
・The Company assumes that the total number of units outstanding is 1,385,210 units, the number as of September
30, 2022.
・In the March 2023 period, the Company will refinance the entire short-term loan, the remaining balance of whichis 3.2 billion yen, as of November 30, 2022. The short-term loan of 3.2 billion yen remaining after the aboverefinancing will be repaid before maturity with the proceeds from the disposition of the 25% co-ownership interest
in Harumi Front as of December 1, 2022. In addition, as of November 15, 2022, the Company will refinance theInterest-bearing
debt

long-term loans due for repayments during the period totaling 25.0 billion yen (repayment dates: December 20,
2022, January 6, 2023, January 10, 2023, January 16, 2023, January 17, 2023, January 31, 2023, March 24, 2023,
and March 27, 2023) and the short-term loan due for repayment in full during the period of 11.0 billion yen(repayment date: November 18, 2022). There are no investment corporation bonds set to mature in the March 2023
period.
・In the September 2023 period, as of November 15, 2022, the Company will refinance the long-term loans due
for repayments during the period totaling 23.5 billion yen (repayment dates: May 29, 2023, June 1, 2023, and June15, 2023) and the short-term loans due for repayment in full during the period totaling 7.5 billion yen (repayment
dates: April 20, 2023, June 15, 2023, and July 10, 2023). There are no investment corporation bonds set to maturein the September 2023 period.

Operatingrevenues

・Revenues from portfolio properties held by the Company are calculated by taking into consideration the newleases and the tenancy terminations confirmed as of November 15, 2022, and by factoring in potential variables
that reflect the recent office leasing market landscape, such as rent levels and occupancy rates.

7

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Item

OperatingexpensesAssumption
・ Of the taxes applicable to the Company, property taxes, city planning taxes and depreciable property taxes
corresponding to the relevant fiscal period have been recorded as property-related expenses. However, when a property
is acquired at a point during the period used for the calculation of property tax, a property tax adjustment is levied thattakes into account the date of the transfer of the new acquisition. The amount of the adjustment is factored into theacquisition price and therefore not recorded as an expense in the relevant fiscal period. In addition, the Company
assumes the 2023 property taxes, city planning taxes, and depreciable property taxes for properties acquired in 2022
to be as follows:・Toyosu Front: 86 million yen
・Property and other taxes will be 3,480 million yen in the March 2023 period and 3,640 million yen in the September
2023 period.
・Depreciation will be 6,130 million yen in the March 2023 period and 6,030 million yen in the September 2023
period.
・Repair expenses may vastly differ from the projected amounts as such costs fluctuate significantly from one fiscal
period to another, and because these costs are not recurring.

Nonoperating
expenses

・The non-operating expenses, such as interest expenses on loans and investment corporation bonds, will be 870
million yen in the March 2023 period and 910 million yen in the September 2023 period.
・Gain on the split disposition of Harumi Front will be 3,360 million yen in the March 2023 period and 4,110 million

Dividend
amountsOther

yen in the September 2023 period.
・The Company shall not distribute dividends in excess of earnings. Thus, based on its Articles of Incorporation, theCompany shall make cash distributions of the amount that is higher than 90% of profit available for dividends up to
the earnings including the reserve for reduction entry.

・No revisions will be made in such areas as laws, tax systems, accounting standards, and listing rules as well as
regulations of the Investment Trusts Association, Japan to the extent that impact the above-mentioned forecasts.
・No unprecedented or significant changes will occur to the general market trends or real estate market conditions orother factors.
・In addition to the income taxes deferred related to reversal of reserve for reduction entry, etc., the corporate and othertaxes are calculated by taking into consideration the taxes in relation to the amortization of term leasehold interest forbuildings and asset retirement obligations.

8

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

2. Financial Statements(1) Balance Sheets
Thousands of yen
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes refund receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
LandConstruction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Land leasehold interests
Easement
Other
Total intangible assets

9

As of September 30, 2022

21,150,064
6,023,858
608,869
96,270617,709
208,981
28,705,752

20,473,628
6,319,372
466,371503,071－
307,853
28,070,298

266,395,817(119,112,797)
147,283,020
3,237,811(1,228,447)
2,009,363
3,437,918(2,723,473)
714,444508,728(344,652)
164,075
473,737,244
32,712
116,270,016(37,173,354)
79,096,662
1,135,217(444,958)
690,258
893,580(617,387)
276,192
76,983(52,189)
24,794
292,084,985
71,215996,184,970

255,140,683(116,706,330)
138,434,352
3,112,295(1,233,432)
1,878,863
3,266,422(2,592,318)
674,103524,266(356,945)
167,321458,991,518
54,256
116,752,139(39,425,825)
77,326,313
1,139,925(477,306)
662,619904,598(638,594)
266,003
79,252(54,975)
24,277292,105,411
87,072
970,672,114

5,580,065
828,095
27,782
6,435,942

5,564,235
826,648
24,371
6,415,255

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Thousands of yen
As of March 31, 2022
Investments and other assets
Investment securities
Leasehold and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term borrowings
Deposits received from tenants
Deferred tax liabilities
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary retained earnings
Reserve for tax purpose reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

10

As of September 30, 2022

660,468
1,580,934
26,4631,400,696
3,668,562
1,006,289,476

660,468
1,580,934
48,744
1,457,579
3,747,726
980,835,096

77,31377,313
1,035,072,541

64,88564,885
1,008,970,280

1,936,919
41,200,000
48,500,000
2,164,967
327,656
11,158－3,092,429
211,31297,444,443

1,540,850
21,700,000
48,500,000
2,138,389
289,8349,208
2,324,024
2,821,313
68,657
79,392,278

42,993,175
317,200,000
58,334,907
1,952,196
366,911
17,912420,865,102
518,309,545

42,993,175
310,200,000
55,831,455
2,407,179
370,608
13,695
411,816,113
491,208,392

497,241,216

497,241,216

3,439,070
3,439,070
16,082,709
19,521,779
516,762,995
516,762,995
1,035,072,541

3,693,378
3,693,378
16,827,292
20,520,671
517,761,887
517,761,887
1,008,970,280

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(2) Statements of Income and Retained Earnings
Thousands of yen
For the period
from October 1, 2021
to March 31, 2022
Operating revenues
Rent revenues
Other lease business revenues
Gain on sales of real estate properties
Total operating revenues
Operating expenses
Expenses related to lease business
Asset management fees
Asset custody fees
Administrative service fees
Directors’ compensations
Commission expenses
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Interest income
Dividend income
Reversal of distributions payable
Refund of property taxes
Other
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
Other
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings

11

For the period
from April 1, 2022
to September 30, 2022

34,739,020
396,245
1,318,376
36,453,643

34,095,465
193,855
3,365,229
37,654,549

17,391,031
1,541,945
64,774
134,4037,800
122,766
83,716
19,346,437
17,107,205

17,480,747
1,718,962
64,634
136,484
7,800
83,339120,248
19,612,216
18,042,332

134
－
1,583
781
8
2,507

122
9,378
1,129
80,376
5,102
96,109695,591
174,500

661,923
172,615

12,36012,42735,904
918,356
16,191,356
16,191,356
11,178134,475
145,653
16,045,702
37,007
16,082,709

35,064
882,031
17,256,411
17,256,411
11,142454,983
466,125
16,790,285
37,007
16,827,292

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(3) Statements of Changes in Unitholders’ Equity
For the period from October 1, 2021 to March 31, 2022
Thousands of yen

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning of
the period

497,241,216

Voluntary retained
earnings
Reserve fortax purpose
reduction
entry

Unappropriated retained
earnings

Total
voluntary
retainedearnings

Total
surplusTotal
unitholders’equityTotal
net assets

2,303,775

2,303,775

16,902,746

19,206,522

516,447,738

516,447,738

1,135,294

1,135,294(1,135,294)

－

－

－

Dividends of surplus(15,730,444)(15,730,444)(15,730,444)(15,730,444)

Profit16,045,702

16,045,702

16,045,702

16,045,702

Changes during the period
Provision of reserve for tax
purpose reduction entry

Total changes during
the period
Balance at end of the period－

1,135,294

1,135,294(820,037)

315,257

315,257

315,257

497,241,216

3,439,070

3,439,070

16,082,709

19,521,779

516,762,995

516,762,995

For the period from April 1, 2022 to September 30, 2022
Thousands of yen

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning of
the period

497,241,216

Voluntary retained
earnings
Reserve fortax purpose
reduction
entry

Total
voluntary
retainedearnings

Unappropriated retained
earnings

Total
surplusTotal
unitholders’equityTotal
net assets

3,439,070

3,439,070

16,082,709

19,521,779

516,762,995

516,762,995

254,308

254,308(254,308)－－－

Dividends of surplus(15,791,394)(15,791,394)(15,791,394)(15,791,394)

Profit16,790,285

16,790,285

16,790,285

16,790,285

Changes during the period
Provision of reserve for tax
purpose reduction entry

Total changes during
the period
Balance at end of the period－

254,308

254,308

744,583

998,891

998,891

998,891

497,241,216

3,693,378

3,693,378

16,827,292

20,520,671

517,761,887

517,761,887

12

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(4) Statements of Cash Distributions
For the period
From October 1, 2021
to March 31, 2022

For the period
From April 1, 2022
to September 30, 2022

Amount (Yen)Amount (Yen)I Retained earnings

16,082,709,191

16,827,292,959

Ⅱ Cash distribution

15,791,394,000

15,929,915,000(11,400)(11,500)

254,308,146

860,370,914

37,007,045

37,007,045(Dividend per investment unit)
Ⅲ Voluntary retained earnings
Provision of reserve for tax purpose
reduction entry
Ⅳ Retained earnings brought forward

Computation Method for Determining
Dividends

The Company will make cash
distributions using earnings based on the
cash distribution policy outlined in Article
32-1(2) of the Company’s Articles ofIncorporation, in an amount that exceeds
90% of the “amount of distributableprofit” as set forth in Article 67-15 of theSpecial Taxation Measures Act. Based on
this policy, the Company has decided thatthe total amount of dividends, under theapplication of Article 65-7 “Exceptions of
the Taxation in case of the Replacement
by Purchase of Specific Assets” of theSpecial Taxation Measures Act, making
reduction entries, and securing retained
earnings brought forward, is¥15,791,394,000 for the period underreview, which is a multiple of 1,385,210— the number of units outstanding as ofMarch 31, 2022. Furthermore, theCompany does not pay out dividends thatexceed earnings as outlined in Article 321(3) of the Company’s Articles ofIncorporation.

13

The Company will make cash
distributions using earnings based on the
cash distribution policy outlined in Article
32-1(2) of the Company’s Articles ofIncorporation, in an amount that exceeds
90% of the “amount of distributableprofit” as set forth in Article 67-15 of theSpecial Taxation Measures Act. Based on
this policy, the Company has decided thatthe total amount of dividends, under theapplication of Article 65-7 “Exceptions of
the Taxation in case of the Replacement
by Purchase of Specific Assets” of theSpecial Taxation Measures Act, making
reduction entries, and securing retained
earnings brought forward, is¥15,929,915,000 for the period underreview, which is a multiple of 1,385,210— the number of units outstanding as of
September 30, 2022. Furthermore, theCompany does not pay out dividends thatexceed earnings as outlined in Article 321(3) of the Company’s Articles ofIncorporation.

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(5) Statements of Cash Flows
Thousands of yen
For the period
from October 1, 2021
to March 31, 2022
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of investment corporation bond issuancecosts
Dividend income
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in supplies
Decrease (increase) in prepaid expenses
Decrease in property, plant and equipment due to sale
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Purchase of investment securities
Payments of leasehold and guarantee deposits
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Distributions paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period

14

For the period
from April 1, 2022
to September 30, 2022

16,191,356
6,326,332

17,256,411
6,275,709

12,36012,427－(134)
870,092(269,758)(9,378)(122)
834,539
142,497(617,709)

617,709

1,697
148,985
1,293,228
84,010(213,925)(1,133,236)
131
27,096(878)(26,418)
22,693,229
134(883,413)(8,611)21,801,339

3,338(406,801)
20,813,797
119,543
110,645
2,324,024(131)(271,115)(22,280)(139,181)
47,661,633
9,500(872,229)(13,091)
46,785,812(1,071,951)(53,601,404)(2,179)(83,300)(7,086)(2,257,627)
3,289,597(53,733,952)(1,469,824)(715,579)(1,698)－－(4,302,561)
1,611,838(4,877,825)

50,200,000(27,000,000)
34,700,000(27,500,000)(15,730,505)
14,669,494(17,263,118)
44,437,040
27,173,922

41,500,000(61,000,000)
16,500,000(23,500,000)(15,788,907)(42,288,907)(380,920)
27,173,922
26,793,001

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(6) Notes Concerning Going Concerns Assumption“Not applicable”(7) Summary of Significant Accounting Policies
Investment securities
Non-marketable securities, which have no market prices, classified as other securities are carried at cost. Cost of securities sold isdetermined by the moving average method.
Property and equipment, depreciation and impairment (except for leased assets)
Property and equipment is stated at cost, less accumulated depreciation. The cost of land, buildings and building improvements includes
the purchase price of property and acquisition costs. Depreciation is calculated on a straight-line basis over the estimated useful lives of
the assets ranging as stated below:
Buildings....................................................................... 2-61 years
Structures...................................................................... 2-75 years
Machinery and equipment............................................ 2-18 years
Tools, furniture and fixtures......................................... 2-29 years
Expenditures for repairing expenses are charged to income as incurred. Significant renewals and betterments are capitalized.
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
its fixed assets may not be recoverable. According to the standard set by the Accounting Standards Board of Japan, companies are required
to recognize an impairment loss in their statements of income if certain indicators of asset impairment exist and the book value of an asset
exceeds the undiscounted sum of future cash flows of the asset. The standard states that impairment losses should be measured as theexcess of the book value over the higher of (i) the fair market value of the asset, net of disposition costs, and (ii) the present value of
future cash flows arising from ongoing utilization of the asset and from disposal after asset use. The standard covers land, factories,
buildings and other forms of property, plant and equipment as well as intangible assets. Fixed assets are grouped at the lowe st level forwhich there is identifiable cash flows that are independent of cash flows of other groups of assets.
Intangible assets
Intangible assets primarily consist of leasehold rights and easement, which are stated at cost. Amortization of a term leasehold interest forbusiness use is calculated by the straight-line method based on the period of agreement.
Leased assets
Leased assets under finance lease transactions that do not transfer ownership of the leased assets to the lessees are capitalized anddepreciated by the straight-line method over the lease term with no residual value.
Deferred charges
Investment corporation bond issuance costs are amortized using the straight-line method over the redemption periods.
Investment unit issuance expenses are charged to income as incurred. The underwriters’ economic remunerations for underwriting theoffering are not recognized as investment unit issuance expenses in the financial statements since such costs are not paid by the Company
as commission under the so-called “spread-method”.
Under the spread-method, the difference between the offer price (the price paid by the unitholder) and the issue price (the price received
by the Company) is retained by the underwriters as remuneration.
Revenue recognition
The content of main performance obligations related to revenue arising from contracts with customers of the Company and the normal
timing for satisfying such performance obligations (the normal timing for recognizing revenue) are as follows:① Sales of real estate properties
The Company recognizes revenue from the sale of real estate properties when the purchaser, as the customer, obtains control of the realestate property by fulfilling the delivery obligations stipulated in the contract for the sale of real estate property.
② Utilities income
The Company recognizes utilities income based on the supply of electricity, water, etc. to the lessee as the customer, in accordance withthe terms of the real estate lease contract and related agreements. Of utilities income, in the case that the Company determines it is anagent for utilities income, the utilities income is recognized as income at the net amount received as charges for electricity, gas, etc.
supplied by other parties, less the amount paid to such other parties.
Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally charged
to income during the period. The sellers of the properties are liable for property taxes for the calendar year including the period from thedate of purchase by the Company through the end of the year since the taxes are imposed on the owner registered on the record as ofJanuary 1 based on the assessment made by the local government. The Company pays the amount equivalent to the property taxes to thesellers applicable to the period since acquisition and includes the amount equivalent to the taxes in the purchase price of each property
and capitalizes it as a cost of the property.
Consumption taxes
Consumption taxes withheld and consumption taxes paid are not included in the statements of income. The consumption taxes paid are
generally offset against the balance of consumption taxes withheld. As such, the excess of payments over amounts withheld are includedin current assets and the excess of amounts withheld over payments are included in current liabilities.
15

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks, and short-term investments, which are highly liquid, readily
convertible to cash and with insignificant risk of price fluctuation, with original maturity of three months or less.
Hedge accounting
The Company enters into derivative transactions to hedge against interest-rate risk and other forms of risk based on the risk management
policies outlined in the Company’s Articles of Incorporation. The Company uses interest-rate swap transactions for hedging fluctuationsin interest rates on floating-rate loans. The Company has also executed currency swap transactions as a method of hedging against
currency exchange fluctuation risks. Deferred hedge accounting is generally used for such interest-rate swaps and currency swap
transactions, and the effectiveness of hedging is measured by comparing the total cash flow fluctuation of the hedged item and that of thehedging instrument since the inception of the hedge.
For interest-rate swaps and currency swaps that qualify for hedge accounting and meet certain criteria provided under Japanese GAAP,
however, the Company applies special accounting treatment. Under such special accounting treatment, the differentials paid or received
under the swap agreements are recognized and included in interest expense of the hedged loans, and the interest-rate swaps and currency
swaps are not required to be separately valued. For interest-rate swaps and currency swaps that meet the specific criteria for such special
accounting treatment, ongoing assessments of hedge effectiveness are not required and hence not performed.

16

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(8) Notes to Financial Statements(Notes to Balance Sheets)a.

Commitment line agreement
The Company has signed commitment line agreements with three banks.
Thousands of yen
As of March 31, 2022b.

As of September 30, 2022

Total amount of commitment line agreement
Debt financing balance

60,000,000－

60,000,000－

Balance

60,000,000

60,000,000

Reserve for tax purpose reduction entry
Thousands of yen
As of March 31, 2022

As of September 30, 2022

Reserve for tax purpose reduction entry
Deferred tax liability for the reserve for tax
purpose reduction entry

3,439,070

3,693,378

1,953,125

2,408,105

Total

5,392,196

6,101,484

Note: Reduction entry is made based on the reserve method, where the requirements of the tax law are met, and deferred tax liability isrecorded in the liabilities section for the future taxable temporary difference related to the amount of the reserve for reduction entry,
and the net amount after deducting the deferred tax liability is recorded in the net assets section as the reserve for tax purpose reduction
entry. This deferred tax liability is recorded (or reversed) as a counterpart account of income taxes-deferred in the statements ofincome.

c.

Minimum net assets required by Article 67, Paragraph 4 of the ITA
Thousands of yen
As of March 31, 2022

As of September 30, 2022

50,00050,000(Notes to Statements of Income and Retained Earnings)
a. Breakdown of property-related revenues and expenses
Thousands of yen
For the period from October 1, 2021
to March 31, 2022

For the period from April 1, 2022
to September 30, 2022

Property-Related Revenues
Rent revenues
Rental revenues
Common service charges
Parking revenues
Other rental revenues
Other lease business revenues
Cancellation charges
Other miscellaneous revenues

35,135,266
34,739,020
29,251,345
2,364,432
713,0932,410,148
396,245
271,572
124,673

34,289,320
34,095,465
28,564,156
2,290,265
694,1102,546,932
193,855
82,652111,202

Property-Related Expenses
Expenses related to lease business
Property management expenses
Utilities expenses
Property and other taxes
Casualty insurance
Repairing expenses
Depreciation
Other rental expenses
Property-Related Profits

17,391,031
17,391,031
3,986,885
2,249,197
3,371,900
46,6861,217,236
6,326,242
192,881
17,744,235

17,480,747
17,480,747
3,836,799
2,760,966
3,521,321
48,583
849,752
6,275,535
187,788
16,808,573

17

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）b.

Breakdown of gain on sales of real estate properties
For the period from October 1, 2021 to March 31, 2022
Thousands of yen

Nagoya Misono Building
Revenue from sale of real estate property
Cost of real estate property sold
Other sales expenses
Gain on sales of real estate properties

2,629,000
1,293,228
17,394
1,318,376

For the period from April 1, 2022 to September 30, 2022
Thousands of yen

Harumi Center Building
Revenue from sale of real estate property
Cost of real estate property sold
Other sales expenses
Gain on sales of real estate properties

24,330,000
20,813,797
150,973
3,365,229(Changes in Unitholders’ Equity)
Total number of investment units issuable
and number of units outstanding

As of March 31, 2022

As of September 30, 2022

Total number of investment units issuable

4,000,000 units

4,000,000 units

Number of units outstanding

1,385,210 units

1,385,210 units(Supplemental Cash Flow Information)
Cash and cash equivalents
The following table represents a reconciliation of cash and cash equivalents as of March 31, 2022 and September 30, 2022:
Thousands of yen
As of March 31, 2022
As of September 30, 2022

Cash and deposits
Cash and deposits in trust
Time deposits with maturities of more than three months
Cash and cash equivalents

21,150,064
6,023,858－
27,173,922

20,473,628
6,319,372－
26,793,001(Financial Instruments)
a. Status of financial instruments(i) Policies for dealing financial instruments
Concerning the financing of property acquisitions, the Company shall use several funding sources including bank loans, the issuanceof investment corporation bonds and the issuance of investment units. When executing such financing activities, the Company
endeavors to retain the ability to secure stable and low-cost financing by maintaining high credit ratings and thereby limiting thefinancial covenants that may restrict the financial flexibility of the Company. To achieve these goals, the Company intends to further
develop and reinforce the confidence of debt holders and rating agencies in the Company by bolstering the capital base and controlling
the loan-to-value ratio (“LTV”) at an adequate level.
In order to hedge against future interest-rate fluctuations, the Company may enter into derivative transactions, which shall be
executed solely for the purpose of hedging against interest-rate fluctuation and other risks, and not for speculative purposes.
With respect to management of excess funds, as a matter of policy the Company uses time deposits as its main vehicle, while
securities and monetary claims are also eligible for such investment.
(ii) Characteristics and risk profile of each financial instrument and risk management system
The Company regularly re-evaluates the appropriateness and effectiveness of its risk management system in order to improve on it.
The characteristics and risk profile of financial instruments and the system in place to manage such risks are as follows:
The deposits, which are typically large time deposits used to manage excess funds, are exposed to the credit risk of the deposit-taking
financial institutions. The Company manages credit risk by restricting the tenor of the deposit to relatively short periods and setting aminimum credit rating requirement for the deposit-taking financial institutions.
The funding proceeds from borrowings and issues of investment corporation bonds are applied mainly to acquire real estate
18

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

properties and repay outstanding loans and bonds. While floating-rate short-term and long-term loans are exposed to the risk ofinterest-rate hikes, such risk is mitigated by the Company’s low LTV and relatively high percentage of long-term fixed-rate debts
within the total borrowing. The Company may also exercise hedging by means of derivative transactions (interest-rate swap
transactions) in order to mitigate the risk of fluctuation concerning the floating-rate long-term loans, thereby effectively stabilizing
the overall interest rates on the loans. Foreign currency-denominated loans are also exposed to currency exchange and interest-ratefluctuation risk. However, the Company uses derivative transactions as a method of hedging against these risks (interest-rate andcurrency swap transactions). Foreign currency investment corporation bonds are also exposed to currency exchange risk. However,
the Company uses derivative transactions as a method of hedging against the risks (currency swap transactions). For more detailed
information on the hedge accounting method, please refer to the previous section “(7) Summary of Significant Accounting Policies:
Hedge accounting”.
Loans and investment corporation bonds involve liquidity risk at the time of maturity. To manage such liquidity risk, the Company
implements measures such as ① maintaining and strengthening its ability to access equity markets to secure funds, ② maintaining
commitment lines with major financial institutions (There is no amount outstanding under the facility as of March 31, 2022 andSeptember 30, 2022) and ③ preparing monthly financial plans.
(iii) Supplementary note regarding fair value of financial instruments
Since the fair value of financial instruments is calculated based on certain assumptions, the fair value could differ depending on theassumptions used. In addition, the contract value of derivative transactions, which is presented in the following section entitled“Derivative Transactions”, is not an exact representation of market risk attributable to derivative transactions.
b. Fair value of financial instruments
Fair value of financial instruments, their values carried on the balance sheets and the differences between them as of March 31, 2022 andSeptember 30, 2022 are as follows. Since “Cash and deposits”, “Cash and deposits in trust”, and “Short-term borrowings” are cash anddue to be settled in a short period, and their fair values approximate their book values, the notes are omitted.
Thousands of yen
As of March 31, 2022

Book value
48,500,000
42,993,175
317,200,000
58,334,907－(1) Current portion of long-term borrowings(2) Investment corporation bonds(3) Long-term borrowings(4) Deposits received from tenants(5) Derivative transactions

Fair value
48,606,802
43,624,512
315,353,094
57,105,428－

Difference
106,802631,337(1,846,905)(1,229,478)－

Thousands of yen
As of September 30, 2022

Book value
48,500,000
42,993,175
310,200,000
55,831,455－(1) Current portion of long-term borrowings(2) Investment corporation bonds(3) Long-term borrowings(4) Deposits received from tenants(5) Derivative transactions

Fair value
48,556,944
43,561,203
307,817,490
54,654,518－

Difference
56,944
568,028(2,382,509)(1,176,936)－

Notes: 1. Measurement of fair value of financial instruments and matters concerning derivative transactions(1) Current portion of long-term borrowings and (3) Long-term borrowings
For loans with floating interest rates, since the interest rates on such loans reflect market rates reasonably well over the short term
and their book values are good approximations of their fair values, the book values are presented as their fair values. (However, thefair values of floating-rate long-term loans (please refer to the following “Derivative Transactions, b. Derivatives designated as
hedging instruments”) hedged by an interest-rate and currency swap subject to integrated treatment or by an interest-rate swap subject
to special accounting treatment are calculated by discounting the aggregated principal and interest on such loans using reasonableestimates of the rates that would be applicable if the Company were to refinance the existing loans for the remaining period to maturity
under the prevailing market condition.) The fair values of long-term loans with fixed interest rates are calculated by discounting theaggregated amounts of the principal and the interest of the loans by the rates that are reasonably estimated to be applicable if theCompany were to refinance the existing loans for the remaining period to maturity.
(2) Investment corporation bonds
Their fair values are based on reference prices published by a financial data provider where available. When reference prices are notavailable, their fair values are calculated by discounting the aggregate of the principal and interest by nominal rates assumed
applicable if the loans were refinanced for the duration of the current maturity. (However, the fair values of investment corporation
bonds (please refer to the following “Derivative Transactions, b. Derivatives designated as hedging instruments”) hedged by acurrency swap subject to allocation treatment are calculated by discounting the aggregate of the principal and interest integrated withthe currency swap by nominal rates assumed applicable if the loans were refinanced for the duration of the current maturity.)(4) Deposits received from tenants
These fair values of these deposits are the discounted present values by estimated periods until the deposits are returned and discountrates reflected credit risks of the Company.
(5) Derivative transactions
Please refer to the following section entitled “Derivative Transactions”.

19

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）
2. Repayment schedule for investment corporation bonds, long-term borrowings and other interest-bearing debt after the closing dateThousands of yen
As of March 31, 2022
1 year or less

Investment corporation bonds
Long-term borrowings
Total—
48,500,000
48,500,000

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years

10,000,000
39,500,000
49,500,000—
54,800,000
54,800,000

20,000,000
52,500,000
72,500,000

10,000,000
25,700,000
35,700,000

2,993,175
144,700,000
147,693,175

Thousands of yen
As of September 30, 2022
1 year or less

Investment corporation bonds
Long-term borrowings
Total—
48,500,000
48,500,000

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years

10,000,000
42,300,000
52,300,000

10,000,000
57,000,000
67,000,000

10,000,000
36,700,000
46,700,000

10,000,000
21,000,000
31,000,000

2,993,175
153,200,000
156,193,175

20

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Derivative Transactions)a. Derivatives not designated as hedging instruments
As of March 31, 2022
“Not applicable”
As of September 30, 2022
“Not applicable”
b. Derivatives designated as hedging instruments
As of March 31, 2022
The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative
designated as a hedging instrument is as follows:(Thousands of yen)

Derivative
accounting method
Special Treatment forinterest-rate swap
Integrated Treatment (Special
Treatment and Allocation
Treatment) for interest-rate andcurrency swap

Allocation Treatment for
currency swap

Type ofderivative transaction
Receive floating,pay fixed interest-rate
swap transactions
Receive floating USD,
pay fixed JPY,
interest-rate and currency
swap transactions (withinitial and final exchange)
Receive fixed USD,
pay fixed JPY, currency
swap transactions (withinitial and final exchange)

Hedged item

Contract valueOver one year

Fair value

Measurementof fair value

Long-term
borrowings

26,300,000

9,800,000*1―Long-term
borrowings

10,000,000

10,000,000*1―Investment
corporation bonds

2,993,175

2,993,175*2―

As of September 30, 2022
The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative
designated as a hedging instrument is as follows:(Thousands of yen)

Derivative
accounting method
Special Treatment forinterest-rate swap
Integrated Treatment (Special
Treatment and Allocation
Treatment) for interest-rate andcurrency swap

Allocation Treatment for
currency swap

Type ofderivative transaction
Receive floating,pay fixed interest-rate
swap transactions
Receive floating USD,
pay fixed JPY,
interest-rate and currency
swap transactions (withinitial and final exchange)
Receive fixed USD,
pay fixed JPY, currency
swap transactions (withinitial and final exchange)

Hedged item

Contract valueOver one year

Fair value

Measurementof fair value

Long-term
borrowings

16,800,000

6,800,000*1―Long-term
borrowings

10,000,000

10,000,000*1―Investment
corporation bonds

2,993,175

2,993,175*2―*1. The derivative transactions eligible for Special Treatment for interest-rate swap and Integrated Treatment (Special Treatment for interest-rate swap
and Allocation Treatment for currency swap) are accounted for as integral parts of the hedged loans, and the fair value of those derivativetransactions is included in that of the underlying long-term borrowings as of March 31, 2022 and September 30, 2022. Please refer to page 19,
Note 1 of the section entitled “b. Fair value of financial instruments” under “Financial Instruments”, as well as subheadings (1) and (3) concerningderivative transactions.
*2. Currency swap transactions eligible for allocation treatment are accounted for as integrated parts of the hedged investment corporation bonds, andthe fair value of the currency swap transactions is included in that of the underlying investment bonds as of March 31, 2022 and September 30,
2022. Please refer to page 19, Note 1 of the section entitled “b. Fair value of financial instruments” under “Financial Instruments”, as well as
subheading (2) concerning derivative transactions.

21

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Income Taxes)
The Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation Measures
Act, an investment corporation is allowed to deduct dividends of earnings or dividend distributions, paid to unitholders from its taxable
income if certain tax requirements are satisfied. Such tax requirements include dividend distributions in excess of 90% of its profit
available for dividends for the fiscal period as stipulated by Article 67-15 of the Special Taxation Measures Act. The significant
components of deferred tax assets and liabilities as of March 31, 2022 and September 30, 2022 were as follows:

Thousands of yen
As of March 31, 2022
As of September 30, 2022

Deferred tax assets:
Accrued enterprise tax
Amortization of a term leasehold interest
Asset retirement obligations
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Asset retirement obligations
Reserve for advanced depreciation of non-current assets
Total deferred tax liabilities
Net deferred tax liabilities

929
122,288
126,914250,132(147,747)
102,385926
127,763
128,193
256,883(154,501)
102,381

101,455
1,953,125
2,054,581
1,952,196

101,455
2,408,105
2,509,561
2,407,179

The reconciliation of tax rate difference between the adjusted statutory tax rate and the effective tax rate as of March 31, 2022 andSeptember 30, 2022 was as follows:
Statutory tax rate
Deductible dividend distribution
Change in valuation allowance
Others
Effective tax rate

As of March 31, 2022

As of September 30, 2022

34.59%(33.74%)
0.04%
0.00%
0.90%

34.59%(31.93%)
0.04%
0.00%
2.70%

(Asset Retirement Obligations)
For the six months March 31, 2022 and September 30, 2022
Asset retirement obligations reported on balance sheets
The Company acquired Osaki Front Tower on February 1, 2011 under the term leasehold for business use agreement which, at the expiryof the leasehold, obligates the Company to restore the leased land to its original state. At the inception of a lease with such an obligation,
the Company recognized an asset retirement obligation and a corresponding capital asset in an amount equal to the present value of theestimated demolition cost required for the removal of the properties located on the leased land. The present value is calculated using
2.015% as the discount rate over 42 years, which is the term of the leasehold.
Change in the asset retirement obligations for the six months ended March 31, 2022 and September 30, 2022 consisted of the following:Thousands of yen
For the period from October 1, 2021
For the period from April 1, 2022
to March 31, 2022
to September 30, 2022

Balance at the beginning of the period
Increase in tangible fixed assets
Accretion expense
Balance at the end of the period

363,251－
3,659
366,91122

366,911－
3,696
370,608

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Investment and Rental Property)
For the six months ended March 31, 2022 and September 30, 2022
The Company owns primarily a portfolio of office properties in Tokyo and other prefectures in order to gain rental revenue from them.
The book values on balance sheets as of March 31, 2022 and September 30, 2022 and the fair values as of March 31, 2022 andSeptember 30, 2022 are as follows:
Thousands of yen

Book value

Fair value

As of September 30, 2021

Change during the period *1

As of March 31, 2022

As of March 31, 2022

954,902,065

47,718,397

1,002,620,463

1,322,980,000

Thousands of yen

Book value

Fair value

As of March 31, 2022

Change during the period *2

As of September 30, 2022

1,002,620,463(25,534,367)

977,086,095

As of September 30, 2022

1,303,560,000

Notes: 1. Book value on balance sheets means the acquisition cost less accumulated depreciation.
2. Significant changes*1. As for the increases/decreases for the period, the major reasons for the increases were the acquisitions of GRAND FRONT OSAKA (North
Building) (¥9,869,891 thousand), GRAND FRONT OSAKA (Umekita Plaza and South Building) (¥11,347,537 thousand), Toyosu Front(¥25,643,143 thousand) and the additional acquisition of Otemachi Financial City North Tower (¥6,429,989 thousand), and the major reasons forthe decreases were the disposition of Nagoya Misono Building (¥1,293,228 thousand) and by depreciation.
*2. As for the increases/decreases for the period, the major reasons for the decreases were the disposition of Harumi Center Building (¥20,813,797
thousand) and by depreciation.
3. Fair values as of March 31, 2022 and September 30, 2022 are defined as the appraised values provided by an external qualified professional
appraiser. As of March 31, 2022, Harumi Center Building, for which the disposition agreement was made dated May 16, 2022, was valued at thedisposition price, and as of September 30, 2022, Harumi Front, for which the disposition agreement was made dated November 15, 2022, wasvalued at the disposition price.

Profits and losses related to investment and rental property are listed in the “Breakdown of property-related revenues and expenses”
under “Notes to Statements of Income and Retained Earnings”.

（Revenue Recognition）
Breakdown information on revenue from contracts with customers
For the period from October 1, 2021 to March 31, 2022
Thousands of yen

Revenue from contracts with customers
Sales of real estate properties
Utilities income
Others
Total
*1

*2
*3

*1

Revenue from external customers－
1,567,099 *3－
1,567,099

1,318,376 *2
1,567,099
33,568,167
36,453,643

Rent revenues subject to “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13) and revenue from sales of real estate
properties subject to “Practical Guidelines on Accounting by Transferors for Derecognition of Real Estate Securitized by means of Special
Purpose Companies” (the Accounting System Committee Statement No. 15 of the Japanese Institute of Certified Public Accountants(JICPA)) are excluded from “Revenue from contracts with customers” as they are not subject to Accounting Standard f or Revenue
Recognition. The revenue from contracts with customers is mainly revenues from utilities income.
Sales of real estate properties are recorded as gains or losses on sales of real estate properties in the statements of income in accordancewith Article 48-2 of the Regulations on Accounting of Investment Corporation (Cabinet Office Ordinance No. 47 of 2006), andtherefore the amount is the proceeds from sales of real estate properties, less the cost of real estate properties sold and other sales expenses.
Utilities income is the amount of income recognized in proportion to the supply of electricity, water, etc. to the lessee as the customer, in
accordance with the terms of the real estate lease contract and related agreements .

For the period from April 1, 2022 to September 30, 2022
Thousands of yen

Revenue from contracts with customers
Sales of real estate properties
Utilities income
Others
Total
*1

*1

Revenue from external customers－
1,699,920 *3－
1,699,920

3,365,229 *2
1,699,920
32,589,399
37,654,549

Rent revenues subject to “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13) and revenue from sales of real estate
properties subject to “Practical Guidelines on Accounting by Transferors for Derecognition of Real Estate Securitized by means of Special
Purpose Companies” (the Accounting System Committee Statement No. 15 of the Japanese Institute of Certified Public Accountants(JICPA)) are excluded from “Revenue from contracts with customers” as they are not subject to Accounting Standard for Revenue
Recognition. The revenue from contracts with customers is mainly revenues from utilities income.

23

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）*2*3

Sales of real estate properties are recorded as gains or losses on sales of real estate properties in the statements of incom e in accordancewith Article 48-2 of the Regulations on Accounting of Investment Corporation (Cabinet Office Ordinance No. 47 of 2006), andtherefore the amount is the proceeds from sales of real estate properties, less the cost of real estate properties sold and other sales expenses.
Utilities income is the amount of income recognized in proportion to the supply of electricity, water, etc. to the lessee as the customer, in
accordance with the terms of the real estate lease contract and related agreements.

(Segment Information)
For the six months ended March 31, 2022 and September 30, 2022
Since the Company has been engaged in the real estate leasing business using a single segment, segment information has been omitted.
Information on products and services
Since revenues from external customers for a single segment accounted for more than 90% of total operating revenues, segment
information on products and services has been omitted.
Information on geographic area
a. Revenue
Since 100% of total operating revenues was generated from external customers within Japan, a geographical breakdown of revenues
has been omitted.
b. Property and equipment
Since 100% of total property and equipment on the balance sheets was located within Japan, a geographical breakdown of suchproperty and equipment has been omitted.
Information on major clients
Since no single external client represents 10% or more of the Company’s total operating revenues, information on major clients has been
omitted.
(Per Unit Information)
The following table summarizes information about net assets per unit and profit per unit as of March 31, 2022 and September 30, 2022
and for the periods then ended, respectively:
Yen

Net assets per unit
Profit per unit

For the period from October, 2021
to March 31, 2022

For the period from April 1, 2022
to September 30, 2022

373,057
11,583

373,778
12,121

Notes: 1. Profit per unit is computed by dividing profit by the weighted average number of units outstanding during each period.
Diluted profit per unit has not been presented since no warrants or convertible bonds were outstanding during the period.
2. The basis for the computation of profit per unit is as follows:

Thousands of yen
For the period from October 1, 2021
For the period from April 1, 2022
to March 31, 2022
to September 30, 2022

ProfitAmount not attributable tonormal unitholders
Profit applicable tonormal investment units
Average number of units

16,045,702

16,790,285－－

16,045,702

16,790,285

1,385,210 units

1,385,210 units(Subsequent Events)“Not applicable”

24

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(9) Increase/Decrease in Total Number of Units Outstanding
There is no change in the number of investment units outstanding and the amount of unitholders’ capital during the period underreview. Changes in the past five years are as follows.

Date

April 16, 2018

Number of Units Outstanding

Total Unitholders’ Capital(Millions of yen)

Increase/Decrease Balance

Increase/Decrease Balance

Remarks
Issuance of new investment
units (public offering)

69,000 1,378,310

35,659493,675

Notes

＊

1

Issuance of new investment＊26,900 1,385,210
3,565 497,241
units (third-party allocation)*1. New investment units were issued at 533,120 yen per unit (underwriting price of 516,800 yen) for the purpose of funding theacquisition of specified assets and the partial repayment of short-term loans, and in the event there are any funds remaining, cash
reserves.
*2. New investment units were issued at 516,800 yen per unit for the purpose of funding the partial repayment of short-term loans and,in the event there are any funds remaining, cash reserves.
May 9, 201825

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

3. Reference Dataa.

Composition of the Company’s Assets
As of March 31, 2022

Asset type

Real property

RegionTotal ofnet book value*1(¥ million)

Ratio tototal assets(%)

Tokyo 23 wards

512,41149.5

489,486

48.5

Tokyo metropolitan area
(excluding Tokyo 23 wards)*2

40,506

3.9

40,316

4.0

Other major cities

77,456

7.5

76,8107.6

630,37460.9

606,612

60.1

Tokyo 23 wards

264,067

25.5

263,060

26.1

Tokyo metropolitan area
(excluding Tokyo 23 wards)*2

15,731

1.5

15,584

1.5

Other major cities

92,446

8.9

91,8289.1

372,24536.0

370,47336.7

32,452

3.1

31,884

3.2

(－)

(－)

(－)

(－)

1,035,072

100.0

1,008,970

100.0(1,002,620)(96.9)(977,086)(96.8)

Total

Real property
in trust

As of September 30, 2022

Total

Total ofnet book value*1(¥ million)

Ratio tototal assets(%)

Savings and other assets

Total amount of assets*1. Totals of net book value as of March 31, 2022 and September 30, 2022 are based on the total amounts from the balance sheets as ofMarch 31, 2022 and September 30, 2022, respectively. Real property and real property in trust present the net book values after
depreciation and amortization.
*2. Tokyo metropolitan area encompasses the prefectures of Tokyo, Kanagawa, Chiba and Saitama throughout this document.
*3. The figures in parentheses indicate the value of real property held. Ratios are rounded to the first decimal place.

26

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）b.

Real Estate Investment Property and Trust Beneficiary Rights in Trust of Real Estatei) Outline of real estate and other assets included in the Company's holdings (quick reference guide)
The table below is a quick reference guide outlining the real estate and other assets included in the Company’s holdings as of,
September 30, 2022.

Occupancy rate*2

Appraisal value
at the end of
period (¥ mil)*3

Book value at theend of period(¥ mil)88,40069,08081,555,500

7.5%

JRE KandaOgawamachi
Building

Realproperty

8

6,269

89.5%

9,310

8,567

9,520,000

0.9%

Kandabashi
Park Building

Realproperty

9

3,687

83.5%

5,360

4,377

4,810,000

0.4%

OtemachiFinancial City
North Tower

Realproperty/Trust

12

7,420

77.6%

28,80020,711

15,462,900
6,380,000
Total:
21,842,900

2.0%OtemachiPark Building

Trust

22

2,372

100.0%

11,00010,095

10,175,000

0.9%Nibancho
GardenRealproperty

1
*5

9,316
*5

100.0%*5

18,40011,883

14,700,000

1.3%

Mitsubishi
UFJ Trust and

Real

10

11,904100.0%

57,30028,48644,700,000

4.1%

1

4,495

100.0%

7,570

5,285

7,000,000

0.6%

1.9%

Tokyo
23
wards

Burex
Kojimachi
Building

propertyRealproperty

area (m2)

Banking
Building(¥ thousand)

Ratio
*2

76.7%

Sanno Grand
Building

Realproperty

42

20,58982.5%

26,50020,794

10,200,000
10,700,000
Total:
20,900,000

Yurakucho
Denki
Building

Realproperty

9

4,697

93.2%

9,470

7,635

7,200,000

0.7%

Front Place
Nihonbashi

Realproperty

2

8,468

100.0%

21,200*6

17,282

17,560,000

1.6%

Trust

9

4,419

87.5%

5,050

4,029

4,410,000

0.4%

Burex
Kyobashi
Building

Realproperty

1

4,279

100.0%

7,680

4,246

5,250,000

0.5%

JRE Ginza
1Chome East
Building

Trust

8

4,513

100.0%

8,160

5,940

6,459,000

0.6%

Ginza Sanwa
Building

Realproperty

11

4,326

100.0%

19,60017,052

16,830,000

1.5%

JRE
Kayabacho
2ChomeRatio byregion*2

Leasable floor

96.8%
*5

Number oftenants*1

25,678*5Type ofspecified asset

7*5

propertyRealproperty

Name ofRegionTokyo metropolitan area

Kitanomaru
SquareAcquisition price*4

Building

27

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(¥ thousand)

Ratio
*2

JRE Ginza
3ChomeBuilding

Realproperty

10

4,255

100.0%

6,480

7,128

5,353,500
2,645,922*7 0.7%
Total:
7,999,422

Harumi Front

Real
property

7

33,36999.7%

38,000*8

25,22931,300,000 2.9%

Realproperty

32*5

44,999
*5

91.7%
*5

83,10057,07160,800,000 5.6%

Realproperty

8

4,898

90.2%

9,800

6,987

7,680,000 0.7%

Trust

9

2,550

100.0%

5,040
*6

4,351

4,500,000 0.4%

Akasaka Park
Building
JRE Aoyama
Crystal
Building
CloverShiba-koen

Shiodome
Building

Tokyo metropolitan area

JER Shiba
2ChomeDaimonBuilding
JRE Cosmo
Kanasugibashi
Building
Tokyo 23
Seavans S
wards
Building
Tamachi Front
Building

Trust

38

44,21367.7%

123,000

99,20921,250,000
54,600,000
10,100,000
10,450,000 9.8%
10,530,000
Total:
106,930,000

Trust

23

9,525

98.3%

8,990

5,841

4,859,000 0.4%

Trust

6

4,062

87.0%

3,790

2,440

2,808,000 0.3%

RealpropertyRealproperty

13

6,082

84.6%

7,350

5,610

5,400,000 0.5% 76.7%

10

3,792

100.0%

7,930
*6

5,964

6,210,000 0.6%
23,100,000
6,660,000
25,460,000
5.8%
8,460,000
Total:
63,680,000
25,025,000
10,100,000
3.2%
Total:
35,125,000

Shinjuku
Eastside Square

Trust

40

40,941

98.5%

74,500*6

58,915

Shinjuku Front
Tower

Trust

39

21,41678.6%

37,500*6

34,170

JRE NishiShinjuku
TerraceRealproperty

12

6,036

100.0%

9,350

7,635

7,830,000 0.7%

Tokyo Opera
Real
City Building*9 property
Front PlaceMinamiShinjuku
Link Square
Shinjuku

Ratio byregion*2Book value atthe end of period(¥ mil)Appraisal value
at the end of
period (¥ mil)*3

Occupancy rate*2

Leasable floorarea (m2)

Number oftenants*1

Type ofspecified asset

Name ofproperty

RegionAcquisition price*4

RealpropertyRealproperty

93

34,96390.8%

36,00027,6859,350,000
22,426,831
2.9%
Total:
31,776,831

2

4,095

100.0%

10,400*69,215

9,250,000 0.8%

22,4106,670,000(1,170,000)*10
2.1%
17,300,000
Total:
22,800,000

17

9,786

28

100.0%

25,400JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Book value at theend of period(¥ mil)13,9006,597

8,700,000

0.8%

Real
property

6

3,147

100.0%

7,410

4,767

4,885,000

0.4%

Real
property

6

5,558

100.0%

10,200

10,638

12,200,000
*11

1.1%

43,80034,600,000(8,076,000)
27,186*13
Total:
26,524,000

2.4%

1.3%

Real
property

*12

*12

*12

Ratio
*2

Ratio byregion*2

Appraisal value atthe end of period(¥ mil)*3

100.0%

Occupancy rate*2

7,745

Leasable floorarea (m2)

Tokyo
23
wards

8

Number oftenants*1

Shibuya Cross
Tower(Land)

Real
Property

Type ofspecified asset

Name ofproperty

Region

JRE Yoyogi
1 Chome
Building
JRE Jingumae
Terrace
JRE Jingumae
Media Square
Building(¥ thousand)Acquisition price*4

Tokyo metropolitan area

Ebisu Neonato

Realproperty

4

8,659

100.0%

20,2003,740,000
360,000
13,749 10,512,000
Total:
14,612,000

TIXTOWER
UENO

Real
property

16

15,016100.0%

26,60017,837 22,000,000

2.0%

Toyosu Front

Trust

21

17,40798.9%

26,60025,502 25,500,000

2.3% 76.7%

4

5,205

100.0%

7,140

4,165

5,500,000

0.5%

1

16,856100.0%

17,900*87,176 12,300,000

1.1%

26

7,706

100.0%

6,020

4,633

5,123,000

0.5%

1.0%

JRE Higashi
Real
Gotanda 1Chome
property
Building
Osaki Front
Real
Tower*14
property
JRE Omori-Eki
Higashiguchi
Trust
Building

Harmony Tower

Realproperty

23

14,34097.3%

15,2009,490

8,500,000
520,000
2,100,000
Total:
11,120,000

JRE Ikebukuro
2ChomeBuilding*15

Trust

9

2,186

100.0%

2,000

1,548

1,728,000

0.2%

JRE MinamiIkebukuro
Building

Realproperty

10

5,932

93.4%

6,260

3,913

4,500,000

0.4%

Hachioji First
SquareRealpropertyTokyo
metroJRE Saitama
Realpolitan Urawa Building property
area,
excludMM Park
Real
ing
Building
propertyTokyo
23
wards Queen’s Tower A Trust
Musashi Kosugi
STM Building

Realproperty48

10,125100.0%

5,190

4,692

19

4,510

100.0%

3,190

2,413

3,300,000
2,379,112
Total:
5,679,112
1,232,000
1,342,000
Total:
2,574,000

0.5%

0.2%
6.1%

33

38,415

93.7%

42,40029,582 37,400,000

3.4%

50

26,66998.5%

25,100*6

15,584 17,200,000

1.6%

27

5,378

98.1%

4,620

3,628

0.4%

29

4,000,000

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Leasable floorarea (m2)Occupancy rate*2

Appraisal value
at the end of
period (¥ mil)*3

Book value atthe end of period(¥ mil)8

12,265100.0%

10,9005,420

7,100,000

0.7%

Jozenji Park Building

Realproperty

20

2,518

98.0%

1,120

914

1,000,000

0.1%

JRE Higashi Nibancho
SquareRealproperty

22

20,526100.0%

15,100*88,103

9,950,000

0.9%

0.3%

(¥ thousand)

Ratio
*2

Other major cities

JRE Sendai Honcho
Honma Building

Trust

27

6,234

98.7%

2,780

2,767

2,924,000
250,000
Total:
3,174,000

AER

Real
property

62

23,612

96.6%

19,30017,78018,640,000

1.7%

Daido Seimei
Niigata Building

Realproperty

10

3,928

100.0%

1,900

1,644

1,770,000

0.2%

Kanazawa Park
Building

Realproperty

75

20,946

85.4%

7,110

4,430

2,880,000
1,700,000
Total:
4,580,000

0.4%

JRE Kanazawa
Kamitsutsumicho
Building

Realproperty

27

7,213

98.1%

3,050

2,307

2,780,000

0.3%

0.5%

Nishiki Park
Building*16

Realproperty

63*5

10,338
*5

93.0%
*5

5,550

4,813

3,850,000
1,300,000
650,000
175,000
Total:
5,975,000

JRE Nagoya Hirokoji
Place

Trust

32

13,20087.1%

14,300*6

7,537

8,567,000

0.8%

Nagoya Hirokoji
Building

Realproperty

41

21,37796.7%

13,10014,334

14,533,000

1.3%

JRE Shijo Karasuma
Center Building

Realproperty

12

6,634

85.2%

7,240
*6

3,545

4,400,000

0.4%

GRAND FRONTOSAKA(North
Building) *17

Trust

5

8,462

98.3%

10,400*89,806

9,750,000

0.9%

GRAND FRONTOSAKA（Umekita Plazaand South Building）*17

Trust

2

5,178

89.6%

11,800*8

11,242

11,250,000

1.0%

JRE Umeda Square
Building*18

Trust

37

10,37599.3%

16,80015,537

15,523,520

1.4%

JRE Dojima Tower

Trust

46

28,40396.8%

20,00020,41824,000,000

2.2%

JRE Sakaisujihonmachi
Building

Realproperty

3,482

2,264,000
1,900,000
Total:
4,164,000

0.4%

24

11,520100.0%

30

3,880

Ratio byregion*2Type ofspecified asset
Realproperty

Number oftenants*1

Name ofproperty

Region8･3 Square Kita
Building

Acquisition price*4

17.2%

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

31

Other major cities

Lit City Building

Realproperty

28

13,352

15,50092.9%

10,5007,865

9,300,000

0.9%

2,319

4,650,000(555,131)*19
Total:
4,094,868

0.4%

0.3%

8,885

91.8%

5,110

(¥ thousand)

Ratio
*2

1.3%

17.2
%

NHK Hiroshima
Broadcasting Center
Building

Realproperty

12

9,881

94.8%

3,460

2,909

1,320,000
1,450,000
Total:
2,770,000

JRE Tenjin 3Chome
Building

Realproperty

19

3,995

100.0
%

1,980

1,331

1,550,000

0.1%

JRE Tenjin Crystal
Building

Realproperty

30

5,964

100.0
%

3,270

3,471

5,000,000

0.5%

Hinode Tenjin
Building

Trust

4

5,944

100.0
%

4,940

3,299

3,657,000

0.3%

Total

1,499

875,64893.9%

1,302,450

977,086

1,091,248,154*1.

Ratio byregion*2

Trust

14,7006,934,000
7,380,000
Total:
14,314,000Book value atthe end of period(¥ mil)

JRE Amagasaki
Front Building

20,450100.0%

Appraisal value
at the end of
period (¥ mil)*340

Occupancy rate*2

Trust

Leasable floorarea (m2)

Number oftenants*1

Type ofspecified asset

Name ofproperty

Region

JRE Midosuji Daiwa
Building

Acquisition price*4

100.0%The total number of tenants is based on the gross number of tenants in each building. Each instance of occupancy of a single tenantleasing space is considered separately on a per property basis even if said tenant leases floor area in multiple properties. Moreover,a portion of GRAND FRONT OSAKA (North Building) and GRAND FRONT OSAKA (Umekita Plaza and South Building) areleased in bulk through a pass-through master lease system, the number of bulk lessees is defined as the number of tenants. For the
portion of GRAND FRONT OSAKA (North Building) leased in part under a fixed master lease or direct lease, the bulk lessees orend tenants of the said portion are added to the total number of tenants of the same property.
*2. Occupancy rate, ratio of acquisition price and ratio by region are rounded to the nearest first decimal place.
*3. Appraisal value at the end of period is, as a rule, the value assessed by real estate appraisers based on the Company's Articles ofIncorporation and the Cabinet Office Ordinance on Accountings of Investment Corporations. The book closing date is used as theappraisal date and the appraisal value is calculated by Daiwa Real Estate Appraisal Co., Ltd.
*4. Incidental expenses arising from acquisitions are not included in the acquisition price.
*5. Residential portions are not included in the total number of tenants, the occupancy rate or the leasable floor area for Kitanomaru
Square, Nibancho Garden, Akasaka Park Building or Nishiki Park Building. The residential portions for these properties are as
follows: Kitanomaru Square, leasable floor area: 11,694m 2, occupancy rate: 96.3%; Nibancho Garden, leasable floor area: 1,686m 2,
occupancy rate: 100.0%; Akasaka Park Building, leasable floor area: 10,780m2, occupancy rate: 89.2%; Nishiki Park Building,leasable floor area: 954m2, occupancy rate: 83.6%.
*6. Appraisal values by Japan Real Estate Institute.
*7. This includes the acquisition price of the land and building adjacent to JRE Ginza 3Chome East Building dated July 4, 2008, thecost of the adjacent building’s demolition and the total expense of the construction and expansion of the Ryoshin Ginza East Mirror
Building (excluding brokerage fees and other acquisition-related expenses) after its completion on May 24, 2010.
*8. Appraisal values by Chuo Real Estate Appraisal Co., Ltd.
*9. Accompanying the acquisition of Tokyo Opera City Building on September 13, 2005, the Company acquired 33 shares of Tokyo
Opera City Building Co., Ltd. (the business that maintains, services and operates the building) at a total acquisition price of 2,797
thousand yen and inherited the 874 thousand yen deposit made to Tokyo Opera City Building Co., Ltd. by the seller. In an additional
acquisition, on March 24, 2010, the Company acquired 91 shares of Tokyo Opera City Building Co., Ltd. at a total acquisition priceof 7,539 thousand yen. Concurrently, the Company acquired 4,931 shares of Tokyo Opera City Heat Supply Co., Ltd. (the supplierof heat to the building) at a total acquisition price of 566,831 thousand yen, inheriting the 2,360 thousand yen deposit made toTokyo Opera City Building Co., Ltd. by the seller.
Regarding the appraisal value at the end of the fiscal period of the above-mentioned shares, the 124 shares of Tokyo Opera City
Building Co., Ltd. are valued at 10,336 thousand yen and the 4,931 shares of Tokyo Opera City Heat Supply Co., Ltd. are valued
at 566,831 thousand yen.
*10. Because the building was disposed on August 23, 2013, the acquisition price of the building at the time of the land and building
31

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

purchase dated March 24, 2004, has been deducted.
*11. This is the acquisition price dated October 9, 2003, and includes a portion of the site disposed of and a portion of the extinguishedeasement related to the site (liquidation cost, 615 million yen) thereafter.
*12. Because the building portion of Shibuya Cross Tower (land with leasehold interest) was disposed on January 18, 2018, no total
number of tenants, leasable floor area or occupancy rate are provided. Furthermore, the 5,153 m2 portion of land still held is being
rented to the transferee of the building, Mitsubishi Estate Co., Ltd.
*13. Because the building was disposed on January 18, 2018, the acquisition price of the building at the time of the land and building
purchase dated November 30, 2001, has been deducted.
*14. On acquiring Osaki Front Tower, the Company inherited the land renter’s lease deposit of 1,040,000 thousand yen held by the sellerof the building. The value of the lease deposit was appraised at the end of the fiscal period and remained unchanged.
*15. The name of the property was changed from Ikebukuro 2Chome Building on July 1, 2022.
*16. On acquiring Nishiki Park Building on October 2, 2006, the Company inherited the 9,000 thousand yen lease deposit made by theland renters held by the seller of the building.
*17 Accompanying the acquisitions of GRAND FRONT OSAKA (North Building) and GRAND FRONT OSAKA (Umekita Plaza andSouth Building) on October 1, 2021, the Company acquired 1,666 shares of KMO Corporation (planning and management business
related to the "Knowledge Capital" facility) at a total acquisition price of 83,300 thousand yen, a right to claim a refund of funds
related to Knowledge Capital Association (planning and management business related to the "Knowledge Capital" facility) at a totalacquisition price of 4,900 thousand yen, and a right to claim a refund of funds related to GRAND FRONT OSAKA TMO General
Incorporated Association (business related to regional revitalization, etc.) at an acquisition price of 490 thousand yen.
Regarding the appraisal values at the end of the fiscal period for the above-mentioned shares and the rights to claim a refund offunds, the 1,666 shares of KMO Corporation were valued at 83,300 thousand yen, the right to claim a refund of funds related toKnowledge Capital Association was valued at 4,900 thousand yen, and the right to claim a refund of funds related to GRANDFRONT OSAKA TMO General Incorporated Association was valued at 490 thousand yen.
*18. Trust assets of the trust beneficiary right acquired by the Company include a claim for 500,000 thousand yen of deposit for
construction to connect to underground shopping centers given to Osaka Shigaichi Kaihatsu Co., Ltd., which was held by theprevious owner.
*19. Because the retail units were disposed on September 28, 2018, the acquisition price of the retail units at the time of the land andbuilding purchase dated February 1, 2006, has been deducted.
*20. In the above quick reference guide, if the real estate or other assets are classified as shared ownership or compartmental ownership,
only the real estate or other assets owned by the Company are presented and the portions owned by the other shared owners orcompartmental owners are excluded.

32

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

ii) Breakdown of property-related revenues and expenses for real estate and other assets included in the Company's holdings
The table below is a quick reference guide outlining the revenues and expenses on each real estate and other asset for the
September 2022 period (April 1, 2022 – September 30, 2022). Furthermore, the income summary is presented based on thepreviously mentioned “Summary of Significant Accounting Policies”.
(Millions of Yen)
Revenues / Expenses (April 1, 2022 – September 30, 2022)
Property- Propertyrelated related
revenues expenses

Property and other
taxes

Repairing expenses

Depreciation
①

137

82

98

1

44

259

0

1,062

1,321

55

1,265

219

91

16

15

22

0

6

29

-

128

158

67

91

118

43

2

-

18

0

2

19

-

75

95

16

78

335

270

46

51

69

0

0

101

0

64

166

-

166

191

95

8

14

34

0

0

37

0

96

134

-

134

492

215

61

30

58

0

7

57

-

276

333

5

328

986

372

59

55

166

0

2

84

2

614

698

3

695

162

57

-

-

15

0

8

33

-

104

138

-

138

859

443

100

60

128

0

90

63

-

416

479

2

477

280

128

32

22

51

0

-

21

-

151

173

-

173

403

139

23

19

41

0

0

53

0

263

317

5

311

138

58

10

11

12

0

2

21

-

79

100

-

100

158

41

-

-

12

0

6

23

-

116

140

6

133

191

87

14

10

11

0

3

47

-

103

151

-

151

400

164

26

16

93

0

3

24

0

235

260

1

258

164

89

13

11

17

0

6

40

-

74

115

36

79

1,141

517

87

45

82

1

2

296

0

624

921

19

902

199

102

25

18

16

0

-

41

0

97

138

-

138

2,161

1,246

238

252

276

3

48

424

1

915

1,340

88

1,251

209

86

14

11

34

0

2

23

0

123

146

-

146

117

42

10

7

7

0

4

12

-

74

87

-

87

Shiodome Building

1,984

953

195

127

201

1

12

413

2

1,030

1,444

59

1,385

JRE Shiba 2Chome
Daimon Building

316

163

34

22

42

0

4

60

0

152

213

23

190

Harumi Center
Building*2
Akasaka Park
Building
JRE Aoyama
Crystal Building
Clover Shiba-koen

33

Other expenses

Utilities expenses

623

Kitanomaru Square
JRE KandaOgawamachi
Building
Kandabashi Park
Building
Otemachi Financial
City North Tower
Otemachi Park
Building
Nibancho Garden
Mitsubishi UFJ
Trust and Banking
Building
Burex Kojimachi
Building
Sanno Grand
Building
Yurakucho Denki
Building
Front Place
Nihonbashi
JRE Kayabacho
2ChomeBuilding
Burex Kyobashi
Building
JRE Ginza 1Chome
East Building
Ginza Sanwa
Building
JRE Ginza
3ChomeBuilding
Harumi Front

Casualty insurance

Property management
expenses

PropertyNOI
Capitalrelated ③(①+②)
expend- NCF
profits
itures ③－④
②
② (
④*1
①
①

1,685

Name of property

+
②
)

③

－
④

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Millions of Yen)
Revenues / Expenses (April 1, 2022 – September 30, 2022)
Property- Propertyrelated related
revenues expenses

Other expenses

Depreciation①

Repairing expenses

Casualty insurance

Property and othertaxes

Utilities expenses

Property management
expensesName of property

CapitalPropertyexpendNOI
related
NCF
ituresprofits ③(①+②)④*1 ③－④
②
② (
① ④
①
+
②
)

JRE Cosmo
Kanasugibashi
Building

117

51

12

7

14

0

3

14

-

66

80

-

80

Seavans S Building

220

136

34

31

20

0

9

39

0

84

124

16

108

167

65

11

8

14

0

1

29

0

102

131

4

127

1,653

703

131

139

123

1

19

286

1

949

1,235

13

1,222

688

414

91

50

86

1

12

171

1

274

445

66

378

246

96

18

15

21

0

0

39

-

150

189

6

182

1,525

1,068

*3

*3

*3

*3

*3

457

*3

40

*3

198

84

15

10

26

0

0

30

0

114

144

2

142

587

272

44

33

60

0

-

132

0

315

447

-

447

310

122

24

22

26

0

9

39

-

188

228

31

197

187

61

10

8

21

0

5

16

-

125

142

-

142

232

190

39

22

63

0

15

49

-

42

91

3

88

542

90

-

-

90

-

-

-

-

452

452

-

452

483

254

50

19

38

1

41

101

-

228

330

179

151

662

365

69

43

38

1

20

192

-

297

490

26

463

Tamachi Front
Building
Shinjuku Eastside
SquareShinjuku Front
Tower
JRE NishiShinjuku Terrace
Tokyo Opera City
Building*3
Front PlaceMinami- Shinjuku
Link Square
Shinjuku
JRE Yoyogi
1Chome Building
JRE Jingumae
Terrace
JRE Jingumae
Media Square
Building
Shibuya Cross
Tower(Land)
Ebisu Neonato
TIXTOWER
UENO
Toyosu Front

*3

*3

715

299

69

50

-

1

1

176

0

415

592

-

592

JRE Higashi
Gotanda 1Chome
Building

197

90

13

22

15

0

14

24

0

107

132

2

129

Osaki Front Tower

727

415

66

51

25

0

10

164

96

312

476

0

475

JRE Omori-Eki
Higashiguchi
Building

242

158

30

21

26

0

40

40

0

83

124

69

54

Harmony Tower

499

163

43

-

57

0

12

50

-

335

385

2

383

70

30

7

5

5

0

2

9

0

39

48

-

48

186

76

19

12

16

0

1

26

-

110

136

21

114

236

122

51

2

26

0

4

36

0

114

150

2

148

JRE Ikebukuro
2Chome Building
JRE MinamiIkebukuro
Building
Hachioji First
Square

34

*
2

③

－
④

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Millions of Yen)
Revenues / Expenses (April 1, 2022 – September 30, 2022)
Property- Propertyrelated related
revenues expenses

Property and other
taxes

54

13

10

9

0

2

18

-

74

92

18

74

MM Park Building

1,192

624

131

184

81

1

45

177

1

568

746

44

701

Queen’s Tower A

1,018

694

204

103

116

2

10

249

7

323

573

102

470

168

68

22

1

12

0

3

27

0

99

127

4

123

377

168

33

57

23

0

15

38

-

208

247

31

215

66

41

9

7

7

0

5

12

-

24

36

-

36

608

269

68

53

42

0

2

101

-

339

440

8

432

142

68

16

13

17

0

2

18

-

73

92

17

75

703

357

89

54

66

0

21

124

0

346

470

24

446

79

52

12

5

6

0

2

25

-

26

52

6

45

470

350

100

41

67

1

55

83

0

120

204

90

113

141

89

18

15

9

0

4

40

-

52

92

-

92

284

183

56

27

25

0

6

60

6

101

161

13

148

448

169

37

41

36

0

5

48

-

279

327

13

314

585

394

92

57

68

0

19

155

0

191

346

4

342

211

105

28

16

11

0

3

45

0

106

151

2

149

*4

*4

*4

*4

*4

*4

*4

*4

*4

84

144

10

133

*4

*4

*4

*4

*4

*4

*4

*4

*4

144

201

6

194

477

230

54

31

53

0

6

83

-

247

330

17

313

741

525

107

76

77

1

9

252

-

216

469

23

446

260

144

43

33

36

0

5

25

-

115

141

16

125

570

306

64

53

78

0

12

96

0

263

360

11

348

407

252

65

31

26

0

23

105

0

155

260

6

253

JRE
Sakaisujihonmachi
Building
JRE Midosuji
Daiwa Building
JRE Amagasaki
Front Building

35

Depreciation①

JRE Dojima Tower

Casualty insurance

Musashi Kosugi
STM Building
8･3 Square Kita
Building
Jozenji Park
Building
JRE Higashi
Nibancho Square
JRE Sendai
Honcho Honma
Building
AER
Daido Seimei
Niigata Building
Kanazawa Park
Building
JRE Kanazawa
Kamitsutsumicho
Building
Nishiki Park
Building
JRE Nagoya
Hirokoji Place
Nagoya Hirokoji
Building
JRE Shijo
Karasuma Center
Building
GRAND FRONTOSAKA(North
Building)*4
GRAND FRONTOSAKA(Umekita
Plaza and South
Building)*4
JRE Umeda Square
Building

Other expenses

Utilities expenses

128

Repairing expenses

Property management
expenses

Property- NOI
Capitalrelated③(①+②) expend- NCF
profits③－④
itures
①
②
④*1 (
①
①

JRE Saitama
Urawa Building

Name of property

+
②
)

②

－
④

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Millions of Yen)
Revenues / Expenses (April 1, 2022 – September 30, 2022)
Property- Propertyrelated related
revenues expenses

22

16

1

13

31

-

124

156

-

156

258

201

49

28

24

0

9

63

26

56

119

19

100

101

48

12

6

7

0

7

13

0

53

66

-

66

167

135

23

19

19

0

9

64

0

31

96

22

73

207

84

32

16

15

0

1

19

0

122

141

13

128

①

Casualty insurance

NHK Hiroshima
Broadcasting
Center Building
JRE Tenjin
3Chome Building
JRE Tenjin Crystal
Building
Hinode Tenjin
Building

Other expenses

Property and other
taxes

29

Depreciation

Utilities expenses

115

Repairing expenses

Property management
expenses

Lit City Building

Property- NOI
Capitalrelated③(①+②) expend- NCF
profits③－④
itures
③
②
④*1 (
②
①

240

Name of property

+
②
)

Total
34,289 17,480 3,836 2,760 3,521
48
849 6,275
187 16,808
23,084
1,411 21,672*1. Construction expenses that correspond to capital expenditures incurred during the period under review are listed under capital
expenditures. This does not include expenses capitalized as construction in progress, expenses capitalized as furniture, etc., or such
expenses included in the book value as brokerage fees for acquiring real estate or other assets, real estate acquisition taxes or otheracquisition-related expenses.
*2. Harumi Center Building has been disposed of as of May 31, 2022.
*3. Disclosure of NOI and NCF in the breakdown of the expenses of the property leasing business for Tokyo Opera City Building has
been withheld at the request of the joint owners of the relevant real estate.
*4. The Property-related revenues and expenses (including breakdown) of Grand Front Osaka (North Building) and Grand Front Osaka(Umekita Plaza and South Building) have been refrained from disclosure as the consent of the co-owners, etc. has not been obtained.
c. Condition of Other Assets(i) Shares/Investment Securities
Acquisition price(¥ thousand)Appraisal value(¥ thousand)Unit priceAmountUnit priceAmountValuation
gain/loss(¥ thousand)

124

83

10,336

83

10,336

－

*

4,931

114

566,831114

566,831－*

KMO Corporation

1,666

50

83,30050

83,300

－

*

Total

－

－

660,468－

660,468

－

－

Notes

AmountValuation
gain/loss(¥ thousand)

4,900

－

*

Securities
Tokyo Opera City
Building Co., Ltd.
Tokyo Opera City Heat
Supply Co., Ltd.

Number ofsharesNotes* Appraisal value for relevant non-listed stock are defined as acquisition costs.
(ii) Securities Other Than Shares/Investment Securities
Acquisition price(¥ thousand)Specified asset type
Quantity
Unit priceAmountAppraisal value(¥ thousand)Unit price

Right to claim
－
－
1
4,900
a refund of funds* Appraisal value for the right to claim a refund of funds is defined as an acquisition cost.

36

④

－
④

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(iii) Other Specified Assets
Specified asset type
Monetary claim（Guarantee deposits）
Right to claima refund of funds
Monetary claim(Operating accounts
receivable)
Total

Appraisal value(¥ thousand)Unit priceAmountUnit priceAmountValuation
gain/loss(¥ thousand)1

1,040,000

1,040,000

1,040,000

1,040,000

－

－

1

－

490

－

490

－

*

1

5,024

5,024

5,024

5,024

－

－

－

－

1,045,514－

1,045,514－－

Book value (¥ thousand)
Quantity

Notes* Appraisal value for the right to claim a refund of funds is defined as an acquisition cost.
Trust beneficiary rights, mainly consisted of the trust asset of real estate, are included in the previous section b. “Real Estate Investment
Property and Trust Beneficiary Rights in Trust of Real Estate”.

37

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

d. Capital Expenditures(i) Schedule for Capital Expenditures
The significant scheduled capital expenditures, such as current plans for repair, maintenance and renovation work on existing
properties, are listed below.
The following scheduled capital expenditures include those accounted for as expenses.
Estimated cost (¥ million)
Name of property(Location)

PurposeScheduled period

Burex Kyobashi Building(Chuo-ku, Tokyo)

Upgrade of
air conditioning
facilities

JRE Umeda Square Building(Osaka, Osaka Prefecture)TotalamountPayment amountfor the fiscal underreview period

Total amountalready paid

From September 2022
To May 2023

196

－

－

Upgrade ofelectricalequipment

From June 2022
To September 2023

194

－

－

Elevator renewal
construction

From June 2022
To March 2023

149

－

－

Upgrade of
air conditioning
facilities

From April 2022
To March 2023

146

－

－

Construction work

From October 2022
To March 2023

104

－

－

From June 2021
To November 2022

80

－

－

(Hiroshima, Hiroshima Prefecture)

Upgrade of
air conditioning
facilities

JRE Omori-Eki Higashiguchi
Building(Ota-ku, Tokyo)

Upgrade of
air conditioning
facilities

From October 2022
To March 2023

61

－

－

Kanazawa Park Building

Elevator renewal
construction

From April 2022
To December 2022

55

－

－

Elevator renewal
construction

From February 2023
To March 2023

19

－

－

NHK Hiroshima
Broadcasting Center Building(Hiroshima, Hiroshima Prefecture)

Kanazawa Park Building(Kanazawa, Ishikawa Prefecture)

Kanazawa Park Building(Kanazawa, Ishikawa Prefecture)

NHK Hiroshima
Broadcasting Center Building(Kanazawa, Ishikawa Prefecture)

Daido Seimei
Niigata Building(Niigata, Niigata Prefecture)(ii) Capital expenditures during the period under review
For acquired real estate and other assets, capital expenditures incurred in the period under review totaled ¥1,411 million and repair,maintenance and renovation expenses classified as expenses in the period under review totaled ¥849 million, for a total of ¥2,261
million worth of construction that has been carried out.
The major item in the capital expenditure was the upgrade of air conditioning facilities of Ebisu Neonato.
Name of property(Location)
Ebisu Neonato(Shibuya-ku, Tokyo)

JRE Omori-Eki Higashiguchi
Building(Ota-ku, Tokyo)

Expenditures forconstruction (¥ million)

Purpose

PeriodUpgrade of
air conditioning facilities

From June 2021
To August 2022

167

Upgrade of
air conditioning facilities

From April 2022
To September 2022

61

Other real estate

1,182

Total

1,411
38

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(iii) Money Saved for Long-term Repair Plans“Not applicable”

39

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

e. Expenses and Liabilities(i) Details on Operation-related Expenses
Item

For the period
from October 1, 2021
to March 31, 2022

For the period
from April 1, 2022
to September 30, 2022(a) Asset management fees *1(breakdown) NOI-linked fee
Distribution-linked fee I *2
Distribution-linked fee II*2

¥1,541,945 thousand¥962,819 thousand¥414,329 thousand¥164,797 thousand¥1,718,962 thousand¥923,364 thousand¥374,944 thousand¥420,653 thousand(b) Asset custody fees

¥64,774 thousand¥64,634 thousand(c) Administrative service fees

¥134,403 thousand¥136,484 thousand(d) Directors’ compensations¥7,800 thousand¥7,800 thousand(e) Commission expenses¥122,766 thousand¥83,339 thousand(f) Other operating expenses¥83,716 thousand¥120,248 thousand¥1,955,406 thousand¥2,131,469 thousand

Total*1 In addition to the asset management fees listed above, in the case that a property is acquired, an “acquisition fee” is included in theacquisition cost of the property and paid to the asset management company. In the case that a property is sold, a “disposition fee” isincluded in the loss on sale and paid to the asset management company. These fees are calculated by multiplying the buying/selling
price of the property by a fee rate. In the period ended March 31, 2022, the acquisition fee amounted to ¥264,400 thousand, and thedisposition fee amounted to ¥13,145 thousand, and in the period September 30, 2022, the disposition fee amounted to ¥103,737
thousand.
*2 The Company set up “Distribution-linked fee I”, which is mainly linked to leasing business profit, which is a distributable resource ofa regular nature, and “Distribution-linked fee II”, which is linked to gains on the sale of real estate (the positive value after taking into
account the gains and losses on the sale of real estate), which is a distributable resource of a transient nature.

40

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(ii) Borrowings
The condition of loans by financial institutions as of September 30, 2022 is as follows.
Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

Balance at
end ofcurrent period(¥thousand)Averageinterest
rate *1(%)

Repayment
date

Sumitomo Mitsui
Trust Bank, Limited

April 20,2021

2,000,000―

0.1254

April 20,2022

MUFG Bank, Ltd. *3

February 18,
2022

11,000,000―

0.10727

May 18,2022

MUFG Bank, Ltd. *4

May 18,2022――

0.10727

August 18,
2022

MUFG Bank, Ltd. *5

August 18,
2022―

11,000,000

0.10364

November 18,
2022

MUFG Bank, Ltd.

November 30,
2021

3,200,000

3,200,000

0.11739

November 30,
2022

MUFG Bank, Ltd.

March 29,2022

15,000,000―

0.11995

March 29,2023
*6Mizuho Bank, Ltd.

March 29,2022

10,000,000―

0.1199March 29,2023
*7

Sumitomo Mitsui
Trust Bank, Limited

April 20,2022―

2,000,000

0.11987

April 20,2023

Mizuho Bank, Ltd.

April 25,
2022

―

―

0.11758

April 25,2023
*8

MUFG Bank, Ltd.

June 15,
2022

―

―

0.12182

June 15,2023*9Shinsei Bank,
LimitedJune 15,2022―

2,500,000

0.12205

June 15,2023

MUFG Bank, Ltd.

July 15,
2022

―

―

0.12383

July 10,2023*10Mizuho Bank, Ltd.

July 25,2022―

3,000,000

0.12127

July 10,2023

41,200,000

21,700 ,000

Classification
LenderShort-term borrowings

SubtotalLong-term borrowings

Mizuho Bank, Ltd.

April 24,2013

3,000,000―

0.87375

April 25,2022

MUFG Bank, Ltd.

June 15,2012

4,000,000―

1.1975June 15,2022

MUFG Bank, Ltd.

June 15,2012

2,500,000―

1.2725June 15,2022

Shinsei Bank,
LimitedJune 15,2012

2,500,000―

1.2725June 15,
2022

The
Norinchukin Bank

June 17,2014

3,000,000―

0.6785June 17,2022

1,000,000―

The Gunma
Bank, Ltd.
The Shinkumi
Federation Bank

1,000,000―

Daishi Hokuetsu
Bank, Ltd.

1,000,000―

1,000,000―

The Toho Bank, Ltd.

1,000,000―

The Fukui Bank, Ltd.

1,000,000―

The Tochigi
Bank, Ltd.

500,000―

The Chugoku
Bank, Limited

August 10,2015

0.3925

41

August 10,
2022

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedBullet*2

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

Balance at
end ofcurrent period(¥thousand)Averageinterest
rate *1(%)

Repayment
date

MUFG Bank, Ltd.

September 1,
2015

2,000,000―

0.47125

September 1,
2022

The Hachijuni
Bank, Ltd.

December 20,
2017

1,000,000

1,000,000

0.1863Development Bankof Japan Inc.

January 7,
2013

3,000,000

3,000,000

1.115

Daishi Hokuetsu
Bank, Ltd.

January 7,
2016

1,500,000

1,500,000

0.2802The 77 Bank, Ltd.

January 10,
2018

1,000,000

1,000,000

0.205

The Hachijuni
Bank, Ltd.

January 15,
2016

1,000,000

1,000,000

0.265

The Iyo Bank, Ltd.

January 15,
2016

1,000,000

1,000,000

0.265

Sumitomo Mitsui
Trust Bank, Limited

January 17,
2018

3,000,000

3,000,000

0.210

Development Bankof Japan Inc.

January 31,
2014

5,000,000

5,000,000

0.9325The Yamaguchi
Bank, Ltd.

March 25,2013

1,000,000

1,000,000

0.945

The Bank ofFukuoka, Ltd.

March 24,2015

2,000,000

2,000,000

0.5125The
Norinchukin Bank

March 25,2015

3,500,000

3,500,000

0.46825

The Chugoku
Bank, Limited

March 26,2018

2,000,000

2,000,000

0.1988

Sumitomo Mitsui
Banking Corporation

November 29,
2018

3,000,000

3,000,000

0.1694

Sumitomo Mitsui
Trust Bank, Limited

November 29,
2018

3,000,000

3,000,000

0.1694

MUFG Bank, Ltd.

June 1,
2017

12,000,000

12,000,000

0.0415*12 *13

The Chugoku
Bank, Limited

June 15,2015

3,000,000

3,000,000

0.61175

The Bank ofFukuoka, Ltd.

June 15,2017

2,500,000

2,500,000

0.2388MUFG Bank, Ltd.

December 19,
2014

10,000,000

10,000,000

0.42375*14

December 19,
2023

MUFG Bank, Ltd.

March 26,2018

5,000,000

5,000,000

0.07985*12 *15

March 26,
2024

The Hachijuni
Bank, Ltd.

March 26,2018

1,000,000

1,000,000

0.2338March 26,2024

Sumitomo Mitsui
Trust Bank, Limited

May 29,2019

5,000,000

5,000,000

0.075

May 29,2024

The Iyo Bank, Ltd.

June 15,2017

2,500,000

2,500,000

0.275

June 17,2024

The Hachijuni
Bank, Ltd.

June 15,2017

1,000,000

1,000,000

0.275

June 17,2024

MUFG Bank, Ltd.

September 1,
2015

3,500,000

3,500,000

0.630

September 2,
2024

Sumitomo Mitsui
Trust Bank, Limited

September 2,
2015

3,800,000

3,800,000

0.536

September 2,
2024

Classification
LenderLong-term borrowings

42

December 20,
2022*11
January 6,
2023*11
January 10,
2023*11January 10,
2023*11January 16,
2023*11January 16,
2023*11January 17,
2023*11January 31,
2023*11
March 24,2023
*11
March 24,2023
*11
March 27,2023
*11
March 27,2023
*11
May 29,2023*11May 29,2023*11June 1,2023*11
June 15,2023*11
June 15,2023*11

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

Balance at
end ofcurrent period(¥thousand)Averageinterest
rate *1(%)

Repayment
date

The
Norinchukin Bank

September 1,
2017

5,000,000

5,000,000

0.240

September 2,
2024

Sumitomo Mitsui
Trust Bank, Limited

September 26,
2019

5,500,000

5,500,000

0.105

September 26,
2024

Taiyo Life Insurance
Company

October 1,
2014

2,000,000

2,000,000

0.7825October 1,
2024

Mizuho Bank, Ltd.

October 1,
2015

2,500,000

2,500,000

0.5575October 1,
2024

The Gunma
Bank, Ltd.

November 18,
2019

1,000,000

1,000,000

0.11642*12

November 18,
2024

MUFG Bank, Ltd.

June 1,
2018

10,000,000

10,000,000

0.2544

December 2,
2024

Shinkin Central Bank

January 7,
2020

2,000,000

2,000,000

0.2075January 7,
2025

The Ashikaga
Bank, Ltd.

January 9,
2018

1,000,000

1,000,000

0.285January 9,2025

Mizuho Trust &Banking Co., Ltd.

March 2,2015

3,000,000

3,000,000

0.5585

March 3,2025

MUFG Bank, Ltd.

March 26,2018

2,000,000

2,000,000

0.2725

March 26,2025

Development Bankof Japan Inc.

March 30,2017

5,000,000

5,000,000

0.315

March 31,2025

Classification
LenderLong-term borrowings

Taiyo Life Insurance
Company

May 29,2015

1,500,000

1,500,000

0.7375

May 29,2025

Sumitomo Mitsui
Trust Bank, Limited

June 15,2020

7,000,000

7,000,000

0.2075June 16,2025

Sumitomo Mitsui
Banking Corporation

July 20,2021

5,000,000

5,000,000

0.15375

July 22,2025

Sumitomo Mitsui
Trust Bank, Limited

August 31,
2018

3,000,000

3,000,000

0.320

August 29,
2025

Development Bankof Japan Inc.

September 1,
2015

7,000,000

7,000,000

0.7175September 1,
2025

Sumitomo Mitsui
Trust Bank, Limited

September 23,
2020

5,000,000

5,000,000

0.1475September 24,
2025

Mizuho Bank, Ltd.

December 26,
2016

5,000,000

5,000,000

0.3625

December 26,
2025

Sumitomo Mitsui
Trust Bank, Limited

January 29,
2021

2,000,000

2,000,000

0.1625January 29,
2026

MUFG Bank, Ltd.

February 26,
2018

6,500,000

6,500,000

0.3413February 26,
2026

Mizuho Bank, Ltd.

March 27,2018

5,500,000

5,500,000

0.300

March 27,2026

Shinkin Central Bank

March 30,2017

5,000,000

5,000,000

0.360

March 30,
2026

43

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

Balance at
end ofcurrent period(¥thousand)Averageinterest
rate *1(%)

Repayment
date

Sumitomo Mitsui
Trust Bank, Limited

June 28,2021

3,700,000

3,700,000

0.17875

June 29,
2026

The
Norinchukin Bank

January 23,
20194,000,000

4,000,000

0.1988July 23,2026

Shinkin Central Bank

September 1,
2017

5,000,000

5,000,000

0.3188September 1,
2026

MUFG Bank, Ltd.

October 31,
2016

3,000,000

3,000,000

0.240

October 30,
2026

Mizuho Bank, Ltd.

December 21,
2016

5,000,000

5,000,000

0.415

December 21,
2026

Shinkin Central Bank

January 23,
20195,000,000

5,000,000

0.2213January 25,
2027

Shinkin Central Bank

April 24,2018

6,000,000

6,000,000

0.3675

April 26,
2027

The
Norinchukin Bank

July 3,2020

2,000,000

2,000,000

0.24375

July 5,2027

The Joyo Bank, Ltd.

January 9,
2018

1,000,000

1,000,000

0.4188January 11,2028

Sumitomo Mitsui
Banking Corporation

January 19,
2018

3,000,000

3,000,000

0.4338January 19,
2028

The Bank ofFukuoka, Ltd.

January 29,
2021

2,500,000

2,500,000

0.21875

January 31,
2028

Mizuho Bank, Ltd.

March 30,2018

4,000,000

4,000,000

0.3963

March 30,2028

MUFG Bank, Ltd.

March 30,2018

4,000,000

4,000,000

0.3963

March 30,
2028

Taiyo Life Insurance
Company

March 30,2018

1,000,000

1,000,000

0.3963

March 30,
2028

The Bank ofFukuoka, Ltd.

August 31,
2021

1,500,000

1,500,000

0.20625

August 31,
2028

Mizuho Bank, Ltd.

November 15,
2019

8,500,000

8,500,000

0.34875

November 15,
2028

The Nishi-Nippon
City Bank, Ltd.

December 17,
2021

1,000,000

1,000,000

0.27875

December 18,
2028

Shinkin Central Bank

January 15,
2020

5,000,000

5,000,000

0.325

January 15,2029

Mizuho Bank, Ltd.

November 1,
2019

6,000,000

6,000,000

0.35125

November 1,
2029

MUFG Bank, Ltd.

January 15,
2020

5,500,000

5,500,000

0.3625January 15,
2030

MUFG Bank, Ltd.

April 27,2020

5,000,000

5,000,000

0.35875

April 26,
2030

Classification
LenderLong-term borrowings

44

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

Balance at
end ofcurrent period(¥thousand)Averageinterest
rate *1(%)

Repayment
date

Mizuho Bank, Ltd.

April 27,2020

5,000,000

5,000,000

0.35875

April 26,2030

MUFG Bank, Ltd.

June 15,2020

4,000,000

4,000,000

0.36125

June 14,2030

MUFG Bank, Ltd.

October 20,
2020

5,000,000

5,000,000

0.2925October 18,
2030

MUFG Bank, Ltd.

December 21,
2020

10,000,000

10,000,000

0.2825

December 20,
2030

The Iyo Bank, Ltd.

March 24,2021

2,000,000

2,000,000

0.16719*12

March 24,
2031

The Yamanashi Chuo
Bank, Ltd.

March 26,2019

2,000,000

2,000,000

0.3688March 26,
2031

MUFG Bank, Ltd.

April 5,2021

5,000,000

5,000,000

0.41875

April 4,2031

MUFG Bank, Ltd.

April 26,2021

5,000,000

5,000,000

0.35625

April 25,
2031

Mizuho Bank, Ltd.

June 15,2021

4,000,000

4,000,000

0.28875

June 16,
2031

The
Norinchukin Bank
*16

January 29,
2021

5,000,000

5,000,000

0.34625

July 31,
2031

The Chugoku
Bank, Limited

October 1,
2021

1,000,000

1,000,000

0.345

October 1,
2031

The
Norinchukin Bank
*17

November 15,
2021

5,000,000

5,000,000

0.395

November 17,
2031

Shinkin Central Bank

November 15,
2021

5,000,000

5,000,000

0.405

November 17,
2031

Daishi Hokuetsu
Bank, Ltd.

November 15,
2021

3,200,000

3,200,000

0.395

November 17,
2031

The Chugoku
Bank, Limited

November 15,
2021

1,000,000

1,000,000

0.405

November 17,
2031

The 77 Bank, Ltd.

November 15,
2021

1,000,000

1,000,000

0.395

November 17,
2031

The Hachijuni
Bank, Ltd.

November 15,
2021

1,000,000

1,000,000

0.16636*12

November 17,
2031

The Nishi-Nippon
City Bank, Ltd.

December 17,
2021

1,000,000

1,000,000

0.37375

December 17,
2031

Sumitomo Mitsui
Banking Corporation

January 7,
2022

2,000,000

2,000,000

0.415January 7,
2032

Mizuho Bank, Ltd.

January 17,
2022

5,000,000

5,000,000

0.4475January 19,
2032

The
Norinchukin Bank
*18

January 29,
2021

5,000,000

5,000,000

0.3675January 30,
2032

The
Norinchukin Bank

January 31,
2022

3,500,000

3,500,000

0.4725January 30,
2032

The Shiga Bank, Ltd.

February 21,
2022

3,000,000

3,000,000

0.440

February 24,
2032

Classification
LenderLong-term borrowings

45

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

Balance at
end ofcurrent period(¥thousand)Averageinterest
rate *1(%)

Repayment
date

The Chugoku
Bank, Limited

February 21,
2022

1,000,000

1,000,000

0.440

February 24,
2032

The Gunma
Bank, Ltd.

February 21,
2022

1,000,000

1,000,000

0.440

February 24,
2032

The Chugoku
Bank, Limited

June 15,2022―

1,000,000

0.57375

June 15,2032

The 77 Bank, Ltd.

June 15,2022―

1,000,000

0.57375

June 15,
2032

The
Norinchukin Bank
*19

June 17,2022―

3,000,000

0.61625

June 17,2032―

3,000,000―

1,000,000
0.37875

August 10,
2032

Classification
LenderThe Shinkumi
Federation Bank

Long-term borrowings

The Toho Bank, Ltd.
August 10,
2022
The Keiyo Bank, Ltd.

―

1,000,000

The Tochigi
Bank, Ltd.

―

500,000

Daishi Hokuetsu
Bank, Ltd.

August 10,2022―

2,000,000

0.39875

August 10,
2032

The Chugoku
Bank, Limited

August 10,2022―

1,000,000

0.39875

August 10,2032

MUFG Bank, Ltd.

September 9,2022―

2,000,000

0.555

September 9,
2032

The Nishi-Nippon
City Bank, Ltd.

September 12,
2022―

1,000,000

0.5475September 13,
2032

Sumitomo Life
Insurance Company

March 26,2019

1,000,000

1,000,000

0.505

March 27,2034

Sumitomo Life
Insurance Company

December 16,
2019

2,000,000

2,000,000

0.490

December 18,
2034

365,700,000

358,700,000

406,900,000

380,400,000

Subtotal
Total

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
Unsubordinated

The average for floating interest rates is recorded as the weighted average during the period. The average is rounded off to thefifth decimal place. The weighted average for interest rates of loans for which floating interest rates were swapped to fixed rates
in order to hedge the risk of interest rate fluctuations is calculated taking the effect of this swap into consideration.
*2. The purposes of executing these loans are to purchase real properties or beneficiary right of real estate in trust, to repay existingloans, and to fund the redemption of investment corporation bonds.
*3. As of February 18, 2022, MUFG Bank, Ltd. transferred its loan receivable of ¥10,600 million to Mitsubishi UFJ Trust and Banking
Corporation.
*4. As of May 18, 2022, MUFG Bank, Ltd. transferred its loan receivable of ¥10,800 million to Mitsubishi UFJ Trust and Banking
Corporation.
*5. As of August 18, 2022, MUFG Bank, Ltd. transferred its loan receivable of ¥6,800 million to Mitsubishi UFJ Trust and Banking
Corporation.
*6. The Company made a full repayment (¥15,000 million) before maturity on May 31, 2022.
*7. The Company made a full repayment (¥10,000 million) before maturity on May 31, 2022.
*8. The Company made a full repayment (¥3,000 million) before maturity on July 25, 2022.
*9. The Company made a full repayment (¥4,500 million) before maturity on July 15, 2022.
*10. The Company made a repayment (¥3,000 million) before maturity on August 10, 2022, and made a repayment for the remaining(¥1,500 million) before maturity on September 12, 2022.
*11. At the end of the period under review, these loans are accounted for under current liabilities on the balance sheets as the current
portion of long-term borrowings.
*1.

46

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）*12. These are floating rate borrowings which are not swapped into fixed rates.
*13. The loan was based on floating rate (Base rate (Risk free rate (TONA) compounded in arrears over rate observation period (1 month)according to the lookback method + spread adjustment (-0.02923%)) + 0.09%).
*14. In order to hedge the risk of exchange rate and interest rate fluctuations related to foreign currency-denominated loans, theCompany conducted an interest-rate and currency swap transaction, which substantially secured exchange and interest rates.
Accordingly, the balance and the weighted average for interest rates during the period are calculated taking the effect of thisinterest-rate and currency swap into consideration.
*15. The loan was based on floating rate (Base rate (Risk free rate (TONA) compounded in arrears over rate observation period(3 months) according to the lookback method + spread adjustment (0.00835%)) + 0.09%).
*16. The applicable interest rate will be lowered by 0.01% from the original rate of 0.35625% for a corresponding period pursuant to
the loan agreement on the condition that either one of the targets set for CO2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation at the end of
July 2021, the interest rate for the period until the next confirmation was 0.34625%.
*17. The applicable interest rate will be lowered by 0.01% from the original rate of 0.405% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO 2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation on May 16, 2022,
the interest rate for the period until the next confirmation was 0.395%.
*18. The applicable interest rate will be lowered by 0.01% from the original rate of 0.3775% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO 2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation at the end of
July 2021, the interest rate for the period until the next confirmation was 0.3675%.
*19. The applicable interest rate will be lowered by 0.01% from the original rate of 0.61625% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO 2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved.

47

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(iii) Investment Corporation Bonds
Outstanding investment corporation bonds as of September 30, 2022 are as follows.
Securities

Date of issue

Balance at
beginning ofcurrent period(¥ thousand)4th unsecured investment
corporation bondSeptember 29,
2005

10,000,000

10,000,0002.56

September 29,
2025

Bullet*1*2

10th unsecured investment
corporation bondMarch 30,2017

10,000,000

10,000,000

0.3975

March 30,
2027

Bullet*1*2 *3

11th unsecured investment
corporation bondOctober 26,
20172,993,175

2,993,175

0.2788October 26,
2027

Bullet*1*2 *3 *4

November 1,
2018

10,000,000

10,000,000

0.23

November 1,
2023

Bullet*1*2

October 26,
2020

10,000,000

10,000,000

0.2

October 24,
2025

Bullet*1*2

42,993,175

42,993,175

12th unsecured investment
corporation bond(Japan Real Estate
Investment Green Bonds)

13th unsecured investment
corporation bond
Total

Balance at
end ofcurrent period(¥ thousand)Interest
rate(%)

Repayment
periodRepayment
methodUse ofproceeds

Notes*1. The investment corporation bonds are primarily used to fund the acquisition of real properties or beneficiary right of real estate intrust, and to repay existing loans.
*2. Financial covenants, such as a negative pledge, are not included in these bonds.
*3. Bond issuance was limited to qualified institutional investors by a private placement.
*4. For the purpose of avoiding foreign currency risk with respect to foreign currency investment corporation bonds, the Company engages
in currency swap transactions to fix the exchange rates. Considering the effects of the currency swap transactions, the balances andinterest rates are reflected in the schedule.
(iv) New Unit Acquisition Rights“Not applicable”

48

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

f. Examination of the Value of Specified Assets(i) Real Estate, etc.
Acquisition
or
Disposition

Disposition

Property nameDate oftransaction

Acquisition/
disposition
cost*1(¥ million)

Real estateappraisalvalue(¥ million)

Appraising
institution

Date ofappraisal

Harumi Center Building

May 31,
2022

24,33021,000Daiwa Real
Estate Appraisal
Co., Ltd.

May 1,
2022*1. The “acquisition/disposition cost” refers to the amount listed in the sale and purchase contract, and does not include various
expenses necessary in the acquisition or disposition of the property such as trading intermediate fees.
*2. The appraisal value listed above is decided in accordance with the 3rd chapter of the Japanese Real Estate Appraisal Act and Real
Estate Appraisal Standards.
(ii) Other assets
Acquisition
or
Disposition

Date oftransaction

Type

Name and addressof Creditor

Name and addressof Debtor

Transaction price(¥ million)

Investigated pricespecified assets(¥ million)

Japan Real EstateTokyo Metropolitan
Investment Corporation
Government
5,024
5,024
Chiyoda-ku, Tokyo
Shinjuku-ku, Tokyo*1. For transactions which require investigations into the value of monetary claim related to specified assets pursuant to Paragraph 2,
Article 201 of the ITA, the Company has outsourced Yoshihiro Tanaka CPA Office to conduct the investigations pursuant toPractical Guidelines for Specialized Operations 4400 “Practical Guidelines for Agreed-Upon Procedures Engagements” andPractical Guidelines for Specialized Operations 4460 “Practical Guidelines for Agreed-Upon Procedures Engagements Pertaining
to Investigation into the Value, etc. of Specified Assets of Investment Trusts and Investment Corporations” published by The
Japanese Institute of Certified Public Accountants, and the Company has been notified of the results of the investigations.
*2. No collateral has been established.
Acquisition

August 30,
2022

Monetaryclaim

49

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

g. Transactions with Interested Parties (from April 1, 2022 to September 30, 2022)(i) Transactions
Buying and selling amounts
Segment
Buying amounts

Selling amounts¥ － thousand¥ 24,330,000 thousand

Total Amount

Breakdown of Transactions with Interested Parties¥ － thousandTotal¥ － thousand

(－%)

(－%)

* The numerical values within the ( ) represent a percentage of the total buying/selling amounts.

(ii) Amount of Commission Fees and Other Expenses

Segment

Property
management
expensesUtilities
expenses
Other
operatingexpenses

Total amount ofcommission fees andother expenses A¥3,836,799 thousand¥2,760,966 thousand¥159,511 thousand

Breakdown of transactions with interested parties
Payment recipient

Amount paid B

Percentage of
total amount
B/A

Mitsubishi Jisho Property
Management Co., Ltd.

¥2,487,663 thousand

64.8 %

Mitsubishi Estate Co., Ltd.

¥181,096 thousand

4.7 %Mitsubishi Real Estate Services
Co., Ltd.

¥43,336 thousand

1.1 %Yuden Building Kanri Co., Ltd.

¥30,044 thousand

0.8 %Mitsubishi Estate Parks Co.,Ltd.
Minato Mirai 21 District
Heating and Cooling Co., Ltd.
Mitsubishi Jisho Property
Management Co., Ltd.

¥1,087 thousand

0.0 %¥98,260 thousand

3.6 %¥23,431 thousand

14.7 %

Mitsubishi Estate Co., Ltd.

¥1,103 thousand

0.7 %Mitsubishi Jisho Design Inc.

¥4,000 thousand

2.5 %*1. Interested parties refers to interested parties of the asset management company who has concluded consignment agreements with theCompany, as stipulated in Article 123 of the enforcement order of the ITA, and Section 26, Paragraph 1, Item 27 of the Regulationsfor Management Reports Concerning Investment Trusts and Investment Corporations of the Investment Trusts Association, Japan.
*2. In addition to the transactions and commission fees listed above, other amounts paid to interested parties, such as order s placed for
repair work, are listed below.
Mitsubishi Jisho Property Management Co., Ltd.
Mitsubishi Estate Co., Ltd.
Mitsubishi Jisho Design Inc.
Mitsubishi Real Estate Services Co., Ltd.

¥650,837 thousand¥151,436 thousand¥9,600 thousand¥48,278 thousand

50

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

h. Other Announcements
Board of Directors
Below is an overview of the important changes and the conclusions of major contracts that were accepted by the Company’s Board of
Directors
Date of acceptanceMay 16, 2022

Accepted item
Consignment of a generaladministrative work
concerning the issuance ofinvestment corporation bonds

Overview
In connection with the comprehensive resolution adopted on the samedate on the issuance of investment corporate bonds, the approval was
given to the candidate agents to whom an administrative work for thesaid bonds was consigned. Other items necessary for its operation are
entrusted to the executive directors to decide.

51

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Selected Financial Data
Millions of yen
For the period from

For the period from

For the period from

For the period from

For the period from

April 1, 2022 toSeptember 30, 2022

October 1, 2021 toMarch 31, 2022

April 1, 2021 toSeptember 30, 2021

October 1, 2020 toMarch 31, 2021

April 1, 2020 to
September 30, 2020

Operating revenues

37,65436,45336,901

34,94434,966

Operating expenses

19,612

19,346

18,507

18,464

18,468Operating profit

18,042

17,107

18,394

16,47916,498

Ordinary profit

17,256

16,191

17,477

15,50815,608

Profit before income
taxes
Profit17,256

16,191

17,477

15,50815,608

16,79016,045

16,865

15,56015,5981,008,970

1,035,072

1,003,583

1,001,734

1,000,254

Interest-bearing debt

423,393449,893

419,493

419,493418,993

Net assets

517,761

516,762

516,447

515,262

515,302

Unitholders’ capital

497,241

497,241

497,241

497,241

497,241

Number of units (Units)

1,385,210

1,385,210

1,385,210

1,385,210

1,385,210

Net assets per unit (Yen)373,778

373,057

372,829

371,974

372,002

Cash distribution

15,92915,791

15,73015,68015,600

Dividend payout ratio(Note 1)Dividend per unit (Yen)

94.9%

98.4%

93.3%

100.8%

100.0%

11,50011,40011,356

11,32011,262

Net operating income(NOI)
Funds from operations(FFO)
Return on assets (ROA)(Note 2)

23,08424,07024,204

24,82524,943

19,70021,053

20,58322,08922,225

1.7%

1.6%

1.7%

1.5%

1.6%

(3.4% annualized)(3.2% annualized)(3.5% annualized)(3.1% annualized)(3.1% annualized)

3.2%

3.1%

3.3%

3.0%

3.0%

(6.5% annualized)(6.2% annualized)(6.5% annualized)(6.1% annualized)(6.0% annualized)

EOP equity ratio(Note 4)
EOP interest-bearing
debt ratio on total assets(Note 5)
FFO multiple (Times)

51.3%

49.9%

51.5%

51.4%

51.5%

42.0%

43.5%

41.8%

41.9%

41.9%

21.0

21.0

22.5

20.4

16.8

Debt service coverage
ratio (Times) (Note 6)

29.2

26.9

27.7

24.8

24.2

Total assets

Return on equity (ROE)(Note 3)

Notes:1.
2.
3.

4.
5.
6.

Dividend payout ratio = Dividend per unit / Profit per unit × 100
ROA = Ordinary profit / Average of Total assets during the period × 100
ROE = Profit / Average of Net assets during the period × 100(Annualized portion of the calculation given in Note 2 and Note 3 assumes a fiscal period of 183 days for the period ended
September 30, 2020, 182 days for the period ended March 31, 2021, 183 days for the period ended September 30, 2021, 182 days
for the period ended March 31, 2022 and 183 days for the period ended September 30, 2022.)
EOP equity ratio = (Net assets at the end of period / Total assets at the end of period) × 100
EOP interest-bearing debt ratio on total assets = (Interest-bearing debt at the end of period / Total assets at the end of period) ×100
Debt service coverage ratio = Profit before Interest, Taxes, Depreciation and Amortization / Interest expenses

52