https://nud-reit.co.jp/en/
Granpark / Garden Itabashi Hikawacho

43 Semiannual ReportrdFiscal Period

Ended April 30, 2024

1-5-1 Otemachi, Chiyoda Ward, Tokyo
https://nud-reit.co.jp/en/
Securities Code: 8956

FEATURES OF
NTT UD REIT INVESTMENT CORPORATION

1Comprehensive Support from NTT Urban Development,
the Sole Comprehensive Real Estate Company in the NTT Group

Since May 2010, when NTT Urban Development (NTT UD) participated as its sponsor, NTT UD REIT Investment
Corporation (NUD) has received a broad range of support from NTT UD, including such pipeline support services
as supply and information provision of new properties, as well as support for leasing activities and provision ofproperty management operations.

2

Compound Portfolio with Office Buildings and Residential Properties
as Main Investment Targets■ Mitigates the impact of economic fluctuations by combining asset types that have low correlation to each otherin terms of market rent fluctuations■ Diversifies the tenant base into different types such as corporations and individuals
Portfolio Distribution by Asset Type(As of April 30, 2024)

Residence

OfficeStability

Profitability

Stable demands evenin a receding economy

Exerts strengths when theeconomy is recovering

26.3%

73.7%

■ Abundant track record of development and pipelines
for office buildings■ Operating capability in real estate rental business■ Fund-raising capability based on its high credibility
3

Portfolio Focused in the Tokyo Economic Bloc

■ Focuses investments in the Tokyo Economic Bloc, which enjoys an established economic base due to a highconcentration of population and industry■ Diversify risks by combining investments in Major Regional Cities
Results of Property Acquisitions through NTT UD’s Pipelines

Portfolio Distribution by Geographical Area

(As of April 30, 2024)(As of April 30, 2024)

Other

7.4%

NTT Urban Development

18.117.5
bn yen85.0%

bn yenOther sponsors

7.6%
201.1
bn yen1

Total acquisition pricesince May 2010236.7 billion yen

Major Regional Cities

5 Central Wards of Tokyo

9.6%(Chiyoda Ward, Chuo Ward, Minato Ward,
Shinjuku Ward and Shibuya Ward)

Urban Areas Surrounding Tokyo

65.7%

3.3%
Other 18 Wards of Tokyo

21.4%

2

43RD FISCAL PERIODPERFORMANCE HIGHLIGHTSMESSAGE TO OUR UNITHOLDERS

Financial Results Highlights
Distribution per Unit (Note 1)

Takeshi Oodera

Yutaka Torigoe

Executive Director

President and CEO

NTT UD REIT Investment Corporation(NUD)(Asset management company)
NTT Urban Development Asset Management Corporation(UDAM)¥ 3,239

42nd Fiscal Period (ended October 2023)

On behalf of NTT UD REIT Investment Corporation (NUD), we would like to express our sincere gratitude for theloyal patronage of our unitholders.

¥ 2,848

43rd Fiscal Period (ended April 2024)¥ 2,810 (forecast)

44th Fiscal Period (ending October 2024) (Note 2)

NUD has been steadily growing by leveraging support continuously provided by our unitholders as well as NTT
Urban Development Corporation, the sponsor.
In the 43rd fiscal period ended April 2024, we raised 9.5 billion yen through a public offering conducted for the firsttime in two years at the beginning of the period and acquired Urbannet Shijo Karasuma Building and Urbannet
Fushimi Building, situated in favorable locations in core regional cities, from the sponsor. In March 2024, we
acquired additional ownership interest in “Granpark” as well as ownership interest in “Garden Itabashi Hikawacho,”a large-scale rental residence, from an NTT Group company. With the acquisition of four properties valued at 36.1
billion yen, we achieved an asset size of 300 billion yen, and NUD’s owned assets as of April 30, 2024, comprise 62
properties with 29 office buildings and 33 residential properties amounting to 307.2 billion yen in total.
Revenue increased due to property acquisitions, and the occupancy rate remained stable for both office buildings
and residential properties in the fiscal period under review. As a result, NUD posted operating revenues of 11,477
million yen and net income of 4,221 million yen for the 43rd fiscal period. Distribution per unit came to 2,848 yen,which surpassed the forecast of 2,680 yen for the period announced as of December 15, 2023.
Looking ahead, we at NUD will continue our utmost efforts to meet the expectations of our unitholders by realizing
steady growth of assets and stable management over the medium to long term in line with the growth strategy of
the NTT Group. We appreciate and request your continued support and encouragement.

(Note 1)	Number of outstanding investment units at
end of period:		
42nd Fiscal Period: 1,401,635 units		43rd Fiscal Period: 1,482,035 units		
44th Fiscal Period: 1,482,035 units (forecast)(Note 2)	The figure is based on what was announced
in the Financial Report for the 43rd Fiscal
Period Ended April 30, 2024 (November 1,
2023 – April 30, 2024) dated June 14, 2024.

42nd Fiscal Period

43rd Fiscal Period(as of October 31, 2023)(as of April 30, 2024)

Operating Revenues

12,181 million yen

11,477 million yen

Operating Income

5,490 million yen

4,769 million yen

Ordinary Income

5,042 million yen

4,223 million yen

Net Income

5,039 million yen

4,221 million yen

Total Assets

274,959 million yen

311,579 million yen

Net Assets

139,289 million yen

148,487 million yen

Net Assets Ratio

50.7%

47.7%

Net Assets per Unit

99,376 yen

100,191 yen

Total assets basis

44.4%

47.8%

Market value basis

38.1%

41.6%

LTV (Note)(Note) LTV (Total assets basis) = interest-bearing liabilities / total assets × 100
LTV (Market value basis) = interest-bearing liabilities / (appraisal value of owned properties and beneficiary interests in trust + book value of preferred securities) × 100

Monthly Occupancy Rate for the 43rd Fiscal Period
(%)
100

98

Table
of
Contents

3

Features of NTT UD REIT Investment Corporation 
Message to Our Unitholders 
43rd Fiscal Period Performance Highlights 
Status of External Growth Collaboration with the NTT Group 
Initiatives on ESG Awareness Management Status in the 43rd Fiscal Period 
Financial Status in the 43rd Fiscal Period Property Portfolio Overview of Properties Owned Organization of NUD 
Information for Unitholders 

1
3
4
6
8
9
11
13
15
17
25
26

<FINANCIAL SECTION>
Balance Sheets Profit and Loss Statements Statements of Changes in Unitholders’ Equity 
Cash Flow Statements Notes to Financial Statements 
Other Information (Unaudited) 

27
29
30
31
32
47

Strategic Policies 

53

Independent Auditor’s Report 

61

96

96.1%
96.1%
96.1%

96.3%
96.1%

96.8%
96.7%
96.4%

97.3%
97.1%
97.0%

96.8%
96.8%
96.8%

Officebuildings
96.9%
Total
96.6%
95.9%
Residential
properties

95.6%

94

92

90

End of Nov. 2023

End of Dec. 2023

End of Jan. 2024

End of Feb. 2024

End of Mar. 2024

End of Apr. 2024

(Note) The value related to the property backing the preferred securities of an SPC is not included in the calculation of the occupancy rate.

4

(43rd Fiscal Period Performance Highlights)

STATUS OF EXTERNAL GROWTH

Portfolio Status■ Acquired four properties (36.1 billion yen in total) from NTT Urban Development and NTT Facilities by leveraging
sponsor support in the 43rd fiscal period.
42nd Fiscal Period

43rd Fiscal Period(as of October 31, 2023)(as of April 30, 2024)

No. of properties

59 properties

62 properties

Acquisition price271.1 billion yen

307.2 billion yen

Average building age (Note 1)

24.5 years

24.6 years

Occupancy rate at end of period

96.0%

96.6%

3,979

4,291

NOI yield (Note 2)

5.0%

4.9%

Yield after depreciation (Note 3)

3.8%

3.8%

No. of tenants■ Established a scheme for joint ownership of a large-scale rental residence developed on the former site of NTT’s
company housing with the group companies of NTT for Garden Itabashi Hikawacho.

Property acquired in 43rd Fiscal Period (ended April 2024)
Urbannet Shijo
Karasuma Building

Urbannet Fushimi
Building

Granpark

Garden Itabashi
Hikawacho

Complex building
occupying one of therarest prime locations
in Kyoto

Highly practical officebuilding withexcellent
transportation access

Large-scale,environmentallyfriendly complex
facility

Large residencewith convenient
access to city center

Location

Kyoto City, Kyoto

Nagoya City, Aichi

Minato Ward, Tokyo

Itabashi Ward, Tokyo

Use

Offices and shops

Offices

Offices, residences,and shops

Residences

SellerNTT Urban Development

NTT Urban Development

NTT Urban Development

NTT Facilities, Inc.

Acquisition
date

November 8, 2023

November 8, 2023

March 14, 2024

March 22, 2024

Acquisition
price

9,700 million yen

8,750 million yen

14,850 million yen

2,820 million yen

Appraisalvalue at timeof acquisition

9,960 million yen

9,560 million yen

16,200 million yen

2,930 million yen

Appraisal
NOI yield

3.7%

4.2%

4.5%

4.1%

AssumedNOI yield (Note)

4.0%

4.3%

4.9%

4.2%

Acquiredproperty

Distribution by asset type

28.8%

26.3%
71.2%

■ Office Buildings

73.7%



■ Residential Properties

3.7%

4.0%

9.6%
3.3%

Distribution by geographical area
■ 5 Central Wards of Tokyo■ Other 18 Wards of Tokyo

23.2%

69.0%

21.4%

65.7%

Photo: Forward Stroke Inc.

■ Urban Areas Surrounding Tokyo■ Major Regional Cities(Note 1) Average building age is calculated by adding the building age of Akihabara UDX (that backs the preferred securities in which NUD holds 19.0% ownership).
(Note 2)	NOI yield is calculated by using the following formulas.
NOI yield = annualized rental NOI* / investment value**		*	Annualized rental NOI = sum total of [(real estate rental income + depreciation + dividend income from preferred securities) x 2] of owned assets (including preferred
securities) for each fiscal period		** Investment value = sum total of book value as of the end of each fiscal period of owned assets (including preferred securities) for each fiscal period(Note 3)	Yield after depreciation is calculated by using the following formulas.
Yield after depreciation = annualized real estate rental income* / investment value**		*	Annualized real estate rental income = sum total of [(real estate rental income + dividend income from preferred securities) x 2] of owned assets (including preferred securities)
for each fiscal period		** Investment value = sum total of book value as of the end of each fiscal period of owned assets (including preferred securities) for each fiscal period(Note) Assumed NOI yield is calculated based on the annualized NOI in the plan for the 44th fiscal year / acquisition price. The NOI for Granpark and Garden Itabashi Hikawacho was
calculated after deducting the portion equivalent to property taxes.

5

6

(Status of External Growth)

COLLABORATIONWITH THE NTT GROUP

Overview of Property Acquired in 43rd Fiscal Period

Changes in Asset Size

Urbannet Shijo Karasuma Building

Urbannet Fushimi Building

NUD has steadily expanded its asset size since NTT UD became its sponsor.
Acquisition, brokerage, information provision, etc.

(bn yen)NTT Urban Development Corporation

Other

Other sponsors

307.2

May 2010
NTT UD took an equity stakein the REIT’s Asset Manager

261.8 260.0
249.0 246.4246.4
224.4

196.5196.5196.5 199.4 44.4


Photo: Forward Stroke Inc.

Property characteristics

Property characteristics■ It is an office/commercial complex building of commercial
facilities from the basement to the third floor and office floors
from the fourth to the seventh floor that is located in the ShijoKarasuma area, the center of Kyoto’s office market, directly
connected to the nearest subway station and on the corner of
the Shijo-Karasuma Intersection, which makes it one of therarest prime locations in Kyoto and has high visibility.

■ It is an office building located in the Fushimi area, which ishalfway between the bustling Meieki and Sakae areas of
Nagoya City, and within a one-minute walk of Fushimi
Station and along Fushimi-dori Street that runs northsouth through Nagoya City, which makes it a property
offering high convenience for transportation.

■ The commercial facility LAQUE Shijo Karasuma is occupied

in the center and can be divided into small spaces. With aparking capacity of 64 vehicles for company vehicles, itoffers excellent utilities.

by shops that sell goods, food and beverages, andprovide services that mainly target women in their 30s.

Granpark

165.8165.8
139.3
46.9

146.0

235.8 233.2 235.9 235.9 234.0
216.3

44.4 44.4 44.4 44.4 44.4

243.7243.7243.7 246.7

272.6 272.6 275.1 271.1
45.2 45.2

41.2 37.3

60.2 60.2
59.4 60.2 60.2

89.2

60.2 60.2 60.2 60.2

44.4
89.2 89.2

44.4 44.4 44.4 44.4

37.3

89.2 89.2

91.0 89.2
102.3 96.1 96.1 96.1 96.1 96.1

46.9 46.9

96.1 96.1 91.0 910 91.0 91.0

110.5 102.3

46.9
110.5 110.5 110.5 110.5

180.7■ The property has a typical floor of 311 tsubo and no pillars

138.2 138.2 144.6 144.6

104.6 104.6
92.4 99.1
69.4 69.4

88.9 92.5 95.3 95.3 93.4 93.4 90.1 90.1 92.4 92.4 92.4 95.4

110.6 110.6

41.5 41.5 41.5 44.4

Garden Itabashi Hikawacho

14.3 14.3

15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th 37th 38th 39th 40th 41st 42nd 43rd
period period period period period period period period period period period period period period period period period period period period period period period period period period period period period
Apr. 2010 Oct. 2010 Apr. 2011 Oct. 2011 Apr. 2012 Oct. 2012 Apr. 2013 Oct. 2013 Apr. 2014 Oct. 2014 Apr. 2015 Oct. 2015 Apr. 2016 Oct. 2016 Apr. 2017 Oct. 2017 Apr. 2018 Oct. 2018 Apr. 2019 Oct. 2019 Apr. 2020 Oct. 2020 Apr. 2021 Oct. 2021 Apr. 2022 Oct. 2022 Apr. 2023 Oct. 2023 Apr. 2024
(forecast)

Top 10 Tenants Occupying NUD’s Office Buildings (as of April 30, 2024)
NTT Group

Rank

Property characteristics

Property characteristics■ The property is a real estate complex that fuses office,■ The property is convenient being located a four-minuteresidential and commercial facilities with a moist environment,
where approximately 60% of the site is green space.

walk to Itabashi-Kuyakushomae Station, which can directly
access Otemachi Station, where there is accumulation ofmany offices, and nearby is an area of many shopping
streets.

■ Granpark Tower (office building), the central building, has
34 floors above ground and the typical floor of the property
is approximately 620 tsubo (2,000 m2). It offers office spacethat can cater to high level business needs. The Granpark
Heights (residential building) has 28 floors above groundwith a total of 172 leased residences. The Granpark Plaza(retail building) comprises a combination of five small andlarge conference venues, restaurants and stores.

■ A redevelopment project participated in by the sponsor isin progress on an adjacent site, with future value increase
expected for the area.

7■ The property aims to separate the buildings into a highrise building with a view for singles and a low-rise building
opening north-south for families, with a full-range ofincidental equipment and high levels of security, utilizing
the merits of scale with a large lounge space fullyequipped with Wi-Fi, a car sharing service, and 24-hour a
day garbage area, etc.

Tenant nameLeased floor space(change from previous
fiscal period)

Ratio(Note)

Property

1

NTT Facilities, Inc.

13,367 m2 (+2,373 m2 )

6.1% Urban Ace Higobashi Building, etc.

2

DOCOMO CS, Inc.

10,565 m2(− m2 )

4.8% Urbannet Ikebukuro Building, etc.

3

NTT Business Associe East Co., Ltd.

7,488 m2(− m2 )

3.4% Urbannet Omori Building

4

Tokyo Legal Mind K.K.

7,139 m2(− m2 )

3.2% Urbannet Nakano Building

5

NTT Finance Corporation

6,679 m2(− m2 )

3.0% Urbannet Ikebukuro Building, etc.

6

NTT Communications Corporation

2

2

6,423 m (+3,606 m )2.9% Granpark

7

MIRAIT ONE Corporation

5,325 m2(− m2 )

2.4% Urbannet Gotanda NN Building, etc.

8

Nippon Telegraph and Telephone East Corporation 5,159 m2(− m2 )

2.3% Tokyo Opera City Building

9

NTT ExC Partner Corporation

4,801 m2(− m2 )

2.2% Urbannet Azabu Building

10

NTT DATA Corporation

4,581 m2 (+1,028 m2 )

2.1% Urbannet Mita Building, etc.

(Note) The ratio represents the percentage of the leased floor space of the relevant tenants to the gross area under lease of floors practically used for offices.

8

INITIATIVES ON ESG AWARENESS
Materiality

Environment■ Identifying materiality (key issues) for the realization of a sustainable society■ Setting Goals for Greenhouse Gas

Materiality

Relationship with SDGs
Adaption to climate changeManagement and reduction of energy consumption and greenhouse gas (CO2)emissions
Policies and• Aiming for net zero greenhouse gas (CO2) emissions by FY2050
Objectives• Aiming for reduction of greenhouse gas (CO2) emissions (intensity) by 42% (vs.
FY2020) by FY2030
KPI

Portfolio’s energy consumption per floor space and greenhouse gas (CO2)emissions (intensity)

Emissions

GRESB Public Disclosure Rating

1. Achieving net zero greenhouse gas (CO2)emissions by FY2050(Scope 1, 2, and 3 total emissions)Management, reduction, and reuse of water consumption
Policies and• Reduction of intensity in the portfolio to below the previous year’s level each
Objectives
year

FY203042% reduction

Portfolio’s water consumption per floor space (intensity)

Environment
Policies andE
Management, reduction and reuse of waste
Objectives

Percentage of waste recycled in the portfolio
Promotion of green portfolio

Increase in the number of properties with environmental certifications
Policies and • Increase in the number of properties in the entire portfolio that acquire
environmental certifications each year over the previous year (excluding
Objectives
properties transferred)• Maintaining and improvement of GRESB Real Estate Assessment
KPI

Number of properties in the portfolio with environmental certifications
GRESB Real Estate Assessment
Tenant engagement

in intensity(Scope 1 and 2)

FY2020

Promotion of resource-saving and recycling

KPI

Base year

SocialS

Development of an employee-friendly work environment that takes into
consideration respect for human rights, health, safety, and comfort
Promotion of human resource development by offering qualification incentive
Policies andprograms
Objectives
Promotion of diversity• As the NTT Group, aiming to achieve a percentage of women in senior
management of 15% or more by FY2025

KPI

Feedback of results on management policy through employee satisfaction surveys
and stress checks
Number of persons who have acquired major professional qualifications
Percentage of female managers /Percentage of female employees /Percentage of
employees aged 60 and older
Rigorous complianceconsecutive year

■ Acquired “A” assessment (highest rank) in the
GRESB Public Disclosure Rating for the fourthconsecutive year

FY2050Net zeroemissions(Scope 1, 2 and 3)

properties in 43rd Fiscal Period.
: Shibaura Island Air Tower (Rank A)

CASBEE for Real Estate

DBJ Green Building Certification : Premier Stage MitaKeidaimae (3 Stars)
Low-Carbon Model Building: Urbannet Gotanda NN Building (A4)
Ueno Tosei Building (A2+)
Number ofproperties acquiringcertifications

Acquisition ratio(by number ofproperties)

Floor space ofproperties acquiringcertifications (Note)

Acquisition ratio(by total floor space)

CASBEE for Real Estate

23

37.1%

276,565 m2

53.2%

DBJ Green Building Certification

23

37.1%

90,013 m2

17.3%

BELS

3

4.8%

30,520 m2

5.9%

Low-Carbon Model Building

7

11.3%

59,922 m

11.5%

Tenant engagement

Employee engagement (Asset Management Company)■ Acquired the ”Green Star” for the seventh■ Proactively acquired environmental certifications for properties owned, acquiring new certifications for four

Policies andImprovement of tenants’ health, safety, and comfort
Objectives
Feedback of results on operational policies through tenant satisfaction surveys

Rating for the second consecutive year

■ Acquisition of Environmental Certifications

Policies and Promotion of energy conservation in collaboration with tenants (including
Objectives distribution of tenant renovation guide)

KPI■ Acquired the highest rank “5 Stars” in GRESB

2. 42% reduction in greenhouse gas (CO2) emissions(Scope 1 and 2 intensity) by FY2030 (vs. FY2020)

Conservation of water resources

KPI■ 2023 GRESB Real Estate Assessment and2(Note)(Note) Calculated by taking into account NUD’s substantial co-ownership interests in the buildings of respective properties.

Society■ Organizing and Supporting Events
Shinagawa Season Terrace

Tokyo Opera City Building

Policies and Efforts to ensure compliance with laws and regulations and prevent misconduct
based on strengthened compliance system (including promotion of appropriate
Objectives transactions with interested parties)
KPI

Number of compliance training sessions/year
Enhanced management of operational risks

Governance Policies and Protection of personal, business, and other information through enhanced
Objectives cybersecurity
G
KPI
Number of safety drills/year
Stakeholder engagement
Promotion of accurate and prompt information disclosure and dialogue that
Policies andrespects the rights of stakeholders
Objectives• Maintaining and improvement of the level of GRESB Public Disclosure rating

9

KPI

GRESB Public Disclosure

Held the “Shinagawa Kids Family
Terrace,” an event to stimulate children’s
curiosity and imagination and promote
their development through play

Implemented “Shinagawa Konan Area
Pika Pika Project,” a participatorycommunity beautification program, as
part of the area management.

Jazz musicians from Japan and abroad performed live at the “Opera
City Festival,” and live art workshops and other events were held

10

MANAGEMENT STATUS
IN THE 43RD FISCAL PERIOD
Changes in Occupancy Rates

Changes in Asset Size
Office buildings

(%)
100

98.8%

Office buildings(bn yen)Residential properties

Residential properties

350

98.6%

98.2%

96.8%

96.6%

96.1%

97.2%

94.7%

95

96.2%

96.8%

96.2%

96.0%

94.5%

96.5%
95.7%

300

96.9%

250

95.9%

94.5%
93.4%

59 properties 59 properties 59 properties
243.7 bn yen 243.7 bn yen 246.7 bn yen

59 properties 59 properties 60 properties 59 properties
59 properties 58 properties 272.6 bn yen 272.6 bn yen 275.1 bn yen
271.1 bn yen
261.8 bn yen 260.0 bn yen

62 properties
307.2 bn yen

200

93.4%
150

90
100

50

0

85
End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

End of
End of42nd period 43rd period

End of34th period

Changes in NOI and NOI Yields
Rental NOI for office buildings (right axis)

(%)
6

5.4%

6,093
3

mm yen5.5%

6,199
mm yen5.3%

6,134
mm yen4.9%
6,035
mm yenEnd of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

70.0

71.0

End of
End of42nd period 43rd period

Changes in Unrealized Gains or Losses
Rental NOI for residential properties (right axis)

4.9%

5,964

4.9%
6,286

5.2%
6,621
mm yen(mm yen)
8,000

4.9%

5.0%

4.9%

6,302

6,343

7,129

mm yenmm yenNOI yield (Note) (left axis)

mm yen(bn yen)70

Unrealized gains or losses (left axis)
Unrealized gains or losses as % of total value (right axis)

bn yen68.7
bn yen69.1
bn yen

60

52.7
6,000

50

48.1

bn yen54.3

57.1
bn yen

58.3

70

60

bn yenbn yen50

bn yen40
0(%)

bn yenmm yenmm yen65.1

bn yen

40

4,000
30

23.2%

25.4%

25.8%

25.4%

26.2%

27.7%

29.9%

30.0%

29.6%
25.8%

30

20

20

10

10

2,000

0
End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

End of
End of42nd period 43rd period00
End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

End of
End of42nd period 43rd period(Note) NOI yield = annualized rental NOI* / investment value*** Annualized rental NOI = sum total of [(real estate rental income + depreciation + dividend income from preferred securities) x 2] of owned assets (including preferred securities) for
each fiscal period** Investment value = sum total of book value as of the end of each fiscal period of owned assets (including preferred securities) for each fiscal period

1112FINANCIAL STATUS
IN THE 43RD FISCAL PERIOD
Status of Interest-Bearing Liabilities (as of April 30, 2024)

Changes in the Average Interest Rate and Average Remaining Period to Maturity■ Ratios of Long-Term and Short-Term(year)■ Ratios of Fixed and Floating Interest

Borrowings (Note)

Rate Borrowings

5

Average remaining period to maturity (left axis)

years

4.2

4.0

years

6.5%

6.5%

4.6

years

Floating interest rate

Short-term interest-bearing
liabilities

Average interest rate on debt financing (right axis)

4.7

4.2

4.0

years

3.7

4

4.6

years

4.5

years

years

years

3.7

years

1.2

years

3

0.9

0.61%

Long-terminterest-bearing liabilities

Fixed interest rate

93.5%

93.5%

0.61%

2

(Note) Classification is made by using the periods from the drawdown dates for loans and from the issue dates for corporate bonds.

0.60%

0.58%

0.58%

0.57%

0.57%

0.60%

0.64%

0.72%
0.6

0.3

1

■ Breakdown of Lenders

0.0

0End of34th period

Others

17.4%

Sumitomo Mitsui Trust Bank

(%)
1.5

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

End of
End of42nd period 43rd period(Note) Average interest rate is an average weighted by balances outstanding as of the end of the period for each nominal interest rate

24.8%

Repayment Schedule of Interest-Bearing Liabilities (as of April 30, 2024)

Total LoansMUFG Bank

141.7

10.3%

NUD works to reduce the refinancing risk by diversifying repayment dates of interest-bearing liabilities.

billion yen

Mizuho Bank

21.5%

NTT TC Leasing

12.8%

Borrowings(bn yen)

Corporate bonds

Green loans

Green bonds

20

Sumitomo Mitsui Banking
Corporation

13.2%

13.7

15

bn yen(mm yen)

Lenders
Sumitomo Mitsui Trust Bank, Limited

Short-term

33,090

2,100

Total
35,190Mizuho Bank, Ltd.

23,7406,700

30,440Sumitomo Mitsui Banking Corporation

18,350300

18,650NTT TC Leasing Co., Ltd.

17,900300

18,200MUFG Bank, Ltd.

14,270300

14,570Resona Bank, Limited

6,450

−

6,450

Aozora Bank, Ltd.

5,750

−

5,750

Development Bank of Japan Inc.

5,000

−

5,000

The Norinchukin Bank

2,500

−

2,500

The Bank of Fukuoka, Ltd.

2,000

−

2,000

The 77 Bank, Ltd.

1,000

−

1,000

The Bank of Kyoto, Ltd.

1,000

−

1,000

The Hachijuni Bank, Ltd.

1,000

−

1,000

132,050

9,700

141,750

Total

13Long-term

10

8.3

8.2

bn yenbn yen8.9 9.0 8.9 8.9 8.7
bn yen bn yen bn yen

bn yenbn yen7.7

bn yen8.6
8.3 8.4 bnyen

bn yenbn yen7.5

7.5

bn yenbn yen

5.0

4.9

5

bn yenbn yen3.3

6.0

bn yen5.0

bn yenbn yen2.0

bn yen044thperiod45th
period46th
period47th
period48th
period49th
period50th
period51st
period52nd
period53rd
period54th
periodCredit Rating Status (as of April 30, 2024)
NUD has been granted an issuer rating of AA by Japan Credit
Rating Agency, Ltd. (JCR).

55th
period56th
period57th
period58th
period59th
period60th
period61st
period62nd
period63rd
periodJapan Credit Rating Agency, Ltd. (JCR)

AA Stable

14

PROPERTY PORTFOLIO (as of April 30, 2024)(cont.)No

Area

Property Name (Note 1)

AcquisitionPrice(mm yen)(Note 2)

Share(%)
(Note 3)

Period End Real Estate Rental Income
Occupancy
Revenues Expenses IncomeRate(mm yen) (mm yen) (mm yen)
(%)

PML
Value
(%)

A02

5 Central
Wards of
Tokyo

A03

(Note 2)

D15

5 Central
Wards of
Tokyo

(Note 3)

Period End Real Estate Rental Income
Occupancy
Revenues Expenses IncomeRate(mm yen) (mm yen) (mm yen)
(%)

PML
Value
(%)
(Note 4)

Premier Stage Uchikanda

1,723

0.6

93.5

61

21

40

13.8

Premier Stage Ichigayakawadacho

1,460

0.5

100.0

48

13

34

13.1

Walk Akasaka

2,043

0.7

100.0

56

24

32

13.9

Landic Shimbashi Building

6,341

2.1

100.0

210

82

127

10.6

D16

Landic Shimbashi 2 Building

7,045

2.3

88.1

228

83

145

12.9

D17

Premier Dogenzaka Building

1,727

0.6

100.0

89

29

59

5.5

D18

Premier Stage Shibakoen

1,585

0.5

90.9

43

20

23

16.1

MEW

1,556

0.5

96.5

37

18

19

13.9

A04

KN Shibuya No.3

5,348

1.7

100.0

280

103

176

10.6

A05

Takadanobaba Center Building

5,118

1.7

91.1

247

117

129

2.0

D20

Shibaura Island Air Tower

7,590

2.5

95.8

373

243

130

11.2

A10

Urbannet Mita Building

10,300

3.4

100.0

320

159

160

7.2

D21

Storia Akasaka

3,930

1.3

93.1

98

43

54

11.7

A11

Urbannet Azabu Building

5,000

1.6

100.0

(Note 5)(Note 5)

70

10.5

D22

Renai Shinjuku-Gyoen Tower

6,500

2.1

95.4

193

118

75

7.2

A15

Granpark

26,340

8.6

98.5

599

311

288

12.0

D23

Shibaura Island Bloom Tower

5,500

1.8

97.0

298

184

113

10.0

A17

Otemachi Financial City Grand Cube

4,680

1.5

99.2

(Note 5)(Note 5)

64

8.6

D24

Questcourt Harajuku

4,500

1.5

100.0

151

66

85

12.7

A18

Shinagawa Season Terrace

18,6876.1

99.7(Note 5)(Note 5)

229

4.7

D25

Urbancourt Ichigaya

1,385

0.5

92.1

66

27

38

12.0

A19

Tokyo Opera City Building

22,0007.2

98.5(Note 5)(Note 5)

384

9.0

D26

Premier Stage Azabu-Juban

1,420

0.5

97.2

39

18

20

14.6

A20

Urbannet Uchisaiwaicho Building

5,640

1.8

98.9

(Note 5)(Note 5)

73

8.5

D27

Premier Stage Sasazuka

1,080

0.4

92.8

32

13

18

10.5

Premier Toyocho Building

4,310

1.4

100.0

97

49

48

16.2

E01

Other 18
Wards ofTokyo

Other 18
Wards ofTokyo

Premier Stage Osaki

1,072

0.3

100.0

37

14

23

12.1

Premier Garden Hongo

975

0.3

100.0

36

14

21

12.1

Ueno TH Building

4,380

1.4

100.0

124

65

59

12.8

E02

B04

Gotanda NT Building

4,100

1.3

88.9

91

43

47

14.3

E03

Premier Grande Magome

1,560

0.5

85.0

44

22

21

15.7

B05

Ueno Tosei Building

5,900

1.9

100.0

209

75

134

10.7

E04

Premier Nozze Yutenji

1,525

0.5

89.7

45

20

24

13.6

B06

Urbannet Ikebukuro Building

13,600

4.4

100.0

752

400

351

13.0

E05

Premier Stage Yushima

1,803

0.6

97.3

53

24

28

17.2

Premier Stage Komagome

1,830

0.6

95.4

57

22

34

18.0

B03

B07

Urbannet Omori Building

4,800

1.6

100.0

249

121

127

6.8

E06

B09

Urbannet Gotanda NN Building

5,250

1.7

86.8

178

90

87

9.7

E07

Premier Stage Otsuka

1,310

0.4

97.0

44

20

24

22.5

B10

Urbannet Nakano Building

6,400

2.1

100.0

(Note 5)(Note 5)

143

10.1

E08

Premier Stage Honjo-Azumabashi

2,640

0.9

97.0

85

35

50

14.7

3,558

1.2

100.0

155

69

86

10.2

E09

Premier Stage Ryogoku

1,496

0.5

97.7

49

19

30

12.8

6,556

2.1

89.5

387

426

(39)

10.4

E10

C01 Urban Areas Premier Yokohama Nishiguchi Building
Surrounding
C02
Tokyo
The Kanagawa Science Park R&D Building
G02

Major
Regional
Cities

Garden Itabashi Hikawacho

2,820

0.9

98.8

17

7

9

7.5

33 properties

80,874

26.3

95.9

2,710

1,307

1,402

−

UDX Special Purpose Company Preferred
Securities (Akihabara UDX) (Note 6)

19,940

6.5

−

−

−

−

−

Subtotal

NTT CRED Okayama Building

3,600

1.2

91.1

274

259

14

14.4

Urbannet Shizuoka Ote-machi Building

1,628

0.5

95.4

104

51

53

9.0

G04

Urbannet Shizuoka Building

1,119

0.4

93.8

72

41

31

9.0

G05

Urban Ace Higobashi Building

4,600

1.5

100.0

249

129

119

6.3

G06

Urbannet Shijo Karasuma Building

9,700

3.2

97.2

422

187

234

2.5

Subtotal

1 property

19,940

6.5

−

−

−

−

−

8,750

2.8

95.5

261

82

178

12.9

Total

62 properties

307,292

100.0

96.6

11,004

6,010

4,993

8.2

206,477

67.2

96.9

8,293

4,702

3,590

−

G03

G07

Urbannet Fushimi Building
Subtotal

28 properties

Residential Properties
D01

5 Central
Wards ofTokyo

Preferred Securities (Office Building)
Z01

5 Central
Wards of
Tokyo

(Note 1)	NUD owns properties in the form of real estate, beneficiary interests in real estate or preferred securities.
(Note 2)	The acquisition price represents the transaction price before taxes, not including various expenses required for the acquisition of the property.

Park Axis Yotsuya Stage

5,208

1.7

94.6

166

74

92

7.4

Park Axis Meiji-Jingumae

2,604

0.8

97.9

57

18

38

9.9

(Note 3) 	The indicated shares represent the ratio of the acquisition price of respective properties to the total acquisition price of all properties.

D04

Cabin Arena Akasaka

1,330

0.4

94.5

41

13

28

10.1

D05

Cabin Arena Minami-Aoyama

1,070

0.3

97.4

35

19

15

11.2

D08

Roppongi Green Terrace

4,678

1.5

97.6

154

54

99

10.3

(Note 4)	NUD acquired earthquake risk reports for real estate and real estate in trust in which NUD invests from Takenaka Corporation. However, the earthquake risk reports are only theexpression of opinions, and do not guarantee the correctness of the statements. The Probable Maximum Loss (PML) values of individual properties are defined as the loss rate fromearthquake damage for individual properties, evaluated based on the strength of a probable earthquake of maximum magnitude that could cause the greatest damage to buildings
and is assumed to happen once every 475 years. However, the PML values do not consider damage to equipment, furniture or inventories, damage by water or fire, compensation
to victims, or losses due to work closures.
		In assessing the PML of the portfolio, the correlation of damages to multiple properties is considered. As such, the loss rates as a whole (total damage/price to reacquire all buildings)
are obtained from the sum of the damage generated simultaneously among buildings that comprise the portfolio when an earthquake that happens once every 475 years occurs at
a certain epicenter, and the maximum figure of the values has been set as the PML value of the portfolio.

D09

Premier Stage Shibakoen II

2,181

0.7

97.5

58

20

37

11.5

(Note 5)	Detailed information on revenues and expenses is not indicated for the property as no consent to disclosure has been obtained from major tenants or co-ownership holders, etc.

D11

Langue Tower Kyobashi

927

0.3

94.7

37

13

23

12.5

(Note 6)	The property owned by UDX Special Purpose Company, the issuer of the preferred securities, comprises an entire office building and its site, and the property name is Akihabara
UDX.

D02

15

Property Name (Note 1)

Share
(%)

D19

B02



Area

(Note 4)

Office Buildings
A01

No

AcquisitionPrice(mm yen)

D12

Premier Stage MitaKeidaimae

1,580

0.5

96.6

53

17

35

14.3

D13

Premier Rosso

1,662

0.5

95.2

59

25

34

14.0

D14

Premier Blanc Yoyogikouen

2,330

0.8

95.1

73

32

40

13.1

(continued on next page)

16

OVERVIEW OF PROPERTIES OWNED (as of April 30, 2024)
Distribution of Portfolio Properties
5 Central Wards of Tokyo

E10
Itabashi Ward

Arakawa Ward

E06

B06 E07

Toshima Ward

E02
Bunkyo Ward

B05

Taito Ward

Nakano Ward

B03
E05

A05

B10

Z01

Shinjuku Ward

D16

Shinjuku
Station

D22

D25

D01

Chiyoda Ward

A19
D27

E08
Akihabara
Station

D02

D14
D13

Koto Ward

D04
D21
D17

A20
A02 A01

D08
A03

ShibuyaStation

D05

A04

A11

B02

D04 Cabin Arena Akasaka

D20 Shibaura Island Air Tower

A04 KN Shibuya No.3

D05 Cabin Arena Minami-Aoyama

D21 Storia Akasaka

A05 Takadanobaba Center Building

D08 Roppongi Green Terrace

D22 Renai Shinjuku-Gyoen Tower

A10 Urbannet Mita Building

D09 Premier Stage Shibakoen II

D23 Shibaura Island Bloom Tower

A11 Urbannet Azabu Building

D11 Langue Tower Kyobashi

D24 Questcourt Harajuku

A15 Granpark

D12 Premier Stage MitaKeidaimae

D25 Urbancourt Ichigaya

A17 Otemachi Financial City Grand Cube

D13 Premier Rosso

D26 Premier Stage Azabu-Juban

A18 Shinagawa Season Terrace

D14 Premier Blanc Yoyogikouen

D27 Premier Stage Sasazuka

A19 Tokyo Opera City Building

D15 Premier Stage Uchikanda

Z01	UDX Special Purpose Company

A20 Urbannet Uchisaiwaicho Building

D16 Premier Stage Ichigayakawadacho

D26

D18
D09
D12

B02 Premier Toyocho Building

B09 Urbannet Gotanda NN Building

E05 Premier Stage Yushima

B03 Ueno TH Building

B10 Urbannet Nakano Building

E06 Premier Stage Komagome

B04 Gotanda NT Building

E01 Premier Stage Osaki

E07 Premier Stage Otsuka

B05 Ueno Tosei Building

E02 Premier Garden Hongo

E08 Premier Stage Honjo-Azumabashi

B06 Urbannet Ikebukuro Building

E03 Premier Grande Magome

E09 Premier Stage Ryogoku

B07 Urbannet Omori Building

E04 Premier Nozze Yutenji

E10 Garden Itabashi Hikawacho

Hamamatsucho
Station

B09

Major Regional Cities
Kyoto

Tokyo
Okayama

Kawasaki C02
City

Hyogo

G02

G06

G05

C01
Kanagawa

A18

Meguro Ward

Preferred Securities (Akihabara UDX)

Chuo Ward

A10 A15 D20
D23
D19

E04

A03 Premier Dogenzaka Building

Urban Areas Surrounding Tokyo

MinatoWard

Setagaya Ward

D19 MEW

Other 18 Wards of Tokyo

D11
D24

D18 Premier Stage Shibakoen

D02 Park Axis Meiji-Jingumae

Sumida WardTokyo
StationShibuya Ward

D01 Park Axis Yotsuya Stage

A02 Landic Shimbashi 2 Building

D17 Walk Akasaka

E09

D15
A17

A01 Landic Shimbashi Building

Osaka

Yokohama
City

Shinagawa
Station

B04
E01

G07

G03

Aichi

G04

Shizuoka
Shinagawa Ward

JR lines
Ginza Line
Marunouchi Line
Hibiya LineE03

Ota Ward

17

B07

C01 Premier Yokohama Nishiguchi Building

G02 NTT CRED Okayama Building

C02 The Kanagawa Science Park R&D Building

G03 Urbannet Shizuoka Ote-machi Building
G04 Urbannet Shizuoka Building
G05 Urban Ace Higobashi Building

Hanzomon Line

G06 Urbannet Shijo Karasuma Building

Nanboku Line

G07 Urbannet Fushimi Building18

(Overview of Properties Owned (as of April 30, 2024))

Office
Buildings

5 Central Wards of Tokyo
A02

A03

A04

Landic Shimbashi Building

Landic Shimbashi 2 Building

Premier Dogenzaka Building

KN Shibuya No.3

Premier Toyocho Building

Ueno TH Building

Gotanda NT Building

Ueno Tosei Building(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Shibuya Ward, Tokyo)(Shibuya Ward, Tokyo)(Koto Ward, Tokyo)(Bunkyo Ward, Tokyo)(Shinagawa Ward, Tokyo)(Taito Ward, Tokyo)

A05

B02

Other 18 Wards of Tokyo

A01



5 Central Wards of Tokyo
A10

A11

A15



B03

B04

B05


B06

Other 18 Wards of Tokyo
B07

B09

B10

Forward Stroke Inc.

Takadanobaba Center Building

Urbannet Mita Building

Urbannet Azabu Building

Granpark

Urbannet Ikebukuro Building

Urbannet Omori Building

Urbannet Gotanda NN Building

Urbannet Nakano Building(Shinjuku Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Toshima Ward, Tokyo)(Ota Ward, Tokyo)(Shinagawa Ward, Tokyo)(Nakano Ward, Tokyo)

A17

5 Central Wards of Tokyo
A18

A19

A20

Otemachi Financial City Grand
Cube(Chiyoda Ward, Tokyo)

Shinagawa Season Terrace

Tokyo Opera City Building(Minato Ward, Tokyo)(Shinjuku Ward, Tokyo)OfficeBuildings

Urban Areas Surrounding Tokyo

C01

C02

Urbannet Uchisaiwaicho
Building

Premier Yokohama Nishiguchi
Building

The Kanagawa Science Park
R&D Building(Minato Ward, Tokyo)(Yokohama City, Kanagawa)(Kawasaki City, Kanagawa)



19


OfficeBuildings

Photo: Forward Stroke Inc.

20

(Overview of Properties Owned (as of April 30, 2024))


OfficeBuildings

Major Regional Cities

5 Central Wards of Tokyo

G02

G03

G04

G05

D08

D09

D11

D12

NTT CRED Okayama Building

Urbannet Shizuoka Ote-machi
Building

Urbannet Shizuoka Building

Urban Ace Higobashi Building

Roppongi Green Terrace

Premier Stage Shibakoen II

Langue Tower Kyobashi

Premier Stage MitaKeidaimae(Shizuoka City, Shizuoka)(Osaka City, Osaka)(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Chuo Ward, Tokyo)(Minato Ward, Tokyo)(Okayama City, Okayama)(Shizuoka City, Shizuoka)

Major Regional Cities

G06





5 Central Wards of Tokyo

G07

D13

D14

D15

D16

Urbannet Fushimi Building

Premier Rosso

Premier Blanc Yoyogikouen

Premier Stage Uchikanda(Nagoya City, Aichi)(Shibuya Ward, Tokyo)(Shibuya Ward, Tokyo)(Chiyoda Ward, Tokyo)

Premier Stage
Ichigayakawadacho

Photo: Forward Stroke Inc.

Urbannet Shijo Karasuma
Building(Kyoto city, Kyoto)(Shinjuku Ward, Tokyo)

Residential
Properties21

5 Central Wards of Tokyo

5 Central Wards of Tokyo

D01

D02

D04

D05

D17

D18

D19

D20

Park Axis Yotsuya Stage

Park Axis Meiji-Jingumae

Cabin Arena Akasaka

Cabin Arena Minami-Aoyama

Walk Akasaka

Premier Stage Shibakoen

MEW

Shibaura Island Air Tower(Shinjuku Ward, Tokyo)(Shibuya Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)

22

(Overview of Properties Owned (as of April 30, 2024))

Residential
Properties

5 Central Wards of Tokyo

Other 18 Wards of Tokyo

D21

D22

D23

D24

E05

E06

E07

Storia Akasaka

Renai Shinjuku-Gyoen Tower

Shibaura Island Bloom Tower

Questcourt Harajuku

Premier Stage Yushima

Premier Stage Komagome

Premier Stage Otsuka(Minato Ward, Tokyo)(Shinjuku Ward, Tokyo)(Minato Ward, Tokyo)(Shibuya Ward, Tokyo)(Bunkyo Ward, Tokyo)(Toshima Ward, Tokyo)(Toshima Ward, Tokyo)

E08

Premier Stage
Honjo-Azumabashi(Sumida Ward, Tokyo)



5 Central Wards of Tokyo

Other 18 Wards of Tokyo

D25

D26

D27

Urbancourt Ichigaya

Premier Stage Azabu-Juban

Premier Stage Sasazuka

Premier Stage Ryogoku

Garden Itabashi Hikawacho(Shinjuku Ward, Tokyo)(Minato Ward, Tokyo)(Shibuya Ward, Tokyo)(Sumida Ward, Tokyo)(Itabashi Ward, Tokyo)Residential
Properties
E01

E09

Other 18 Wards of Tokyo
E02

E03

E10


Preferred
Securities (Office Building)

E04

5 Central Wards of Tokyo

UDX Special Purpose
Company Preferred
Securities(Akihabara UDX) (Note)

Z01(Chiyoda Ward, Tokyo)(Note) 
The property owned by UDX
Special Purpose Company, theissuerofthepreferred
securities, comprises an entire
office building and its site, andthe property name is Akihabara
UDX.

23

Premier Stage Osaki

Premier Garden Hongo

Premier Grande Magome

Premier Nozze Yutenji(Shinagawa Ward, Tokyo)(Bunkyo Ward, Tokyo)(Ota Ward, Tokyo)(Setagaya Ward, Tokyo)Photo by Kawasumi Architectural Office24

ORGANIZATION OF NUDINFORMATION FOR UNITHOLDERS

Structure of NUD

Changes in Investment Unit Price of NUD
Investment unit price (yen) (left axis)
Transaction volume (units) (right axis)• Consignment of asset
management operations• Consignment
NTT UD REIT Investmentof generaladministration
Corporation
on operationof institutions

NTT Urban Development AssetManagement Corporation(yen)

39th Fiscal Period

40th Fiscal PeriodMarket capitalization: 179,326 million yen
Investment unit price at the end of the 43rd Fiscal Period: 121,000 yen
(as of April 30, 2024)

41st Fiscal Period

42nd Fiscal Period(units)43rd Fiscal Period

80,000150,000

Investment(Securities)

Corporate bondinvestors

60,000Principal andinterest repayment(Loans)Equityinvestment

Unitholders’capital40,00050,000Tokyo
Stock Exchange

Distribution

Investment

Sumitomo Mitsui Trust Bankand others

Financial
institutions, etc.

Principal andinterest repayment

Assets• Consignment of asset custodyoperations• Consignment of generaladministration on accounting
and transfer agent operations• Consignment of operations
related to corporate bonds

100,000

Lending

Liabilities

20,000Unitholders
00

End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr.

Rental revenues

2021

Unitholders

2022

2023

2024

Real estate

Number of Investment Units by Unitholders and Number of Unitholders (as of April 30, 2024)
Foreign corporations, etc.

(Note) The above chart shows the major part of NUD’s structure.

Individuals and others

16.8%

12.2%

Other domestic corporations

Foreign corporations, etc.

1.8%

1.3%

Financial institutions

Overview of Asset Manager
Other domestic
corporations

Trade name

NTT Urban Development Asset Management Corporation

Paid-in capital

100 million yen

Line of business

Investment management business in accordance with the Financial Instruments and Exchange Act

Shareholder composition

6.5%(including securities
companies)

Number ofinvestment units
by unitholders
Total

0.8%

1,482,035
Units

NTT Urban Development Corporation (100.0%)

Number ofUnitholders
Total

18,059Financial institutions(including securities
companies)

Individuals and others

64.3%

95.9%

(Note) The investment unit ratio has been rounded down to the first decimal place.

Shareholders’ Meeting

Annual Schedule

Statutory Auditors
Board of Directors
Compliance Committee

Apr.

Acquisition Priority Review Meeting

Settlement monthfor the fiscal periods
ending April

Investment Committee
President and CEO

Internal Audit Office

Investment
Marketing
Department

25

Operation I
Department

Compliance Office

Operation II
Department

FundManagement
Department

Finance
Department

Inverstor
Relations
OfficeCorporate
Administration
Department

Oct.
Engineering andSustainability
Management Office

Settlement monthfor the fiscal periods
ending October

May

Jun.
Announce financial
results for the fiscal
periods ending April

Nov.

Dec.
Announce financial
results for the fiscal
periods ending
October

Jul.

Aug.

Sep.

Start payment of distributions
for the fiscal periods ending April
Send out asset management reportfor the fiscal periods ending April

Jan.

Feb.

Mar.

Start payment of distributions
for the fiscal periods ending October
Send out asset management reportfor the fiscal periods ending October

26

BALANCE SHEETS
as of October 31, 2023 and April 30, 2024
Thousands of yen
October 31, 2023

Thousands of yen

April 30, 2024

October 31, 2023

ASSETSLIABILITIESCURRENT ASSETSCURRENT LIABILITIESCash and deposits

¥

6,607,299¥

4,979,578

Accounts payable
Short-term loans payable¥

2,697,741

April 30, 2024¥

2,890,367

Cash and deposits held in trust

13,436,871

14,812,025

5,700,000

9,700,000

Tenant receivables

1,047,576

947,293Long-term loans payable due within one year

(Note-9) (Note-16)

9,500,000

12,250,000

Prepaid expenses

170,195

276,695

Corporate bonds due within one year

(Note-8) (Note-16)

2,000,000−

Income taxes refund receivables

99,681

93,587

Accrued expenses

128,789

165,617−394,454

Distributions payable

15,435

14,024364

17,892

Income taxes payable

605

2,315

21,361,987

21,521,527

Consumption taxes refund receivables
Other current assets


TOTAL CURRENT ASSETSLONG-TERM ASSETS

Consumption taxes payable

211,447−

Business office taxes payable

7,425

17,394

1,040,863

1,111,679

59,39095,154TOTAL CURRENT LIABILITIES

21,361,698

26,246,553

Long-term loans payable

(Note-9) (Note-16)

97,750,000

119,800,000

Corporate bonds

(Note-8) (Note-16)

Rents received in advance

Property and equipment

Deposits received

Buildings

(Note-6)

6,703,792

8,097,006

Structures

(Note-6)

20,60954,649

Machinery and equipment

(Note-6)

6,363

6,363

LONG-TERM LIABILITIES

Tools, furniture and fixtures

(Note-6)

4,439

4,986

Land

(Note-6)

16,273,040

18,180,095

Construction in progress

(Note-6)

21,483

13,721

Buildings held in trust(Note-6)

96,257,894

102,292,254

7,200,000

7,200,000

Tenant security deposits

1,547,264

1,501,049

Tenant security deposits held in trust

7,810,917

8,345,216

Structures held in trust(Note-6)

2,351,807

2,487,027



TOTAL LONG-TERM LIABILITIES

114,308,182

136,846,265

Tools, furniture and fixtures held in trust(Note-6)

908,461

926,913

TOTAL LIABILITIES

135,669,881

163,092,818

Land held in trust(Note-6)

134,370,288

162,804,148

Construction in progress held in trust (Note-6)

28,266

125,520

UNITHOLDERS' EQUITY

(Note-6)(39,758,795)(41,420,321)

Unitholders’ capital

132,637,845

142,154,069

Total property and equipment, net

217,187,650

253,572,366

Reserve for reduction entry

1,611,384

2,111,384

Unappropriated retained earnings

5,039,953

4,221,670

139,289,182

148,487,123

Less accumulated depreciation


NET ASSETS

Units authorized – 10,000,000 units as of October 31, 2023

Intangible fixed assets– 10,000,000 units as of April 30, 2024

Leasehold held in trust(Note-6)

14,998,573

14,998,573

Other intangible fixed assets held in trust(Note-6)

192

169

Other intangible fixed assets

(Note-6)

5,830

6,977

Total intangible fixed assets

15,004,596

15,005,719

(Note-7)Units issued and outstanding – 1,401,635 units as of October 31, 2023
– 1,482,035 units as of April 30, 2024
SurplusInvestments and other assets
Investment securities

20,035,175(Note-16) (Note-17)

Deferred tax assets

20,035,175



TOTAL UNITHOLDERS’ EQUITY

2,336

5,821



TOTAL NET ASSETS

Other deposits

17,252

17,252

TOTAL LIABILITIES AND NET ASSETS

Other deposits held in trust

819,166

819,166

Long-term prepaid expenses

496,471562,115(Note-12)

Total investment and other assets

21,370,401

21,439,531



TOTAL LONG-TERM ASSETS

253,562,648

290,017,617

New investment unit issuance costs

8,835

18,722

Corporate bond issuance costs

25,592

22,07534,42740,797139,289,182¥

274,959,064

148,487,123¥

311,579,942

The accompanying notes are an integral part of these financial statements.

DEFERRED ASSETSTOTAL DEFERRED ASSETSTOTAL ASSETS¥

274,959,064¥

311,579,942

The accompanying notes are an integral part of these financial statements.

27

28

PROFIT AND LOSS STATEMENTS

STATEMENTS OF CHANGES IN
UNITHOLDERS’ EQUITY

For the six months ended October 31, 2023 and April 30, 2024

For the six months ended October 31, 2023 and April 30, 2024
Thousands of yen
October 31, 2023

Thousands of yen
Unitholders’ Equity

April 30, 2024

SurplusOPERATING REVENUES AND EXPENSES
Operating revenues
Rental revenues

(Note-10)

Other rental revenues

(Note-10)

1,165,896

1,159,445

Gains from sale of properties

(Note-11)

1,475,346−

488,086

472,450

5,940,833

6,010,785

Asset management fees

482,400

453,774

Directors’ compensation

4,200

4,200

Custodian fees

12,644

13,509Administration fees

85,80390,368

Audit fees

10,20010,675

Other expenses

155,744

124,650

5,490,155

4,769,098¥

Dividend income

9,052,651¥

Property operating expenses


NON-OPERATING REVENUES AND EXPENSES
Interest income

92

103

Return of unclaimed distribution

887

1,148

Other non-operating revenues

143

19

Interest expenses

415,638

505,185

Interest expenses on corporate bonds

21,50920,080

Amortization of corporate bond issuance costs

4,198

3,516

Amortization of new investment unit issuance costs

4,417

7,278

Public listing related costs of new investment units

−

8,836

2,705

2,127

5,042,809

4,223,344

5,042,809

4,223,344

Current

605

5,217

Deferred

2,268(3,485)

Net income

5,039,936

4,221,612

16

57

Non-operating expenses

Other non-operating expenses
Ordinary income

Income before income taxes¥ 132,637,845

Total
Voluntary
Retained
Earnings¥¥

1,110,784

1,110,784

Total
Surplus

Total
Net Assets¥

6,119,058¥ 138,756,904¥ 138,756,904(500,600)−−−(4,507,658)(4,507,658)(4,507,658)(4,507,658)

5,039,936

5,039,936

5,039,936

5,039,936

31,678532,278

532,278

532,278

6,651,337¥ 139,289,182¥ 139,289,182

9,516,224

9,516,224

5,008,274¥

Provision of reserve for
reduction entry

500,600

500,600

Cash distributions paid
Net income
Total changes during the period−

BALANCE AT OCTOBER 31, 2023 ¥ 132,637,845

500,600¥

1,611,384

500,600¥

1,611,384¥

5,039,953¥

Changes during the period
Issuance of new investment
units

9,516,224(500,000)−−−

Cash distributions paid

(4,539,895)(4,539,895)(4,539,895)(4,539,895)

Net income

4,221,612

4,221,612

4,221,612

4,221,612(818,283)(318,283)

9,197,941

9,197,941

6,333,054¥ 148,487,123¥ 148,487,123

Total changes during the period
BALANCE AT APRIL 30, 2024

500,000

9,516,224¥ 142,154,069

500,000

500,000¥

2,111,384

500,000¥

2,111,384¥

4,221,670¥

The accompanying notes are an integral part of these financial statements.

(Note-12)

Income carried forward
UNAPPROPRIATED RETAINED EARNINGSBALANCE AT APRIL 30, 2023

Reserve for
Reduction
Entry

Provision of reserve for
reduction entry

Non-operating revenues

Income taxes

(Note-1)

Total
Unitholders’EquityUnappropriatedRetained
Earnings

Changes during the period(Note-10)

Operating incomeUnitholders’Capital9,845,166

Operating expenses

Voluntary Retained
Earnings¥

5,039,953¥

4,221,670

The accompanying notes are an integral part of these financial statements.

2930

CASH FLOW STATEMENTSNOTES TO FINANCIAL STATEMENTS

For the six months ended October 31, 2023 and April 30, 2024

For the six months ended October 31, 2023 and April 30, 2024
Note-1. Organization and basis of presentation

Thousands of yen
October 31, 2023

April 30, 2024

CASH FLOW FROM OPERATING ACTIVITIESIncome before income taxes¥

Depreciation

5,042,809¥

4,223,344

1,579,098

1,664,526

Amortization of corporate bond issuance costs

4,198

3,516

Amortization of new investment unit issuance costs

4,417

7,278

For the six months ended April 30, 2024, NUD resolved on the issuance of new investment units at the board of directors’ meeting heldon October 23, 2023. Payment was completed on November 1, 2023 for new investment units issued through public offering, and on
November 28, 2023 for new investment units issued through third-party allotment. Furthermore, equity financing NUD made in the past
five years through the end of the 43rd fiscal period (April 30, 2024) is summarized below.

Interest income

(92)

(103)

Return of unclaimed distributions(887)(1,148)Interest expenses

437,148525,266

Decrease (increase) in tenant receivables(101,509)

100,760

Increase (decrease) in accounts payable(372,946)

125,606

3,813(394,454)

November 1, 2021

Public offering

80,6001,397,595

11,701132,051

Increase (decrease) in consumption taxes payable

211,447(211,447)

November 29, 2021

Third-party allotment

4,040

1,401,635

586

132,637

Increase (decrease) in rents received in advance

43,08870,816

November 1, 2023

Public offering

76,6001,478,235

9,066

141,704

Increase (decrease) in deposits received

8,963

35,763

November 28, 2023

Third-party allotment

3,800

1,482,035

449

142,1543,759,907−

53,331(82,791)

10,672,786

6,066,93492

103(427,858)(589,166)(2,989)2,587

10,242,031

5,480,458

Payments for purchases of property and equipment(22,262)(3,359,458)

Payments for purchases of property and equipment held in trust(908,746)(34,619,624)

(275)

(448)

Proceeds from tenant security deposits

26,54859,921

Payments of tenant security deposits(16,841)(106,412)

Proceeds from tenant security deposits held in trust

241,076

1,129,068

Payments of tenant security deposits held in trust(380,262)(594,971)

Net cash provided by (used in) investing activities(1,060,762)(37,491,925)

Decrease (increase) in consumption taxes refund receivables

Decrease in carrying amounts of property and equipment held in trust
due to sale
Other
SUBTOTALInterest received
Interest paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities
CASH FLOW FROM INVESTING ACTIVITIESPayments for purchases of intangible fixed assets

Proceeds from short-term loans payable

2,000,000

Repayments of short-term loans payable¥

Proceeds from long-term loans payable−

7,700,000¥

5,000,000(3,700,000)
28,050,000

Repayments of long-term loans payable(7,700,000)(3,250,000)

Redemption of corporate bonds(2,000,000)(2,000,000)

Payments of distributions(4,506,512)(4,540,158)

Proceeds from issuance of new investment units−

9,516,224

Payments of new investment unit issuance costs−(17,165)

Net cash provided by (used in) financing activities(7,206,512)

31,758,900

NET CHANGE IN CASH AND CASH EQUIVALENTS

1,974,757(252,566)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

18,069,412

20,044,170

CASH AND CASH EQUIVALENTS AT END OF PERIODThe accompanying notes are an integral part of these financial statements.

Date

Description

Total Number of Investment Units
Issued and Outstanding(units)Increase (Decrease)

BalanceUnitholders’ Capital(millions of yen)
Increase (Decrease)

Balance

As of April 30, 2024, NUD had total unitholders’ capital of 142,154,069 thousand yen with 1,482,035 units outstanding.
As of April 30, 2024, NUD owned a portfolio of 28 office buildings, 33 residential properties and preferred securities of an SPC (62properties in total).
Total acquisition costs of those properties were 307,292 million yen, with the investment ratio by asset type standing at 67.2% for officebuildings, 26.3% for residential properties and 6.5% for others (preferred securities).
(b)	Basis of presentation - The financial statements of NUD have been prepared in accordance with the provisions set forth in the Financial
Instruments and Exchange Act and other related regulations of Japan and in conformity with accounting principles and practices generally
accepted in Japan, which are different in certain respects from the application and disclosure requirements of International Financial
Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements that were prepared for Japanese domestic
purposes from the accounts and records maintained by NUD and were filed with the Kanto Local Finance Bureau of the Ministry of Financeas required by the Financial Instruments and Exchange Act. Certain items presented in the financial statements have been reclassified forthe convenience of readers outside Japan. NUD does not prepare consolidated financial statements as NUD has no subsidiaries.
NUD’s fiscal period is six months, which respectively ends in April and October of each year.
Amounts less than 1 thousand yen have been omitted. As a result, the total shown in the financial statements and notes thereto do notnecessarily agree with the sum of the individual account balances.

Note-2. Summary of significant accounting policies

CASH FLOW FROM FINANCING ACTIVITIES

31(a)	Organization - NTT UD REIT Investment Corporation (hereinafter, “NUD”) is an investment corporation established in May 2002 under the
Act on Investment Trusts and Investment Corporations (hereinafter, “Investment Trusts Act”) with an initial capital of 200,000 thousand yen(400 units), and it is listed on the Tokyo Stock Exchange. NTT Urban Development Asset Management Corporation (hereinafter, “UDAM”)
is the asset manager of NUD.

(Note-5)¥

20,044,170¥

19,791,603(a)	Cash and cash equivalents - Cash and cash equivalents consist of cash, demand deposits, cash and deposits held in trust, and short-term
investments. Short-term investments are highly liquid, readily convertible to cash, have an insignificant risk of change in value, and an
original maturity of three months or less.
(b)	Valuation standard and method for securities Available-for-sale investment securities - Stocks and other securities with no market prices are stated at cost being determined by themoving average method.
(c)	Depreciation and amortization Property and equipment (including those held in trust) - Property and equipment are carried at cost, less accumulated depreciation.
Depreciation of property and equipment, except for land, is computed by using the straight-line method at rates based on estimateduseful lives.
The ranges of useful lives used in the computation of depreciation are generally as follows:
Buildings ............................................... 3-68 years
Structures ............................................... 3-58 years
Machinery and equipment ......................... 11 years
Tools, furniture and fixtures ................... 2-15 years

32

(Notes to Financial Statements cont.)

In accordance with the amended Japanese tax law, properties and equipment acquired on or after April 1, 2007 are depreciated with theresidual value of 1 yen recognized at the end of the useful lives.
Properties and equipment acquired before March 31, 2007 are depreciated with the residual value of 5% of acquisition costs over useful
lives based on the tax law at that time. However, in accordance with the amended Japanese tax law, such properties and equipment are
depreciated with the residual value of 1 yen over five years from the following fiscal years after they are depreciated to the residual value
of 5% of acquisition costs.
Long-term prepaid expenses - Prepaid expenses are amortized using the straight-line method.
New investment unit issuance costs - New investment unit issuance costs are amortized using the straight-line method over three years.
Corporate bond issuance costs - Corporate bond issuance costs are amortized using the straight-line method over the period through theredemption of the bonds.
(d)	Income taxes - Income taxes are accounted for financial reporting purposes. The tax effect of temporary differences for the carrying
amount of assets and liabilities between accounting basis and tax basis is recognized as deferred taxes.
(e) Revenue recognition Sale of properties - NUD recognizes revenues from sale of properties when the purchaser who is a customer obtains control of the relevant
property following the seller fulfilling its delivery obligations stipulated in the transaction agreement of the property. On the profit and loss
statements, the amount obtained by deducting cost of properties, which is the book value of sold properties, and other expenses for sale,
which are expenses directly related to the sale, from revenues from sale of properties, which are the proceeds from the sale of theproperties, is indicated as gains (losses) from sale of properties.
Lease of properties - NUD owns and operates office buildings and residential properties that are rented to tenants. Revenues from leasing
the office and residential spaces are recognized on an accrual basis based on the lease agreements. Rental revenues include fixed rental
revenues, recoveries of utility charges, and other income.
(f)	Property-related taxes - Property-related taxes (i.e., property tax, city planning tax and depreciable property tax) are imposed on properties
on a calendar year basis. The amount of taxes paid in the period is charged to income as property operating expenses. In accordance withJapanese business practice, at the time of disposal, the seller of the property is generally liable for property-related taxes on the property
from the date of disposal to the end of the calendar year in which the property is disposed. The seller, however, is reimbursed by thepurchaser of the property for the accrued property-related tax liabilities, and the amount of the settlement reflects this adjustment. NUD
is allocated the portion of the property-related taxes for the period from the purchase date of each property through the end of thecalendar year. The amounts of those allocated portions of the property-related taxes are capitalized as part of the acquisition costs of those
properties. Capitalized property-related taxes totaled 1,270 thousand yen for the six months ended October 31, 2023 and 25,653 thousand
yen for the six months ended April 30, 2024.
(g)	Method of hedge accounting - Special accounting is applied for interest rate swap transactions that satisfy the requirements for special
accounting.
Hedging instruments and hedged items - Hedging instruments: interest rate swap transactions, Hedged items: interest expenses on loans
payable.
Hedging policy - NUD conducts derivative transactions to hedge interest rate fluctuation risks for loans payable with floating interest rates
based on the “Asset Management Target and Policy” provided in its Articles of Incorporation and the risk management regulations onderivative transactions.
Method for assessing the effectiveness of hedging - Assessment of the effectiveness of hedging is omitted as requirements are satisfied
for special accounting for interest rate swap transactions.
(h)	Accounting treatment of beneficiary interest in trust accounts, including real estate - For beneficiary interests in real estate trust, which
are commonly utilized in the ownership of commercial properties in Japan and through which NUD holds all of its properties, all accountsof assets and liabilities held in trust, as well as all income generated and expenses incurred from assets in trust, are recognized in therelevant balance sheet and profit and loss statement.
Furthermore, the following material accounts are separately stated on the balance sheet for assets in trust recognized in relevant accounts.
(1) Cash and deposits held in trust(2)	Buildings held in trust, structures held in trust, tools, furniture and fixtures held in trust, land held in trust, and construction inprogress held in trust(3) Leasehold held in trust(4) Other intangible fixed assets held in trust(5) Other deposits held in trust(6) Tenant security deposits held in trust

Note-3. Significant accounting estimates
Impairment of long-term assets(1) Amounts recorded on the financial statements
Thousands of yen
October 31, 2023
Property and equipment¥

Intangible fixed assets

217,137,900

April 30, 2024¥

253,433,124

14,998,765

15,000,013(2)	Information on the details of the significant accounting estimates for identified items
In accordance with the Accounting Standard for Impairment of Fixed Assets, NUD has adopted the accounting treatment to reduce thebook value of long-term assets to a recoverable amount when the invested amount is deemed to be unrecoverable due to lowered
profitability.
In adopting the accounting treatment, the respective properties owned by NUD are regarded as a single asset group, and judgment ismade whether it is required to recognize impairment losses when indications of impairment are deemed to exist for the group due tocontinuous operating losses, a significant drop in the market value and significant deterioration of the business environment, etc.
Future cash flow estimates are used to determine whether or not to recognize impairment losses. When it is determined that impairment
losses should be recognized, the book value is reduced to the recoverable amount based on the real estate appraisal values by external
appraisers, and the reduced amount is recorded as impairment losses.
In calculating the future cash flow, the underlying rent, occupancy rate and real estate rental expenses, etc. are determined bycomprehensively taking into account the market trends and transaction cases of similar properties, etc.
The performance and the market value of each property may be affected by the trends in the real estate rental market and real estatetransaction market. Accordingly, when changes arise to the assumptions of the estimate, they may affect the financial position and resultsof operation of NUD in the following fiscal period.

Note-4. Revenue recognition
Six months ended October 31, 2023 [May 1, 2023 - October 31, 2023]
1. Breakdown information on revenues from contracts with customers:
For the breakdown information on revenues from contracts with customers, refer to Note-10 and Note-11.
Note that Note-10 includes revenues in accordance with the Accounting Standard for Lease Transactions (ASBJ Statement No.13).
Moreover, revenues generated from contracts with major customers comprise of gains from sale of properties and utilities income.
Six months ended April 30, 2024 [November 1, 2023 - April 30, 2024]
1. Breakdown information on revenues from contracts with customers:
For the breakdown information on revenues from contracts with customers, refer to Note-10 and Note-11.
Note that Note-10 includes revenues in accordance with the Accounting Standard for Lease Transactions (ASBJ Statement No.13).
Moreover, revenues generated from contracts with major customers comprise of gains from sale of properties and utilities income.

Note-5. Cash and cash equivalents
Cash and cash equivalents as of October 31, 2023 and April 30, 2024 consisted of the following:Thousands of yen
October 31, 2023
Cash and deposits¥

Cash and deposits held in trust
CASH AND CASH EQUIVALENTS

6,607,299

April 30, 2024¥

13,436,871¥

20,044,170

4,979,578
14,812,025¥

19,791,603(i)	Accounting for consumption taxes - Non-deductible consumption taxes on property acquisitions are capitalized with the acquisition costsof the individual properties.

33

34

(Notes to Financial Statements cont.)

Note-6. Schedule of property and equipment and intangible fixed assets

Note-8. Corporate bonds

Property and equipment and intangible fixed assets as of October 31, 2023 and April 30, 2024 consisted of the following:

Corporate bonds for the six months ended October 31, 2023 and April 30, 2024 were as follows:

Thousands of yen

Thousands of yen

October 31, 2023
Acquisition
costs

April 30, 2024

Accumulated
depreciation

Acquisition
costsBook value

Accumulated
depreciation

Book value

Unsecured bond No.8 (issued on July 24, 2018 and due on July 24, 2028)(with pari passu conditions among specified investment corporation bonds)

Property and equipment
Buildings and structures
Buildings¥

Structures
Machinery and equipment
Tools, furniture and fixtures
Land
Construction in progress

6,703,792¥

438,410¥6,265,381¥

8,097,006¥

566,331¥7,530,674

20,6091,169

19,43954,6491,775

52,874

6,363

878

5,485

6,363

1,170

5,192

4,439

870

3,568

4,986

1,254

3,732

16,273,040−

16,273,040

18,180,095−

18,180,095

21,483−

21,483

13,721−

13,721

Structures
Tools, furniture and fixtures
Land
Construction in progress
SUBTOTAL

37,274,299

2,351,807

1,421,365¥

58,983,594¥ 102,292,254¥

38,713,352

930,4412,487,027

1,464,810¥

Unsecured bond No.10 (issued on April 27, 2021 and due on April 25, 2031)(with pari passu conditions among specified investment corporation bonds)(green bond)

3,200,000

3,200,000

0.50

7,200,000−

908,461

621,802286,658

926,913671,626

255,286

134,370,288−

134,370,288

162,804,148−

162,804,148

28,266−28,266

125,520−

125,520

256,946,446

39,758,795

217,187,650

294,992,688

41,420,321

253,572,366

14,998,573

14,998,573−

14,998,573

6,469

6,276

192

6,469

6,300

169

44,948

39,117

5,830

47,27940,302

6,977

SUBTOTAL

15,049,991

45,39415,004,596

15,052,322

46,602

15,005,719

TOTAL¥ 271,996,437

39,804,190¥ 232,192,247¥ 310,045,010

41,466,923¥ 268,578,086

¥

¥

¥



(thousands of yen)More than one year andtwo years or less−More than two years andthree years or lessMore than three years andfour years or lessMore than four years andfive years or less−−

4,000,000−

Note-9. Short-term and long-term loans
Short-term and long-term loans as of October 31, 2023 and April 30, 2024 consisted of the following:Thousands of yen
LenderOctober 31,
2023(Amount)

Increase

April 30,
2024
(Amount)

Decrease

Averageinterest
rate *1(%)

Repay­
ment

0.19784

Mar. 29,2024

Unsecured andnon-guaranteed
Floating rate

0.21784

Mar. 29,2024

Unsecured andnon-guaranteed
Floating rate

Use offunds

Remarks

SHORT-TERM LOANS

A government subsidy of 19,834 thousand yen, granted for the capital expenditures at The Kanagawa Science Park R&D Building in 2006, hasbeen deducted from the acquisition cost of the building held in trust.

Note-7. Unitholders’ equity
NUD issues investment units in accordance with the Investment Trusts Act. All the proceeds from the issuance of new units are designated asstated capital. NUD maintains minimum net assets of at least 50,000 thousand yen as required by the Investment Trusts Act.

Mizuho Bank, Ltd.

1,700,000−

1,700,000−

Sumitomo Mitsui Trust Bank, Limited

1,100,000−

1,100,000−

MUFG Bank, Ltd.

300,000−

300,000−

Sumitomo Mitsui Banking Corporation

300,000−

300,000−

NTT TC Leasing Co., Ltd.

300,000−

300,000−

Mizuho Bank, Ltd.

2,000,000−−

2,000,000

0.22107

Jun. 28,2024

Mizuho Bank, Ltd.

−2,000,000−

2,000,000

0.28091

Feb. 28,2025

Mizuho Bank, Ltd.

−1,700,000−

1,700,000

Sumitomo Mitsui Trust Bank, Limited−

1,100,000−

1,100,000

0.31000

Mar. 31,2025

Unsecured andnon-guaranteed
Floating rate

MUFG Bank, Ltd.

−

300,000−

300,000

0.33000

Mar. 31,2025

Unsecured andnon-guaranteed
Floating rate

0.35000

Mar. 31,2025

Unsecured andnon-guaranteed
Floating rate

0.31273

Apr. 30,
2025

Unsecured andnon-guaranteed
Floating rate

Sumitomo Mitsui Banking Corporation−

300,000−

300,000

NTT TC Leasing Co., Ltd.

−

300,000−

300,000

Sumitomo Mitsui Trust Bank, Limited−

1,000,000−

1,000,000−

1,000,000−

1,000,000

5,700,000

7,700,000

3,700,000

9,700,000

Mizuho Bank, Ltd.
SUBTOTAL

35

9,200,000

1,022,217

−

Other

¥

63,578,902

14,998,573

Other intangible fixed assets

0.58* The anticipated maturities of corporate bonds for the following five years beginning May 1, starting in 2024 are as follows:

Intangible fixed assets held in
trust
Leasehold4,000,000

0.06

¥

¥

¥

4,000,000−

TOTAL

Buildings and structures
96,257,894¥

2,000,000

One year or less¥April 30, 2024
(Amount)

Unsecured bond No.9 (issued on April 27, 2021 and due on April 26, 2024)(with pari passu conditions among specified investment corporation bonds)(green bond)

Property and equipment held in
trust

Buildings

October 31, 2023
(Amount)

Interest
rate
(%)

*2

Unsecured andnon-guaranteed
Floating rate
Unsecured andnon-guaranteed
Floating rate(continued on next page)36

(Notes to Financial Statements cont.)(cont.)Thousands of yen
LenderOctober 31,
2023(Amount)

Increase

Averageinterest
rate *1(%)

April 30,
2024
(Amount)

Decrease(cont.)Thousands of yen

Repay­
ment

Use offunds

LenderRemarks

LONG-TERM LOANS *3 *4
Sumitomo Mitsui Banking Corporation

1,000,000−−

1,000,000

Sumitomo Mitsui Trust Bank, Limited

550,000−−

550,000

Aozora Bank, Ltd.

700,000−−

700,000

Mizuho Bank, Ltd.

2,040,000−−

2,040,000

Sumitomo Mitsui Trust Bank, Limited

1,140,000−−

1,140,000

MUFG Bank, Ltd.

1,220,000−−

1,220,000

Sumitomo Mitsui Trust Bank, Limited

4,000,000−−

4,000,000

Sumitomo Mitsui Banking Corporation

3,000,000−−

3,000,000

Mizuho Bank, Ltd.

2,000,000−−

2,000,000

2,000,000−−

2,000,000

0.51755

Oct. 30,
2026

Unsecured andnon-guaranteed
Fixed rate

Nov. 30,
2029

NTT TC Leasing Co., Ltd.

2,500,000−−

2,500,000

0.61304

Aug. 31,2029

0.62380

Oct. 30,
2026

Unsecured andnon-guaranteed
Fixed rate

Sumitomo Mitsui Trust Bank, Limited

1,500,000−−

1,500,000

0.28380

Mar. 31,2025

0.73500

Nov. 30,
2026

Unsecured andnon-guaranteed
Fixed rate

Mizuho Bank, Ltd.

1,300,000−−

1,300,000

0.55943

Sep. 28,2029

700,000−−

700,000

0.61005

Mar. 29,2030

Sumitomo Mitsui Banking Corporation

3,200,000−−

3,200,000

0.41505

May 31,
2028

Mizuho Bank, Ltd.

1,800,000−−

1,800,000

0.52375

May 31,2030

Mizuho Bank, Ltd.

2,400,000−−

2,400,000

0.57250

Sep. 30,2031

Sumitomo Mitsui Trust Bank, Limited

1,950,000−−

1,950,000

0.78500

Apr. 30,
2030

Sumitomo Mitsui Banking Corporation

1,950,000−−

1,950,000

0.71625

Apr. 27,2029

0.623800.59880

May 30,2025

0.54505

Mar. 27,2025

0.61125

Mar. 27,2026

0.61125

Mar. 27,2026

0.66649

Apr. 30,2026

1,200,000−−

1,200,000

Development Bank of Japan Inc.
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, LimitedAozora Bank, Ltd.

1,500,000

3,000,000

−

−

−

−

1,500,000

3,000,000

1,000,000−−

1,000,000

500,000−−

500,000

750,000−

750,000−

MUFG Bank, Ltd.

1,250,000−−

1,250,000

Mizuho Bank, Ltd.

1,500,000−−

1,500,000

Resona Bank, Limited

1,500,000−−

1,500,000

Sumitomo Mitsui Trust Bank, Limited

1,500,000−

1,500,000−

Mizuho Bank, Ltd.

750,000−−

750,000

Resona Bank, Limited

750,000−−

750,000

0.76755

Jul. 24,2028

3,500,000

0.75625

Jul. 31,2030

0.77969

May 31,2030

Aug. 31,2027

Mizuho Bank, Ltd.

2,500,000−−

2,500,000

0.862500.23375

Mar. 29,2024

Unsecured andnon-guaranteed
Fixed rate

Aug. 29,2031

MUFG Bank, Ltd.

3,000,000−−

3,000,000

0.92875

0.65125

Mar. 30,
2029

Unsecured andnon-guaranteed
Fixed rate

Aug. 31,2032

1.03500

Nov. 28,
2031

Unsecured andnon-guaranteed
Fixed rate

1.01500

Nov. 28,
2031

Unsecured andnon-guaranteed
Fixed rate

1.11125

Nov. 30,
2032

Unsecured andnon-guaranteed
Fixed rate

1.10125

Nov. 30,
2032

Unsecured andnon-guaranteed
Fixed rate

0.76880

NTT TC Leasing Co., Ltd.

1,200,000−−

1,200,000

0.45065

Mar. 31,2028

3,000,000−

1,800,000

Sep. 30,
2026

−

−

−

0.37880−

3,500,000−

2,000,000

3,000,000

Sumitomo Mitsui Trust Bank, Limited

1,800,000−

2,000,000

0.54204

MUFG Bank, Ltd.

Aug. 31,
2027

−

−

1,200,000

Unsecured andnon-guaranteed
Fixed rate

0.76880

2,000,000−−

Aug. 31,2029

Sumitomo Mitsui Banking Corporation

2,000,000−

0.73000

Mar. 29,2024

MUFG Bank, Ltd.

1,200,000

2,500,000

0.19520

2,000,000

Sumitomo Mitsui Banking Corporation

*2

−

−

−

Unsecured andnon-guaranteed
Fixed rate

Jan. 31,2028−

1,000,000−*2

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate

2,500,000

Feb. 29,2024−

2,000,000

Unsecured andnon-guaranteed
Fixed rate

Remarks

The Norinchukin Bank

0.49877

1,000,000

Development Bank of Japan Inc.

NTT TC Leasing Co., Ltd.

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate

Use offunds

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate

Sumitomo Mitsui Trust Bank, Limited

Sumitomo Mitsui Trust Bank, Limited

37

NTT TC Leasing Co., Ltd.

3,300,000

MUFG Bank, Ltd.



Unsecured andnon-guaranteed
Fixed rate−

Resona Bank, Limited

Nov. 30,
2028

Aug. 30,2024

0.52380−

2,600,000

0.46500

Nov. 30,2029

3,300,000−

1,000,000

0.49755

Sumitomo Mitsui Trust Bank, Limited−−

3,000,000

0.53250

2,600,000−−

4,000,000

Sumitomo Mitsui Trust Bank, Limited

1,000,000−−

1,500,000

Sumitomo Mitsui Trust Bank, Limited

3,000,000−−

Repay­
ment

Mizuho Bank, Ltd.

4,000,000−

Decrease

Averageinterest
rate *1(%)

Unsecured andnon-guaranteed
Fixed rate

NTT TC Leasing Co., Ltd.

1,500,000

Increase

April 30,
2024
(Amount)

Aug. 30,2024

0.52380

May 31,
2024

Sumitomo Mitsui Banking Corporation

October 31,
2023(Amount)0.450650.29755

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate

Mar. 31,2028

Unsecured andnon-guaranteed
Fixed rate

Nov. 29,2024

Unsecured andnon-guaranteed
Fixed rate(continued on next page)

Aozora Bank, Ltd.

1,500,000−−

1,500,000

NTT TC Leasing Co., Ltd.

1,500,000−−

1,500,000

Resona Bank, Limited

1,500,000−−

1,500,000

500,000−−

500,000

Aozora Bank, Ltd.

1,500,000−−

1,500,000

NTT TC Leasing Co., Ltd.

1,500,000−−

1,500,000

Resona Bank, Limited

1,500,000−−

1,500,000

Sumitomo Mitsui Trust Bank, Limited

1,000,000−−

1,000,000

500,000−−

500,000

Sumitomo Mitsui Trust Bank, Limited

Mizuho Bank, Ltd.
(continued on next page)38

(Notes to Financial Statements cont.)(cont.)Thousands of yen
LenderOctober 31,
2023(Amount)

Increase

April 30,
2024
(Amount)

Decrease

The Bank of Fukuoka, Ltd.

2,000,000−−

2,000,000

The 77 Bank, Ltd.

1,000,000−−

1,000,000

The Bank of Kyoto, Ltd.

1,000,000−−

1,000,000

The Hachijuni Bank, Ltd.

1,000,000−−

1,000,000

NTT TC Leasing Co., Ltd.

−2,000,000−

2,000,000

Sumitomo Mitsui Trust Bank, Limited−

1,000,000−

1,000,000

Aozora Bank, Ltd.

−

300,000−

300,000

Aozora Bank, Ltd.

−

1,000,000−

1,000,000

Sumitomo Mitsui Trust Bank, Limited−

350,000−

350,000

Sumitomo Mitsui Banking Corporation−

2,000,000−

2,000,000

Mizuho Bank, Ltd.

−2,000,000−

2,000,000

Averageinterest
rate *1(%)

Note-10. Rental revenues and expenses
Repay­
ment

Unsecured andnon-guaranteed
Fixed rate

0.96750

Nov. 8,2028

Unsecured andnon-guaranteed
Fixed rate

1.23000

Nov. 8,2030

Unsecured andnon-guaranteed
Fixed rate

1.40333

May 7,
2032

1.54750

Nov. 8,2033

750,000−

750,000

0.96375

Sumitomo Mitsui Trust Bank, Limited−

2,500,000−

2,500,000

0.56750

Aug. 31,2026

Sumitomo Mitsui Trust Bank, Limited−

2,200,000−

2,200,000

0.67205

Aug. 31,2027

MUFG Bank, Ltd.

−2,000,000−

2,000,000

0.89468

Aug. 31,2029

MUFG Bank, Ltd.

−1,500,000−

1,500,000

1.01485

Aug. 30,2030

Mizuho Bank, Ltd.

−2,500,000−

2,500,000

1.08250

Feb. 28,2031

Sumitomo Mitsui Banking Corporation−

2,500,000−

2,500,000

1.20250

Feb. 27,
2032

NTT TC Leasing Co., Ltd.

−2,500,000−

2,500,000

0.70500

Feb. 29,2028

Mizuho Bank, Ltd.

−

450,000−

450,000

1.05250

Feb. 28,2031

Sumitomo Mitsui Trust Bank, Limited−

2,500,000−

2,500,000

0.69875

Sep. 30,2027

107,250,000

28,050,000¥

35,750,000¥

3,250,000

132,050,000

6,950,000¥ 141,750,000*2Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate

Rental revenues¥

Common area charges

8,497,450
1,347,715
9,845,166

Utilities income

601,964

550,968

Parking fees

239,656

267,607

Other rental revenues

Facility fees

123,254

142,412

Other incidental revenues

51,257

69,211

Miscellaneous income

149,764

129,244

Subtotal

1,165,896

1,159,445



10,218,548

11,004,611

1,269,708

1,425,388

Utilities

833,214795,253

Real estate taxes

734,750

700,236

Insurance

17,674

19,457

Maintenance and repairs

834,300

728,836

Trust fees

28,05928,896

Depreciation

1,578,096

1,663,483

Rent expenses

499,334

503,897

Miscellaneous expenses

145,694

145,335

5,940,833

6,010,785

TOTAL REAL ESTATE RENTAL REVENUESREAL ESTATE RENTAL EXPENSES
Property operating expenses
Property management fees



TOTAL REAL ESTATE RENTAL EXPENSES

REAL ESTATE RENTAL INCOME¥

4,277,714¥

4,993,826

Note-11. Gains and losses from sale of properties
Gains from sale of properties for the six months ended October 31, 2023 were as follows:*2	All the loans are used for such purposes as purchasing beneficiary interests in real estate trust, repaying existing borrowings and redeeming corporate bonds.

October 31, 2023

*3	Long-term loans payable due within one year on the balance sheets are included in long-term loans in the table above for the purpose of indicating the loans in accordance with respective
loan agreements.

Rokubancho Building(50% quasi co-ownershipinterest)*4	The anticipated maturities of long-term loans for the following five years beginning May 1, starting in 2024 are as follows:(thousands of yen)

12,250,000¥

9,052,651

Thousands of yen¥

7,853,447
1,199,203

Subtotal*1	Floating interest rates in the table above represent the weighted average interest rates for the period. For loans for which NUD conducted interest rate swap transactions in order to reducethe interest rate fluctuation risk, the fixed rate interests obtained by taking into account the effect of the interest rate swaps are indicated.

One year or lessApril 30, 2024

REAL ESTATE RENTAL REVENUES

Rents

−

¥ 112,950,000

Rental revenues and expenses for the six months ended October 31, 2023 and April 30, 2024 were as follows:

October 31, 2023
Aug. 31,1.22625
2033

Aozora Bank, Ltd.

SUBTOTAL

Remarks

Thousands of yen

Feb. 28,2030

TOTALUse offunds

More than one year andtwo years or lessMore than two years andthree years or lessMore than three years andfour years or lessMore than four years andfive years or less

11,600,000

17,900,000

17,850,000

12,450,000

Revenues from sale of properties¥

Cost of properties

3,759,907

Other expenses for sale
GAINS FROM SALE OF PROPERTIES

5,250,000

14,746¥

1,475,346

There were no gains and losses from sale of properties for the six months ended April 30, 2024.

39

40

(Notes to Financial Statements cont.)

Note-12. Income taxes

Note-14. Leases

Income taxes in Japan applicable to NUD consist of corporate income tax, enterprise tax, and inhabitant tax. The following is reconciliation
between the statutory income tax rate in Japan and the effective tax rate reflected in the accompanying financial statements for the six months
ended October 31, 2023 and April 30, 2024:

NUD leases some properties to tenants under non-cancellable operating leases. As of October 31, 2023 and April 30, 2024, the future lease
expenses and revenues under the non-cancellable operating leases were as follows:

October 31, 2023
Statutory tax rate

Operating leases (as lessee)

April 30, 2024

Thousands of yen

31.46%

31.46%

Deductible cash distributions(28.30)(31.44)Other(3.11)

0.02

0.06%

0.04%

Adjustments

October 31, 2023
Due within one year

EFFECTIVE TAX RATE¥

Due after one year
TOTAL

594,524

April 30, 2024¥

604,990

12,088,673¥

12,683,197

11,998,973¥

12,603,963

Operating leases (as lessor)
Under NUD’s distribution policy, cash distributions are made in excess of 90% of distributable income as defined in the Special Taxation
Measures Law of Japan for the fiscal period to qualify for conditions as set forth in the Special Taxation Measures Law to achieve a deductionof cash distributions for income tax purposes. Based on such policy, NUD treated the cash distributions as tax deductions allowed in theSpecial Taxation Measures Law.
The tax effects of significant temporary differences that resulted in net deferred tax assets or liabilities as of October 31, 2023 and April 30,
2024 were as follows:

Thousands of yen
October 31, 2023
Due within one year¥

2,326,395¥

6,795,864

Due after one year
TOTAL

April 30, 2024¥

2,910,105¥

8,270,621

4,469,468

5,360,516

Thousands of yen
October 31, 2023

April 30, 2024

Deferred tax assets
Enterprise taxes

Note-15. Distribution information¥

Total of deferred tax assets
NET DEFERRED TAX ASSETS

2,336

¥

5,821

2,336
¥

2,336

5,821
¥

5,821

Pursuant to the distribution policy set forth in Article 13, Paragraph 1 of NUD’s Article of Incorporation, the maximum distribution amountcannot exceed the unappropriated retained earnings, and this amount must exceed 90% of the “distributable income” which is defined in
Article 67-15 of the Special Taxation Measures Law of Japan. No cash distributions exceeding the unappropriated retained earnings as set
forth in Article 13, Paragraph 2 of the NUD’s Article of Incorporation were made.
[October 31, 2023]

Note-13. Per unit information
The following table summarizes the net assets per unit as of October 31, 2023 and April 30, 2024 and the net income per unit for the six
months ended October 31, 2023 and April 30, 2024:
October 31, 2023
Net assets per unit¥

Net income per unit

99,376[April 30, 2024]

April 30, 2024¥

100,191

3,595

In accordance with this policy, NUD declared a total distribution of 4,539,895,765 yen as distribution of income for the 42nd fiscal period(payment to start on January 22, 2024), which was the maximum value of unappropriated retained earnings after deducting provision ofreserve for reduction entry, in application of the Special Provisions for Taxation in Cases of Repurchase of Specified Assets (Article 65-7 of theSpecial Taxation Measures Law of Japan), arrived at when the number of units outstanding (1,401,635 units) was multiplied by an integer.

2,849*1	The net income per unit is calculated by dividing the net income by the weighted-average number of units outstanding for the respective six-month period. Diluted net income per unit is
not presented since no warrants and convertible bonds were outstanding during the six months ended October 31, 2023 and April 30, 2024.

In accordance with this policy, NUD declared a total distribution of 4,220,835,680 yen as distribution of income for the 43rd fiscal period(payment to start on July 16, 2024), which was the maximum value arrived at when the number of units outstanding (1,482,035 units) was
multiplied by an integer, within the limit of the unappropriated retained earnings for the 43rd fiscal period.
Income carried forward after the distributions for the six months ended October 31, 2023 and April 30, 2024 were as follows:
October 31, 2023

*2	The basis for calculating net income per unit was as follows:

Unappropriated retained earnings

Thousands of yen
October 31, 2023
Net income
Amount not attributable to ordinary unitholders
Net income related to ordinary unit
Average number of units during the period

41¥

5,039,936

Cash distributions declared

April 30, 2024¥¥

4,221,612−−

5,039,936

4,221,612

1,401,635 units

1,481,471 units(Cash distribution declared per unit)

5,039,953,079

April 30, 2024¥

4,221,670,046

4,539,895,765

4,220,835,680(3,239)(2,848)500,000,000−

Voluntary retained earnings(Provision of reserve for reduction entry)
INCOME CARRIED FORWARD¥

57,314¥

834,366

42

(Notes to Financial Statements cont.)

Note-16. Financial instruments*3 Planned repayment and redemption amounts of loans and corporate bonds as of October 31, 2023 and April 30, 2024 are as follows:

Thousands of yen(a)	Items concerning the current status of financial instruments

October 31, 2023

Policies on financial instruments - NUD procures funds for acquiring properties, conducting maintenance and repairs, repaying interestbearing liabilities and for other purposes primarily through borrowings from financial institutions, issuing corporate bonds or issuing newinvestment units.
With regard to temporary surplus funds, tenant security deposits held in trust, etc., NUD manages them as bank deposits in considerationof such factors as safety and liquidity.

Long-term loans payable

Moreover, NUD owns investment securities (preferred securities backed by the cash flow gained from real estate) as part of its real estate
investment.

TOTAL

Within one year

More thanMore thanMore than
one year andtwo years andthree years andtwo years or less three years or less four years or lessMore thanfour years andfive years or less

¥

¥

¥

Corporate bonds

9,500,000

9,300,000

2,000,000¥

11,500,000¥

14,700,000−¥

9,300,000¥

14,700,000

In addition, although loans with floating interest rates are exposed to interest rate fluctuation risk, NUD manages the risk by adjusting theratio of the balance of loans with floating interest rates to the entire loans in accordance with the financing environment, as well as utilizing
derivative transactions (interest rate swap transactions) as hedging instruments.
The investment securities (preferred securities backed by the cash flow gained from real estate) are exposed to liquidity risk, credit risk of
the issuer, etc., in addition to investment risks specific to real estate. However, NUD will manage such risks by maintaining the ratio of theinvestment securities to its total assets at a certain level, and by employing such measures as assessing the financial status on a regularbasis.
Supplemental explanation on items concerning fair value of financial instruments - Since calculation of the fair value of financial instruments
uses certain assumptions and conditions, the calculated prices may differ if different assumptions and conditions are used. As for thecontract amount and other conditions of derivative transactions indicated in “(b) Items concerning fair value of financial instruments”
below, the contract amount is not an indicator of the market risks related to such derivative transactions.
(b)	Items concerning fair value of financial instruments - The book values recorded on the balance sheets, fair values and their difference asof October 31, 2023 and April 30, 2024 were as follows. Furthermore, notes on “Cash and deposits,” “Cash and deposits held in trust”
and “Short-term loans payable” are omitted as these are settled with cash and within a short period of time and thus the fair value
approximates the book value.
Thousands of yen

Fair value

DifferenceBook value

Fair value

Difference

9,513,040

13,04012,250,000

12,257,830

7,830

(2) C
 orporate bonds due within one year

2,000,000

1,999,000(1,000)−−−(3) Long-term loans payable

97,750,000

95,430,623(2,319,376)

119,800,000

118,371,107(1,428,892)(4) Corporate bonds

7,200,000

6,960,672(239,328)

7,200,000

7,002,272(197,728)−¥−

13,250,000

¥

−

¥

−

¥

−

4,000,000¥

49,400,000
3,200,000

15,100,000¥

52,600,000

April 30, 2024

Long-term loans payable

Within one year

More thanMore thanMore than
one year andtwo years andthree years andtwo years or less three years or less four years or lessMore thanfour years andfive years or less

¥

¥

¥

Corporate bonds

12,250,000

11,600,000−

TOTAL

¥12,250,000¥

17,900,000−¥

11,600,000¥

17,850,000−¥

17,900,000−¥

17,850,000

12,450,000

More than
five years¥

4,000,000¥

60,000,000
3,200,000

16,450,000¥

63,200,000

Note-17. Investment securities
Investment securities represent the preferred securities issued by UDX Special Purpose Company, which are backed by cash flows from Real
Estate Property managed by UDX Special Purpose Company. NUD owns 53,580 units (19.0% equity) of the preferred securities (282,000 units
in total) as of October 31, 2023 and April 30, 2024, respectively.
These securities are excluded from the disclosure of fair value in accordance with Paragraph 5 of Implementation Guidance on Disclosuresabout Fair Value of Financial Instruments (ASBJ Guidance No. 19 (revised 2020) issued on March 31, 2020).

Note-18. Derivative transactions(a)	Derivatives to which hedge accounting is not applied - Not applicable for the six months ended October 31, 2023 and April 30, 2024.
(b)	Derivatives to which hedge accounting is applied - For the six months ended October 31, 2023 and April 30, 2024, the following table shows
the contract amount or amount equivalent to the principal provided in the contract as of the closing date for each method of hedge accounting.

¥

October 31, 2023
Type of hedge
accounting

Type of derivativetransactions, etc.

Major
hedged item

Special accounting forinterest rate swaps

Interest rate swap transaction
Receivable floating; payable fixedLong-term loans
payableContract
amount, etc.

Of which,exceeding
one year

Fair
value

Calculation
methodfor the fairvalue

¥ 51,930,000¥ 43,880,000

*

−

−

Thousands of yen
April 30, 2024

*1 The following methods are used to estimate the fair value of financial instruments:(1) Long-term loans payable due within one year and (3) long-term loans payable - For long-term loans payable with floating interest rates, book values are used to determine their fairvalues as the fair values are considered to approximate the book values because these instruments reflect market interest rates over the short term. However, fair values of certain
long-term loans payable with floating interest rates that qualify for the special accounting of interest rate swaps (refer to Note-18. Derivative Transactions below) are based on themethod of calculating by discounting the sum of their principal and interest payments net of any cash flows from the interest-rate swap by estimated rates assumed in the event that
NUD borrows new loans corresponding to the remaining periods. Moreover, fair values of long-term loans payable with fixed interest rates are based on the method of calculating bydiscounting the sum of their principal and interest by the rates assumed in the event that NUD borrows new loans corresponding to the remaining periods.
(2) Corporate bonds due within one year and (4) Corporate bonds - Fair values of these instruments are calculated based on their market prices.
(5) Derivative Transactions - Refer to Note-18. Derivative Transactions below.
*2 Stocks and other securities with no market prices:	
Investment securities - The preferred securities (recorded on the Balance Sheets at 20,035,175 thousand yen as of October 31, 2023 and April 30, 2024, respectively) are excluded from thedisclosure of fair value of financial instruments in accordance with Paragraph 5 of Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No.
19 (revised 2020) issued on March 31, 2020).

43¥

Thousands of yen

9,500,000¥¥

April 30, 2024

(1) L ong-term loans payable due within
one year(5) Derivative Transactions−

11,100,000

Thousands of yen

Description of financial instruments, their respective risks and risk management structure - Short-term loans, long-term loans andcorporate bonds are means of fund procurement primarily for acquiring trust beneficiary interests and repaying interest-bearing liabilities.
Although loans and corporate bonds are exposed to liquidity risk upon the arrival of repayment dates, NUD manages the risk by suchmeasures as working to maintain and enhance its ability to procure funds from the capital market through issuing investment units, bycontrolling the ratio of interest-bearing liabilities to total assets within a range considered appropriate, creating fund procurement plans as
early as possible by regularly checking liquidity on hand through making monthly cash payment schedules, etc., and preparing necessary
funds based on such plans.

Book value

13,250,000−

As for derivative transactions, NUD may use them only to hedge against interest rate fluctuation risks arising from liabilities.

October 31, 2023¥

More than
five years

Type of hedge
accounting

Type of derivativetransactions, etc.

Major
hedged item

Special accounting forinterest rate swaps

Interest rate swap transaction
Receivable floating; payable fixedLong-term loans
payableContract
amount, etc.

Of which,exceeding
one year

Fair
value

Calculation
methodfor the fairvalue

¥ 49,430,000¥ 37,880,000*−* Transactions for which special accounting for interest rate swaps is applied are combined with long-term loans payable for accounting purposes. Accordingly, their fair value is included in
the fair value of the relevant long-term loans payable.

44

(Notes to Financial Statements cont.)

Note-19. Rental property

Note-20. Segment information

NUD owns office buildings and residential properties for rental purposes mainly in the 23 wards of Tokyo. The book values of these rental
properties recorded on the balance sheets as of October 31, 2023 and April 30, 2024, the changes during the fiscal period and their fair values
are as follows:(a) Segment information - Description has been omitted because the real estate business constitutes NUD’s sole business segment.

Thousands of yen
October 31, 2023
*2

*1

Office buildings

TOTAL

*2

*1

*1

*3

Fair value at
October 31,
2023

Increase andBook value atBook value atNovember 1, Decrease during
April 30,
the period
2023
2024

Fair value atApril 30,2024

Operating revenues - Description has been omitted because operating revenues from external customers in Japan account for over
90% of the operating revenues on the profit and loss statements.

¥ 171,934,500

Property and equipment - Description has been omitted because the amount of property and equipment located in Japan accounts
for over 90% of the amount of property and equipment on the balance sheets.

¥

64,514,142¥ 236,448,643¥(4,067,328)¥ 167,867,172¥ 205,038,000¥ 167,867,172(244,648)

64,269,493

95,830,000

64,269,493(4,311,976)¥ 232,136,666¥ 300,868,000¥ 232,136,666¥¥

33,686,212¥ 201,553,385¥ 238,674,000

2,610,258

66,879,752

98,930,000

36,296,471¥ 268,433,137¥ 337,604,000*1	The book values recorded on the balance sheets represent the amounts obtained by deducting the accumulated depreciation from the acquisition prices (including incidental expenses
accompanying the acquisitions). Note that construction in progress and construction in progress held in trust are not included.
*2	Of the increases and decreases in rental properties during the period, major increases in the six months ended October 31, 2023 are due to the capital expenditures (1,027,721 thousandyen) for owned properties, and major decreases are due to the partial sale of Rokubancho Building (3,759,907 thousand yen) and the depreciation (1,578,096 thousand yen). Major increases
in the six months ended April 30, 2024 are due to the acquisitions of Urbannet Shijo Karasuma Building, Urbannet Fushimi Building and Garden Itabashi Hikawacho (21,536,462 thousandyen), additional acquisition of Granpark (14,961,378 thousand yen) and the capital expenditures (1,462,588 thousand yen) for owned properties, and major decreases are due to thedepreciation (1,663,483 thousand yen).
*3	The fair values at the end of the fiscal periods in the above table are appraisal values based on external real estate appraisers.

Real estate
rental expenses

Real estate
rental income

Real estate
rental revenues

Real estate
rental expenses

Real estate
rental income

¥

¥

¥

¥

¥

¥

Residential properties


TOTAL

April 30, 2024

Real estate
rental revenues
7,549,344
2,669,204¥

10,218,548

4,425,116
1,515,717¥

5,940,833

3,124,227
1,153,486¥

4,277,714

8,293,834
2,710,777¥

11,004,611

Customer’s nameOperating revenues (thousands of yen)

Related segment

NTT Urban Development Corporation¥ 1,475,346

Real estate rental businessSix months ended April 30, 2024 [November 1, 2023 – April 30, 2024](i)	Information by product/service category - Description has been omitted because operating revenues from external customers in asingle product/service category account for over 90% of the operating revenues on the profit and loss statements.

4,702,900
1,307,885¥

6,010,785

Operating revenues - Description has been omitted because operating revenues from external customers in Japan account for over
90% of the operating revenues on the profit and loss statements.
Property and equipment - Description has been omitted because the amount of property and equipment located in Japan accounts
for over 90% of the amount of property and equipment on the balance sheets.

Thousands of yen
October 31, 2023(iii)	Information by major customer -(ii)	Information on geographical area -In addition, the operating revenues and expenses of the rental properties for the six months ended October 31, 2023 and April 30, 2024 are
as follows:

Office buildings(ii)	Information on geographical area -Increase andBook value atBook value at
Decrease during October 31,
May 1,
the period
2023
2023

Residential properties*3

Six months ended October 31, 2023 [May 1, 2023 - October 31, 2023](i)	Information by product/service category - Description has been omitted because operating revenues from external customers in asingle product/service category account for over 90% of the operating revenues on the profit and loss statements.

April 30, 2024
*1(b) Related information -3,590,933
1,402,892¥(iii)	Information by major customer - Description has been omitted because the operating revenues from a single external customer
accounts for less than 10% of the operating revenues on the profit and loss statements.

4,993,826

Note-21. Subsequent events
Not applicable* The real estate rental revenues and real estate rental expenses are rental revenues and corresponding expenses (depreciation, property management fees, utilities, etc.), and are recorded
in “Operating revenues” and “Operating expense,” respectively.

45

46

OTHER INFORMATION (UNAUDITED)For the six months ended October 31, 2023 and April 30, 2024(cont.)CAPITAL EXPENDITURES

Name

1. Capital Expenditures
NUD plans to incur capital expenditures for scheduled renovations, etc. of the portfolio it owns, including the following material expenditures.
Please note that the planned construction expenditures shown below may include portions that will be recorded as expenses for accounting
purposes.
Planned Construction Expenditures(thousands of yen)
Name

Address

PurposeScheduled Period
Total

AmountAmountPaid during Paid before
the 43rdthe 43rd
Fiscal Period Fiscal PeriodTokyo Opera City
Building

Shinjuku Ward, Tokyo

Renovation of
October 2023 –transportation equipment 
June 2024

115,055−−

Urbannet Gotanda
NN Building

Shinagawa Ward, Tokyo

Renovation of elevator
equipment

January 2024 –
October 2024

109,800−−

Urban Ace Higobashi Nishi Ward, Osaka City,
Building
Osaka

Renovation of electric
equipment

December 2023 –July 2024

83,850−−Premier Yokohama
Nishiguchi Building

Nishi Ward, Yokohama
City, Kanagawa

Renovation of airconditioning systems

February 2024 –
October 2024

76,370−−Tokyo Opera City
Building

Shinjuku Ward, Tokyo

Renovation of elevator
equipment

December 2023 – September 2024

43,994−−

The Kanagawa
Science Park R&D
Building

Takatsu Ward, Kawasaki
City, Kanagawa

Renovation of airconditioning systems

November 2023 –June 2024

36,473

Premier Stage
Shibakoen II

Minato Ward, Tokyo

Renovation of electric
equipment

August 2024 – September 2024

22,604−−

Urbannet Azabu
Building

Minato Ward, Tokyo

Renovation of airconditioning systems

September 2024 –
October 2024

20,750

−

−

−



47

PeriodAmount Paid
(thousands of yen)

Shinjuku Ward, Tokyo

Renovation of elevator
equipment

May 2023 –April 2024

60,217

Premier Yokohama Nishiguchi
Building

Nishi Ward, Yokohama
City, Kanagawa

Renovation of air-conditioning
systems

November 2023 –April 2024

55,858The Kanagawa Science Park
R&D Building

Takatsu Ward, Kawasaki
City, Kanagawa

Renovation of air-conditioning
systems

November 2023 –
February 2024

47,329The Kanagawa Science Park
R&D Building

Takatsu Ward, Kawasaki
City, Kanagawa

Renovation of sanitary facilities

November 2023 –
February 2024

45,724

Urbannet Gotanda NN
Building

Shinagawa Ward, Tokyo

Renovation of mechanicalparking system

August 2023 –April 2024

31,735Granpark

Minato Ward, Tokyo

Renovation of air-conditioning
systems

November 2023 –
March 2024

29,677

Urbannet Azabu Building

Minato Ward, Tokyo

Renovation of central
monitoring equipment

June 2023 –April 2024

26,658

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of security
equipment

August 2023 –
March 2024

25,964

The Kanagawa Science Park
R&D Building

Takatsu Ward, Kawasaki
City, Kanagawa

Renovation of air-conditioning
systems

February 2024 –April 2024

24,886

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of sanitary facilities

December 2023 –
March 2024

23,452

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of drainage facilities

September 2023 –
March 2024

21,127

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of air-conditioning
systems

December 2023 –
March 2024

20,956

Other construction

505,962

TOTAL

1,462,588

3. Amounts Reserved for Long-Term Maintenance and Repair Plans

The following is an overview of major construction classified as capital expenditures during the 43rd fiscal period (November 1, 2023 – April
30, 2024) for the portfolio owned by NUD. Capital expenditures during the period totaled 1,462,588 thousand yen. This amount, combinedwith maintenance and repair expenditures of 728,836 thousand yen, was classified as operating expenses for the period, aggregating a totalof 2,191,424 thousand yen representing renovation expenditures.
Address

PurposeTakadanobaba Center
Building−

2. Capital Expenditures during the 43rd Fiscal Period

Name

Address

Purpose

PeriodAmount Paid
(thousands of yen)

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of transportationequipment

February 2023 –
March 2024

111,171

Urban Ace Higobashi Building

Nishi Ward, Osaka City,
Osaka

Renovation of central
monitoring panel

January 2023 –April 2024

90,790NTT CRED Okayama Building

Kita Ward, Okayama City, Renovation of air-conditioning
Okayamasystems

August 2023 –
March 2024

75,106

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of generator control
panel

December 2022 –
March 2024

69,280

The Kanagawa Science Park
R&D Building

Takatsu Ward, Kawasaki
City, Kanagawa

Renovation of sanitary facilities

November 2023 –
February 2024

67,343

The Kanagawa Science Park
R&D Building

Takatsu Ward, Kawasaki
City, Kanagawa

Renovation of air-conditioning
systems

November 2023 –December 2023

66,998

Urbannet Ikebukuro Building

Toshima Ward, Tokyo

Renovation of elevator
equipment

July 2023 –April 2024

62,346

Fiscal Period
Item

Thousands of yen
42nd Fiscal Period(May 1, 2023 – October 31, 2023)

43rd Fiscal Period(November 1, 2023 – April 30, 2024)

Deposits at end of the preceding period

638,370

633,793

Deposits made during the period

14,323

14,323

Amounts used from deposits during the period

18,900−

Deposits carried forward to the next period

633,793648,116(continued on next page)48

(Other Information (Unaudited) cont.)

OVERVIEW OF FUND PROCUREMENT

Lenders

Aozora Bank, Ltd.

Sumitomo Mitsui Trust
Bank, Limited

Sumitomo Mitsui
Banking Corporation

Mizuho Bank, Ltd.

1. Issuance of New Investment Units

Amount of Debt Finance

1,000 million yen

350 million yen

2,000 million yen

2,000 million yen[Issuance of new investment units through public offering]

Drawdown Date

In the 43rd fiscal period, NUD issued new investment units through public offering as described below and procured funds totaling 9,066
million yen.

Principal Repayment Date

NUD used the proceeds as part of the funds to acquire specified assets (Urbannet Shijo Karasuma Building and Urbannet Fushimi Building),
in combination with long-term loans (refer to 2. Borrowing of Funds, etc. (1) below).

November 8, 2023
November 8, 2030

Principal Repayment Method

May 7, 2032

November 8, 2033

Lump-sum repayment upon maturity
Fixed rate:(1.23000%)Interest Rate

Fixed rate:(1.40333%)

Collateral/Guarantee

Fixed rate:(1.54750%)

Unsecured and non-guaranteed

Number of new investment units issued

76,600 units

Issue price (offer price)

122,313 yen per unit

(Paid-in amount (issue amount)

118,361 yen per unit)

Payment dateNovember 1, 2023

Total paid-in amount (total issue amount)

9,066,452,600 yen

LenderAozora Bank, Ltd.

Date of commencement of distribution calculation

November 1, 2023

Amount of Debt Finance

750 million yen

Use of funds

To partially fund acquisitions of specified assets

Drawdown Date

March 14, 2024(2)	NUD borrowed 750 million yen in a long-term loan on March 14, 2024 to fund the cash on hand that decreased due to the repayment of
750 million yen of long-term loan which was due on February 29, 2024. The breakdown of lender, etc. of the 750 million yen in the longterm loan is as follows:[Issuance of new investment units through third-party allotment]

Principal Repayment Date

February 28, 2030

Principal Repayment Method

Lump-sum repayment upon maturity

In the 43rd fiscal period, NUD issued new investment units through third-party allotment with SMBC Nikko Securities Inc. as the allottee, as
described below, and procured funds totaling 449 million yen.

Interest Rate

NUD used the proceeds as funds for the acquisitions of specified assets, expenditures for maintenance and repairs, and repayment of loans,etc.

Collateral/Guarantee

Fixed rate:(0.96375%)
Unsecured and non-guaranteed(3)	NUD borrowed 15,200 million yen in total, consisting of 2,000 million yen in short-term loans and 13,200 million yen in long-term loans,to partly fund the acquisition of beneficiary interest in real estate trust for Granpark, which was additionally acquired on March 14, 2024,
and various expenses related to the acquisition. The breakdown of lenders, etc. of the 2,000 million yen in these short-term loans and13,200 million yen in these long-term loans are as follows. The said borrowing will be carried out by using green loans that will be executed
based on the Green Finance Framework established by NUD.

Number of new investment units issued

3,800 units

Paid-in amount (issue amount)

118,361 yen per unit

Payment dateNovember 28, 2023

Total paid-in amount (total issue amount)

449,771,800 yen

Allottee

SMBC Nikko Securities Inc.

Date of commencement of distribution calculation

November 1, 2023

Lenders

Use of funds

o fund acquisitions of specified assets, expenditures for maintenance andT
repairs, and repayment of loans, etc.

Mizuho Bank, Ltd.
(green loan)*

Sumitomo Mitsui Trust
Bank, Limited(green loan)*

Sumitomo Mitsui Trust
Bank, Limited(green loan)*

MUFG Bank, Ltd.
(green loan)*Amount of Debt Finance

2,000 million yen

2,500 million yen

2,200 million yen

2,000 million yen

February 28, 2025

August 31, 2026

Drawdown Date

2. Borrowing of Funds, etc.

Principal Repayment Date(1)	NUD borrowed 8,650 million yen in total in long-term loans to partly fund the acquisition of beneficiary interests in real estate trust for
Urbannet Shijo Karasuma Building and Urbannet Fushimi Building, which were acquired on November 8, 2023, and various expenses
related to the acquisition. The breakdown of lenders, etc. of the 8,650 million yen in these long-term loans is as follows:
Lenders
Amount of Debt Finance

NTT TC Leasing Co., Ltd.

Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.

2,000 million yen

1,000 million yen

300 million yen

Drawdown Date

November 8, 2023

Principal Repayment Date

November 8, 2028

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate
Collateral/Guarantee

Fixed rate:(0.96750%)
Unsecured and non-guaranteed

March 14, 2024

Principal Repayment Method
Interest Rate

August 31, 2027

Lump-sum repayment upon maturity
Floating rate:(1-month TIBOR +0.12000%)

Collateral/Guarantee

Fixed rate:(0.56750%)

Fixed rate:(0.67205%)

MUFG Bank, Ltd.
(green loan)*Mizuho Bank, Ltd.
(green loan)*

Sumitomo Mitsui
Banking Corporation(green loan)*Amount of Debt Finance

1,500 million yen

2,500 million yen

2,500 million yen

August 30, 2030

February 28, 2031

Drawdown Date

March 14, 2024

Principal Repayment Method
Interest Rate
Collateral/Guarantee

Fixed rate:(0.89468%)

Unsecured and non-guaranteed

Lenders

Principal Repayment Date

August 31, 2029

February 27, 2032

Lump-sum repayment upon maturity
Fixed rate:(1.01485%)

Fixed rate:(1.08250%)

Fixed rate:(1.20250%)

Unsecured and non-guaranteed* The green loan will be used to fund the additional acquisition of Granpark, which is an eligible green asset. NUD obtained Green 1(F), the highest possible rating, in “JCR Green Finance
Framework Evaluation” by Japan Credit Rating Agency, Ltd. (JCR) regarding the eligibility of its Green Finance Framework.

49

50

(Other Information (Unaudited) cont.)(4) NUD	borrowed 2,950 million yen in long-term loans on March 22, 2024 to partly fund the acquisition of Garden Itabashi Hikawacho, which
was acquired on March 22, 2024, and various expenses related to the acquisition. The breakdown of lenders, etc. of the 2,950 million yen
in these long-term loans is as follows:
Lenders
Amount of Debt Finance

NTT TC Leasing Co., Ltd.

Mizuho Bank, Ltd.

2,500 million yen

450 million yen

Drawdown Date
Principal Repayment Date

Amount of Debt FinanceFebruary 28, 2031

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate

Fixed rate:(0.70500%)

Collateral/Guarantee

Lenders

March 22, 2024
February 29, 2028

Fixed rate:(1.05250%)

Lenders

Mizuho Bank, Ltd.

Sumitomo Mitsui Trust
Bank, Limited

MUFG Bank, Ltd.

Amount of Debt Finance

1,700 million yen

1,100 million yen

300 million yen

Drawdown Date

March 29, 2024

Principal Repayment Date

March 31, 2025

Principal Repayment Method

Lump-sum repayment upon maturity
Floating rate:(1-month TIBOR + 0.12000%)

Collateral/Guarantee
Lenders
Amount of Debt Finance

Sumitomo Mitsui Trust
Bank, Limited

Mizuho Bank, Ltd.

1,000 million yen

1,000 million yen

Drawdown Date

April 30, 2024

Principal Repayment Date

April 30, 2025

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate

Floating rate:(1-month TIBOR + 0.12000%)

Collateral/Guarantee

Unsecured and non-guaranteed

Unsecured and non-guaranteed(5) 	NUD refinanced the 3,700 million yen in short-term loans borrowed on March 31, 2023 into 3,700 million yen in short-term loans on March
29, 2024. The breakdown of lenders, etc. of the 3,700 million yen in these short-term loans is as follows:

Interest Rate(7) 	NUD borrowed 2,000 million yen in total in short-term loans on April 30, 2024 to fund the cash on hand that decreased due to theredemption of 2,000 million yen of corporate bonds which were due on April 26, 2024. The breakdown of lenders, etc. of the 2,000 million
yen in these short-term loans is as follows:

NTT TC Leasing Co., Ltd.

300 million yen

300 million yen

Drawdown Date

March 29, 2024

Principal Repayment Date

March 31, 2025

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate

Floating rate:(1-month TIBOR + 0.16000%)

Collateral/Guarantee

Unsecured and non-guaranteed* Ratio of long-term interest-bearing liabilities = total long-term interest-bearing liabilities/total interest-bearing liabilities x 100%

3. Credit Ratings
Floating rate:(1-month TIBOR +0.14000%)

Unsecured and non-guaranteed
Sumitomo Mitsui
Banking Corporation

As a result of the above, NUD’s interest-bearing liabilities totaled 148,950 million yen as of April 30, 2024. The breakdown is as follows: 9,700
million yen in short-term loans, 132,050 million yen in long-term loans (including long-term loans due within one year) and 7,200 million yen
in corporate bonds. Of the total interest-bearing liabilities, the ratio of long-term interest-bearing liabilities* was 93.5%.

NUD has been granted the following issuer and bond credit ratings.
Rating Agency
Japan Credit Rating Agency, Ltd. (JCR)

RatingIssuer rating (Rating outlook)

Bond rating

AA (Stable) *AA *1, *2

1*1	Japan Credit Rating Agency, Ltd. (JCR) announced that it changed NUD’s issuer rating, etc. as described below as of January 11, 2024.
• Issuer rating (Rating outlook): AA- (Positive) → AA (Stable)• Bond rating: AA- → AA
*2	The bond rating has been granted to the 8th Unsecured Corporate Bonds (with pari passu conditions among specified investment corporation bonds) and the 10th Unsecured Corporate
Bonds (with pari passu conditions among specified investment corporation bonds) (green bonds).

(6) 	NUD refinanced the 2,500 million yen in long-term loans borrowed on April 5, 2019 and July 31, 2019 into 2,500 million yen in long-termloans on March 29, 2024. The breakdown of lender, etc. of the 2,500 million yen in this long-term loan is as follows:
LenderAmount of Debt Finance

2,500 million yen

Drawdown Date

March 29, 2024

Principal Repayment Date

September 30, 2027

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate
Collateral/Guarantee

51

Sumitomo Mitsui Trust Bank, Limited

Fixed rate:(0.69875%)
Unsecured and non-guaranteed

52

STRATEGIC POLICIESI. INVESTMENT POLICY
1. Basic Policy
NTT UD REIT Investment Corporation (NUD)
shall invest in real estate located primarily in
the Tokyo metropolitan area, comprisingbuildings and land which are primarily for
office and residential uses, as well as in securities and other assets that are backed bysuch real estate. NUD shall conduct management with an aim to ensure solid growthof its assets and to secure stable earnings
from medium- to long-term perspectives.
NTT Urban Development Asset Management(UDAM), the asset manager of NUD, hasestablished Asset Management Guidelines
as its internal rules for conducting asset
management of NUD.
UDAM has established such AssetManagement Guidelines based on the belief
that they should be most suited to the basic
policy for managing the assets of NUD inlight of the existing market environment andeconomic conditions. The following is a summary of the Guidelines:

2. P ortfolio Management
Standards Based on Basic Policy
1. Holding Period
In principle, all investment assets are held
for the medium to long term. No assets will
be acquired solely for the purpose of divestiture after a short period of time.

2. Acquisition Standards
A) Acquisition Standards
In acquiring investment assets in which NUD
invests, UDAM shall comprehensively investigate the real estate market situation overthe medium to long term, the investment
returns assumed from the acquisition prices
of and the expected income from relevant
investment assets, fluctuations in asset values
and their forecasted fluctuations, prospects
and stability of areas where the propertiesare located, building size, building and facility specifications, earthquake resistance performance, status of rights, tenants, property
management conditions, environment andsoil quality, current responses to deterioration or obsolescence of real estate, projected future capital expenditures thereof,

53

status of insurance and other factors, andselect investments after considering theimportance of these assets in the portfolio
structure. In doing so, steps shall be taken to
construct a portfolio that clearly classifies
the strategic position of these investment
assets.
B) Use ➠ see table on page 54
a.	NUD shall invest in real estate, its leasehold interest or surface rights (chijo-ken),real estate in trust underlying its beneficial interests, its leasehold interest or
surface rights, and real estate underlying
equity investments in real estate backed
securities or anonymous partnerships(hereinafter, “Real Estate Backed
Securities, etc.”), its leasehold interests
or surface rights (collectively referred toas “Investment Real Estate”), all of whichshall be primarily for office and residential uses. However, such properties may
in some cases be used partially for retailor other purposes. Consequently, theoffice buildings and residential properties acquired by NUD may include properties that are partially used for retail orother purposes.
b.	In consideration of the characteristics ofeach real estate use indicated in thetable on page 54, NUD works to ensure
diversification of property uses by investing primarily in both office buildings andresidential properties while assigning a
relatively high importance to office buildings, aiming to minimize the effects ofchanges in economic and social conditions on NUD’s earnings and ensure creation of stable cash flow over the medium
to long term.
C) Areas ➠ see table on page 55
a.	As noted earlier, NUD’s investments arefocused primarily in the Tokyo Economic
Bloc, which is characterized by high concentrations of people and industries andan established economic foundation, andin Major Regional Cities.
b.	Specifically, by dividing the investment
target areas into the categories of the 5Central Wards of Tokyo, the Other 18
Wards of Tokyo, the Urban Areas
Surrounding Tokyo and the Major
Regional Cities, and by considering thebalance between those categories while
concentrating on the 5 Central Wards ofTokyo, NUD seeks to achieve a portfolio
diversified by asset type comprising
office buildings and residential properties. NUD diversifies its investment targeting to achieve a geographical split asindicated in the table on page 55 forboth office buildings and residential
properties (each of which is set at 100%in the table).

Use
Use

a. In the real estate market of Japan, office buildings are relatively less individualized and are available in a greater stock compared to realestate provided for other uses, and therefore may be considered relatively superior with respect to market scale and liquidity. For thesereasons, NUD has positioned office buildings as its primary investment target.

OfficeBuildings

and location characteristics.
a. NUD invests in Japanese rental residential properties commanding relatively high quality in terms of designs of exteriors, entrances andother areas, specifications of story height, exterior walls and other items, total floor space, floor plans and other aspects.
b. Rental residential properties are relatively resistant to adverse changes in economic and social conditions compared to real estate for otheruses, and thus are expected to yield relatively stable earnings. Due to such characteristics, NUD has positioned rental residential properties
as part of the main investment target for the purpose of stabilizing cash flow and diversifying investment assets.

Residential
Propertiesc. As of the date of this document, UDAM expects that the market for rental residential properties in the Tokyo Economic Bloc will expand anddiversify over the medium to long term due to the effects of the recent demand for returning to city centers and lifestyle changes. However,
if UDAM determines that the aforementioned characteristics have been damaged due to changes in the market or other reasons, different
investment decisions may be made.

are the investment targets.

d. Since tenants of rental residential properties are particularly selective about geographical areas, and different markets are formed forb. Residential properties

different types of residential properties, NUD invests in said properties based on the following analyses and understandings of the future

In principle, residential properties of thesizes indicated in the table on page 55
are the investment targets (in accordancewith the classifications by unit type).

supply and demand trends and other factors in accordance with the characteristics of respective property types.
a. This type refers to residential properties specially planned and designed for expatriates (i.e., persons dispatched or set off from abroad tooffices established in the Tokyo Economic Bloc by Western and multinational companies) under limited location conditions in accordancewith their lifestyles.
(Classification
by type ofb. Recently, the tenant demand for these properties has increased among wealthy Japanese families as well. Like those described in a. above,
residential
these tenants have higher creditworthiness than those of other types of residences, and the risk of delinquent rent and similar problems withproperties)
regard to such tenants appears to be low.

Widec. Because the properties with this type of units are in shorter supply than office buildings, residential properties intended for Japanese
residents and real estate for other uses, stable income is expected due to its scarcity and other features. Also, depending on the quality ofmanagement performance, differences in profitability may arise regarding investments in these properties.

E) Due Diligence ➠ see table on page 56
NUD decides on whether or not it will
acquire investment assets in a comprehensive manner after conducting economic,
physical and legal inspections of the assets.
The table on page 56 lists the items that are,in principle, investigated in conducting sucheconomic, physical and legal inspections.
However, since the importance of each item
listed in the table in deciding on the acquisition of investment assets may differ depending on the use of the Investment Real Estateor the type and nature of the investment
assets, NUD will not necessarily examine allof the said items before acquiring the investment assets. In addition, the investment
assets acquired by NUD may not in the end
satisfy all of the standards of such items,
which are intended for the inspections andinvestigations for deciding on the acquisition of the investment assets.

might adversely affect NUD’s profitability with regard to its office buildings. However, compared to real estate for other uses, office buildingsc. NUD will consider acquisition of large-scale office buildings with great care, after thoroughly investigating future supply and demand trends

a. Office buildings

For both office buildings and residential
properties, NUD will determine the appropriate size of each property based on thestandards above and by considering theregional characteristics of the location and thecompatibility of asset size with the location.

b. Demand from tenants (lessees) for office buildings may fluctuate, due to business cycles and other economic trends. Consequently, thisare generally expected to generate relatively higher levels of profitability.

D) Asset Size per Property➠ see table on page 55
In principle, office buildings with leasable
floor space of approximately 2,000 m2(approximately 700 tsubos) or more, andstandard floor sizes of approximately
300 m2 (approximately 90 tsubos) or more,

Key Investment Points (Note 1)a. This type refers to residential properties intended for mean-income Japanese families (especially families with three or more members,

Familyincluding children), and are designed to meet their lifestyles.
b. Generally, these families tend to place emphasis on neighborhood scenes and living environments; thus, they tend to prefer locations awayfrom the center of Tokyo. These properties are expected to yield relatively high levels of profitability.
a. This type refers to residential properties intended for young households (without children) where both partners work, and are designed tomeet their lifestyles. (DINK is the acronym for “Double Income, No Kids.”)

DINKs

b. Demand of these tenants tends to focus on areas with convenient commuter access to the center of Tokyo. Since those properties appear
to be in short supply in such areas and said households of DINKs earn high levels of income, these properties have a scarcity value, and are
expected to yield relatively high profitability.
a. This type refers to residential properties intended for persons living alone, and are designed to meet their lifestyles.
b. Together with diversifying lifestyles, the market for more spacious and higher-quality residential properties targeting singles is growing

Singlesteadily, and such properties are expected to continue yielding stable profitability going forward.
c. Since the 5 Central Wards of Tokyo (Note 2), especially Minato, Shinjuku and Shibuya Wards, enjoy higher average rents and more stabledemand with respect to these properties compared to other areas, investments in properties located in these wards may increase cash flow.

(Note 1)	The “Key Investment Points” in the table above reflect the current views of UDAM as of the date of this document. These points may change due to future economic and real estatemarket trends. Moreover, they provide no guarantee of future trends regarding the degree of importance of properties for different uses, future earnings yield thereon or otherconsiderations.
(Note 2) The 5 Central Wards of Tokyo in this Semiannual Report refer to Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards (hereinafter the same).

54

(Strategic Policies cont.)F) Standards for Tenant Selection➠ see table belowa. 
Credit, as well as other information, ischecked regarding prospective tenants inline with the attribute classifications indicated in the table below. With respect tochecks of corporate tenants, when their
credit status cannot be determined fromthe materials obtained or when otherwise
deemed necessary, databases of outside
research agencies and other materials will
be used. When examination results ofcredit checks and other matters are recognized to be satisfactory, judgment will
be made on the appropriateness of executing a lease agreement after comprehensively considering rent level, term oflease, amount of deposit, type of tenantbusiness, balance with other tenants inthe subject property, size and configuration of desired space, and other matters.
b. Concerning current tenants and new tenants with whom lease agreements havebeen concluded, NUD as a rule intends tomaintain long-term relationships to thefullest extent possible. However, in Japan,
the term of a lease agreement for bothoffice buildings and residential properties
is usually two years. Moreover, many
agreements include provisions that allow
tenants to cancel the agreement by providing notice in advance for a certain
period of time. Such provisions are also
included in many of the lease agreements
for the investment assets of NUD.
G) Amount of Investmenta.	
From the standpoint of increasing theefficiency of asset and real estate management, the smallest amount of investment in each investment asset will be
one billion yen (¥1,000,000,000) (which
only covers the purchase price andexcludes taxes, acquisition expenses,etc.) as a rule.
b.	On the other hand, the maximum ratio of
the investment amount of a single investment asset will, in principle, be 25% of
the total amount invested in the investment assets after investing in that single
asset, and an investment decision shallAreas

be made after considering the overall
portfolio structure and effects of diversification investments.

Due Diligence
Item

3. Sales PolicyA) The basic policy is to hold the investment
assets acquired by NUD over the medium tolong term. In principle, NUD does not plan
to sell the acquired investment assets overthe short term.
B) Considered in the medium to long term,
however, NUD may investigate sales of its
investment assets after the portfolio structure is strategically classified, comprehensively taking into consideration such factors
as real estate market conditions, projected
future earnings, current fluctuations andforecasted fluctuations in asset values, future
prospects and stability of areas where theproperties are located, and projected capital expenditures, etc. arising from the deterioration or obsolescence of the real estate.
Moreover, while the sales policy for each
investment asset will basically be determined in the annual asset management
plan, this plan may be revised as necessary.

Tenantinspection

Economic Market research
Inspection

5 Central
Wards ofTokyo

Other 18
Wards ofTokyo

Urban Areas
Surrounding
Tokyo (Note 1)

Major
Regional
Cities (Note 2)

Office buildings

50% or more

0% - 20%0% - 40%0% - 20%

Residential properties

50% or more

0% - 40%0% - 20%0% - 20%

Area(Note 1)	The Urban Areas Surrounding Tokyo refers to Tokyo Prefecture excluding the 23 wards of Tokyo, Kanagawa
Prefecture (Yokohama City, Kawasaki City and other cities), Saitama Prefecture (Saitama City and other cities) andChiba Prefecture (Chiba City and other cities) (hereinafter the same).
(Note 2)	The Major Regional Cities refers to such cities as Sapporo, Sendai, Shizuoka, Nagoya, Osaka, Kyoto, Kobe,
Hiroshima, Okayama and Fukuoka, etc. (hereinafter the same).
(Note 3)	Diversification ratios by area show the respective ratios of office buildings and residential properties. Since thefigures in the table represent ranges, the total of such figures is not necessarily 100%. Although NUD makes
investments by aiming to achieve the ratios above, the actual ratios may differ in the course of acquiring theinvestment assets.

Dedicated
Use Area per
Rental Unit

Number of
Rental Units

Wide

80 m2 or more

10 or more

Family60 m or more

20 or more

DINKs

40-80 m2

20 or more

Single25-40 m2

30 or more

2Standards for Tenant Selection
Classification

Check Items (Details)

Location

1. Condition of roadways, access to primary means of transport (e.g., passenger trains), numbers of users of primary means oftransport
2. Location and accessibility of convenience facilities, commercial facilities, public offices, and recreational facilities, status of
usage of neighboring and nearby land, and future indicators (all of which are specific to residential properties)
3. Status of sunlight, vistas, views, noise, etc. (all of which are specific to residential properties)
4. Area’s name value, reputation, scale, etc.

Construction,
facilities andspecifications

1. For both office buildings and residential properties: Design, primary structure, building age, construction companies, etc.
2. Conditions of interior and exterior components
Office buildings: Configuration of rental floors, free-access floors (e.g., OA floors), subdivision measures, ceiling heights,
electrical capacity, air-conditioning system, floor load, illuminance, security measures, water supply and drainage facilities,
elevator facilities, parking, other common facilities, etc.
Residential properties: Configuration of rental rooms, floor plans, ceiling heights, security measures, broadcast reception
equipment, water supply and drainage facilities, elevator facilities, parking for cars and bicycles, assembly rooms, othercommon facilities, etc.

Earthquake
resistance1. 
Achievement of performance in line with new earthquake-resistant construction standards (the earthquake-resistantconstruction standards based on the Building Standards Act revised in 1981) or equivalent or higher standards
2. In principle, the probable maximum loss (PML (Note)) value caused by an earthquake should be less than 20%. Reinforcement
work for earthquake resistance or other similar measures must be taken for a property with a PML of 20% or more for acquiring
the property.

Property
management

1. Compliance with applicable laws and regulations (specifically, the Fire Service Act, City Planning Act and other buildingrelated laws and regulations), etc.
2. Estimates of future maintenance and repair expenses (for the next ten years or so) based on building condition reports
3. Quality of property management, existence or non-existence of and terms of management bylaws, and the quality andfinancial credibility of a property management company

Environment,
groundcharacteristics,etc.

1. Status of use and management of hazardous materials such as asbestos, chlorofluorocarbons, and PCBs
2. Soil quality, land use history, status of soil contamination, etc.

Title, etc.

Matters relating to rights in a property, including the following items, will be carefully investigated, considering the reliability of
titles of former owners and other parties. Particularly careful investigations are required with regard to properties with complex
title arrangements such as those for which NUD does not hold any ownership or not hold ownership independently (e.g.,properties for which NUD holds co-ownership or compartmentalized ownership or leased land).
1. Completion or incompletion of the perfection of a leasehold interest and review of other interests or rights superseding theleasehold interest
2. Existence or non-existence of registration of rights for a site where the building is located, existence or non-existence of (i)restrictions on separate disposition of a building and the right for a site where a property is located and (ii) registrations
thereof, and (iii) proportions of ownership shares
3. Measures for securing the repayment of deposit money, and policies and measures concerning reserve funds accumulated forlong-term maintenance and repair plans
4. Existence or non-existence of (i) special agreements prohibiting separation of co-ownership interest and (ii) registration
thereof, appropriate measures concerning such matters as requests for separation of co-ownership interest and sales of said
co-ownership interests, and obligations and rights between such owners
5. Compartmentability of compartmentalized ownership6. Status of collateral established before acquisition of the property by NUD, terms of such collateral agreement, and whether
any such collateral agreement is to be succeeded
7. Terms of agreements, special agreements, etc. which are executed with lessors of leasehold interests, compartmentalized
owners, co-owners and other related parties (particularly, existence or non-existence of first refusal right, and details of such right)
8. Attributes of lessors of leasehold interests, compartmentalized owners, co-owners and other related parties (including whether
they are corporations or individuals)
9. Terms of trust agreements in the case of trust beneficial interests of real estate in trust

Property line
inspection

1. Status of confirmation of boundaries, existence or non-existence of any assets extending beyond boundaries, and related
circumstances

Tenant attributes

1. Purpose of use by tenants, and formats of agreements with tenants
2. Existence or non-existence of any disputes with tenants

Legal
Inspection

2. Purpose of lease (e.g., purpose of use, period)
3. Existence or non-existence of joint and several guarantors and attributes of such guarantors
1. Office and details of employment, service years, etc.
2. Annual income (and the proportion of the total amount of rent to annual income, etc.)

Individuals

3. Purpose of lease (e.g., purpose of use, period and number of residents)
4. Existence or non-existence of joint and several guarantors and attributes of such guarantors (e.g., relationship with such individuals)
5. Age, gender, family structure, etc.

55

1. Market rents, occupancy rates, trends in competing properties and tenant demand, etc.

Income-related

1. Business types, business history, financial details (i.e., financial soundness), etc.

Corporations

1. Financial credibility, status of rent collection, etc. of tenants
2. Tenants’ business types, number of tenants, purposes of use, etc. (including household conditions for residential properties)
3. Past occupancy rates, rent trends and future expectations
4. Proportion occupied by each tenant, diversification of tenants, etc.

1. Inspection of competitive strength, including ability to attract tenants and resale potential
2. Lease agreement levels, lease agreement structures, and possibility of renewal of such agreements
3. Expense levels, structures of agreements related to expenses, and possibility of renewal of such agreements
4. Inspection of appropriate levels of rents and expenses, and possibility of projected future expense burdens
5. Comparison of maintenance and repair plans with actual funds accumulated

PhysicalInspection

Asset Size per Property

Details(Note) Probable Maximum Loss (PML) refers to the maximum estimated rate of loss resulting from an earthquake. Although there is no single precise definition of PML, as used here, PML
refers to the ratio (in terms of percentage) of projected construction costs to restore the damaged building to the state before suffering damage to total reconstruction work costs(replacement price) for the said building when there occurs the strongest earthquake (Probable Maximum Earthquake (PME): a major earthquake occurring once every 475 years witha 10% probability of occurrence during every fifty-year period) expected to occur in the area where the building is located. Furthermore, the PML value does not consider the impact
of destruction of neighboring buildings or damages by water, fire or other causes.

56

(Strategic Policies cont.)

a. Strategic classifications4)	When the property is sold from afinancial viewpoint:

Classification

Strategic SignificanceCore Assets

Assets with respect to which
the basic policy is to carry overin the long term for the purpose of ensuring medium- tolong-term stability of earnings.

The investment assets withhigher liquidity, from which
earnings based mainly on
medium- to long-term rent
income (income gains) are
obtained, provided that the
total returns (income gains
Active Assets plus capital gains) including
earnings from sale (capitalgains) based on the increased
asset values (value enhancement) from the increase in theincome gains after acquisition,
are also intentionally and proactively sought.

The upper limit on active assets as a proportion of the portfolio shall be 20% as a
rule.
b.	
Specific cases
considered

where

sale

will

be

1)	When a strategic sale would contribute to earnings of NUD:
[Example] When the property value
increases through improved profitability resulting from measures suchas lower vacancy rates, higher rent
income, or reduced expenses.
2)	When an investor offers an attractive
purchase price:[Example] When the prospective purchaser indicates a strong intent topurchase, for instance, by making an
attractive bid that exceeds appraisal
value by 10% or more or otherwise
exceeds the estimated value in the surrounding area due to such prospective purchaser’s special circumstances.
3)	When the property has lost strategic
importance:[Example 1] When the age of theproperty reduces its profitability, and
it is determined that the targetedearnings will not be achieved evenwith additional allocation of capital.
[Example 2] When another investment
asset with higher profitability has
been acquired in the same area, or
the fact that the marketability in thesurrounding area has remarkably
declined or other circumstances are
judged to have led the asset to lose
importance in the portfolio structure.

57[Example] When a reduction in theinterest-bearing liabilities ratio is
intended.
C) The Investment Real Estate related to theinvestment assets to be sold will be soldthrough measures such as the acceptance ofcompetitive bids over a limited period anduse of competitive real estate brokers andspecialized agents, so that sales at highprices can be realized.

4. Policy for Investment in
Development Projects
NUD shall, in principle, acquire investment
assets that provide or promise stable rental
income or similar earnings. NUD does notintend to acquire undeveloped land andconstruct buildings thereon. However, withregard to an investment property being constructed by a third party, NUD may decide
on investing in it even before completion if,
for example, it is determined that such property under construction is capable enoughto securely attract tenants after completion
and risks regarding completion and delivery
have been minimized. In this case, theinvestment determination shall be made bycomparing the benefits of acquiring such aninvestment asset with the negative impact of
not earning rental income over the period
until the asset begins to generate suchincome, as well as other risks possibly borne
by NUD in connection with acquiring theinvestment asset.

5. Investment Policy for Real Estate
Backed Securities, etc.
When NUD invests in the Real Estate Backed
Securities, etc., the investment decision
shall be made after additionally investigating the following items.
A) The Investment Real Estate underlying
the Real Estate Backed Securities, etc. shallbe assets compliant with the Targets andPolicies of Asset Management stipulated in
the Attachment to the Articles ofIncorporation of NUD.
B) In principle, NUD shall be given an opportunity to acquire the underling Investment
Real Estate when it is being sold.
C) The same policy as indicated in the above
subparagraph 4 shall be followed when
NUD invests in the Real Estate Backed
Securities, etc. of which the underlying

Investment Real Estate is development
properties.

6. Insurance Policy
Determination as to whether or not theinvestment assets should be insured against
earthquake damage will be made by comparing the effects of such a disaster with thecost of casualty insurance premiums, using
the PML value of the entire portfolio as abasis. If any individual property has a highPML value, taking out an earthquake insurance policy on such individual property will
be considered.

7. Investment Policy for Healthcare
Facilities
A) Investment Policy for Healthcare Facilities
When NUD invests in “serviced apartments
for the elderly” as defined in the Act on
Securement of Stable Supply of Elderly
Persons’ Housing (Act No. 26 of 2001, as
amended) and “fee-based homes for theelderly” and “group homes for the elderlywith dementia” as defined in the Act on
Social Welfare for the Elderly (Act No. 133 of
1963, as amended) (hereinafter, collectively
referred to as “healthcare facilities”), it shallrefer to the “Guideline related to the utilization of healthcare REITs targeting housing
for the elderly, etc.” announced by the Ministryof Land, Infrastructure, Transport and Tourism
on June 27, 2014; receive advice from outside experts who, based on their experience
in investment, financing, due diligence, realestate appraisal and operations of healthcare facilities, fully understand the businesscharacteristics of healthcare facilities where
living services and nursing services are provided (hereinafter, the “outside experts”);
and pay attention to the following points.
a.	
Due diligence in consideration of thebusiness characteristics
When acquiring relevant healthcare facilities, business due diligence (including
investigations on the operational abilityof the operators for the facilities and thestability of their business management,
tours to the facilities conducted asneeded, and hearing from the facility
heads) shall be implemented to analyze
the durability and stability of their business in consideration of the businesscharacteristics of healthcare facilities,
either by receiving advice from the outside experts or consign the relevant
operations to the outside experts.

b. Publicity of the healthcare REIT scheme
NUD shall encourage the operators to let
the facility users fully understand thescheme of the investment corporation
system and performance results and initiatives by investment corporations, etc.
When necessary, UDAM shall also work
to make the users familiar with thesematters.
c.	Confirmation of appropriate operationsof healthcare facilities
In order to ensure that facility users feelsecure, confirmation shall be made as tolegal compliance and responses to notifications, etc. from local governments
regarding such matters as the conditions
and use fees of the facilities and contract
details. For fee-based homes for theelderly (excluding those registered asserviced apartments for the elderly), in
particular, it shall be noted that local governments have prepared guidelines for
guiding principles that suit the local situations, in reference to the Standard
Guidelines for the Establishment andOperation of Fee-Based Homes for the
Elderly (Rouhatsu 0718003, Notice by
the Director of Health and Welfare
Bureau for the Elderly dated July 18,2002), and conduct administrative guidance based on the principles.
d.	Securing appropriate
healthcare facilities

operationsof

In order to ensure that facility users feelsecure, NUD shall request the operators
to express in the lease contracts or alternative agreements and memorandums
between NUD and the operators that,with regard to the use fees and contract
details, they will comply with relevantlaws and regulations that are applicableto the healthcare facilities that may be
managed by NUD and that they will
operate such facilities in response to theadministrative guidance.
e. OtherWith regard to a through d above, regulations on real estate investment trusts
and real estate investment corporations
designated by The Investment Trusts
Association, Japan (“Investment Trusts
Association”), etc. shall be abided by sothat the users do not feel uneasy.

8. Financial PolicyA) Loans and Corporate Bondsa.	In order to achieve the steady growth ofinvestment assets and efficient andstable operation of investments, NUD
may borrow funds or issue corporate
bonds to raise funds to acquire or repair
assets, pay distributions, fund NUD’s
operation, or repay debts (including
repayment of deposit money, loans andobligations of its corporate bonds (including short-term corporate bonds; hereinafter referred to as “Corporate Bonds”)).
However, the respective maximum limitof the loans and bond issuances shall be
one trillion yen (¥1,000,000,000,000) andthe combined amount shall not exceed
one trillion yen (¥1,000,000,000,000)(Articles 14-1 and 14-3 of the Articles ofIncorporation).
b.	In the case of borrowing funds in accordance with above a., NUD shall selecteffective means of funding from the perspective of the term of the loan and thefixed or floating interest rate structures,
and aim to raise funds at low costs after
comprehensively considering the capital
market and the financial environment,
and after making projections concerning
future changes in economic and social
climates. Moreover, in order to flexibly
respond to the capital needs for theacquisition of new investment assets,
repayment of security deposits or othermonies in custody for tenants, or otherevents, NUD may enter into agreements(e.g., commitment line agreements) bywhich a credit line will be established inadvance or agreements on the reservation of loans at any time it requires.
c.	When borrowing funds in accordancewith above a., the said funds shall only beborrowed from qualified institutional
investors designated by the Financial
Instruments and Exchange Act (hereinafter referred to as “FIEA”) (on the condition, however, that they are the institutional
investors designated in the “Special Tax
Measures for an Investment Corporation”
under the Act on Special Measures
Concerning Taxation).
d.	NUD may offer its investment assets as
collateral for borrowed funds or the issuance of corporate bonds.
e.	NUD shall aim to maintain the ratio of thebalance of loans and issued corporate
bonds to total assets (Note) (hereinafterreferred to as “loan-to-value ratio”) at
60% or less. However, in connection withthe acquisition of new investment assets
and other circumstances, this ratio may
tentatively exceed 60% for a short periodof time.
(Note) Total assets shall be the amount obtained byadding the book value of the preferred securities as of the end of the most recent fiscal period
to the value of the real estate and beneficial
interests calculated on the basis of the appraisals by real estate appraisers as of the end of thesaid fiscal period.

B) Issuance ofSubscription

Investment

Units

for

a.	To raise funds, NUD may, upon approvalof the Board of Directors, issue investment units for subscription.
b.	Issuance of investment units for subscription shall be determined by considering
NUD’s financial situation, including theloan-to-value ratio, and the dilution of
the investment units.

3. Property Management PolicyA) In managing real estate, NUD intends tomaintain and enhance the value and competitiveness of its assets through continuous
capital expenditures made from a medium
to long-term perspective, and aims toachieve steady growth in investment returns
through higher earnings (e.g., increases inrents, decreases in vacancy rates, and prolonging and fixing the terms of agreements)
and reduced expenses (e.g., reduction in
outsourcing fees, utility expenses and otherfees and expenses).
B) UDAM shall select an appropriate party tocontract with for the provision of property
management services for each acquired
investment property by considering thedetails of the items listed below (see table on
page 59). If such a party falls under the category of interested parties as stipulated in theRegulations on Transactions with Interested
Parties, UDAM shall consign the property
management services to the party only
when the standards and procedures stipulated in the said Regulations are satisfied, on
top of the following requirements.
In renewing the property managementagreement, NUD shall consider the detailsof the following items, in addition to (1)through (7) listed below, to make comprehensive judgment. Furthermore, UDAM will

58

(Strategic Policies cont.)

periodically check the quality of the services
provided by the consigned property management companies, not limited to the timeof renewing the contract.
A. No material breach of the property management agreement is made by the consigned party during the consigned
period.
B. No inappropriate fact must occur during
the consigned period as to reporting ofimportant matters and settlement ofmonies.
C. The party must be recognized to have thestructure and capability to appropriately
implement the services.
C) NUD may accumulate a long-term maintenance and repair reserve, a reserve forpayments, a reserve for distributions andother similar reserves and allowances as
deemed necessary to maintain the investment assets or enhance their value.

D) NUD will endeavor to take measures suchas maintaining appropriate allocation rates
of investments and taking out insurance
against losses (e.g., fire and general liability
insurance) in order to avoid major declines
and fluctuations in earnings caused by disasters, move-outs of tenants and otherfactors.
E) To secure stable earnings over the
medium to long term, NUD shall, in principle, lease all of its Investment Real Estate(including facilities such as parking lots andsignage). At the time of leasing, NUD may
collect deposits and guarantees and othersimilar monies. The said monies shall be
invested pursuant to the provisions of theTargets and Policies of Asset Management
stipulated in the Attachment to the Articles
of Incorporation of NUD.
F) The occurrence of unforeseen events,
such as drastic changes in funding conditions, general market conditions, and realestate market conditions, may prevent theoperations described above.

4. Disclosure PolicyA) NUD shall make efforts to provide appropriate information for making investment
decisions at all times by disclosing, to thegreatest extent possible, information that is
considered useful for unitholders/investors
to understand NUD.
B) NUD shall make efforts to establish asystem which enables prompt transmissionof accurate and unbiased information tounitholders/investors.
C) NUD shall disclose information in accordance with the contents and the formats
required by the Act on Investment Trusts
and Investment Corporations, the Financial
Instruments and Exchange Act, the Tokyo
Stock Exchange, the Investment Trusts
Association, etc.

II. C
 ASH DISTRIBUTION
POLICY
1. Distribution of Profits
In principle, NUD shall make distributions
based on the following policies (Article 13-1of the Articles of Incorporation):1)	Of the total cash amount to be distributed to unitholders, profits (the amountobtained by subtracting the sum total ofunitholders’ capital and surplus from thenet assets amount appearing on the balance sheets of NUD; hereinafter thesame) shall be calculated based on theInvestment
TrustsAct,
corporateaccounting standards generally acceptedin Japan and other corporate accounting
practices.
2)	Where it is approved by tax-related laws
and regulations in Japan to include the
cash distributions to unitholders of NUD
in deductible expenses under certain

conditions, NUD must make cash distributions to its unitholders in a way thatmeets the requirements provided by the
tax-related laws and regulations in Japanfor approving the inclusion in deductible
expenses.

2. Distributions in Excess of
Earnings
When it is possible to reduce imposition of
corporate tax and other taxes for NUD or isotherwise determined by the Board of
Directors as appropriate, NUD shall be able
to make cash distributions in excess of earnings based on the Statements of CashDistributions approved by the Board of
Directors, pursuant to the provisions of theInvestment Trusts Act, on the condition that,
however, the distribution amount shall not
exceed the amount designated by the rulesof the Investment Trusts Association, etc.
(Article 13-2 of the Articles of Incorporation).

3. Distribution Method
Distributions provided in 1. and 2. above
shall be paid in cash and, in principle, distributed within three months from the settlement date to the unitholders or registeredinvestment unit pledgees who are listed orregistered or recorded in the latest unitholders registry as of the settlement date, in
accordance with the number of investment
units held by the unitholders or the numberof investment units subject to the registeredpledges of investment units (Article 13-3 ofthe Articles of Incorporation).

4. Limitation on Cash Distributions
If the distributions specified in 1. and 2.
above are unclaimed for a period of threefull years after the date on which such distributions first became payable, NUD shall bedischarged from its payment obligation
thereof. Furthermore, any distributions
remaining unpaid shall bear no interest(Article 13-4 of the Articles of Incorporation).

Standards for Selection of Property Manager
Item

Details
1. Deemed to be capable of appropriately implementing operations due to such reasons as having(1) Business history

been engaged in property management services for at least three years or having been in charge ofproperty management services for the relevant individual properties or facilities and residences forthe elderly so as to have a thorough knowledge of the situation and characteristics of such properties.

(2) Financial standing

1. Not generating net loss continuously for the most recent three fiscal periods
2. Not in a state of insolvency in any of the most recent three fiscal periods
1. Preparation of internal regulations
2. Number of employees(3) Organizational structure

3. Establishment of compliance structure and business audit system
4. Track record related to the subject investment assets, feasibility of implementing operations inaccordance with management plans, and continuity of management operations
5. Establishment of a system to avoid conflicts of interests(4) Level of knowledge and experience
regarding the relevant properties andrelationship with the tenants (or operatorsof the facilities and residences for theelderly)

1. Consigned period for the relevant properties
2. Any trouble with the tenants or operators(5) Ability to report on the relevant properties

1. Capable of preparing management plans and monthly reports(6) Level of compensation and fees

1. Level of compensation to be in the scope of market levels
1. No fact of conducting material breach of laws and regulations or causing misconduct, etc. in the most(7) Social attributes

recent three years, and no problem found in the legal compliance structure
2. Not belonging to or having a relationship with any anti-social forces

59

60

INDEPENDENT AUDITOR’S REPORT

Independent auditor’s report
To the Board of Directors of NTT UD REIT Investment Corporation:
Report on the Audit of the Financial Statements
OpinionWe have audited the accompanying financial statements of NTT UD REIT Investment Corporation(“the Investment Corporation”), which comprise the balance sheet as at April 30, 2024, the profit andloss statement, statement of changes in unitholders’ equity and cash flow statement for the six months
period then ended, and notes, comprising a summary of significant accounting policies and otherexplanatory information.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Investment Corporation as at April 30, 2024, and its financial performance andits cash flows for the six months period then ended in accordance with accounting principles generally
accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Investment
Corporation in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Responsibilities of Management and Supervisory Directors for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Investment
Corporation’s ability to continue as a going concern, and disclosing, as applicable, matters related togoing concern in accordance with accounting principles generally accepted in Japan.
Supervisory directors are responsible for overseeing the executive director’s performance of his duties
with regard to the design, implementation and maintenance of the Investment Corporation’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with auditing standards generally accepted in Japan will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overrideof internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Investment Corporation’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Investment Corporation’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause theInvestment Corporation to cease to continue as a going concern.



Evaluate whether the presentation and disclosures in the financial statements are in accordancewith accounting standards generally accepted in Japan, the overall presentation, structure andcontent of the financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

Other Information
The other information comprises the information included in the Semiannual Report, but does notinclude the financial statements and our auditor’s report thereon. Management is responsible for the
preparation and presentation of the other information. The supervisory directors are responsible foroverseeing the directors’ performance of their duties with regard to the design, implementation andmaintenance of the reporting process for the other information.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.

61

62

(Independent Auditor’s Report cont.)

DISCLAIMER

We communicate with the executive director regarding, among other matters, the planned scope andtiming of the audit, significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the executive director with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence, and where applicable, actions taken toeliminate threats or safeguards applied.
Fee-related Information
Fees paid or payable to our firm and to other firms within the same network as our firm for audit andnon-audit services provided to the Investment Corporation for the six months period from November 1,
2023 to April 30, 2024 are 12 million yen and 4 million yen, respectively.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Investment Corporation which is required to be disclosed pursuant to
the provisions of the Certified Public Accountants Act of Japan.

/S/Koji Fukai
Designated Engagement Partner
Certified Public Accountant/S/Hirofumi Hanyu
Designated Engagement Partner
Certified Public Accountant

This English document contains selected information including apartial translation of certain documents originally prepared inaccordance with the Financial Instruments and Exchange Act ofJapan or the Law Concerning Investment Trusts and Investments
Corporation of Japan. This document was prepared solely for theconvenience of readers outside Japan, and the content of thisdocument does not constitute an offer to sell, or a solicitation of an
offer to buy or sell, any securities of NUD or otherwise, nor is it
advice or the recommendation of NUD to enter into any transaction.
Unless otherwise specified, the information contained herein does
not constitute disclosure documents or management reports
stipulated by the Financial Instruments and Exchange Act or Law
Concerning Investment Trusts and Investments Corporation, or
requested by the listing regulations of the Tokyo Stock Exchange orother related rules and regulations. When purchasing investment
units of NUD, investors are kindly requested to make investment
decisions based on their own judgment and responsibility.
English terms for Japanese legal, accounting, tax and businessconcepts used herein may not be precisely identical to the conceptof the equivalent Japanese terms. With respect to any and all terms
herein, if there exist any discrepancies in the meaning or interpretation
thereof between the original Japanese documents and English
translation contained herein, the Japanese documents will always
govern the meaning and interpretation. Neither NUD, UDAM nor
any of their respective directors, officers, employees, partners,
shareholders, agents, affiliates or their advisors will be responsible or
liable for the completeness, appropriateness or accuracy of English
translations contained herein. No person has been authorized togive any information or make any representations, other than thosecontained in this document, in relation to the matters set out in thisdocument, and if such information is given or representations are
made, such information or representations must not be relied upon
as having been authorized by NUD, UDAM or any of their respective
directors, officers, employees, partners, shareholders, agents,
affiliates or their advisors.
The financial statements of NUD have been prepared in accordancewith generally accepted accounting principles in Japan (Japanese

KPMG AZSA LLC
Tokyo Office, Japan
July 29, 2024
Notes to the Reader of Independent Auditor’s Report:
This is a copy of the Independent Auditor’s Report and the original copies are kept separately by theInvestment Corporation and KPMG AZSA LLC.

63GAAP), which may differ materially, in certain respects, from generally
accepted accounting principles in other jurisdictions.
This document contains forward-looking statements. In some cases,
readers of this document can identify forward-looking statements byterms such as “may,” “will,” “should,” “would,” “expect,” “plan,”“anticipate,” “believe,” “estimate,” “potential,” or the negative of
these terms or other similar terminology. These statements discuss
expectations, indicate our intent or belief, identify strategies, containprojections of results of operations or of NUD’s financial condition, orstate other forward-looking information. These statements are notguarantees of future performance and are subject to various risks
and uncertainties. Actual results, performance or achievements, or
those of the industries in which we operate, may differ materiallyfrom any future results, performance or achievements expressed or
implied by these forward-looking statements. In addition, theseforward-looking statements are necessarily dependent uponassumptions, estimates and data that may be incorrect or imprecise
and involve known and unknown risks and uncertainties. Accordingly,
readers of this document should not interpret the forward-looking
statements included herein as predictions or representations of
future events or circumstances. NUD and UDAM do not intend anddisclaim any duty or obligation to update or revise any forwardlooking statements contained in this document to reflect new
information, future events or otherwise.
NUD takes the utmost care to ensure that the information provided
herein has no errors or omissions. However, this document has been
prepared for the convenience of quick and easy reference, and theinformation provided may include inaccurate descriptions or
typographical errors. In addition, the information provided is subject
to change without notice. NUD shall not be liable for the accuracy,completeness, appropriateness and fairness of the information
contained herein.
Use and perusal of this document shall be made at the responsibilityof the reader. NUD and other related parties involved in the
preparation and disclosure, etc. of this document shall not be liable
for any damages (regardless of whether direct or indirect, or bywhatever cause) that arise from the use of this document.