Japan Real Estate Investment Corporation

SEMIANNUAL REPORTMarch 2024
For the period from October 1, 2023 to March 31, 2024

Contents
P. 2	The Strengths of Japan Real Estate Investment Corporation
P. 3

To Our Unitholders

P. 7

Asset Management SummaryP. 9

Financial Highlights

P. 9

Top 10 Unitholders

P. 9

Unit Price Performance

P. 10 Portfolio Highlights
P. 11 Approach to ESG
P. 15	Asset Size, Property Acquisitions, and Performance Trends
P. 18	Overview of Portfolio Properties
P. 24 Financial Section
P. 55 Other Information
P. 66 Corporate Data

1

Japan Real Estate Investment Corporation

ProfileJapan Real Estate Investment Corporation (the “Company” or “JRE”) wasestablished as one of the first real estate investment corporations in Japanfollowing revisions to the Act on Investment Trusts and Investment
Corporations of Japan, as amended, or the ITA. Its investments
focus primarily on office buildings, and it is aiming to maintain­geographic diversity while seeking stable growth and dividends in themedium- to long-term. The Company was listed on the Tokyo Stock
Exchange (TSE) on September 10, 2001 (Securities Code: 8952).
Note: Investment corporations, including the Company, are special legal entities
incorporated and operated under the ITA. Accordingly, the “units” of suchinvestment corporations, including the units of the Company, are governed by
the ITA and represent the equity interests in such investment corporations,which may differ in certain material respects from the “shares” governed by the
Corporation Law of Japan and representing the equity interests in Japaneseordinary corporations incorporated and operated under the Corporation Law
of Japan. Investors and readers are specifically reminded to pay attention tosuch differences when reviewing this semiannual report and making any investment decision on or in respect of the units of the Company. “Unitholders” of
the Company may be construed accordingly. Each investor and reader should
consult their own legal, tax, and other advisors regarding all Japanese legal, tax,
and other consequences of an investment in the units of the Company, withspecific reference to their own legal, tax, and other situations, and any recentchanges in applicable laws and guidelines or their interpretation.

The Strengths ofJapan Real Estate Investment Corporation

1

Steady Growth of Dividends
Actual dividend per unit for the March 2024 period:

JPY 12,216
Forecast dividend per unit for the September 2024 period:

JPY 12,100

2Collaboration with Sponsor
Expertise of Mitsubishi Estate Co., Ltd.

3

Steady Growth of Quality Portfolio (As of March 31, 2024)
Total acquisition price: JPY 1.16 trillion 77 properties

The first listed J-REIT in 2001

4

Sound Financial Base (As of March 31, 2024)
Highest credit ratings for a J-REIT: AA+ from JCR, AA from R&I, A+ from S&P
Long-term interest-bearing debt ratio*: 88.2%
LTV (Interest-bearing debt / Total assets): 44.0%* ‌(Long-term loans [including current portion of long-term loans] + Investment corporation bonds) / Total interest-bearing debt

Japan Real Estate Investment Corporation

2

To Our Unitholders
The Japan Real Estate Investment Corporation’s investment management policy of providing stable dividends to its unitholders has remained unchanged since its listing on the Tokyo Stock Exchange. Guided by this policy, JRE increased dividends per unit (“DPU”) by JPY 216, to JPY 12,216, in the fiscal period ended March 31, 2024. This marked the 20thconsecutive period of DPU growth. The leasing market is recovering gradually, driven by demand such as that for larger
office space due to business expansion and for relocation to more favorable locations, and rental revenue from our portfolio is trending upward thanks to our efforts to backfill vacancies. Nevertheless, with increased operational costs resulting
from inflation beginning to become an issue, primarily in repairing costs, we will focus further on cost control measures.

Business Performance for the March 2024 Period 
Summary of Financial Results and Dividends

business expansion and relocations aimed at improving location. As a

In the March 2024 period (October 1, 2023 to March 31, 2024), Japan

result, the vacancy rate in central Tokyo is in a gradual downward

Real Estate Investment Corporation recorded operating revenues

trend. Rent levels are showing signs of rising. In light of the prevailingincreased 7.2% compared with the previous fiscal period, to JPY

conditions in the leasing market, the Company is striving to attract

41,414 million, while operating profit increased 12.6% to JPY 20,317

new tenants through strategic leasing activities and to further enhance

million. After deducting expenses for interest payments on loans andthe satisfaction level of existing tenants by adding value to its portfolio

other costs, ordinary profit increased 13.0% to JPY 19,311 million, andproperties with the aim of securing stable income and maintaining andprofit increased 9.1% to JPY 18,636 million.

improving the occupancy rate across the entire portfolio.

As for dividends in the fiscal period under review, the Company

In the real estate trading market, the appetite for property acquisi-

will make cash distributions using earnings based on the dividend pol-tion among both domestic and foreign investors remains firm because

icy outlined in Article 32-1 (2) of the Company’s Articles ofof the interest rate differential with overseas markets and depreciation

Incorporation, with an amount that exceeds 90% of profit available forin the yen. There is still fierce competition, particularly for high-qual-

dividends as required by Article 67-15 of the Act on Special Measures

ity office buildings, and as a result, conditions for acquiring properties

Concerning Taxation. Based on this policy, it was decided that, after

remain tough because expected yields are also low.

the Company makes a provision for reserve for reduction entry pursu-

In this market environment, the Company made sound invest-

ant to the “Exceptions of the Taxation in case of the Replacement byments based on its investment policy of providing stable dividends toPurchase of Specific Assets” under Article 65-7 of the Act on Special

unitholders, which has remained unchanged since its listing on the

Measures Concerning Taxation and ensures that retained earnings are

TSE. Dividend per unit for the fiscal period under review was JPY

brought forward, the total amount of dividends shall be JPY

12,216, up JPY 216 from the previous fiscal period.

17,381,706,624 for the fiscal period under review, which is a multiple

In the office leasing market in the fiscal period under review, theof 1,422,864, the number of units outstanding as of March 31, 2024.

occupancy rate at the end of the period was 96.6%, up 1.6% from the

Accordingly, the dividend per investment unit came to JPY 12,216.

end of the previous fiscal period. This was mainly due to the completed
disposition of Harumi Front (Chuo-ku, Tokyo), a property that was ter-

Operating Environment and Performance
During the March 2024 period (October 1, 2023 to March 31, 2024),

As for property acquisitions and dispositions, the Company

the Japanese economy continued to demonstrate a gradual recovery on

acquired an additional 4.22% business ownership percentage in Seavans

the back of firm capital investment and personal consumption, despite

S Building (Minato-ku, Tokyo) for JPY 2,290 million on December 1,

the impacts of inflation. On the other hand, with the changes in the2023, which meant its business ownership percentage in the property

Bank of Japan’s monetary policy, including the end of the negative

increased from 13.45% to 17.67%. Also, the Company acquired theinterest rate policy and the abolishment of the yield curve control pol-trust beneficiary right for an additional 22% co-ownership interest inicy, the effects of fluctuations in financial and capital markets, overseas

Toyosu Foresia (Koto-ku, Tokyo) for JPY 19,756 million on February 14,

economic developments, and price trends, including resource prices,2024, which meant its co-ownership interest in the property increased

will bear watching.

from 9% to 31%. In addition, the Company acquired a 77.76% owner-

In the office leasing market, despite a significant supply of new
office buildings, demand continues to grow for leases driven by3

minated by a major tenant of the building, and to filling vacancies.

Japan Real Estate Investment Corporation

ship ratio of 3rd MINAMI AOYAMA (Minato-ku, Tokyo) for JPY
21,000 million on March 8, 2024.

The real estate market remains bullish. In the fiscal period under review, we acquired 3rd MINAMI AOYAMA and additional ownership interests in Toyosu Foresia and Seavans S Building, primarily through sponsor pipeline. We also completed the disposition of a 45% ownership interest in Harumi Front, the third and final stage of a three-stage disposition.
In addition, we have decided to dispose of JRE Dojima Tower over two fiscal periods, from the period ending September
2024. We will continue promoting asset replacement strategy to enhance the competitiveness and earning capabilities ofour portfolio over the medium- to long-term.

Meanwhile, the Company disposed of a 45% quasi-co-ownership

In the fiscal period under review, short-term loans of JPY 2,000

interest of the trust beneficiary right in Harumi Front (Chuo-ku,

million and JPY 20,000 million were borrowed to partially fund an

Tokyo) for JPY 17,599 million on January 12, 2024. The property wasadditional interest in Seavans S Building and an additional interest in

disposed of in stages over three fiscal periods. A 25% quasi-co-owner-

Toyosu Foresia, respectively. A short-term loan of JPY 18,000 million

ship interest was disposed of for JPY 9,777 million on December 1,

and a long-term loan of JPY 3,000 million were also borrowed to par-2022, and a 30% quasi-co-ownership interest was disposed of for JPY

tially fund the acquisition of 3rd MINAMI AOYAMA. The Company

11,733 million on April 3, 2023.

repaid short-term loans with cash on hand, and borrowed to fund the

As a result of the above, the Company’s portfolio at the end of the
fiscal period under review (March 31, 2024) consisted of 77 properties,

repayment of existing loans.
As a result of the above financing activities, as of March 31, 2024,with a total acquisition price of JPY 1.16 trillion. Net rentable floor

the Company’s total interest-bearing debt was JPY 480,193 million, up

area stood at 897,885m2 with 1,622 tenants in total. (Note)

JPY 30,000 million from the end of the previous fiscal period. This

Also, the Company disposed of a 51% quasi-co-ownership interest

amount consists of long-term loans totaling JPY 390,700 millionof the trust beneficiary right in JRE Dojima Tower (Osaka-shi, Osaka)(including the current portion of long-term loans totaling JPY 54,800

for JPY 17,034 million on April 1, 2024. The property will be disposed

million), short-term loans totaling JPY 56,500 million, and investment

of in stages over two fiscal periods, with the second and final portion

corporation bonds totaling JPY 32,993 million. The current LTV ratioof 49% to be disposed of on October 1, 2024 for JPY 16,366 million.

stands at 44.0%.

Note:	Shibuya Cross Tower (land with leasehold interest), in which theCompany’s building ownership was disposed of on January 18,
2018, is included in the above number of properties and totalacquisition price, but is not included in net rentable floor area
and total number of tenants.

Finance Activities
According to its financial policy, the Company aims to maintain the
LTV ratio (ratio of interest-bearing debt to total assets) at 30% to
40%, and strives to maintain a sound and conservative financial profile
by staggering maturities, extending durations, and diversifying stablelenders, among other measures after taking into consideration borrow-

The Company’s credit ratings as of March 31, 2024 were as follows:
Rating Agency

Credit Rating

Japan Credit Rating Agency, Ltd.

Long-term: AA+; Outlook:
StableRating andInvestment Information, Inc.

Rating: AA; Outlook: Stable

S&P Global Ratings Japan Inc.

Long-term: A+; Short-term:
A-1; Outlook: Stableing costs and existing relationships with lenders.
Concerning new loans related to property acquisitions and therefinancing of existing loans, the Company takes out loans strategicallyand flexibly after giving due consideration to the above-mentioned
means, as well as the possibility of repayment with funds procured
from issuing new investment units.

Japan Real Estate Investment Corporation

4

Outlook 
Operating Environment
The Japanese economy is expected to recover up ahead on the back of a(iii) S tabilize revenues and income

likely improvement in domestic demand as wages increase and inboundWith the aim of stabilizing revenues and income, the Company

tourism demand picks up. On the other hand, the Company will keep awill endeavor to promote fixed lease agreements and secure long-closer eye on developments in the Bank of Japan’s monetary policy andterm leasing.

interest rates, while the impact of fluctuations in financial and capital
markets, in Japan and overseas, will bear watching.
In the office leasing market, while there is currently brisk demand(iv) R educe management costs
The Company has introduced sound competitive principles to afor leases driven primarily by business expansion and relocations aimed

number of property management companies so that they perpetu-

at improving location, the impact of a massive supply of new officeally review and improve their management systems and cost struc-space in central Tokyo expected to hit the market in 2025 warrants cau-tures. Along with this, the Company endeavors to ensure andtion. Tenants are becoming more selective about office space because theenhance tenant satisfaction.

way people work is changing, and as such, the Company is aiming tosecure stable earnings over the medium- to long-term and maintain andProperty Acquisitions and Dispositions

enhance the value of its assets by carrying out strategic repairs and reno-

The Company has adopted the following policies for acquiringvations and investing in ESG.

properties.

In the real estate trading market, the Company will continue toproactively search for new properties with a key focus on collaboration(i) To access property information quickly, the Company continues towith its sponsor in order to more strategically reshuffle its portfolio

enhance its property information channels while working to develop

while paying close attention to future market trends brought about by

new channels.

changes in social conditions.
(ii) I n its acquisition activities, the Company continues to meticulously

Property Managementmonitor and examine economic, physical, and legal factors, includ-

Based on the conditions stated above, the Company will adhere to theing rights-related issues, when selecting properties. In particular,

following management policies in order to maintain and improvewith regard to the structure of buildings, the Company requires

profitability.

buildings to meet or exceed new earthquake-resistant standards, verifies the need for renovations by capturing current conditions accu-(i) Strengthen relationships of trust with existing tenants

rately based on engineering reports, and exclusively targets

The Company has contracts with numerous property management

properties capable of maintaining a competitive edge in terms of thecompanies. Each property management company has developed rela-facilities they offer over the medium- to long-term.

tionships of trust with their tenants through their daily diligence inmanaging their respective properties over the years. The Company(iii) I n accordance with its acquisition policies, the Company shallwill work to further solidify these relationships by anticipating ten-maintain its portfolio so that 70% or more of the portfolio proper-

ants’ needs and providing tailored services to bolster tenant satisfac-

ties are located within the Tokyo metropolitan area, with thetion, thereby maintaining and improving occupancy rates and raisingremaining 30% or fewer located in other major cities.

rent levels.
Under these policies, the Company will continue to acquire highly(ii) Fill vacancies promptly
In cooperation with the property management companies men-the quality of its portfolio, the Company will remain open to thetioned above and their leasing brokers, the Company will actively

replacement of portfolio properties with due consideration afforded toseek the most appropriate tenants for each property, based on loca-

the timing of such decisions.

tion and features, in order to fill current and anticipated vacancies
without delay. Furthermore, the Company will work to identify
additional needs for floor area among the existing tenants.

5competitive properties. At the same time, in order to further improve

Japan Real Estate Investment Corporation

Financial Policies
The Company has adopted the following financial policies.
(i) In principle, the Company shall maintain an LTV ratio (including
investment corporation bonds) below 65%. To ensure an even lower
interest-bearing debt ratio, the Company adopts the conservative target level of 30% to 40%.
(ii) The Company shall set the ceiling for the combined total of loans
and investment corporation bonds at JPY 1 trillion.

Jo KatoExecutive Director of Japan Real Estate
Investment Corporation(iii) When obtaining a loan, the Company shall only negotiate withqualified institutional investors (limited to those defined under
Article 67-15 of the Act on Special Measures Concerning Taxation)
before executing a loan agreement.
(iv) With the purpose of maintaining liquidity at an appropriate level,
the Company may establish preliminary borrowing frameworks,
such as commitment line agreements and overdraft agreements, orenter into agreements to reserve borrowings as needed.
(v) In financial transactions, in order to realize low financing costs, theShojiro Kojima
President & CEO of Japan Real Estate
Asset Management Co., Ltd.

Company aims to achieve the best execution by making comprehensive judgments on borrowing terms and conditions, such as interest
rate levels and borrowing periods.

Performance Forecasts for the September 2024 and March2025 Periods
The Company’s forecasts for the September 2024 period (April 1, 2024
to September 30, 2024) are as follows: operating revenues of JPY
42,410 million, operating profit of JPY 20,320 million, ordinary profitof JPY 19,130 million, profit of JPY 18,460 million, and dividend perunit of JPY 12,100.
The Company’s forecasts for the March 2025 period (October 1,
2024 to March 31, 2025) are as follows: operating revenues of JPY
42,600 million, operating profit of JPY 20,450 million, ordinary profitof JPY 19,140 million, profit of JPY 18,470 million, and dividend perunit of JPY 12,100.
Note: Operating revenues, operating profit, ordinary profit, profit, and cash dividend perunit might vary depending on changes that could occur in the market situation.

Japan Real Estate Investment Corporation

6

Asset Management Summary
For the period from October 1, 2023 to March 31, 2024

Acquired Property

3rd MINAMI AOYAMA
Location
3-1-34 Minami-aoyama, Minato-ku, Tokyo
Site area
2,411.62m2
Floor area of building
14,376.28m2
Structure	Steel-framed, Steel-framed reinforced concrete structure, flat roof
FloorsAbove ground: 13 floors
Below ground: 1 floor
Completion
February 2023
Acquisition date / Acquisition price March 8, 2024 / JPY 21,000 million
Type of ownership	Land: Ownership and Leasehold
Building: Ownership
SellerMitsubishi Estate Co., Ltd.

ine
Meiji Jingu
Stadium

Aoyama-itchome Sta.

Watari Museum ofContemporary Art

Harajuku Sta.

ri
ma

Do

Aoyama Park

Nogizaka Sta.

ya

Lin

Ao

da

e

Omote-sando Sta.
Omote-sando
Sta.

The National
Art Center,
Tokyo

Fu

JR YamanoteLineku JR Saikyō Line
tosh
in
Lin
e

iyo

ine

za L

Gin

Gaiemmae
Sta.
Gaiemmae Sta.

the ARGYLE aoyama

Meiji-jingumae Sta.
Ch

Togu Palace

oL

Meiji
Jingu

Oed

Dori

Gaien Nishi Dori

Meiji

Japan National
Stadium

ine

nL

nz

o
om

Ha

Shibuya Sta.

Aoyama Park
South District

3rd MINAMI AOYAMA

Aoyama Gakuin
University

Expressway No.3
Metropolitan

Shibuya Line

Toyosu Foresia (Additional acquisition)
Location
3-2-24 Toyosu, Koto-ku, Tokyo
Site area
16,242.68m2
Floor area of building
98,176.19m2
Structure	Steel-framed, Steel-framed reinforced concrete structure, flat roof
FloorsAbove ground: 16 floors
Below ground: 2 floors
Completion
June 2014
Acquisition date / Acquisition price February 14, 2024 / JPY 19,756 million
Type of ownership	Land: Ownership
Building: Ownership
SellerToyosu 3 Chome Kaihatsu TMK

Shibaura Instituteof Technology

TOYOSU FORESIA

aru

H

Toyosu Front

D
mi
or
i

eD

um

its

M
Bus Rotary

e

in

oL

Japan Real Estate Investment Corporation

h
uc

7

rak
Yu

ToyosuPark

Toyosu Sta.
ine
eL
om
m
a
rik
Yu

i

or

LaLaport

Seavans S Building (Additional acquisition)
Location
1-2-3, Shibaura, Minato-ku, Tokyo
Site area
26,468.48m2
Floor area of building
166,405.36m2
Structure	Steel-framed, Reinforced concrete,
Steel-framed reinforced concrete structure,flat roof
FloorsAbove ground: 24 floors
Below ground: 2 floors
Completion
January 1991
Acquisition date / Acquisition price December 1, 2023 / JPY 2,290 million
Type of ownership
Land: Ownership
Building: Compartmentalized building units
SellerUndiscloseden

Oedo Line

Shiodome Bldg.

Shinkans

Hamamatsucho Sta.
Shibakoen Sta.

TokaidoDaimon Sta.
Shiba
Park

Kyu-Shiba-rikyu
Onshi
Garden

kam
Yuri
oute
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ay H
ssw

Hinode
Sta.

pre

ail

or

on

M

. Ex

yo

k
To

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-to

ihin

Ke

a Lin

e·

Lin

osuk

n

ma

Ya

ote

Yok

Mita Sta.

Seavans
North Bldg.
Amall

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aned

Seavans South Bldg.

Met

Mita Line

AsakusaHibiya Do

ri

Line

ome

Inner
Circular Route

Disposed Property

Harumi Front (45% of the interest)
Location
2-1-40 Harumi, Chuo-ku, Tokyo
Site area
7,250.15m2
Floor area of building
45,420.32m2
Structure
Steel-framed structure, flat roof
Floors	
Above ground: 17 floors
Below ground: 1 floor
Completion
February 2012

Acquisition date / Acquisition price January 7, 2013 / JPY 14,085 million
Disposition date / Disposition price	January 12, 2024 / JPY 17,599 million
Type of ownership	Land: Ownership
Building: Ownership
Buyer
Undisclosed

Property to be Disposed of

JRE Dojima Tower
Location	2-4-27 Dojima, Kita-ku, Osaka City, Osaka
Prefecture
Site area
6,159.61m2
Floor area of building
45,411.31m2
Structure	Steel-framed, Steel-framed reinforced concrete structure, flat roof
Floors	Above ground: 21 floors
Below ground: 2 floors

Completion
April 1995
Acquisition date / Acquisition price September 1, 2008 / JPY 24,000 million
Disposition date / Disposition price	April 1, 2024 / JPY 17,034 million
October 1, 2024 / JPY 16,366 million
Type of ownership	Land: Ownership
Building: Ownership
Buyer
Undisclosed

Japan Real Estate Investment Corporation

8

Financial Highlights
In millions of JPY
For the period from
October 1, 2023 toMarch 31, 2024

For the period from
April 1, 2023 to
September 30, 2023

For the period from
October 1, 2022 toMarch 31, 2023

For the period from
April 1, 2022 toSeptember 30, 2022

For the period from
October 1, 2021 toMarch 31, 2022

Operating revenues

41,414

38,62737,34537,65436,453Operating profit

20,31718,04817,041

18,042

17,107

Ordinary profit

19,311

17,086

16,172

17,256

16,191

Profit18,636

17,075

16,161

16,79016,045

Net operating income (NOI) (Note 1)

22,62922,313

21,901

23,08424,070Funds from operations (FFO) (Note 2)

18,457

19,207

18,97019,70021,053

20.8

21.7

19.2

21.0

21.0

Cash distribution

17,381

17,074

16,161

15,92915,791

Number of units

1,422,864

1,422,864

1,385,210

1,385,210

1,385,210

12,216

12,00011,667

11,50011,400

FFO multiple (Times) (Note 3)

Dividend per unit (JPY)

Notes: 1. NOI = Property-related revenues – Property-related expenses (excluding Depreciation)
2. FFO = Profit + Depreciation – Gain (Loss) on sales of real estate properties
3. FFO multiple = Unit price at end of the respective term / FFO per unit (Annualized)(Annualized portion of the calculation given in Note 2 and Note 3 assumes a fiscal period of 182 days for the period ended March 31, 2022, 183 days for the period
ended September 30, 2022, 182 days for the period ended March 31, 2023, 183 days for the period ended September 30, 2023 and 183 days for the period ended
March 31, 2024.)

Top 10 Unitholders As of March 31, 2024
Units

% of total units
outstanding

Custody Bank of Japan, Ltd. (Shintaku Acc.) ��������������������������������������������������������������������������������������������������������������������������������������������

377,840

26.55%The Master Trust Bank of Japan, Ltd. (Shintaku Acc.) �������������������������������������������������������������������������������������������������������������������������������

221,121

15.54%The Nomura Trust and Banking Co., Ltd. (Toshin Acc.) ���������������������������������������������������������������������������������������������������������������������������

72,724

5.11%

STATE STREET BANK WEST CLIENT - TREATY 505234 �����������������������������������������������������������������������������������������������������������������

31,865

2.24%

SSBTC CLIENT OMNIBUS ACCOUNT ����������������������������������������������������������������������������������������������������������������������������������������������

19,352

1.36%

JP MORGAN CHASE BANK 385781 �����������������������������������������������������������������������������������������������������������������������������������������������������

18,055

1.27%

Mitsubishi Estate Co., Ltd. �����������������������������������������������������������������������������������������������������������������������������������������������������������������������

17,1201.20%

JP MORGAN CHASE BANK 385771 �����������������������������������������������������������������������������������������������������������������������������������������������������

17,043

1.20%

STATE STREET BANK AND TRUST COMPANY 505103 ������������������������������������������������������������������������������������������������������������������

16,269

1.14%

The Chugoku Bank, Limited ���������������������������������������������������������������������������������������������������������������������������������������������������������������������

14,325

1.01%

Company

Unit Price Performance
350%

TSE REIT Index   

TOPIX   The Company

300%

250%

200%

150%

100%

50%
Sep. Mar.
2001 2002

9

Mar.
2003

Mar.
2004

Mar.
2005

Japan Real Estate Investment Corporation

Mar.
2006

Mar.
2007

Mar.
2008

Mar.
2009

Mar.
2010

Mar.
2011

Mar.
2012

Mar.
2013

Mar.
2014

Mar.
2015

Mar.
2016

Mar.
2017

Mar.
2018

Mar.
2019

Mar.
2020

Mar.
2021

Mar.
2022

Mar.
2023

Mar.
2024

Portfolio Highlights
Trends in the State of Portfolio Management

Rentable office area (m2)

Number ofproperties

Number oftenants

Leasable officespace (m2)Occupancy
rate (%)

September 2001

20

213

133,927

94.6

March 2002

24

353

201,884

94.0

March 2003

30

383

236,693

94.4

March 2004

36

477

273,157

94.8

March 2005

46

669

336,026

97.6

March 2006

52

866

400,090

98.7

March 2007

50

887

397,928

97.8

March 2008

53

931

479,877

95.9

March 2009

55

993

516,411

95.5

March 2010

55

979

566,277

93.0

March 2011

57

1,004

588,984

93.2

March 2012

57

1,058

629,761

94.7

March 2013

60

1,131

700,759

96.7

March 2014

64

1,223

750,956

96.7

March 2015

68

1,350

793,976

97.8

March 2016

68

1,420

820,38198.3

March 2017

69

1,482

835,069

98.8

March 2018

70

1,449

833,335

99.2

March 2019

73

1,506

855,902

99.5

March 2020

73

1,515

864,014

99.7

March 2021

73

1,497

873,873

97.9

March 2022

74

1,498

896,530

97.0

March 2023

76

1,582

886,439

95.5

October 2023

77

1,596

888,612

94.8

November 2023

77

1,598

888,611

94.9

December 2023

77

1,603

890,510

94.8

January 2024

76

1,599

875,492

96.5

February 2024

76

1,600

890,219

96.4

March 2024

77

1,622

897,88596.6

Note: The number of tenants is the gross number of tenants by building.

0200,000

400,000

600,000

800,000

1,000,000

Mar.
2024
period

50.0

60.0

70.0

80.0

90.0

100.0
Occupancy rate (%)

Portfolio Breakdown As of March 31, 2024
Properties by geographic region

Tenants by industry type

(Percentage based on acquisition price)(Percentage based on leased office area)

Other areas 6.5%

Electricity andheat supply services

Nagoya city 2.5%

Others 12.3%
Information services

14.9%

1.5%

Osaka city and
Kyoto city 8.7%
Tokyo metropolitan area
(excluding
Tokyo 23 wards) 5.8%

Ceramics 1.4%

Public services andassociations 1.8%
Tokyo 23 wards

76.6%

Service industries

11.4%

Communications

1.9%

Medical 2.2%
Tokyo 5 central wards*

66.7%
Tokyo 23 wards(excluding Tokyo 5 central wards)

9.9%

Construction 2.9%

Real estate 10.2%

Insurance 3.3%
Retail and restaurants

Pharmaceuticals

6.2%

3.5%

Finance 6.0%
Electric devices

Machinery 4.5%
Specialist services (Consulting, etc.)

5.2%* Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku, Shibuya-ku

Media andadvertisement 5.3%

5.5%

Note: GRAND FRONT OSAKA is excluded
Japan Real Estate Investment Corporation

10

Approach to ESG
Sustainability Policy

Sustainability Policy

Japan Real Estate Asset Management Co., Ltd. (JRE-AM), which manages the Company’s assets,
believes that asset management focused on ESG is essential to the sustainable improvement ofasset value.
Sustainability Management Department is driving the Company’s ESG initiatives in accordancewith its Sustainability Policy. Such initiatives include the enhancement of the disclosure of theCompany’s ESG-related information, the acquisition of environmental certifications and evaluations
from external organizations, participation in international initiatives, and other efforts.
We disclose ESG-related information on our company website in a timely manner.
WEB e refer to GRI (Global Reporting Initiative) standards and the SASB (Sustainability Accounting Standards Board) RealW
Estate Standard for the disclosure of a wide range of ESG information on our website.
Please refer to our ESG website
for further information.
https://jre-esg.com/en/esg/
information.html

GRI STANDARDS Content Index
https://jre-esg.com/en/pdf/
en-esg_gri.pdf

SASB Framework
https://jre-esg.com/en/pdf/
sustainability_report2023.pdf#page=25

1

Climate change initiative (promoting decarbonization and strengthening resilience)2

Contribution to resource conservation
including water and resource recycling

3

Contribution to conserving
biodiversity and ecosystem

4

Enhancement of tenants’ health andwell-being, and safety

5Creating a workplace where a diverse
workforce can thrive

6

Enhancement of governance systems

7

Stakeholder engagement through information disclosure and ESG evaluations

Materiality
Based on the Sustainability Policy, JRE and JRE-AM have determined materiality in order to achieve a sustainable society under our corporate social
responsibility, recognizing the importance of consideration for ESG. We will annually disclose the progress of KPIs linked to each objective and work
towards contributing to the Sustainable Development Goals (SDGs) as well as achieving medium- to long-term growth of JRE through our responses
to materiality.

Social trends and stakeholder expectations

Very Strong

Environment

Society

Governance

Climate Change Initiative

Environmental Considerationof Portfolio

Human Resources
Development and Diversity
Promotion

Tenant Engagement

Enhancing Governance
Systems at Both JRE and JRE-AM

Employee Health andWell-being at JRE-AMz

Information Disclosure andStakeholder Engagement
Protecting Biodiversity

Regional Redevelopment

Contributing toLocal Communities

Conservation of
Water Resources
Recycling and Conservationof Resources

StrongWeak
WEB F
 or more information, please visit “Materiality” on our ESG website.
https://jre-esg.com/en/esg/policy.html#anchor02

11

Japan Real Estate Investment Corporation

Impact of JRE’s business
Very Strong

International Initiatives
In 2018, JRE-AM became a signatory to the following international initiatives:
Became Signatory in April 2018

United Nations Global Compact (UNGC) 
Mitsubishi Estate Co., Ltd., JRE-AM’s parent company, became a signatory to the UNGC. Accordingly, JRE-AM has
participated in this i­nitiative as a member of the Mitsubishi Estate Group.
Became Signatory in August 2018

Principles for Responsible Investment (PRI) 
JRE-AM agreed with the basic approach of PRI and became a signatory in August 2018.

External Evaluation and Certification
Commitment to GRESB 
Received the highest evaluations in both GRESB Real Estate
Assessment and GRESB Public Disclosure in the 2023
GRESB results, as shown on the right●●GRESB Real Estate Assessment 5 StarsGRESB Public Disclosure
A

MSCI Japan ESG Select Leaders Index 
Selected as a constituent of the MSCI Japan ESG Select Leaders Index (the “Index”) provided by MSCI Inc. since June 2022
Disclaimer THE INCLUSION OF JRE IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEXNAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF JRE BY MSCI OR ANY OF
ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND
LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Participation in the CDP Climate Change Program 
Received an “A-” score and recognized at the highest Leadership Level in the 2023 CDP Climate Change ProgramAwarded “Prime” Status in the ISS ESG Corporate Rating Awarded “Prime” status in the ISS’s sustainability rating in March 2024

Green Building-Certified Properties in Our Portfolio 
We are focusing on improving the sustainability of the Company’s entire portfolio. As of the end of March 2024,
76.4%* of the Company’s portfolio is green certified. Going forward, the Company will continue to acquire environmental certifications and evaluations, such as the DBJ Green Building and CASBEE Certification.
* On a gross floor area of owned building basis

WEB Please refer to our ESG website for further information.
https://jre-esg.com/en/external/

Japan Real Estate Investment Corporation

12

Environment
SBTi Approval and Joining RE100
JRE’s CO2 emissions reduction targets were approved by the Science Based Targets initiative (SBTi), and JRE became the first J-REIT to join RE100 in May 2022.
Target year

CO2 emissions reduction target

FY2030Near-term Approved

80% reduction*(vs FY2019)

FY2050Net-zero Approved

Net zeroRenewable energy rate
90%
100%

* The reduction targets are more ambitious than those required by SBTi.

WEB For more information, please visit “Environmental Performance”
and “International Initiatives” on our ESG website.

https://jre-esg.com/en/environment/
environment.html

https://jre-esg.com/en/initiative/

Acquisition of ZEB Ready Certification
この建物の
この建物の
この建物の
JRE aims to own 5-10 ZEBs by FY2030.
In collaboration with Mitsubishi Jisho Design
Inc., we have obtained 4 ZEB-certified
properties as of the end of March
エネルギー消費量 51 ％削減
エネルギー消費量 53 ％削減
エネルギー消費量 46 ％削減
2024. We will further pursue the future possibility to realize ZEBs through renovations of the existing properties with an aim to achieve the KPIs for FY2030.

https://jre-esg.com/en/external/andWEB For more information, please visit “External Evaluations 建築物省エネルギー性能表⽰制度
国⼟交通省告⽰に基づく第三者認証
Certifications” and “Climate Change Initiatives” on our
2022年1⽉21⽇交付
ESG website.

この建物のエネルギー消費量51％削減

2022年1⽉21⽇交付 国⼟交通省告⽰に基づく第三者認証

JRE Higashi-Gotanda
1Chome Building(Shinagawa-ku, Tokyo)

https://jre-esg.com/en/environment/climate.html
建築物省エネルギー性能表⽰制度
建築物省エネルギー性能表⽰制度
国⼟交通省告⽰に基づく第三者認証
2023年3⽉7⽇交付

この建物のエネルギー消費量

国⼟交通省告⽰に基づく第三者認証
2023年3⽉7⽇交付

53％削減

この建物のエネルギー消費量

2023年3⽉7⽇交付 国⼟交通省告⽰に基づく第三者認証

Daido Seimei
Niigata Building(Niigata City, Niigata)

46％削減

2023年3⽉7⽇交付 国⼟交通省告⽰に基づく第三者認証

JRE Kayabacho
2Chome Building(Chuo-ku, Tokyo)

JRE Yoyogi 1Chome
Building(Shibuya-ku, Tokyo)

Quantitative Financial Impact Analysis in Line with the TCFD Recommendations
JRE has been consistently expanding the level of disclosure required by TCFD reporting since JRE-AM became the first TCFD supporter in the J-REIT
industry and disclosed our quantitative financial impact analysis in 2023.
WEB For more information, please visit “Climate Change Initiatives”
on our ESG website.

https://jre-esg.com/en/environment/
climate.html

Society
For Tenants and Partners

SUSTAINABILITY
GUIDE

Sustainability Guide to Promote Owner and Tenant Collaboration
JRE has created a Sustainability Guide and distributed it to its tenants, aiming to promote close
collaboration with them. This Sustainability Guide introduces activities that we can do in theoffice, mainly from the viewpoints of the “environment” and “tenant well-being.”
We will team up with our tenants and endeavor to co-create a sustainable society with them.

VOL. 2

MITSUBISHI ESTATE CO., LTD.

Japan Real Estate Investment Corporation

Sustainability Guide VOL. 1
Theme Work Style Reform

Raising ESG Awareness of Our Stakeholders
JRE offers ESG seminars for our business partners, master lessees, and property managers, among
others, for the purpose of raising stakeholder awareness. We invite ESG experts from outside theCompany to cover global ESG trends and discuss specialized fields such as GRESB and ZEB.
We believe that raising sustainability awareness not only within JRE, but among all our
stakeholders, will benefit sustainability efforts at each asset level.
WEB lease refer to the following link for the Sustainability Guide.
P
https://jre-esg.com/en/society/society.html

13

Japan Real Estate Investment Corporation

Society

Tenants/
Customers

Co-creation
EconomyBuilding
OwnersEnvironment

Our Thoughts
In 2020, the COVID-19 pandemic completelychanged the way we live.

The pandemic has prompted us to evolve into

a “non-contact” society where contact is avoided
to prevent infection from airborne droplets.

This transformation has resulted in a steep increasein the use of delivery and take-out services,which in turn has led to more plastic bottle andlunch box waste in homes and offices. Consequently,
the pandemic has had a significant impact
on the problem of waste.

What can we do to help create a sustainable society?

This Sustainability Guide mainly focuses on steps that,
as office workers, all of us can take to enhanceenvironmental and employee friendliness.
In partnership with our tenants,

we will co-create a sustainable society.

2

Sustainability Guide VOL. 2
Theme1 Offices in the “New Normal” Era
Theme2 Waste Recycling

For Communities

Examples of training programs by external lecturers in FY2023(17 programs were conducted in total):

Urban Revitalization / Urban Redevelopment Project
GRAND FRONT OSAKA, which JRE acquired in October 2021, has built a“Knowledge Capital” where knowledge is created. A “Knowledge Office
Space,” consisting of a knowledge work space (for researchers, creators, business owners) and educational functions and a “Future Life Showroom” exhibiting a new lifestyle delivered by the fusion of advanced technologies andsensibilities are ­represented. The “Knowledge Plaza” located at the center of theNorth Wing is a symbol of the “town.” Events and presentations linked to the
Knowledge Capital are held here, bringing even more life and vitality to
exchanges between people in the city.

Supporting Cultural and Artistic Activities

 CASE 1 	‌Compliance training for those engaged in investment management business(June 2023, February 2024)
Internal Audit Training (June 2023)
 CASE 3 Anti-Money Laundering Training (July 2023)
 CASE 4 	DEI (Diversity, Equity & Inclusion) Training (November 2023)
 CASE 2

 CASE 5 	Sustainability Training (January 2024)

For more details on the personnel development system, please refer to thefollowing website.
WEBhttps://www.j-rea.co.jp/en/employee/index.html
Mitsubishi Estate: https://mec.disclosure.site/e/sustainability/activities/social/human-resource/

Tokyo Opera City has two museums, six theatres/halls, and an art gallery.
It includes a concert hall with a wooden interior and one of the world’s best
acoustic systems as well as the New National
Theatre, where operas, plays, modern dances, dramas, and other contemporary performing arts are
performed for ­the public.
We support the Tokyo Opera City Cultural
Foundation, which plans and organizes the musical performances and art exhibitions that takeplace at the Concert Hall, the Recital Hall, and
the Art Gallery of Tokyo Opera City.

Creating a Productive and Employee-friendly WorkplaceWEB lease refer to our website for further information.
Phttps://jre-esg.com/en/society/society.html

Revision of the Personnel System

In October 2023, JRE-AM renovated the office layout to further promoteand strengthen internal communication, improve employee satisfaction, andfoster synergy among employees. We strive to create an office environment for
maximizing the performance of each employee
by realizing an environment where they canmake their own choices from a large number of
options, an environment where they can bethemselves, and a work position structure that
respects individual work styles and personalities.

In FY2024, JRE‐AM revamped its personnel system to retain and recruitskilled individuals.

Key points of the personnel system revision 			For Employees

Enhanced Evaluation Feedback

Learning and Development for All Employees
Based on the idea that all employees should be professionals with a high degreeof specialization, JRE-AM encourages all our employees, i.e., permanent
employees, contract employees, and seconded employees, to participate in avariety of training programs.

AnnualBiannual

Increase employee motivation
Improve employee retention

Extension of Retirement Age

Age 60Age 65Create an environment where people
can continue working
Create a place where diverse people
can work together

GovernanceOur basic policy as an investment corporation and asset management company is not only to comply with laws and regulations, but to meet social
demands as well. Taking care to have each employee perform his or her duties with high ethical standards and strict self-discipline raises our reputation
among investors and garners the trust of the greater society.
Basic Principle of Compliance for theInvestment Corporation (JRE)

Basic Principle of Compliance for the Asset Management Company (JRE-AM)

JRE’s basic principle of compliance is to thoroughly observe legal and other relevant norms inregard to the business operation as well as torespond to the requirements from society. Thismeans that the investment corporation administers
and oversees the outsourcing companies from thesame standpoint, while complying with legal andother relevant norms in its decision-making.

1 Ensuring thorough compliance is one of its top priority issues, since JRE-AM understands that any

Basic Principle
insufficiency in compliance would affect even its management base.
2 As an asset management company, JRE-AM recognizes that it bears the responsibility for realizing thevalues that are required by society in its business operation, and makes proactive and continuous efforts
for full compliance to enhance the value of its business operation both qualitatively and quantitatively.
3 JRE-AM is determined to achieve a reputation for quality among its investors by promoting complianceactivities, and thereby gains the trust of a wide spectrum of society.

WEB For more information on our environmental, social, and governance initiatives,
please visit our ESG website or see our Sustainability Report 2023.

ESG website
https://jre-esg.com/en/

Sustainability Report 2023
https://jre-esg.com/en/pdf/sustainability_report2023.pdf

Japan Real Estate Investment Corporation

14

Asset Size, Property Acquisitions, and Performance Trends
Occupancy rate (%)

94.6

93.2

94.6

94.7

95.5

96.7

96.3

96.7

97.8

97.8

97.7

98.3

98.7 98.8

In September 2001, the Company became the first J-REIT in Japan listed on the Tokyo Stock Exchange. Since then,the Company has targeted stable management to fulfill its goal of maintaining or increasing dividend per unit overthe medium- to long-term. The Company’s growth is based on external growth strategies that aim to increase earnings
through the acquisition and transfer of properties, as well as internal growth strategies that seek to optimize earnings
from properties already held. The size of the Company’s assets (total acquisition price) has grown from JPY 92.8 billion
at IPO to JPY 1.16 trillion as of the period ended March 31, 2024 due to the steady achievement of external growthstrategies. However, in terms of internal growth strategies, ongoing efforts are being made in such areas as
maintaining stable occupancy rates and reducing building management costs.

Total acquisition price (in billions of JPY)
(Number of properties)

718

740

782

794

837

838

883

927

923

923

944

660

657

(20)

(57)

(56)

(57)

(58)

(60)

(62)

(64)

(64)

(68)

(70)

(68)

(68)

(69)

Sep.
2001

Mar.
2011

Sep.
2011

Mar.
2012

Sep.
2012

Mar.
2013

Sep.
2013

Mar.
2014

Sep.
2014

Mar.
2015

Sep.
2015

Mar.
2016

Sep.
2016

Mar.
2017

8,095

7,850

7,570

7,683

7,633

7,648

7,681

8,001

8,121

8,361

8,544

First J-REIT listed
on TSE, beganwith JPY 92.8
billion in assets

92

At IPO

Dividend per unit* (JPY )

7,821

7,925

Listing and issuance of units
Sep. 2001
Listed on TSE
as first J-REIT
Sep. 2001
IPO

Feb. 2012
SeventhFollow-On

Oct. 2012
EighthFollow-On

Apr. 2014
Ninth
Follow-On

Apr. 2015
TenthFollow-On* As the Company implemented a 2-for-1 split of each investment unit as of January 1, 2014, the figures for March 2002 through September 2013 periods have taken the split into account.

15

Japan Real Estate Investment Corporation

99.1

99.2

99.2

99.5

99.3

99.7

99.0

97.9

96.5

97.0

93.9

95.5

95.0

96.6

As of Mar. 31, 2024:
77 properties;
JPY 1,162 billion

955

990

1,014 1,025 1,023

1,053 1,070 1,070 1,067

1,118

1,091

1,125 1,133

1,162

(69)

(70)

(71)

(73)

(73)

(73)

(73)

(73)

(72)

(74)

(73)

(76)

(77)

(77)

Sep.
2017

Mar.
2018

Sep.
2018

Mar.
2019

Sep.
2019

Mar.
2020

Sep.
2020

Mar.
2021

Sep.
2021

Mar.
2022

Sep.
2022

Mar.
2023

Sep.
2023

Mar.
2024

(End of fiscal period)

9,096

9,336

9,495

Apr. 2018
Eleventh
Follow-On

9,697

10,197

10,61011,262

11,32011,356

11,40011,50011,667

12,000 12,216

Apr. 2023
TwelfthFollow-On

Japan Real Estate Investment Corporation16

Major Tenant Roster
Name of tenant

Leased officearea (m2)Name of property% of total leased
office area

Undisclosed

Osaki Front Tower (and 3 other properties)

22,074

2.6%

Undisclosed

Kitanomaru Square (and 3 other properties)

17,853

2.1%

SQUARE ENIX HOLDINGS CO., LTD.

Shinjuku Eastside Square

16,906

2.0%

SCSK Corporation

Toyosu Front (and another property)

14,464

1.7%

HAKUHODO DY HOLDINGS INCORPORATED

Akasaka Park Building (and 2 other properties)

12,8881.5%

Mitsubishi UFJ Trust and Banking Corporation

Mitsubishi UFJ Trust and Banking Building

10,598

1.2%

TOTO LTD.

Shiodome Building (and another property)

9,923

1.2%

Minato Mirai 21 District Heating and Cooling Co., Ltd.

Queen's Tower A

9,536

1.1%

Undisclosed

Shinjuku Eastside Square (and another property)

9,361

1.1%

Seven & i Holdings Co., Ltd.

Nibancho Garden

9,316

1.1%

Notes: 1 . Undisclosed due to tenant’s request
2. GRAND FRONT OSAKA is excluded

Location of Portfolio Properties
II-1 to II-5:
Tokyo metropolitan area, excluding Tokyo 23 wards

III-1

II-2

II-1

III-1 to III-25:
Other major cities

III-7
III-8

III-6

III-2
III-3
III-4
III-5

II-5
II-3
II-4

III-12
III-20

III-23
III-24
III-25

III-22

III-21
III-13
III-14
III-15
III-16
III-17
III-18
III-19

III-9
III-10
III-11
I-46
I-47
I-39
I-45

I-1

I-29 I-28

Tokyo Station
I-4
I-5
I-12
I-8 I-9 I-7
I-13
I-15
I-10 I-11
I-14
I-35
I-19 I-18
I-40
I-36
I-20
I-16 I-17
I-37 I-21
I-41
I-22
I-23
I-38
I-24, I-25
I-26
I-27

I-30
I-32
I-33
I-34

I-31

I-2, I-3

I-6

I-42
I-43

I-44

I-1 to I-47:
Tokyo 23 wards

17Japan Real Estate Investment Corporation

Overview of Portfolio Properties
As of March 31, 2024

Tokyo 23 wards

Kitanomaru
Square●

JRE KandaOgawamachi
Building

I-1●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Chiyoda-ku, Tokyo
5,821.03m2
57,279.20m2
100.0%
January 2006

Location:
Site area:
Floor area of building:
Ownership:Completion:

OtemachiFinancial City
North Tower●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-5

Chiyoda-ku, Tokyo
9,338.74m2
146,611.42m2
2.91%
January 2017●

Location:
Site area:
Floor area of building:
Ownership:Completion:●

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-8

Chiyoda-ku, Tokyo
967.67m2
6,526.64m2
100.0%
January 2005●

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Kayabacho
2Chome Building

Chiyoda-ku, Tokyo
10,992.13m2
57,031.06m2
31.35%
April 2004●

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-9

Front Place
Nihonbashi

I-11

Chiyoda-ku, Tokyo
5,749.91m2
70,287.65m2
10.78%
September 1975●

Location:
Site area:
Floor area of building:
Ownership:Completion:●

Chuo-ku, Tokyo
754.26m2
5,505.80m2
100.0%
April 1991

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-14

Chuo-ku, Tokyo
756.03m2
5,470.54m2
100.0%
February 2002

I-12

Chuo-ku, Tokyo
1,381.52m2
11,672.55m2
100.0%
February 2014

JRE Ginza
1Chome East
Building

Burex Kyobashi
Building

I-13

Chiyoda-ku, Tokyo
171.15m2
1,095.13m2
100.0%
November 2021●

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-6

CIRCLES
Hirakawacho

Yurakucho Denki
Building

I-10

Chiyoda-ku, Tokyo
3,663.93m2
33,875.95m2
99.0%
September 1966●

Chiyoda-ku, Tokyo
1,218.56m2
9,370.25m2
56.76%
July 1993

Nibancho
GardenBurex Kojimachi
Building

Sanno Grand
Building

Location:
Site area:
Floor area of building:
Ownership:Completion:

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-7

Chiyoda-ku, Tokyo
8,100.39m2
108,171.67m2
19.38%
February 2003●

Chiyoda-ku, Tokyo
1,085.83m2
8,185.11m2
100.0%
February 1998

●

I-3

I-2

OtemachiPark Building

Mitsubishi UFJ
Trust and Banking
Building

Location:
Site area:
Floor area of building:
Ownership:Completion:●

I-4

Chiyoda-ku, Tokyo
14,108.16m2
239,769.07m2
4.80%
October 2012●

Kandabashi Park
Building

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-15

Chuo-ku, Tokyo
702.41m2
4,976.85m2
100.0%
May 2008

Japan Real Estate Investment Corporation18

Ginza Sanwa
Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Ginza
3Chome Building

I-16

Chuo-ku, Tokyo
1,119.27m2
8,851.00m2
70.95%
October 1982●

Location:
Site area:
Floor area of building:
Ownership:Completion:

the ARGYLE
aoyama●Location:
Site area:
Floor area of building:
Ownership:Completion:

Chuo-ku, Tokyo
864.91m2
5,751.68m2
100.0%
October 1998●

Location:
Site area:
Floor area of building:
Ownership:Completion:

CloverShiba-koen
●

I-17

●

Location:
Site area:
Floor area of building:
Ownership:Completion:

3rd MINAMIAOYAMA

I-19

Minato-ku, Tokyo
2,142.24m2
22,009.57m2
50.0%
June 2020

Akasaka Park
Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Shiodome
Building

I-22●

Minato-ku, Tokyo
14,198.20m2
97,489.16m2
100.0%
July 1993

JRE Aoyama
Crystal Building

I-20

Minato-ku, Tokyo
2,411.62m2
14,376.28m2
77.76%
February 2023

Minato-ku, Tokyo
528.58m2
3,496.01m2
100.0%
February 2006

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Shiba
2Chome Daimon
Building

I-23

JRE Cosmo
Kanasugibashi
Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Seavans S Building●

19

Minato-ku, Tokyo
2,820.90m2
16,235.10m2
100.0%March 1984

Tamachi Front
Building

I-26●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Shinjuku Eastside
SquareLocation:
Site area:
Floor area of building:
Ownership:Completion:

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-24

I-27

I-25

Minato-ku, Tokyo
758.54m2
5,420.93m2
100.0%March 1992●

Minato-ku, Tokyo
12,054.22m2
115,930.83m2
55.0%
December 2007

I-21

Minato-ku, Tokyo
989.30m2
8,094.36m2
100.0%
December 1982●

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-18

Japan Real Estate Investment Corporation

Location:
Site area:
Floor area of building:
Ownership:Completion:

Shinjuku Front
Tower

I-28

Shinjuku-ku, Tokyo
25,320.28m2
167,245.46m2
39.0%
March 2012

Minato-ku, Tokyo
26,468.48m2
166,405.36m2
17.66725%
January 1991●

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Nishi‐
Shinjuku Terrace

I-29

Shinjuku-ku, Tokyo
9,628.17m2
92,092.30m2
37.16%
August 2011

Minato-ku, Tokyo
747.31m2
5,747.80m2
100.0%
July 2014●

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-30

Shinjuku-ku, Tokyo
822.00m2
8,291.69m2
100.0%
November 1989

Tokyo Opera City
Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Front PlaceMinami-Shinjuku

I-31

Shinjuku-ku, Tokyo
18,236.94m2
232,996.81m2
31.33%
July 1996●

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Yoyogi
1Chome Building●

Link Square
Shinjuku

I-32

Shibuya-ku, Tokyo
1,040.80m2
5,982.36m2
100.0%
September 2015●

Location:
Site area:
Floor area of building:
Ownership:Completion:●

Shibuya-ku, Tokyo
3,852.34m2
42,049.96m2
37.34%
August 2019

JRE Jingumae
Media Square
Building

JRE Jingumae
Terrace

I-34

I-35

●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Shibuya-ku, Tokyo
1,755.75m2
10,778.10m2
100.0%
October 2003

Location:
Site area:
Floor area of building:
Ownership:Completion:

Shibuya Cross Tower(Land with leasehold interest)●

Shibuya-ku, Tokyo
839.66m2
4,359.20m2
100.0%
December 1987

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-38

I-37

Location:
Site area:
Floor area of building:
Ownership:Completion:

Shibuya-ku, Tokyo
2,124.12m2
9,420.42m2
100.0%March 1998●

Shibuya-ku, Tokyo
5,153.45m2———

Location:
Site area:
Floor area of building:
Ownership:Completion:Toyosu Foresia●

Shibuya-ku, Tokyo
5,005.70m2
36,598.38m2
44.72%
October 1994

Location:
Site area:
Floor area of building:
Ownership:Completion:Toyosu Front

I-40

●

Koto-ku, Tokyo
16,242.68m2
98,176.19m2
31.0%
June 2014

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE HigashiGotanda 1Chome
Building

I-41

Osaki Front
Tower●

Koto-ku, Tokyo
13,700.00m2
104,683.98m2
24.0%
August 2010●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Shinagawa-ku, Tokyo
3,684.38m2
23,673.92m2
100.0%
June 2005

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Omori-Eki
Higashiguchi
Building

I-43

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-39

Taito-ku, Tokyo
2,412.80m2
23,727.48m2
94.04%
July 2010●

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-36

TIXTOWER
UENO

Ebisu Neonato
●

I-33

I-42

Shinagawa-ku, Tokyo
1,539.95m2
6,460.39m2
100.0%
July 2004

Harmony Tower
●

I-45

I-44

Ota-ku, Tokyo
2,199.30m2
14,095.34m2
100.0%
July 1989

Location:
Site area:
Floor area of building:
Ownership:Completion:

Nakano-ku, Tokyo
10,020.52m2
72,729.31m2
38.38%March 1997

Japan Real Estate Investment Corporation

20

JRE Ikebukuro
2Chome Building●

JRE Minami‐
Ikebukuro
Building

I-46●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Toshima-ku, Tokyo
397.26m2
3,157.51m2
100.0%
May 1990

Location:
Site area:
Floor area of building:
Ownership:Completion:

I-47

Toshima-ku, Tokyo
1,384.56m2
7,464.64m2
100.0%
December 1989

Tokyo metropolitan area, excluding Tokyo 23 wards

Hachioji First
Square●Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Saitama
Urawa Building

II-1

Hachioji, Tokyo
2,989.33m2
18,329.98m2
80.40%
July 1996●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Queen’s Tower A●

Saitama, Saitama Prefecture
1,533.06m2
6,258.59m2
100.0%March 1990●

Location:
Site area:
Floor area of building:
Ownership:Completion:

21

Yokohama, Kanagawa Prefecture
44,406.40m2
498,282.77m2
11.11%
June 1997

Japan Real Estate Investment Corporation

II-2

Musashi Kosugi
STM Building

II-4

Location:
Site area:
Floor area of building:
Ownership:Completion:

MM Park
Building

II-5

Kawasaki, Kanagawa Prefecture
3,552.15m2
22,839.61m2
34.32%
October 1990●

Location:
Site area:
Floor area of building:
Ownership:Completion:

II-3

Yokohama, Kanagawa Prefecture
6,825.77m2
49,037.51m2
100.0%
December 2007

Other major cities

8∙3 Square Kita
Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Jozenji Park
Building

III-1

Sapporo, Hokkaido
5,541.60m2
16,096.97m2
100.0%
December 2006●

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Sendai
Honcho Honma
Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Sendai, Miyagi Prefecture
1,566.68m2
7,648.33m2
50.0%
January 1993●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Location:
Site area:
Floor area of building:
Ownership:Completion:

Daido Seimei
Niigata Building

III-5

Sendai, Miyagi Prefecture
6,591.05m2
73,186.57m2
55.35%March 1998

III-7

Kanazawa, Ishikawa Prefecture
6,642.71m2
43,481.20m2
89.0%
October 1991

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Kanazawa
Kamitsutsumicho
Building

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Nagoya
Hirokoji Place

Nishiki Park
Building●

Kanazawa, Ishikawa Prefecture
1,561.80m2
9,619.96m2
100.0%
August 2009●

Location:
Site area:
Floor area of building:
Ownership:Completion:

GRAND FRONTOSAKA (North
Building)

Location:
Site area:
Floor area of building:
Ownership:Completion:

Nagoya, Aichi Prefecture
2,170.45m2
25,091.91m2
71.74%
August 1995

JRE Shijo
Karasuma Center
Building

III-11

Nagoya, Aichi Prefecture
4,095.81m2
33,377.73m2
100.0%
May 1987●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Osaka, Osaka Prefecture
22,680.03m2
290,030.59m2
4.9%
February 2013

Location:
Site area:
Floor area of building:
Ownership:Completion:

GRAND FRONTOSAKA (Umekita
Plaza and South
Building)

III-13

Location:
Site area:
Floor area of building:
Ownership:Completion:

III-9

III-8

Nagoya Hirokoji
Building

III-10

Nagoya, Aichi Prefecture
2,401.43m2
15,947.29m2
100.0%
December 2004

●

III-6

Niigata, Niigata Prefecture875.05m2
5,327.23m2
100.0%
October 1998●

Location:
Site area:
Floor area of building:
Ownership:Completion:

III-3

Sendai, Miyagi Prefecture
3,191.27m2
27,680.45m2
100.0%
July 2008

●

●

●

●

AER

Kanazawa Park
Building

Location:
Site area:
Floor area of building:
Ownership:Completion:

III-2

III-4

Sendai, Miyagi Prefecture
1,437.47m2
8,247.50m2
100.0%
November 1991●

JRE Higashi
Nibancho SquareIII-12

Kyoto, Kyoto Prefecture
1,371.16m2
9,185.98m2
100.0%
January 2010

JRE Umeda Square
Building●

III-15

III-14

Osaka, Osaka Prefecture
20,488.08m2
10,226.10m2 (Umekita Plaza)/181,371.39m2(South)
4.9%
February 2013 (Umekita Plaza)/March 2013 (South)

Location:
Site area:
Floor area of building:
Ownership:Completion:

Osaka, Osaka Prefecture
1,652.88m2
18,673.28m2
100.0%
July 1995

Japan Real Estate Investment Corporation

22

JRE Dojima Tower●

JRE
Sakaisujihonmachi
Building

III-16●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Osaka, Osaka Prefecture
6,159.61m2
45,411.31m2
100.0%
April 1995

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Midosuji
Daiwa Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

Location:
Site area:
Floor area of building:
Ownership:Completion:

Osaka, Osaka Prefecture
2,036.22m2
17,145.59m2
100.0%
October 1992●

Location:
Site area:
Floor area of building:
Ownership:Completion:

NHK Hiroshima
Broadcasting
Center Building●

III-17●

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Amagasaki
Front Building

III-19Osaka, Osaka Prefecture
3,044.65m2
31,213.27m2
100.0%
September 1991

JRE
Sakaisujihonmachi
SquareOsaka, Osaka Prefecture
1,666.60m2
16,392.93m2
100.0%
July 2009

Lit City Building●

III-21

III-20Amagasaki, Hyogo Prefecture
3,975.20m2
24,055.58m2
100.0%
October 2008

Location:
Site area:
Floor area of building:
Ownership:Completion:

JRE Tenjin Crystal
Building●

III-18

Okayama, Okayama Prefecture
7,596.44m2
52,653.19m2
24.60%
June 2005

JRE Tenjin Crystal
Building

III-23●

III-24

III-22Hiroshima, Hiroshima Prefecture
3,296.46m2
35,217.28m2
48.75%
August 1994

Location:
Site area:
Floor area of building:
Ownership:Completion:

Fukuoka, Fukuoka Prefecture
1,221.31m2
5,588.57m2
100.0%March 1992

Location:
Site area:
Floor area of building:
Ownership:Completion:

Fukuoka, Fukuoka Prefecture
1,835.17m2
10,432.04m2
100.0%
August 1993

Hinode Tenjin
Building●

Location:
Site area:
Floor area of building:
Ownership:Completion:

III-25

Fukuoka, Fukuoka Prefecture
1,452.15m2
12,527.07m2
74.48%
August 1987

Note:	Concerning real estate or trust beneficiary rights of real estate of which the Company is a partial owner through co-ownership, or compartmentalized building units,or quasi-co-ownership, the ­figures for “Site area” and “Floor area of building” represent total site area and total floor area for the entire building.

23

Japan Real Estate Investment Corporation

Financial Section
Selected Financial Data ........................................................................................................................ p.24
Balance Sheets ................................................................................................................................................ p.25
Statements of Income and Retained Earnings ........................................................... p.27
Statements of Changes in Unitholders’ Equity ......................................................... p.28
Statements of Cash Distributions ............................................................................................ p.29
Statements of Cash Flows ................................................................................................................. p.30
Notes to Financial Statements ...................................................................................................... p.31
Independent Auditor’s Report ..................................................................................................... p.52

Selected Financial Data
Millions of yen

For the period
from October 1, 2023
to March 31, 2024

Operating revenues
Operating expenses
Operating profit
Ordinary profit
Profit before income taxes
ProfitTotal assets
Interest-bearing debt
Net assets
Unitholders’ capital
Number of units (Units)
Net assets per unit (Yen)
Cash distribution
Dividend payout ratio (Note 1)
Dividend per unit (Yen)Net operating income (NOI)
Funds from operations (FFO)
Return on assets (ROA) (Note 2)
Return on equity (ROE) (Note 3)
EOP equity ratio (Note 4)
EOP interest-bearing debt ratio
on total assets (Note 5)
FFO multiple (Times)
Debt service coverage ratio (Times) (Note 6)

41,41421,096
20,317
19,311
19,311
18,636
1,090,912
480,193539,965
516,736
1,422,864
379,491
17,381
93.3%
12,216
22,62918,4571.8%(3.6% annualized)
3.5%(6.9% annualized)
49.5%
44.0%
20.8
27.4

For the period
from April 1, 2023
to September 30, 2023

For the period
from October 1, 2022
to March 31, 2023

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

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

42.6%
21.7
27.1

44.0%
19.2
28.2

42.0%
21.0
29.2

43.5%
21.0
26.9

38,627
20,57918,04817,086
17,086
17,075
1,057,291
450,193
538,402516,736
1,422,864
378,393
17,074100.0%
12,00022,313
19,2071.6%(3.2% annualized)
3.2%(6.3% annualized)
50.9%

37,34520,304
17,041
16,172
16,172
16,161
1,047,158
460,493
517,993497,241
1,385,210
373,945
16,161100.0%
11,667
21,901
18,9701.6%(3.2% annualized)
3.1%(6.3% annualized)
49.5%

37,654
19,612
18,042
17,256
17,256
16,7901,008,970
423,393
517,761
497,241
1,385,210
373,778
15,92994.9%
11,50023,084
19,7001.7%(3.4% annualized)
3.2%(6.5% annualized)
51.3%

36,453
19,346
17,107
16,191
16,191
16,045
1,035,072
449,893516,762497,241
1,385,210
373,057
15,791
98.4%
11,40024,07021,053
1.6%(3.2% annualized)
3.1%(6.2% annualized)
49.9%

Notes: 1. Dividend payout ratio = Dividend per unit / Profit per unit × 100
		For the September 2023 period, calculations are made using the following formula, as new investment units were issued.
		Dividend payout ratio = Cash distribution / Profit × 100
2.	ROA = Ordinary profit / Average of Total assets during the period × 100
3. ROE = Profit / Average of Net assets during the period × 100
		The number of days for the asset management period is taken into consideration for net assets, as new investment units were issued in the September 2023 period.
		(Annualized portion of the calculation given in Note 2 and Note 3 assumes a fiscal period of 182 days for the period ended March 31, 2022, 183 days for the period
ended September 30, 2022, 182 days for the period ended March 31, 2023, 183 days for the period ended September 30, 2023 and 183 days for the period ended
March 31, 2024.)
4. EOP equity ratio = (Net assets at the end of period / Total assets at the end of period) × 100
5. EOP interest-bearing debt ratio on total assets = (Interest-bearing debt at the end of period / Total assets at the end of period) × 100
6. Debt service coverage ratio = Profit before Interest, Taxes, Depreciation and Amortization / Interest expenses

Japan Real Estate Investment Corporation24

Balance Sheets
September 30, 2023 and March 31, 2024

Thousands of yen

ASSETS
Current assets   Cash and deposits   Cash and deposits in trust   Operating accounts receivable  Prepaid expenses  Other   Total current assets
Non-current assets   Property, plant and equipment   Buildings    Accumulated depreciation    Buildings, net   Structures    Accumulated depreciation    Structures, net   Machinery and equipment    Accumulated depreciation    Machinery and equipment, net    Tools, furniture and fixtures    Accumulated depreciation     Tools, furniture and fixtures, net   Land   Construction in progress   Buildings in trust    Accumulated depreciation    Buildings in trust, net   Structures in trust    Accumulated depreciation    Structures in trust, net    Machinery and equipment in trust    Accumulated depreciation     Machinery and equipment in trust, net    Tools, furniture and fixtures in trust    Accumulated depreciation     Tools, furniture and fixtures in trust, net   Land in trust    Construction in progress in trust    Total property, plant and equipment  Intangible assets   Land leasehold interests   Easement   Other    Total intangible assets   Investments and other assets   Investment securities    Leasehold and guarantee deposits   Long-term prepaid expenses   Other    Total investments and other assets   Total non-current assets
Deferred assets   Investment corporation bond issuance costs   Total deferred assets
Total Assets

25

Japan Real Estate Investment Corporation

As of September 30, 2023

As of March 31, 2024

29,088,626
7,031,681
567,325
184,771
187,435
37,059,841

32,066,286
7,319,292
709,783
121,607305,907
40,522,876

245,930,990(117,217,758)
128,713,232
2,976,927(1,290,764)
1,686,162
3,201,108(2,508,248)
692,859566,312(386,398)
179,913459,185,364
42,408
134,776,201(47,321,055)
87,455,146
1,264,520(564,535)
699,984
989,457(742,459)
246,998
87,247(60,077)
27,170330,962,591
3,807
1,009,895,641

253,197,683(120,857,358)
132,340,324
3,107,891(1,340,677)
1,767,214
3,306,743(2,538,869)
767,874
589,390(402,437)
186,953475,136,821
80,007133,201,653(46,512,410)
86,689,242
1,212,849(577,380)
635,469
954,081(694,336)
259,745
95,314(62,421)32,892338,947,236
6,701
1,036,850,483

5,532,575
826,648
16,511
6,375,735

8,702,204
826,648
14,0459,542,898

660,468
1,580,934
94,691
1,584,386
3,920,480
1,020,191,857

660,468
1,580,934
63,197
1,659,598
3,964,199
1,050,357,580

40,09740,097
1,057,291,795

31,82931,8291,090,912,287

Thousands of yen

As of September 30, 2023

As of March 31, 2024

LIABILITIESCurrent liabilities   Operating accounts payable

3,232,399

4,582,184  Short-term borrowings

43,000,000

56,500,000   Current portion of investment corporation bonds

10,000,000—   Current portion of long-term borrowings

42,300,000

54,800,000   Accounts payable - other

2,263,877

2,829,322  Accrued expenses

326,686

394,362   Income taxes payable

10,202

11,145   Accrued consumption taxes

1,144,312

277,362  Advances received

3,041,293

3,071,196

230,742

50,552

105,549,514

122,516,127   Investment corporation bonds

32,993,175

32,993,175  Long-term borrowings

321,900,000

335,900,000   Deposits received from tenants

55,656,092

56,083,929   Deferred tax liabilities

2,407,132

3,070,981

378,113

381,922

5,262

1,046

413,339,776

428,431,055

518,889,290

550,947,182

516,736,574

516,736,574     Reserve for tax purpose reduction entry

4,553,749

4,553,749

     Total voluntary retained earnings

4,553,749

4,553,749   Unappropriated retained earnings

17,112,180

18,674,780   Total surplus

21,665,930

23,228,529   Total unitholders’ equity

538,402,505

539,965,104  Other   Total current liabilities
Non-current liabilities   Asset retirement obligations  Other   Total non-current liabilities
Total Liabilities
NET ASSETS
Unitholders’ equity  Unitholders’ capital  Surplus    Voluntary retained earnings

Total Net Assets
Total Liabilities and Net Assets

538,402,505

539,965,104

1,057,291,795

1,090,912,287

Japan Real Estate Investment Corporation

26

Statements of Income and Retained Earnings
For the six months ended September 30, 2023 and March 31, 2024

Thousands of yen

For the period
from April 1, 2023
to September 30, 2023

For the period
from October 1, 2023
to March 31, 2024

34,131,137

34,880,878

Operating revenues
Rent revenues

365,999

70,700Gain on sales of real estate properties

4,130,837

6,462,563

Total operating revenues

38,627,974

41,414,142

Expenses related to lease business

18,447,146

18,605,318

Asset management fees

1,745,491

2,068,919

Other lease business revenues

Operating expenses

Asset custody fees

47,22947,581

Administrative service fees

139,135

139,800

Directors’ compensations

7,800

7,800

Commission expenses

85,475

108,640

Other operating expenses

107,016

118,686

Total operating expenses

20,579,294

21,096,747

18,048,679

20,317,395

Interest income

158

176

Dividend income

7,036

—

Reversal of distributions payable

2,072

1,562

Interest on tax refund

2,944

—

Gain on receipt of donated non-current assets

3,657

965

Operating profit
Non-operating income—

929

15,8703,633Interest expenses

722,153805,740

Interest expenses on investment corporation bonds

172,848

164,867

Amortization of investment corporation bond issuance costs

12,427

8,267

Investment unit issuance expenses

37,823—Contribution received for construction
Total non-operating income
Non-operating expenses

Other

32,56330,163

Total non-operating expenses

977,817

1,009,039

Ordinary profit

17,086,732

19,311,989

Profit before income taxes

17,086,732

19,311,989

11,664

11,172

Income taxes – current
Income taxes – deferred
Total income taxes
Profit27(42)663,849

11,621

675,021

17,075,110

18,636,967

Retained earnings brought forward

37,07037,812

Unappropriated retained earnings

17,112,180

18,674,780

Japan Real Estate Investment Corporation

Statements of Changes in Unitholders’ Equity
For the six months ended September 30, 2023 and March 31, 2024

For the period from April 1, 2023 to September 30, 2023
Thousands of yen

Unitholders’ equity
Surplus
Voluntary retained earnings

Total
net assets

Total surplus

Totalunitholders’equity16,198,315

20,752,064

517,993,280

517,993,280

19,495,358

19,495,358

Dividends of surplus(16,161,245)(16,161,245)(16,161,245)(16,161,245)

Profit17,075,110

17,075,110

17,075,110

17,075,110

Unitholders’capitalBalance at beginning of the period

497,241,216

Reserve fortax purpose
reduction entry

Totalvoluntary
retainedearnings

Unappropriatedretainedearnings

4,553,749

4,553,749

Changes during the period Issuance of new investment units

19,495,358

Total changes during the period

19,495,358——

913,865

913,865

20,409,224

20,409,224

Balance at end of the period

516,736,574

4,553,749

4,553,749

17,112,180

21,665,930

538,402,505

538,402,505

For the period from October 1, 2023 to March 31, 2024
Thousands of yen

Unitholders’ equity
Surplus
Unitholders’capitalVoluntary retained earnings

Total
net assets

Total surplus

Totalunitholders’equityReserve fortax purpose
reduction entry

Totalvoluntary
retainedearnings

Unappropriatedretainedearnings

4,553,749

4,553,749

17,112,180

21,665,930

538,402,505

538,402,505

Dividends of surplus(17,074,368)(17,074,368)(17,074,368)(17,074,368)

Profit18,636,967

18,636,967

18,636,967

18,636,967

Balance at beginning of the period

516,736,574

Changes during the period

Total changes during the period
Balance at end of the period

—

—

—

1,562,599

1,562,599

1,562,599

1,562,599

516,736,574

4,553,749

4,553,749

18,674,780

23,228,529

539,965,104

539,965,104

Japan Real Estate Investment Corporation

28

Statements of Cash Distributions
For the six months ended September 30, 2023 and March 31, 2024	 
	 For the period
from April 1, 2023 to September 30, 2023

For the period
From October 1, 2023 to March 31, 2024

Amount (Yen)Amount (Yen)I Retained earnings

17,112,180,899

18,674,780,320

II Cash distribution

17,074,368,000

17,381,706,624(12,000)(12,216)—

1,255,260,797

37,812,899

37,812,899

The Company will make cash distributions
using earnings based on the cash distribution policy outlined in Article 32-1(2) of
the Company’s Articles of Incorporation,in an amount that exceeds 90% of the“amount of distributable profit” as set
forth in Article 67-15 of the Act on Special
Measures Concerning Taxation Based on
this policy, the Company has decided thatthe total amount of dividends, which is set
not to exceed the unappropriated retained
earnings and also to secure retained earnings brought forward, is ¥17,074,368,000
for the period, which is a multiple of
1,422,864 — the number of units
outstanding as of September 30, 2023.
Furthermore, the Company does not pay
out dividends that exceed earnings as
outlined in Article 32-1(3) of theCompany’s Articles of Incorporation.

The Company will make cash distributions using earnings based on the cash
distribution policy outlined in Article
32-1(2) of the Company’s Articles ofIncorporation, in an amount that exceeds
90% of the “amount of distributableprofit” as set forth in Article 67-15 of the
Act on Special Measures Concerning
Taxation Based on this policy, theCompany has decided that the total
amount of dividends, under the application of Article 65-7 “Exceptions of theTaxation in case of the Replacement by
Purchase of Specific Assets” of the Act on
Special Measures Concerning Taxation,
making reduction entries, and securingretained earnings brought forward, is¥17,381,706,624 for the period, which isa multiple of 1,422,864 — the number ofunits outstanding as of March 31, 2024.
Furthermore, the Company does not pay
out dividends that exceed earnings as
outlined in Article 32-1(3) of the Company’s Articles of Incorporation.

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

Computation Method for Determining Dividends

29Japan Real Estate Investment Corporation

Statements of Cash Flows
For the six months ended September 30, 2023 and March 31, 2024

Thousands of yen

For the period
from April 1, 2023
to September 30, 2023

For the period
from October 1, 2023
to March 31, 2024

Profit before income taxes

17,086,732

19,311,989

Depreciation

6,263,576

6,283,578

Gain on receipt of donated non-current assets(3,273)(965)

Amortization of investment corporation bond issuance costs

12,427

8,267

Investment unit issuance expenses

37,823—

Dividend income(7,036)—

Interest income

(158)

(176)

Interest expenses

895,002970,608

Decrease (increase) in operating accounts receivable(78,709)(142,457)

Decrease (increase) in consumption taxes refund receivable

599,680

—

—

(15)

Cash flows from operating activities

Decrease (increase) in supplies
Decrease (increase) in prepaid expenses
Decrease in property, plant and equipment in trust due to sale(37,776)

63,164

7,472,036

10,994,041

Increase (decrease) in operating accounts payable

613,483(98,456)

Increase (decrease) in accounts payable - other

66,944468,231

Increase (decrease) in accrued consumption taxes

1,144,312(866,949)

Increase (decrease) in accrued expenses

(131)

131

Increase (decrease) in advances received

139,886

29,903

Decrease (increase) in long-term prepaid expenses

25,714

31,493

Other, net

340,861(410,870)

Subtotal

34,571,397

36,641,517

Interest and dividends received
Interest paid

7,195

176

(871,228)(903,064)(12,642)(10,229)

33,694,722

35,728,400(19,472,546)(21,897,475)(955,704)(20,778,192)(390)(3,171,410)

Refund of leasehold and guarantee deposits received(3,725,174)(1,105,286)

Proceeds from leasehold and guarantee deposits received

2,076,087

1,564,388(22,077,728)(45,387,975)

Proceeds from short-term borrowings

72,500,000

72,000,000

Repayments of short-term borrowings(81,800,000)(58,500,000)

Proceeds from long-term borrowings

22,500,000

42,500,000

Repayments of long-term borrowings(23,500,000)(16,000,000)—(10,000,000)

19,495,358—

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets

Net cash provided by (used in) investing activities
Cash flows from financing activities

Redemption of investment corporation bonds
Proceeds from issuance of investment units(37,823)—

Distributions paid

(16,160,706)(17,075,154)

Net cash provided by (used in) financing activities(7,003,172)

12,924,845

Net increase (decrease) in cash and cash equivalents

4,613,821

3,265,269

Cash and cash equivalents at beginning of the period

31,506,487

36,120,308

Cash and cash equivalents at end of the period

36,120,308

39,385,578

Payments of investment unit issuance expenses

Japan Real Estate Investment Corporation30

Notes to Financial Statements
September 30, 2023 and March 31, 2024

1. Organization and Basis of Presentation
Organization

Japan Real Estate Investment Corporation (the “Company”) is a real estate investment corporation formed to own and invest primarily ina portfolio of office properties. The Company is externally managed by a licensed asset management company, Japan Real Estate AssetManagement Co., Ltd. (“JRE-AM”). JRE-AM is a wholly-owned subsidiary of Mitsubishi Estate Co., Ltd. (“MEC”).
On May 11, 2001, the Company was incorporated with ¥200 million of original capital contribution by MEC, Tokio Marine & Nichido Fire Insurance Co., Ltd. and The Dai-ichi Life Insurance Company, Limited under the ITA.
On September 10, 2001, the Company commenced operations when the Company was listed on the Tokyo Stock Exchange as one of
the first real estate investment corporations in Japan (“J-REITs”). The Company issued 160,000 units at a price of ¥506,625 per unit,
generating gross proceeds of ¥81,060 million.
As of March 31, 2024, the Company owned a portfolio of 77 office properties with an aggregate of approximately 897,885 m2 ofleasable space.
Basis of presenting financial statements

The Company maintains its accounting records and prepares its financial statements in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”), including provisions set forth in the ITA, the Japanese Financial Instruments and Exchange Law
and related regulations, which are different in certain respects as to the application and disclosure requirements of International Financial
Reporting Standards (“IFRS”).
The accompanying financial statements are a translation of the audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and were presented in the Securities Report of the Company filed with the Kanto Local Finance Bureau.
In preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial statements
issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition, the notes to financial
statements include information that might not be required under Japanese GAAP but is presented herein as additional information.
As permitted under the Japanese Financial Instruments and Exchange Law, amounts of less than one million yen have been omitted.
As a result, the totals shown in the accompanying financial statements do not necessarily agree with the sum of the individual amounts.

2. Summary of Significant Accounting Policies
Investment securities

Non-marketable securities, which have no market prices, classified as other securities are carried at cost. Cost of securities sold is determinedby the moving average method.
Property and equipment, depreciation and impairment (except for leased assets)

Property and equipment is stated at cost, less accumulated depreciation. The cost of land, buildings and building improvements includes
the purchase price of property and acquisition costs. Depreciation is calculated on a straight-line basis over the estimated useful lives of theassets ranging as stated below:
Buildings ................................................................................................................................... 2 – 61 years
Structures ................................................................................................................................. 2 – 75 years
Machinery and equipment ................................................................................ 2 – 18 years
Tools, furniture and fixtures ............................................................................. 2 – 29 years

31Japan Real Estate Investment Corporation

Expenditures for repairing expenses are charged to income as incurred. Significant renewals and betterments are capitalized.
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying amount of its
fixed assets may not be recoverable. According to the standard set by the Accounting Standards Board of Japan (“ASBJ”), companies are
required to recognize an impairment loss in their statements of income if certain indicators of asset impairment exist and the book valueof an asset exceeds the undiscounted sum of future cash flows of the asset. The standard states that impairment losses should be measured
as the excess of the book value over the higher of (i) the fair market value of the asset, net of disposition costs, and (ii) the present valueof future cash flows arising from ongoing utilization of the asset and from disposal after asset use. The standard covers land, factories,
buildings and other forms of property, plant and equipment as well as intangible assets. Fixed assets are grouped at the lowest level forwhich there is identifiable cash flows that are independent of cash flows of other groups of assets.
Intangible assets

Intangible assets primarily consist of leasehold rights and easement, which are stated at cost. Amortization of a term leasehold interest forbusiness use is calculated by the straight-line method based on the period of agreement.
Leased assets

Leased assets under finance lease transactions that do not transfer ownership of the leased assets to the lessees are capitalized and depreciated by the straight-line method over the lease term with no residual value.
Deferred charges

Investment corporation bond issuance costs are amortized using the straight-line method over the redemption periods.
Investment unit issuance expenses are charged to income as incurred. The underwriters’ economic remunerations for underwriting theoffering are not recognized as investment unit issuance expenses in the financial statements since such costs are not paid by the Company
as commission under the so-called “spread-method.”
Under the spread-method, the difference between the offer price (the price paid by the unitholder) and the issue price (the price received
by the Company) is retained by the underwriters as remuneration.
Revenue recognition

The content of main performance obligations related to revenue arising from contracts with customers of the Company and the normal
timing for satisfying such performance obligations (the normal timing for recognizing revenue) are as follows:(i) Sales of real estate properties
The Company recognizes revenue from the sale of real estate properties when the purchaser, as the customer, obtains control of the realestate property by fulfilling the delivery obligations stipulated in the contract for the sale of real estate property.
(ii) Utilities income
The Company recognizes utilities income based on the supply of electricity, water, etc. to the lessee as the customer, in accordance with theterms of the real estate lease contract and related agreements. Of utilities income, in the case that the Company determines it is an agent
for utilities income, the utilities income is recognized as income at the net amount received as charges for electricity, gas, etc. supplied byother parties, less the amount paid to such other parties.
Taxes on property and equipment

Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally charged toincome during the period. The sellers of the properties are liable for property taxes for the calendar year including the period from the dateof purchase by the Company through the end of the year since the taxes are imposed on the owner registered on the record as of January 1
based on the assessment made by the local government. The Company pays the amount equivalent to the property taxes to the sellers
applicable to the period since acquisition and includes the amount equivalent to the taxes in the purchase price of each property and­capitalizes it as a cost of the property.

Japan Real Estate Investment Corporation

32

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, deposits with banks, and short-term investments, which are highly liquid, readily
convertible to cash and with insignificant risk of price fluctuation, with original maturity of three months or less.
Hedge accounting

The Company enters into derivative transactions to hedge against interest-rate risk and other forms of risk based on the risk management
policies outlined in the Company’s Articles of Incorporation. The Company uses interest-rate swap transactions for hedging fluctuations ininterest rates on floating-rate loans. The Company has also executed currency swap transactions as a method of hedging against currency
exchange fluctuation risks. Deferred hedge accounting is generally used for such interest-rate swaps and currency swap transactions, and theeffectiveness of hedging is measured by comparing the total cash flow fluctuation of the hedged item and that of the hedging instrument
since the inception of the hedge.
For interest-rate swaps and currency swaps that qualify for hedge accounting and meet certain criteria provided under Japanese GAAP,
however, the Company applies special accounting treatment and allocation accounting treatment, respectively. Under such exceptional
accounting treatments, the differentials paid or received under the swap agreements are recognized and included in interest expense of thehedged loans, and the interest-rate swaps and currency swaps are not required to be separately valued. For interest-rate swaps and currency
swaps that meet the specific criteria for such special accounting treatment and allocation accounting treatment, ongoing assessments ofhedge effectiveness are not required and hence not performed.

3. Commitment Line Agreement
As of September 30, 2023 and March 31, 2024
The Company has signed commitment line agreements with three banks.
Total amount of commitment line agreement
Debt financing balance
BalanceThousands of yen

As of September 30, 2023

As of March 31, 2024

60,000,000

60,000,000——

60,000,000

60,000,000

4. Reserve for Tax Purpose Reduction Entry
As of September 30, 2023 and March 31, 2024
Thousands of yen

Reserve for tax purpose reduction entry

As of September 30, 2023

As of March 31, 2024

4,553,749

4,553,749

Deferred tax liability for the reserve for tax purpose reduction entry

2,408,105

3,071,910

Total

6,961,855

7,625,660

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

33

Japan Real Estate Investment Corporation

5. Financial Instruments
1. Status of financial instruments(1) Policies for dealing with financial instruments
		Concerning the financing of property acquisitions, the Company shall use several funding sources including bank loans, the issuance ofinvestment corporation bonds and the issuance of investment units. When executing such financing activities, the Company endeavors
to retain the ability to secure stable and low-cost financing by maintaining high credit ratings and thereby limiting the financial covenants that may restrict the financial flexibility of the Company. To achieve these goals, the Company intends to further develop andreinforce the confidence of debt holders and rating agencies in the Company by bolstering the capital base and controlling the loan-tovalue ratio (“LTV”) at an adequate level.
		  In order to hedge against future interest-rate fluctuations, the Company may enter into derivative transactions, which shall be
executed solely for the purpose of hedging against interest-rate fluctuation and other risks, and not for speculative purposes.
		  With respect to management of excess funds, as a matter of policy the Company uses time deposits as its main vehicle, while securities
and monetary claims are also eligible for such investment.
(2) Characteristics and risk profile of each financial instrument and risk management system		The Company regularly re-evaluates the appropriateness and effectiveness of its risk management system in order to improve on it.
		 The characteristics and risk profile of financial instruments and the system in place to manage such risks are as follows:		  The deposits, which are typically large time deposits used to manage excess funds, are exposed to the credit risk of the deposit-taking
financial institutions. The Company manages credit risk by restricting the tenor of the deposit to relatively short periods and setting aminimum credit rating requirement for the deposit-taking financial institutions.
		  The funding proceeds from borrowings and issues of investment corporation bonds are applied mainly to acquire real estate properties and repay outstanding loans and bonds. While floating-rate short-term and long-term loans are exposed to the risk of interest-rate
hikes, such risk is mitigated by the Company’s low LTV and relatively high percentage of long-term fixed-rate debts within the totalborrowing. The Company may also exercise hedging by means of derivative transactions (interest-rate swap transactions) in order tomitigate the risk of fluctuation concerning the floating-rate long-term loans, thereby effectively stabilizing the overall interest rates on
the loans. Foreign currency investment corporation bonds are also exposed to currency exchange risk. However, the Company uses
derivative transactions as a method of hedging against the risks (currency swap transactions). For more detailed information on thehedge accounting method, please refer to Section 2. “Summary of Significant Accounting Policies: Hedge accounting.”		  Loans and investment corporation bonds involve liquidity risk at the time of maturity. To manage such liquidity risk, the Company
implements measures such as (i) maintaining and strengthening its ability to access equity markets to secure funds, (ii) maintaining
commitment lines with major financial institutions (There is no amount outstanding under the facility as of September 30, 2023 andMarch 31, 2024) and (iii) preparing monthly financial plans.
(3) Supplementary note regarding fair value of financial instruments
		Since the fair value of financial instruments is calculated based on certain assumptions, the fair value could differ depending on theassumptions used. In addition, the contract value of derivative transactions, which is presented in Section 6. “Derivative Transactions,”
is not an exact representation of market risk attributable to derivative transactions.

Japan Real Estate Investment Corporation

34

2. Fair value of financial instruments

Fair value of financial instruments, their values carried on the balance sheets and the differences between them as of September 30, 2023
and March 31, 2024 are as follows. Since “Cash and deposits,” “Cash and deposits in trust,” and “Short-term borrowings” are cash anddue to be settled in a short period, and their fair values approximate their book values, the notes are omitted.
Thousands of yen

As of September 30, 2023
Book value

Fair value

Difference(1) Current portion of investment corporation bonds

10,000,000

9,999,200(800)(2) Current portion of long-term borrowings

42,300,000

42,348,471

48,471(3) Investment corporation bonds

32,993,175

33,253,995

260,820(4) Long-term borrowings

321,900,000

315,204,422(6,695,577)(5) Deposits received from tenants

55,656,092

53,648,467(2,007,625)

—

—

—

(6) Derivative transactions

Thousands of yen

As of March 31, 2024
Book value(1) Current portion of investment corporation bonds(2) Current portion of long-term borrowings

Fair value

Difference

—

—

—

54,800,000

54,831,392

31,392(3) Investment corporation bonds

32,993,175

33,209,102

215,927(4) Long-term borrowings

335,900,000

331,775,365(4,124,634)(5) Deposits received from tenants

56,083,929

54,190,830(1,893,099)

—

—

—

(6) Derivative transactions

Notes: 1. Measurement of fair value of financial instruments and matters concerning derivative transactions
			 (1) Current portion of investment corporation bonds and (3) Investment corporation bonds					Their fair values are based on reference prices published by a financial data provider where available. When reference prices are not available, their fair values arecalculated by discounting the aggregate of the principal and interest by nominal rates assumed applicable if the loans were refinanced for the duration of the current maturity. (However, the fair values of investment corporation bonds (please refer to Section 6. “Derivative Transactions, (2) Derivatives designated as hedging
instruments”) hedged by a currency swap subject to allocation treatment are calculated by discounting the aggregate of the principal and interest integrated withthe currency swap by nominal rates assumed applicable if the loans were refinanced for the duration of the current maturity.)			 (2) Current portion of long-term borrowings and (4) Long-term borrowings					For loans with floating interest rates, since the interest rates on such loans reflect market rates reasonably well over the short term and their book values are good
approximations of their fair values, the book values are presented as their fair values. (However, the fair values of floating-rate long-term loans (please refer to
Section 6. “Derivative Transactions, (2) Derivatives designated as hedging instruments”) hedged by an interest-rate and currency swap subject to integrated treatment
or by an interest-rate swap subject to special accounting treatment are calculated by discounting the aggregated principal and interest on such loans using reasonableestimates of the rates that would be applicable if the Company were to refinance the existing loans for the remaining period to maturity under the prevailing market
condition.) The fair values of long-term loans with fixed interest rates are calculated by discounting the aggregated amounts of the principal and the interest of theloans by the rates that are reasonably estimated to be applicable if the Company were to refinance the existing loans for the remaining period to maturity.
			 (5) Deposits received from tenants					These fair values of these deposits are the discounted present values by estimated periods until the deposits are returned and discount rates reflected credit risksof the Company.
			 (6) Derivative transactions						 Please refer to Section 6. “Derivative Transactions.”
		 2. Repayment schedule for investment corporation bonds, long-term borrowings and other interest-bearing debt after the closing dateThousands of yen

As of September 30, 2023

Investment corporation bonds
Long-term borrowings
Total

1 year or less
10,000,000
42,300,000
52,300,000

1 to 2 years
10,000,000
57,000,000
67,000,000

2 to 3 years
10,000,000
36,700,000
46,700,000

3 to 4 years
10,000,000
24,000,000
34,000,000

4 to 5 years
2,993,175
18,000,000
20,993,175

Over 5 years—
186,200,000
186,200,000

4 to 5 years—
27,000,000
27,000,000

Over 5 years—
204,200,000
204,200,000

Thousands of yen

As of March 31, 2024

Investment corporation bonds
Long-term borrowings
Total

35

Japan Real Estate Investment Corporation

1 year or less—
54,800,000
54,800,000

1 to 2 years
20,000,000
52,500,000
72,500,000

2 to 3 years
10,000,000
28,700,000
38,700,000

3 to 4 years
2,993,175
23,500,000
26,493,175

6. Derivative Transactions(1) Derivatives not designated as hedging instruments
		 As of September 30, 2023
		  “Not applicable”
		As of March 31, 2024
		  “Not applicable”(2) Derivatives designated as hedging instruments
		 As of September 30, 2023
			The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative designated asa hedging instrument is as follows:
Thousands of yen

Contract value

Fair value

Measurementof fair value

3,000,000*1—

10,000,000

—

*1

—

2,993,175

2,993,175*2—

Derivative accounting method

Type of derivative transaction

Hedged item

Special Treatment for interest-rate swap

Receive floating, pay fixed interest-rate
swap transactions

Long-term
borrowings

6,800,000

Integrated Treatment (Special Treatment
Receive floating USD, pay fixed JPY,
and Allocation Treatment) for interest-rate interest-rate and currency swap transacand currency swap
tions (with initial and final exchange)

Long-term
borrowings
Investment
corporation bonds

Allocation Treatment for currency swap

Receive fixed USD, pay fixed JPY,
currency swap transactions (with initialand final exchange)

Over one year

		 As of March 31, 2024
			The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative designated asa hedging instrument is as follows:
Thousands of yen

Derivative accounting method

Type of derivative transaction

Hedged item

Special Treatment for interest-rate swap

Receive floating, pay fixed interest-rate
swap transactions

Long-term
borrowings

Allocation Treatment for currency swap

Receive fixed USD, pay fixed JPY,
Investment
currency swap transactions (with initialcorporation bonds
and final exchange)

Contract valueOver one year

Fair value

Measurementof fair value

6,800,000

—

*1

—

2,993,175

2,993,175*2—*1. The derivative transactions eligible for Special Treatment for interest-rate swap and Integrated Treatment (Special Treatment for interest-rate swap and Allocation Treatment
for currency swap) are accounted for as integral parts of the hedged loans, and the fair value of those derivative transactions is included in that of the underlying long-termborrowings as of September 30, 2023 and March 31, 2024. Please refer to Note 1 of “2. Fair value of financial instruments” under Section 5. “Financial Instruments,” aswell as subheadings (2) and (4) concerning derivative transactions.
*2. Currency swap transactions eligible for allocation treatment are accounted for as integrated parts of the hedged investment corporation bonds, and the fair value of the­currency swap transactions is included in that of the underlying investment bonds as of September 30, 2023 and March 31, 2024. Please refer to Note 1 of “2. Fair valueof financial instruments” under Section 5. “Financial Instruments,” as well as subheading (3) concerning derivative transactions.

Japan Real Estate Investment Corporation

36

7. Property, Plant and Equipment and Intangible Assets
Changes in property, plant and equipment and intangible assets for the six months ended March 31, 2024 are as follows:
Thousands of yen
Accumulated depreciation
Accumulated amortization

Balance at
beginning of
the period

Increase during
the period

Decrease during
the period

Balance at endof the period

Net balanceat end ofthe period

Remarks

Buildings

245,930,990

7,266,692—

253,197,683

120,857,358

3,639,600

132,340,324—

Structures

2,976,927

130,964—

3,107,891

1,340,677

49,912

1,767,214—

Machinery and equipment

3,201,108

105,635—

3,306,743

2,538,869

30,620767,874—

Tools, furniture and fixtures

566,31223,077—589,390

402,437

16,038

186,953—

459,185,364

15,951,457—

475,136,821——

475,136,821*1

42,40838,391791

80,007——80,007—

Buildings in trust

134,776,201

6,210,446

7,784,995

133,201,653

46,512,410

2,470,435

86,689,242—

Structures in trust

1,264,520

22,76074,431

1,212,849

577,380

34,148635,469—

Machinery and equipment in trust

989,457

36,11571,491

954,081694,336

16,219259,745—

Tools, furniture and fixtures in trust

87,247

8,429

362

95,31462,421

2,555

32,892—

330,962,591

14,412,340

6,427,696

338,947,236——

338,947,236

*2

3,807

2,894

—

6,701

—

—

6,701

—

Subtotal

1,179,986,939

44,209,205

14,359,768

1,209,836,375

172,985,891

6,259,529

1,036,850,483

Land leasehold interests

5,933,601

3,185,459—

9,119,060

416,856

15,8298,702,204*3

Easement

826,648——826,648——826,648—

Other

60,942

1,943—

62,886

48,8404,409

14,045—

6,821,192

3,187,402—

10,008,595

465,696

20,2399,542,898

1,186,808,132

47,396,607

14,359,768

1,219,844,970

173,451,588

6,279,769

1,046,393,381

Type of Asset

Property, plant and equipment

Land
Construction in progress

Land in trust
Construction in progress in trust

Intangible assets

Subtotal
Total

Depreciation andamortization*1. The main reasons for the increase in land were the acquisition of additional interest in Seavans S Building and the new acquisition of 3rd MINAMI AOYAMA.
*2. The main reason for the increase in land in trust was the acquisition of additional interest in Toyosu Foresia.
*3. The main reason for the increase in land leasehold interests was the new acquisition of 3rd MINAMI AOYAMA.

37

Japan Real Estate Investment Corporation

8. Borrowings
The condition of loans by financial institutions as of March 31, 2024 is as follows:
Classification
Drawdown date

Balance at
beginning ofcurrent period(¥ thousand)

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

Repayment date

MUFG Bank, Ltd. *3

August 18, 2023

11,000,000

—

0.110

November 20, 2023

MUFG Bank, Ltd. *4

November 20, 2023

—

—

0.110

February 19, 2024

MUFG Bank, Ltd.

March 27, 2023

1,500,000—

0.09424

March 7, 2024
*5

MUFG Bank, Ltd.

July 3, 2023

9,000,000—

0.10091

March 29, 2024
*6

Sumitomo Mitsui Trust Bank, Limited

April 20, 2023

2,000,000

2,000,000

0.1026

April 22, 2024

MUFG Bank, Ltd. *7

February 19, 2024—

11,000,000

0.14091

May 20, 2024

Mizuho Bank, Ltd.

July 10, 2023

2,000,000

2,000,000

0.10156

July 10, 2024

LenderShort-term borrowings

MUFG Bank, Ltd.

August 31, 2023

9,000,000—

0.10076

August 30, 2024
*8

Mizuho Bank, Ltd.

August 31, 2023

8,500,000—

0.09894

August 30, 2024
*9Mizuho Bank, Ltd.

October 31, 2023—

1,500,000*100.09819

October 31, 2024

MUFG Bank, Ltd.

October 31, 2023——

0.09704

October 31, 2024
*11

MUFG Bank, Ltd.

December 1, 2023—

2,000,000

0.10341

November 29, 2024

MUFG Bank, Ltd.

February 14, 2024—

10,000,000

0.11588

February 14, 2025

Mizuho Bank, Ltd.

February 14, 2024—

10,000,000

0.11587

February 14, 2025

MUFG Bank, Ltd.

March 8, 2024—

11,500,000

0.11455

March 10, 2025

Mizuho Bank, Ltd.

March 8, 2024—

6,500,000

0.1145

March 10, 2025

43,000,000

56,500,000

SubtotalLong-term borrowings

MUFG Bank, Ltd.

December 19, 2014

10,000,000—

0.42375*12

December 19, 2023

MUFG Bank, Ltd.

March 26, 2018

5,000,000—

0.08389*13 *14

March 26, 2024

The Hachijuni Bank, Ltd.

March 26, 2018

1,000,000—

0.2338March 26, 2024

Sumitomo Mitsui Trust Bank, Limited

May 29, 2019

5,000,000

5,000,000

0.075

May 29, 2024
*15

The Iyo Bank, Ltd.

June 15, 2017

2,500,000

2,500,000

0.275

June 17, 2024
*15

The Hachijuni Bank, Ltd.

June 15, 2017

1,000,000

1,000,000

0.275

June 17, 2024
*15

MUFG Bank, Ltd.

September 1, 2015

3,500,000

3,500,000

0.630

September 2, 2024
*15

Sumitomo Mitsui Trust Bank, Limited

September 2, 2015

3,800,000

3,800,000

0.536

September 2, 2024
*15

The Norinchukin Bank

September 1, 2017

5,000,000

5,000,000

0.240

September 2, 2024
*15

Sumitomo Mitsui Trust Bank, Limited

September 26, 20195,500,000

5,500,000

0.105

September 26, 2024
*15

Taiyo Life Insurance Company

October 1, 2014

2,000,000

2,000,000

0.7825October 1, 2024
*15

Mizuho Bank, Ltd.

October 1, 2015

2,500,000

2,500,000

0.5575October 1, 2024
*15

The Gunma Bank, Ltd.

November 18, 2019

1,000,000

1,000,000

0.12693*13

November 18, 2024
*15

MUFG Bank, Ltd.

June 1, 2018

10,000,000

10,000,000

0.2544

December 2, 2024*15

Shinkin Central Bank

January 7, 2020

2,000,000

2,000,000

0.2075January 7, 2025
*15

The Ashikaga Bank, Ltd.

January 9, 2018

1,000,000

1,000,000

0.285January 9, 2025
*15

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedBullet*2

Unsecured
Unguaranteed
UnsubordinatedJapan Real Estate Investment Corporation

38

Classification
Drawdown date

Balance at
beginning ofcurrent period(¥ thousand)

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

Repayment dateMizuho Trust & Banking Co., Ltd.

March 2, 2015

3,000,000

3,000,000

0.5585

March 3, 2025
*15

MUFG Bank, Ltd.

March 26, 2018

2,000,000

2,000,000

0.2725

March 26, 2025
*15

Development Bank of Japan Inc.

March 30, 2017

5,000,000

5,000,000

0.315

March 31, 2025
*15

LenderLong-term borrowings

39

Taiyo Life Insurance Company

May 29, 2015

1,500,000

1,500,000

0.7375

May 29, 2025

Sumitomo Mitsui Trust Bank, Limited

June 15, 2020

7,000,000

7,000,000

0.2075June 16, 2025

Sumitomo Mitsui Banking Corporation

July 20, 2021

5,000,000

5,000,000

0.15375

July 22, 2025

Sumitomo Mitsui Trust Bank, Limited

August 31, 2018

3,000,000

3,000,000

0.320

August 29, 2025

Development Bank of Japan Inc.

September 1, 2015

7,000,000

7,000,000

0.7175September 1, 2025

Sumitomo Mitsui Trust Bank, Limited

September 23, 2020

5,000,000

5,000,000

0.1475September 24, 2025
December 26, 2025

Mizuho Bank, Ltd.

December 26, 2016

5,000,000

5,000,000

0.3625

Sumitomo Mitsui Trust Bank, Limited

January 29, 2021

2,000,000

2,000,000

0.1625January 29, 2026

MUFG Bank, Ltd.

February 26, 2018

6,500,000

6,500,000

0.3413February 26, 2026

Mizuho Bank, Ltd.

March 27, 2018

5,500,000

5,500,000

0.300

March 27, 2026

Shinkin Central Bank

March 30, 2017

5,000,000

5,000,000

0.360

March 30, 2026

Sumitomo Mitsui Trust Bank, Limited

June 28, 2021

3,700,000

3,700,000

0.17875

June 29, 2026

The Norinchukin Bank

January 23, 2019

4,000,000

4,000,000

0.1988July 23, 2026

Shinkin Central Bank

September 1, 2017

5,000,000

5,000,000

0.3188September 1, 2026

MUFG Bank, Ltd.

October 31, 2016

3,000,000

3,000,000

0.240

October 30, 2026

Mizuho Bank, Ltd.

December 21, 2016

5,000,000

5,000,000

0.415

December 21, 2026

Shinkin Central Bank

January 23, 2019

5,000,000

5,000,000

0.2213January 25, 2027

Sumitomo Mitsui Banking Corporation*16

March 30, 2023

3,000,000

3,000,000

0.2375

March 30, 2027
April 26, 2027

Shinkin Central Bank

April 24, 2018

6,000,000

6,000,000

0.3675The Norinchukin Bank

July 3, 2020

2,000,000

2,000,000

0.24375

July 5, 2027

The Joyo Bank, Ltd.

January 9, 2018

1,000,000

1,000,000

0.4188January 11, 2028

Sumitomo Mitsui Banking Corporation

January 19, 2018

3,000,000

3,000,000

0.4338January 19, 2028

The Bank of Fukuoka, Ltd.

January 29, 2021

2,500,000

2,500,000

0.21875

January 31, 2028

Mizuho Bank, Ltd.

March 30, 2018

4,000,000

4,000,000

0.3963

March 30, 2028

MUFG Bank, Ltd.

March 30, 2018

4,000,000

4,000,000

0.3963

March 30, 2028

Taiyo Life Insurance Company

March 30, 2018

1,000,000

1,000,000

0.3963

March 30, 2028

The Bank of Fukuoka, Ltd.

August 31, 2021

1,500,000

1,500,000

0.20625

August 31, 2028

MUFG Bank, Ltd.

September 29, 2023

1,000,000

1,000,000

0.5625September 29, 2028

Mizuho Bank, Ltd.

November 15, 20198,500,000

8,500,000

0.34875

November 15, 2028

MUFG Bank, Ltd. *16

November 30, 2023—

10,000,000

0.610

November 30, 2028

The Nishi-Nippon City Bank, Ltd.

December 17, 2021

1,000,000

1,000,000

0.27875

December 18, 2028

Shinkin Central Bank

January 15, 2020

5,000,000

5,000,000

0.325

January 15, 2029

Mizuho Bank, Ltd.

November 1, 2019

6,000,000

6,000,000

0.35125

November 1, 2029

MUFG Bank, Ltd. *16

December 19, 2023—

10,000,000

0.71125

December 19, 2029

MUFG Bank, Ltd.

January 15, 2020

5,500,000

5,500,000

0.3625January 15, 2030

MUFG Bank, Ltd. *16

March 26, 2024—

5,000,000

0.65125

March 26, 2030

MUFG Bank, Ltd.

April 27, 2020

5,000,000

5,000,000

0.35875

April 26, 2030

Mizuho Bank, Ltd.

April 27, 2020

5,000,000

5,000,000

0.35875

April 26, 2030

MUFG Bank, Ltd.

June 15, 2020

4,000,000

4,000,000

0.36125

June 14, 2030

The Keiyo Bank, Ltd.

June 29, 2023

1,000,000

1,000,000

0.39875

June 28, 2030

MUFG Bank, Ltd.

September 29, 2023

1,000,000

1,000,000

0.755

September 30, 2030

MUFG Bank, Ltd.

October 20, 2020

5,000,000

5,000,000

0.2925October 18, 2030

0.15785*13

November 29, 2030

North Pacific Bank, Ltd. *16

November 30, 2023—

2,000,000

MUFG Bank, Ltd.

December 21, 2020

10,000,000

10,000,000

0.2825

December 20, 2030

The Gunma Bank, Ltd. *16

January 31, 2024—

1,000,000

0.77125

January 31, 2031

Japan Real Estate Investment Corporation

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedClassification
Lender
The Keiyo Bank, Ltd. *16

Drawdown date

Balance at
beginning ofcurrent period(¥ thousand)

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

Repayment date

January 31, 2024—

1,000,000

0.77125

January 31, 2031
March 24, 2031
March 26, 2031

The Iyo Bank, Ltd.

March 24, 2021

2,000,000

2,000,000

0.1809*13

The Yamanashi Chuo Bank, Ltd.

March 26, 2019

2,000,000

2,000,000

0.3688MUFG Bank, Ltd.

April 5, 2021

5,000,000

5,000,000

0.41875

April 4, 2031

MUFG Bank, Ltd.

April 26, 2021

5,000,000

5,000,000

0.35625

April 25, 2031
June 16, 2031

Mizuho Bank, Ltd.

June 15, 2021

4,000,000

4,000,000

0.28875

The Norinchukin Bank *16

January 29, 2021

5,000,000

5,000,000

0.34625

July 31, 2031

The Chugoku Bank, Limited

October 1, 2021

1,000,000

1,000,000

0.345

October 1, 2031

The Norinchukin Bank *16

November 15, 2021

5,000,000

5,000,000

0.395

November 17, 2031

Shinkin Central Bank

November 15, 2021

5,000,000

5,000,000

0.405

November 17, 2031

Daishi Hokuetsu Bank, Ltd.

November 15, 2021

3,200,000

3,200,000

0.395

November 17, 2031

The Chugoku Bank, Limited

November 15, 2021

1,000,000

1,000,000

0.405

November 17, 2031

The 77 Bank, Ltd.

November 15, 2021

1,000,000

1,000,000

0.395

November 17, 2031
November 17, 2031

The Hachijuni Bank, Ltd.

November 15, 2021

1,000,000

1,000,000

0.1776*13

The Chugoku Bank, Limited*16

November 30, 2023—

2,000,000

0.935

November 28, 2031
December 17, 2031

Long-term borrowings

The Nishi-Nippon City Bank, Ltd.

December 17, 2021

1,000,000

1,000,000

0.37375

Sumitomo Mitsui Banking Corporation

January 7, 2022

2,000,000

2,000,000

0.415January 7, 2032

Mizuho Bank, Ltd.

January 17, 2022

5,000,000

5,000,000

0.4475January 19, 2032

The Norinchukin Bank *16

January 29, 2021

5,000,000

5,000,000

0.3675January 30, 2032

The Norinchukin Bank

January 31, 2022

3,500,000

3,500,000

0.4725January 30, 2032

The Shiga Bank, Ltd.

February 21, 2022

3,000,000

3,000,000

0.440

February 24, 2032

The Chugoku Bank, Limited

February 21, 2022

1,000,000

1,000,000

0.440

February 24, 2032

The Gunma Bank, Ltd.

February 21, 2022

1,000,000

1,000,000

0.440

February 24, 2032

The Chugoku Bank, Limited*16

March 8, 2024—

3,000,000

0.83375

March 8, 2032

The Chugoku Bank, Limited

June 15, 2022

1,000,000

1,000,000

0.57375

June 15, 2032

The 77 Bank, Ltd.

June 15, 2022

1,000,000

1,000,000

0.57375

June 15, 2032

The Norinchukin Bank *16

June 17, 2022

3,000,000

3,000,000

0.60625

June 17, 2032

3,000,000

3,000,000

1,000,000

1,000,000

1,000,000

1,000,000

0.37875

August 10, 2032

August 10, 2032

The Shinkumi Federation BankThe Toho Bank, Ltd.
The Keiyo Bank, Ltd.

August 10, 2022

500,000

500,000

Daishi Hokuetsu Bank, Ltd.

The Tochigi Bank, Ltd.
August 10, 2022

2,000,000

2,000,000

0.39875

The Chugoku Bank, Limited

August 10, 2022

1,000,000

1,000,000

0.39875

August 10, 2032

MUFG Bank, Ltd.

September 9, 2022

2,000,000

2,000,000

0.555

September 9, 2032

The Nishi-Nippon City Bank, Ltd.

September 12, 2022

1,000,000

1,000,000

0.5475September 13, 2032

The Tochigi Bank, Ltd.

December 12, 2022

1,000,000

1,000,000

0.68875

December 13, 2032

The Hachijuni Bank, Ltd.

December 20, 2022

1,000,000

1,000,000

0.7225

December 20, 2032

Development Bank of Japan Inc.

January 6, 2023

3,000,000

3,000,000

1.0262January 6, 2033

Daishi Hokuetsu Bank, Ltd.

January 10, 2023

1,500,000

1,500,000

0.9725January 11, 2033

The 77 Bank, Ltd.

January 10, 2023

1,000,000

1,000,000

0.9725January 11, 2033
January 17, 2033

The Iyo Bank, Ltd.

January 16, 2023

1,000,000

1,000,000

0.1741*13

The Hachijuni Bank, Ltd.

January 16, 2023

1,000,000

1,000,000

1.00625

January 17, 2033

The Asahi Shinkin Bank

January 17, 2023

3,000,000

3,000,000

1.125

January 17, 2033

Development Bank of Japan Inc.

January 31, 2023

5,000,000

5,000,000

0.9887January 31, 2033

SBI Shinsei Bank, Limited *16

March 15, 2023

2,500,000

2,500,000

0.80875

March 15, 2033

The Chugoku Bank, Limited

March 27, 2023

2,000,000

2,000,000

0.68375

March 25, 2033

The Norinchukin Bank *16

March 27, 2023

3,500,000

3,500,000

0.72375

March 28, 2033

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
UnsubordinatedJapan Real Estate Investment Corporation40

Classification
Drawdown date

Balance at
beginning ofcurrent period(¥ thousand)

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

Repayment date

Sumitomo Mitsui Banking Corporation*16

March 30, 2023

3,000,000

3,000,000

0.7087

March 30, 2033

Sumitomo Mitsui Banking Corporation

April 7, 2023

5,000,000

5,000,000

0.750

April 7, 2033

The Kiyo Bank, Ltd.

May 8, 2023

1,000,000

1,000,000

0.66625

May 9, 2033

Saitama Resona Bank, Limited

June 7, 2023

2,000,000

2,000,000

0.700

June 7, 2033
June 15, 2033

LenderLong-term borrowings

The Bank of Fukuoka, Ltd.

June 15, 2023

4,500,000

4,500,000

0.1838*13

The Chugoku Bank, Limited

June 15, 2023

3,000,000

3,000,000

0.68125

June 15, 2033
June 29, 2033

Mizuho Bank, Ltd.

June 29, 2023

3,000,000

3,000,000

0.16184*13

The Gunma Bank, Ltd.

July 3, 2023

1,000,000

1,000,000

0.17483*13

July 4, 2033

The Asahi Shinkin Bank

October 31, 2023—

1,000,000

1.18125

October 31, 2033

Saitama Resona Bank, Limited *16

November 30, 2023—

5,000,000

1.0875

November 30, 2033

0.20088*13

December 22, 2033
March 27, 2034

The Bank of Fukuoka, Ltd. *16

December 22, 2023—

1,500,000

Sumitomo Life Insurance Company

March 26, 2019

1,000,000

1,000,000

0.505

The Hachijuni Bank, Ltd.

March 26, 2024—

1,000,000

0.98125

March 27, 2034

Sumitomo Life Insurance Company

December 16, 2019

2,000,000

2,000,000

0.490

December 18, 2034

Subtotal

364,200,000

390,700,000

Total

407,200,000

447,200,000

Repayment
methodUse ofproceeds

Notes

Bullet*2

Unsecured
Unguaranteed
Unsubordinated*1. The average for floating interest rates is recorded as the weighted average during the period. The average is rounded off to the fifth decimal place. The weighted average forinterest rates of loans for which floating interest rates were swapped to fixed rates in order to hedge the risk of interest rate fluctuations is calculated taking the effect of thisswap into consideration.
*2. The purposes of executing these loans are to purchase real properties or beneficiary right of real estate in trust, to repay existing loans, and to fund the redemption of investment corporation bonds.
*3. As of August 18, 2023, MUFG Bank, Ltd. transferred its loan receivable of ¥10,300 million to Mitsubishi UFJ Trust and Banking Corporation.
*4. As of November 20, 2023, MUFG Bank, Ltd. transferred its loan receivable of ¥10,200 million to Mitsubishi UFJ Trust and Banking Corporation.
*5. The Company made repayments (¥1,000 million and ¥500 million) before maturity on December 7, 2023 and January 9, 2024.
*6. The Company made a full repayment (¥9,000 million) before maturity on November 30, 2023.
*7. As of February 19, 2024, MUFG Bank, Ltd. transferred its loan receivable of ¥10,200 million to Mitsubishi UFJ Trust and Banking Corporation.
*8. The Company made repayments (¥1,000 million, ¥7,000 million and ¥1,000 million) before maturity on October 31, November 30, 2023 and January 31, 2024.
*9. The Company made repayments (¥2,000 million, ¥1,500 million and ¥5,000 million) before maturity on November 30, December 29, 2023 and January 31, 2024.
*10. The Company made a repayment (¥4,500 million) before maturity on January 31, 2024.
*11. The Company made a full repayment (¥4,000 million) before maturity on January 31, 2024.
*12. In order to hedge the risk of exchange rate and interest rate fluctuations related to foreign currency-denominated loans, the Company conducted an interest-rate andcurrency swap transaction, which substantially secured exchange and interest rates. Accordingly, the balance and the weighted average for interest rates during the period
are calculated taking the effect of this interest-rate and currency swap into consideration.
*13. These are floating rate borrowings which are not swapped into fixed rates.
*14. The loan was based on floating rate (Base rate (Risk free rate (TONA) compounded in arrears over rate observation period (3 months) according to the lookback method +spread adjustment (0.00835%)) + 0.09%).
*15. At the end of the period, these loans are accounted for under current liabilities on the balance sheets as the current portion of long-term borrowings.
*16. These loans are Sustainability Linked Loans (SLL) based on agreements that stipulate that an interest rate 0.01% lower than the original interest rate be applied for thecorresponding periods where the target (sustainability performance target) at each confirmation point set in the loan agreement has been achieved.

41

Japan Real Estate Investment Corporation

9. Investment Corporation Bonds including Current Portion of Investment Corporation Bonds
Outstanding investment corporation bonds as of March 31, 2024 are as follows:

Securities

Date of issue

Balance at
beginning ofcurrent period(¥ thousand)

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

Repayment period

Repayment
methodUse ofproceeds

Notes

4th unsecured investment
corporation bondSeptember 29, 2005

10,000,000

10,000,0002.56

September 29, 2025

Bullet*1*2

10th unsecured investment
corporation bondMarch 30, 2017

10,000,000

10,000,000

0.3975

March 30, 2027

Bullet*1*2 *3

11th unsecured investment
corporation bondOctober 26, 2017

2,993,175

2,993,175

0.2788October 26, 2027

Bullet*1*2 *3 *4

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

November 1, 2018

10,000,000

—

0.23

November 1, 2023

Bullet*1*2

13th unsecured investment
corporation bondOctober 26, 2020

10,000,000

10,000,000

0.2

October 24, 2025

Bullet*1*2

42,993,175

32,993,175

Total*1. The investment corporation bonds are primarily used to fund the acquisition of real properties or beneficiary right of real estate in trust, and to repay existing loans.
*2. Financial covenants, such as a negative pledge, are not included in these bonds.
*3. Bond issuance was limited to qualified institutional investors by a private placement.
*4.	For the purpose of avoiding foreign currency risk with respect to foreign currency investment corporation bonds, the Company engages in currency swap transactions to fix
the exchange rates. Considering the effects of the currency swap transactions, the balances and interest rates are reflected in the schedule.

10. Net Assets
The Company is required to maintain net assets of at least ¥50 million, as required pursuant to the ITA.

Japan Real Estate Investment Corporation

42

11. Income Taxes
The Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Act on Special Measures
Concerning Taxation, an investment corporation is allowed to deduct dividends of earnings or dividend distributions, paid to unitholders
from its taxable income if certain tax requirements are satisfied. Such tax requirements include dividend distributions in excess of 90% of
its profit available for dividends for the fiscal period as stipulated by Article 67-15 of the Act on Special Measures Concerning Taxation.
The significant components of deferred tax assets and liabilities as of September 30, 2023 and March 31, 2024 were as follows:
Thousands of yen

As of September 30, 2023

As of March 31, 2024

Deferred tax assets:
Accrued enterprise tax

973

928

Amortization of a term leasehold interest

138,715

144,190

Asset retirement obligations

130,789

132,107

270,478

277,226

Valuation allowance(168,048)(174,842)

Total deferred tax assets

102,429

102,384

Deferred tax liabilities:
Asset retirement obligations

101,455

101,455

Reserve for advanced depreciation of non-current assets

2,408,105

3,071,910

Total deferred tax liabilities

2,509,561

3,173,366

2,407,132

3,070,981

Net deferred tax liabilities

The reconciliation of tax rate difference between the adjusted statutory tax rate and the effective tax rate as of September 30, 2023
and March 31, 2024 was as follows:
As of September 30, 2023

43

As of March 31, 2024

Statutory tax rate

34.59%

34.59%

Deductible dividend distribution(34.56%)(31.13%)

Change in valuation allowance

0.04%

0.04%

Others

0.00%

0.00%

Effective tax rate

0.07%

3.50%

Japan Real Estate Investment Corporation

12. Related Party Transactions
For the six months ended September 30, 2023 and March 31, 2024
Transactions with related parties defined under the Financial Instruments and Exchange Act are listed below.
(1) Parent Company and Major Corporation Unitholders
		 For the period from April 1, 2023 to September 30, 2023
			“Not applicable”
		For the period from October 1, 2023 to March 31, 2024
			“Not applicable”(2) Affiliated Companies
		 For the period from April 1, 2023 to September 30, 2023
			“Not applicable”
		For the period from October 1, 2023 to March 31, 2024
			“Not applicable”(3) Sister Companies
		 For the period from April 1, 2023 to September 30, 2023
			“Not applicable”
		For the period from October 1, 2023 to March 31, 2024
			“Not applicable”(4) Directors and Major Individual Unitholders
		 For the period from April 1, 2023 to September 30, 2023
			“Not applicable”
		For the period from October 1, 2023 to March 31, 2024
			“Not applicable”

Japan Real Estate Investment Corporation

44

Transactions with related parties defined under the ITA are listed below.
In addition to controlling unitholders, major unitholders, subsidiary corporations, subsidiary companies of controlling unitholders,and officers and their close relatives, the definition of a “related party” under the ITA also includes the asset management company and its
interested parties (parent and subsidiary corporations, specified individual shareholders, and major shareholders of the asset managementcompany defined as interested parties under Article 201 of the ITA and Article 123 of the enforcement order of the ITA), as well as theasset custody company.
For the period from April 1, 2023 to September 30, 2023 (Unaudited)Type of relationship

Name oftransaction partner

Type of business

Percentage ofunits held

Transaction details

Interested party

Mitsubishi EstateCo., Ltd.

Real estate

1.20%

Security deposit increase

Mitsubishi Jisho
Property Management
Co., Ltd.

Real estate
management

Interested party

Rent revenue
Security deposit return—

Property management
expenses

Transaction amount(¥ thousand)

15,531,122

Accounting item—

595,551 Deposits received
from tenants
1,617,611
2,585,242—

Balance at
end of the period(¥ thousand)—
17,587,063—

Notes: 1. Consumption tax is not included in the above amounts.
2. Transaction terms were decided based on market conditions at the time the transaction was made.

For the period from October 1, 2023 to March 31, 2024 (Unaudited)Type of relationship

Name oftransaction partner

Interested party

Mitsubishi EstateCo., Ltd.

Type of business

Real estate

Percentage ofunits held

1.20%

Transaction details

Accounting item

Balance at
end of the period(¥ thousand)Rent revenue

15,136,608——

Real estate purchase

21,000,000——

Security deposit increase
Security deposit return

348,971 Deposits received
from tenants
1,017,700

16,918,334

Interested party

Mitsubishi Jisho
Property Management
Co., Ltd.

Real estate
management—

Property management
expenses

2,593,192——

Interested party

Toyosu 3 Chome
Kaihatsu TMK

Real estate—

Real estate beneficiaryrights in trust purchase

19,756,000——

Notes: 1. Consumption tax is not included in the above amounts.
2. Transaction terms were decided based on market conditions at the time the transaction was made.

45

Transaction amount(¥ thousand)Japan Real Estate Investment Corporation

13. Segment Information
For the six months ended September 30, 2023 and March 31, 2024
Since the Company has been engaged in the real estate leasing business using a single segment, segment information has been omitted.
Information on products and services

Since revenues from external customers for a single segment accounted for more than 90% of total operating revenues, segment information on products and services has been omitted.
Information on geographic area

(1) Revenue		Since more than 90% of total operating revenues was generated from external customers within Japan, a geographical breakdown ofrevenues has been omitted.
(2) Property and equipment
		Since more than 90% of total property and equipment on the balance sheets was located within Japan, a geographical breakdown ofsuch property and equipment has been omitted.
Information on major clients

For the period from April 1, 2023 to September 30, 2023
Thousands of yen

Name of customer

Operating revenues

Related segment

Mullion TMK

4,130,837

Real estate leasing business

Name of customer

Operating revenues

Related segment

Mullion TMK

6,462,563

Real estate leasing business

For the period from October 1, 2023 to March 31, 2024
Thousands of yen

Japan Real Estate Investment Corporation

46

14. Asset Retirement Obligations
For the six months ended September 30, 2023 and March 31, 2024
Asset retirement obligations reported on balance sheets

The Company acquired Osaki Front Tower on February 1, 2011 under the term leasehold for business use agreement which, at the expiryof the leasehold, obligates the Company to restore the leased land to its original state. At the inception of a lease with such an obligation,
the Company recognized an asset retirement obligation and a corresponding capital asset in an amount equal to the present value of theestimated demolition cost required for the removal of the properties located on the leased land. The present value is calculated using
2.015% as the discount rate over 42 years, which is the term of the leasehold.
Change in the asset retirement obligations for the six months ended September 30, 2023 and March 31, 2024 consisted of the following:Thousands of yen

Balance at the beginning of the period

For the period from April 1, 2023
to September 30, 2023

For the period from October 1, 2023
to March 31, 2024

374,341

378,113

Increase in tangible fixed assets

—

—

3,771

3,809

378,113

381,922

Accretion expense
Balance at the end of the period

15. Investment and Rental Property
For the six months ended September 30, 2023 and March 31, 2024
The Company owns primarily a portfolio of office properties in Tokyo and other prefectures in order to gain rental revenue from them.
The book values on balance sheets as of September 30, 2023 and March 31, 2024 and the fair values as of September 30, 2023 andMarch 31, 2024 are as follows:
Thousands of yen

Book value

Fair value

As of March 31, 2023

Change during the period

As of September 30, 2023

As of September 30, 2023

1,010,084,757

6,185,328

1,016,270,085

1,341,209,500

Thousands of yen

Book value

Fair value

As of September 30, 2023

Change during the period

As of March 31, 2024

As of March 31, 2024

1,016,270,085

30,120,262

1,046,390,348

1,382,480,000

Notes: 1. Book value on balance sheets means the acquisition cost less accumulated depreciation.
2.	As for the change during the period ended March 31, 2024, the major reasons for the increase were the acquisition of 3rd MINAMI AOYAMA (¥21,315,846 thousand),and the additional acquisition of Seavans S Building (¥2,329,785 thousand) and Toyosu Foresia (¥19,962,743 thousand), and the major reasons for the decrease were
the disposition of Harumi Front (45% quasi-co-ownership interest) (¥10,994,041 thousand) and by depreciation.
3.	Fair values as of September 30, 2023 and March 31, 2024 are defined as the appraised values provided by an external qualified professional appraiser. As of September 30,
2023, Harumi Front (45% quasi-co-ownership interest), for which the disposition agreement was made dated November 15, 2022, was valued at the disposition price.
As of March 31, 2024, JRE Dojima Tower, for which the disposition agreement was made dated March 7, 2024, was valued at the disposition price.

Profits and losses related to investment and rental property are listed in Section 18. “Breakdown of Property-Related Revenues and Expenses.”

47

Japan Real Estate Investment Corporation

16. Revenue Recognition
For the six months ended September 30, 2023 and March 31, 2024
Breakdown information on revenue from contracts with customers
For the period from April 1, 2023 to September 30, 2023
Thousands of yen

Revenue from contracts with customers *1

Sales of real estate properties
Utilities income
OthersTotal

Revenue from external customers—

4,130,837 *2

2,053,182 *3

2,053,182—

32,443,954

2,053,182

38,627,974*1.	Rent revenues subject to “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13) and revenue from sales of real estate properties subject to “Practical Guidelines on Accounting by Transferors for Derecognition of Real Estate Securitized by means of Special Purpose Companies” (the Accounting System Committee Statement
No. 15 of the Japanese Institute of Certified Public Accountants (JICPA)) are excluded from “Revenue from contracts with customers” as they are not subject to AccountingStandard for Revenue Recognition. The revenue from contracts with customers is mainly revenues from utilities income.
*2.	Sales of real estate properties are recorded as gains or losses on sales of real estate properties in the statements of income in accordance with Article 48-2 of the Regulations
on Accounting of Investment Corporation (Cabinet Office Ordinance No. 47 of 2006), and therefore the amount is the proceeds from sales of real estate properties, less thecost of real estate properties sold and other sales expenses.
*3.	Utilities income is the amount of income recognized in proportion to the supply of electricity, water, etc. to the lessee as the customer, in accordance with the terms of thereal estate lease contract and related agreements.

For the period from October 1, 2023 to March 31, 2024
Thousands of yen

Revenue from contracts with customers *1

Sales of real estate properties
Utilities income
OthersTotal—
2,003,928 *3

Revenue from external customers

6,462,563 *2
2,003,928—

32,947,650

2,003,928

41,414,142*1.	Rent revenues subject to “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13) and revenue from sales of real estate properties subject to “Practical Guidelines on Accounting by Transferors for Derecognition of Real Estate Securitized by means of Special Purpose Companies” (the Accounting System Committee Statement
No. 15 of the Japanese Institute of Certified Public Accountants (JICPA)) are excluded from “Revenue from contracts with customers” as they are not subject to AccountingStandard for Revenue Recognition. The revenue from contracts with customers is mainly revenues from utilities income.
*2.	Sales of real estate properties are recorded as gains or losses on sales of real estate properties in the statements of income in accordance with Article 48-2 of the Regulations
on Accounting of Investment Corporation (Cabinet Office Ordinance No. 47 of 2006), and therefore the amount is the proceeds from sales of real estate properties, less thecost of real estate properties sold and other sales expenses.
*3.	Utilities income is the amount of income recognized in proportion to the supply of electricity, water, etc. to the lessee as the customer, in accordance with the terms of thereal estate lease contract and related agreements.

Japan Real Estate Investment Corporation48

17. Per Unit Information
The following table summarizes information about net assets per unit and profit per unit as of September 30, 2023 and March 31, 2024
and for the periods then ended, respectively:
Yen

For the period from April 1, 2023
to September 30, 2023

For the period from October 1, 2023
to March 31, 2024

Net assets per unit

378,393

379,491

Profit per unit

12,01313,098Notes: 1.	Profit per unit is computed by dividing profit by the weighted average number of units outstanding during each period. Diluted profit per unit has not been presented
since no warrants or convertible bonds were outstanding during the period.
2.	‌The basis for the computation of profit per unit is as follows:
Thousands of yen

ProfitAmount not attributable to normal unitholders
Profit applicable to normal investment units
Average number of investment units during the period

For the period from April 1, 2023
to September 30, 2023

For the period from October 1, 2023
to March 31, 2024

17,075,110—
17,075,110
1,421,308 units

18,636,967—
18,636,967
1,422,864 units

18. Breakdown of Property-Related Revenues and Expenses
For the six months ended September 30, 2023 and March 31, 2024
Thousands of yen

49

For the period from April 1, 2023
to September 30, 2023

For the period from October 1, 2023
to March 31, 2024

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

34,497,137

34,951,578

34,131,137

34,880,878

28,515,395

29,356,118

1,999,804

1,922,147

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

Japan Real Estate Investment Corporation

707,003730,237

2,908,933

2,872,374

365,999

70,70078,181

5,830

287,81764,87018,447,146

18,605,318

18,447,146

18,605,318

3,939,312

3,945,907

3,282,000

2,843,105

3,640,240

3,622,228

44,16544,5701,064,059

1,665,381

6,263,434

6,283,377

213,933

200,748

16,049,990

16,346,259

19. Breakdown of Gain on Sales of Real Estate Properties
For the six months ended September 30, 2023 and March 31, 2024
For the period from April 1, 2023 to September 30, 2023
Thousands of yen

Harumi Front (30% quasi-co-ownership interest)
Revenue from sale of real estate property
Cost of real estate property sold
Other sales expenses
Gain on sales of real estate properties

11,733,000
7,461,916
140,246
4,130,837

For the period from October 1, 2023 to March 31, 2024
Thousands of yen

Harumi Front (45% quasi-co-ownership interest)
Revenue from sale of real estate property
Cost of real estate property sold
Other sales expenses
Gain on sales of real estate properties

17,599,500
10,994,041
142,894
6,462,563

20. Changes in Unitholders’ Equity
For the six months ended September 30, 2023 and March 31, 2024
Total number of investment units issuable
and number of units outstanding

Total number of investment units issuable
Number of units outstanding

As of September 30, 2023

As of March 31, 2024

4,000,000 units

4,000,000 units

1,422,864 units

1,422,864 units

21. Supplemental Cash Flow Information
Cash and cash equivalents

The following table represents a reconciliation of cash and cash equivalents as of September 30, 2023 and March 31, 2024:
Thousands of yen

As of September 30, 2023

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

As of March 31, 2024

29,088,626

32,066,286

7,031,681

7,319,292——

36,120,308

39,385,578

Japan Real Estate Investment Corporation50

22. Leases
1. L eased assets under finance lease transactions that do not transfer ownership of the leased assets to the lessees are capitalized and depreciated by thestraight-line method over the lease term with no residual value. Such capitalized leased assets primarily consist of tools, furniture and fixtures.
2. The Company, as a lessor, owns office buildings under leases and earns rent income. As of September 30, 2023 and March 31, 2024, thefuture lease revenues under the non-cancelable operating leases are as follows:
Thousands of yen

As of September 30, 2023

Due within one year
Due after one year
Total

23. Subsequent Events
For the six months ended March 31, 2024
“Not applicable”

51

Japan Real Estate Investment Corporation

As of March 31, 2024

28,255,671

30,611,162

53,691,731

62,840,895

81,947,403

93,452,058

Japan Real Estate Investment Corporation

52

53

Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation

54

Other Information
1. Risk Factors
The principal risks with respect to investment in JRE are as follows:• any adverse conditions in the Japanese economy could adversely affect JRE;
• JRE may not be able to acquire properties to execute the growth and investment strategy in a manner that is accretive to earnings;• illiquidity in the real estate market may limit the ability to grow or adjust the portfolio;• the past experience of the asset manager (the “AIFM”) in the Japanese real estate market is not an indicator or guarantee of future results;• JRE’s reliance on its sponsor company, the AIFM, and other third-party service providers could have a material adverse effecton business;• there are potential conflicts of interest between JRE and its sponsor company as well as the AIFM;• JRE’s revenues largely comprise leasing revenues from the portfolio properties, which may be negatively affected by vacancies, decreases
in rent and late or missed payments by tenants;• JRE faces significant competition in seeking tenants and it may be difficult to find replacement tenants;• increases in interest rates may increase the interest expense and may result in a decline in the market price of the units;• JRE may suffer large losses if any of the properties incurs direct or indirect damage from a natural or man-made disaster;• most of the properties in the portfolio are concentrated in Tokyo and the Tokyo metropolitan area;• any inability to obtain financing for future acquisitions could adversely affect the growth of the portfolio;• JRE’s failure to satisfy a complex series of requirements pursuant to Japanese tax regulations would disqualify JRE from certain taxation
benefits and significantly reduce the cash distributions to the unitholders; and• ownership rights in some of JRE’s properties may be declared invalid or limited.
In addition, JRE is subject to the following risks:• risks related to increasing operating costs;• risks related to JRE’s dependence on the efforts of the AIFM’s key personnel;• risks related to the restrictive covenants under debt financing arrangements;• risks related to entering into forward commitment contracts;• risks related to third-party leasehold interests in the land underlying JRE properties;• risks related to holding the property in the form of stratified ownership (kubun shoyū) interests or co-ownership interests(kyōyū-mochibun);• risks related to holding the property through trust beneficiary interests;• risks related to properties not in operation (including properties under development);• risks related to the defective title, design and construction, other defects, non-conformity to the agreement or problems in
the properties;• risks related to impairment losses related to the properties;• risks related to tenant leasehold deposits and/or security deposits;• risks related to tenant’s default as a result of financial difficulty or insolvency;• risks related to the insolvency of master lessee;• risks related to the insolvency of a property seller following the purchase of a property by JRE;• risks related to relying on expert appraisals and engineering, environmental and seismic reports as well as industry and market data;• risks related to the presence of hazardous or toxic substances in the properties, or the failure to properly remediate such substances;• risks related to strict environmental liabilities for the properties;• risks related to the amendment of applicable administrative laws and local ordinances;• risks related to infringing third party’s intellectual property rights;• risks related to holding interests in properties through preferred shares of special purpose companies (tokutei mokuteki kaisha);• risks related to holding Japanese anonymous association (tokumei kumiai) interests;• risks related to investments in trust beneficiary interests;• risks related to the tight supervision by regulatory authorities and compliance with applicable rules and regulations;

55

Japan Real Estate Investment Corporation• risks related to tax authority disagreement with the AIFM’s interpretations of the Japanese tax laws and regulations;• risks related to being unable to benefit from reductions in certain real estate taxes enjoyed by qualified J-REITs;• risks related to changes in Japanese tax laws;• risk of dilution as a result of further issuances of units;• risks related to unexpected repair costs; and• risks related to epidemics, natural disasters and wars.

2. Information Required under Article 22(2)(d) of the EU Alternative Investment Fund Managers
Directive (AIFMD)(1) ‌Material Changes in Information Listed in Article 23 of AIFMD during the Financial Period Covered by the Report (six-month fiscal
period ended March 31, 2024)
None.

3. Remuneration Policy for Asset Manager Directors, Corporate Auditors and Employees
Beginning April 1, 2023 and ending March 31, 2024
1. Remuneration for Asset Manager Directors

	The total amount of remuneration, bonuses and other property benefits received by Asset Management Directors from the Asset Management Company as compensation for their duties, as well as the individual amounts each Asset Management Director receives, is decided
by a resolution of a general meeting of unitholders. The policy for Asset Manager Director remuneration and bonuses is as follows:(1) The remuneration table is determined by the Director’s position.
(2) Remuneration will be paid to full-time Directors but will not be paid to part-time Directors.
(3) Bonuses will not be paid to Directors, regardless of whether they occupy a full-time or part-time position.
2. Remuneration for Asset Manager Corporate Auditors

	The total amount of remuneration, bonuses and other property benefits received by Corporate Auditors from the Asset Management
Company as compensation for their duties, as well as the individual amounts each Corporate Auditor receives, is decided by a resolutionof a general meeting of unitholders. The policy for Corporate Auditor remuneration and bonuses is as follows:(1) Remuneration will not be paid to part-time Corporate Auditors.
(2) Bonuses will not be paid to Corporate Auditors, regardless of whether they occupy a full-time or part-time position.
Directors

Remuneration based on resolutions of
the General Meeting of Shareholders of
the Asset Manager

Number of
person(s)remunerated

3

Corporate Auditors

Remuneration(in millions of JPY)

Number of
person(s)remunerated

52

0

Total

Remuneration(in millions of JPY)

Number of
person(s)remunerated

Remuneration(in millions of JPY)

0

3

52

Japan Real Estate Investment Corporation

56

3. Remuneration for Asset Manager Employees(1)	Remuneration for employees of the Asset Management Company (payment period, payment method, pay raises, promotions, etc.)
is stipulated by pay regulations and personnel evaluation regulations, and decided by objective evaluation of the process as well as
achievements that take into account the overall corporate performance.
(2) Monthly pay consists of base pay, work allowance, executive allowance and overtime pay. Pay raises are based on the results of performance evaluations that take into account management results from the previous fiscal year, and are carried out in April every year.
Promotions are dealt with in the same way.
(3) As for bonuses, the base number of multiples of monthly pay as bonuses is determined in advance by qualifications of the employee.
Increases (or decreases) in the amount paid are based on the results of performance evaluations, which take into account corporate
performance in the previous fiscal year.
All employees
Number of employees

Remuneration based on compensation rules

47

Remuneration (in millions of JPY)
Total

Fixed

Variable

420

265

155

4. Conflicts of Interest

There are potential conflicts of interest between the Company and the Asset Management Company with respect to remuneration for the
Directors, Corporate Auditors and employees of the Asset Management Company. The Company believes that the above remuneration
policy mitigates such potential conflicts. In addition, the Asset Management Company has adopted an internal set of rules that apply to
all related-party transactions, such as transactions between the Company and the Asset Management Company. These rules require strict
compliance by the Asset Management Company with laws and regulations regarding related-party transactions. They also contain specificprocedures to be followed in the event of a transaction that involves a related party, in order to implement arm’s length terms.

57Japan Real Estate Investment Corporation

4.Periodic disclosure for financial products referred to in Article 8, paragraph 1, 2 and 2a, of Regulation(EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852
Product name: Japan Real Estate Investment Corporation
Legal entity identifier: 3538003YAIR3CBGJJ928

Japan Real Estate Investment Corporation (“JRE”) promotes environmental and social characteristics but does not have as its objective a sustainable
investment within the meaning of Article 9(1) of Regulation (EU) 2019/2088. JRE has no employees in accordance with the prohibition on
having employees under the Act on Investment Trusts and Investment Corporations of Japan, and relies on Japan Real Estate Asset Management
Co., Ltd. (the “Asset Manager”) to manage and operate the properties in JRE’s portfolio. The Asset Manager and JRE are hereinafter referred tocollectively as “we,” “us” or “our” unless noted otherwise. References to “fiscal year” or “FY” are to the 12 months began or beginning April 1 of
the year specified in line with the fiscal year of the Asset Manager, unless noted otherwise.

Environmental and/or social characteristics
Did this financial product have a sustainable investment objective?

Yes

No

It made sustainable investments with an­environmental objective: ___%

It promoted Environmental/Social (E/S) characteristics andwhile it did not have as its objective a sustainable investment,
it had a proportion of ____% of sustainable investmentsin economic activities that qualify as environmentally sustainable under the EU Taxonomyin economic activities that do not qualify as environmentally sustainable under the EU Taxonomy

with an environmental objective in economic activities that qualify
as environmentally sustainable under the EU Taxonomy
with an environmental objective in economic activities that do not
qualify as environmentally sustainable under the EU Taxonomy
with a social objectiveIt made sustainable investments with a social ­objective: ____%

I t promoted E/S characteristics, but did not make any sustainable
investments

To what extent were the environmental and/or social characteristics promoted by this financial product met?
We are committed to pursuing social sustainability, making socially responsible investments, and maximizing unitholder value by
being mindful of the environment, contributing to society, and enhancing governance. We view environmental, social, and governance(“ESG”)-related initiatives as essential for a business to be both sustainable and stable, and are committed to implementing these initiatives
in cooperation with our stakeholders. More specifically, we are committed to improving the environmental performance of our real estate
portfolio while generating greater returns on our office investments, achieving sustainable development alongside all of our stakeholders,
including unitholders, tenants, employees, suppliers and local communities, to contribute to sustainable society, and maximizing unitholder value. Our basic policy is to strictly observe legal requirements and relevant social norms, and under this basic policy, we haveestablished a Sustainability Policy to implement the initiatives described below.
•E nvironmental Initiative. Based on the Sustainability Policy items “1. Climate change initiative (promoting decarbonizationand strengthening resilience)” and “2. Contribution to resource conservation including water and resource recycling”, JRE has
set reduction targets for energy consumption and greenhouse gas (“GHG”) emissions in order to improve the environmental
performance of its real estate portfolio. In order to achieve these targets, the Asset Manager implements measures to improve theoperational performance of buildings, conducts energy efficiency retrofits, and engages tenant on energy efficiency based on its“Energy Conservation Policy”, which stipulates operational policies for improving energy efficiency of the real estate portfolio,and “GHG Emissions Reduction Policy”, which aims to create a decarbonized society.

Japan Real Estate Investment Corporation

58• Environmental Consideration of Portfolio. To track the environmental performance of our properties, we rely on certifications
issued by third-party organizations, such as the Development Bank of Japan’s (“DBJ”) Green Building Certification, Comprehensive Assessment System for Built Environment Efficiency (“CASBEE”) certification, Building Energy-efficiency Labeling System(“BELS”) certification, Net Zero Energy Building (“ZEB”) certification and other equivalent certifications.
• Tenant Engagement. To increase the satisfaction of tenants in each building, we periodically carry out tenant satisfaction surveys.
JRE is also implementing various initiatives to enhance the sustainability of each building in collaboration with tenants, such as
distribution of sustainability guides. Sustainability guides introduce activities to improve the office environment, such as creating
open spaces to promote communications among workers and introducing sustainable daily efforts to reduce electricity and water
consumption. Regarding lease agreements, we include Green Lease provisions in our lease agreements that require tenants toachieve certain operational improvements and install energy-efficient retrofits. Specifically, Green Leases include provisions requiring each party to cooperate with the other party on measures to achieve sustainability targets and obtain environmental
certifications, and to share energy-consumption and water usage data. We conduct periodic surveys of property managers of all ofour properties based on the questions from Global Real Estate Sustainability Benchmark (“GRESB”), and we analyze sustainability efforts based on survey results, which are shared with the property managers. The survey includes questions on whether aproperty manager has introduced any measures to reduce energy consumption, water usage and waste, whether it has implemented any sustainability measures and conducted any satisfaction survey for tenants and whether it has engaged in any social
activities with local communities. As for property level energy, water usage, and waste-related data, we utilize a system to give
online feedback regarding such data.
• Employee Health and Well-being at the Asset Manager. We believe that the physical and mental health of employees and the creationof an accommodating work environment are key to maintaining and improving our business performance. As an example ofrelated initiatives, we conduct annual anonymous surveys of all employees on a wide range of topics, including the work environment, benefits and educational support. The survey results are reported to the Asset Manager’s President & CEO and are used for
improving our activities. In addition, the HR department interviews employees to gather their opinions on how to improve operational efficiency. Furthermore, all employees can consult with the General Manager of the Asset Manager’s ComplianceDepartment, a law firm, or an outside specialist on matters such as risks/problems at work, grievances and improvement requests
as well as whistleblowing on illegal or unethical behaviour by officers and employees. Every employee can seek any of the foregoing consultations anonymously, and whistleblowers are given protection under the Whistleblower Protection Act of Japan. If
deemed necessary, such matters of consultations are reported to the President & CEO, who will conduct an investigation andtake measures necessary for resolution of the issue. In addition, we have implemented various measures, including creating a
productive and employee-friendly workplace and promoting diverse work styles, to promote the physical and mental health of
employees, help them achieve good work-life balance, and increase employees’ motivation.
• I nternational Initiatives and External Evaluations. We attach great importance to ESG-conscious investing in order to continuously
improve the value of assets under management, and are a signatory or participant in various international initiatives, such as Principles for Responsible Investment (PRI), RE100 and, as a member of Mitsubishi Estate Group, the United Nations Global
Compact (UNGC). Also, JRE’s updated CO2 emissions reduction target has been approved by the Science Based Targets initiatives (SBTi), which is a global joint initiative by Carbon Disclosure Project (CDP), the United Nations Global Compact, theWorld Resources Institute (WRI) and the World Wide Fund for Nature (WWF). Furthermore, several of the Asset Manager’s
ESG initiatives have been evaluated highly by external organizations in Japan and overseas. Going forward, we will maximize
long-term returns by strengthening our ESG initiatives.

59

Japan Real Estate Investment Corporation• How did the sustainability indicators perform?
We use the following indicators to measure the attainment of the environmental or social characteristics we promote:• Environmental Initiative	  ° Climate Change Initiatives. We aim to achieve a 80% reduction in total CO2 emissions from our portfolio by FY2030
compared with the FY2019 level and net zero CO2 emissions from our portfolio by FY2050. We recognize that reduction of
GHG emissions is of critical importance to ensure the sustainability of our business. We have been working to reduce energy
consumption and GHG emissions of our portfolio by installing eco-friendly equipment such as LED lighting, which reduces
electronic usage, and energy-saving air conditioning systems. The percentage of progress in installing LED light bulbs incertain common areas for the entire portfolio was 57% as of March 31, 2023 and 61% as of March 31, 2024 on a gross floorarea basis. In addition, we have accelerated the use of electricity 100% from renewable energy sources, and the number ofproperties in which we had introduced 100% renewable electricity was 60 as of September 30, 2023 but had grown to 63 asof March 31, 2024. We reduced total CO2 emissions from our portfolio by 69.85% in FY2022, and 75.25% in FY2023, ascompared with the FY2019 level. As for energy consumption, we reduced total energy consumption from our portfolio by
7.31% in FY2022, and 2.73% in FY2023 as compared with the FY2019 level.
	  ° Water Saving Initiatives. We aim to achieve 20% reduction in water use (intensity) in our portfolio by FY2030 comparedwith the FY2019 level. Some of the buildings we own are equipped with facilities for reusing rainwater and greywater, as we
endeavour to reduce the consumption of tap water. We reduced water use (intensity) by our properties by 22.42% in
FY2022, and 12.79% in FY2023, as compared with the FY2019 level.
	  ° Waste Management Initiatives. We aim to achieve a more than 90% waste recycling rate in our portfolio by FY2030. We have
reduced waste and promoted efficient use of resources through the promotion of reuse and recycling at our properties. In
FY2022, we achieved a 55.7% waste recycling rate in our portfolio and in FY2023, we achieved a 55.3% waste recycling rate
in our portfolio.
	  ° Renewable Energy. We are making efforts to accelerate the use of electricity from renewable energy recognized by RE100(where “RE” stands for renewable electricity), which is a global corporate renewable energy initiative bringing together
hundreds of large and ambitious businesses committed to 100% renewable electricity. In May 2022, JRE joined the international initiative RE100 as the first J-REIT. We aim to make 90% of electricity (of Scope 2) used at our buildings renewableenergy by FY2030 and 100% by FY2050. While as of the end of FY2022 the renewal energy rate (Scope 2) of our portfolio
was 70.9%, the renewable energy rate of our portfolio had increased to 79.7% as of the end of FY2023.
• Environmental Consideration of Portfolio. 76.4% of our properties were green-certified based on gross floor area of owned buildings as of September 30, 2023 and as of March 31, 2024. Three of our properties with BELS certification are also certified as ZEB
Ready (energy savings of greater than 50%) and one property is certified as ZEB Oriented (gross floor area 10,000 m2 or moreand energy savings beyond the regulation for each application).
• Tenant Engagement	  ° Including “Green Lease” Provisions in Our Agreements. JRE has increasingly entered into Green Leases. While, as of March 31,
2022, floor area percentage for buildings leased under a Green Lease agreement that contains a cost recovery clause was
58.4%, such percentage had increased by 11.2% to 69.6% as of March 31, 2023. (The figures for Green Leases include
properties disposed during each fiscal year based on the SASB standards).

Japan Real Estate Investment Corporation60	  ° Sustainability Program for Tenants. We conduct periodic satisfaction surveys to solicit feedback from tenants to maintain ahigh level of tenant satisfaction and use such feedback to improve our buildings’ sustainability. Our survey on tenant satisfaction covered 61.8% of our properties calculated based on the number of buildings as of May 2024 as compared to 56.0% as
of May 2023. We believe that this improvement is thanks to advances in the understanding of property managers as a resultof our ongoing engagement efforts, such as ESG seminars for property managers.
•E mployee Health and Well-being at the Asset Manager. As described above, we conduct annual anonymous surveys of all employees
on a wide range of topics, including the work environment, benefits and educational support. During the FY2023, we conducted
the latest survey and achieved a score of 4.3 (on a 5-point scale) for the employee satisfaction level with a 100% response rate. The
score increased by 0.1 point as compared to a score of 4.2 in FY2022.
• International Initiatives and External Evaluations
	  ° MSCI Japan ESG Select Leaders Index. The MSCI Japan ESG Select Leaders Index is an index to represent companies withhigh ESG performance selected based on the data from the MSCI Japan IMI Index. JRE has been selected as a constituentof the MSCI Japan ESG Select Leaders Index since June 1, 2022.
	  ° GRESB Real Estate Rating. GRESB was founded in 2009 by a group of major European pension funds who played leadingroles in launching PRI. In the 2023 GRESB Real Estate Assessment, JRE received for the sixth consecutive year “5 Stars,”
which is the highest GRESB rating (out of “5 Stars”), and also received for the eighth consecutive year “Green Star” basedon its excellent ESG management system and performance record.
	  ° Carbon Disclosure Project (“CDP”) score. Since 2003, CDP has sent questionnaires every year to major companies to assess
corporate actions on climate change. JRE has participated in CDP Climate Change Program since 2018. JRE receives an“A-” score and recognized at the highest Leadership Level in the 2023 CDP Climate Change Program.

• ...and compared to previous periods?
See above.

• What were the objectives of the sustainable investments that the financial product partially made and how did the sustainable investment
contribute to such objectives?

Not applicable.

• How did the sustainable investments that the financial product partially made not cause significant harm to any environmental or social­sustainable investment objective?

Not applicable.

61

Japan Real Estate Investment Corporation

How did this financial product consider principal adverse impacts on sustainability factors?

We collect on an ongoing basis select information on our existing portfolio regarding the principal adverse impact indicators,
including exposure to fossil fuels through investment assets, exposure to energy-inefficient investment assets, GHG emissions and energy
consumption intensity. We monitor these indicators and aim to manage the risk connected to principal adverse impacts from our investment decisions in several ways, including general screening criteria and due diligence. As we actively conduct due diligence review ofproperties before acquisition and promote environmental and social initiatives as described above, we believe that any principal adverse
impacts are substantially mitigated.
• Exposure to fossil fuels through assets. We do not invest in real estate assets involved in the extraction, storage, transport or manufacture of fossil fuels.
• Exposure to energy-inefficient investment assets. We consider properties other than the properties that have received any of thegreen building certifications and energy-saving certifications (“Green Assets”) to be energy-inefficient. As of March 31, 2024,
76.4% of our properties were Green Assets and 23.6% of our properties were not Green Assets. As described in more detail above,
we implement as appropriate measures to reduce the environmental impact of these properties, including by obtaining environmental certifications.
• Energy consumption intensity. The amounts of energy consumption of our properties per square meter are 0.170 MWh in FY2022
and 0.179 MWh in FY2023. The amounts of Scope 1 GHG emission of our properties were 2,785 t-CO2 in FY2022 and 2,658
t-CO2 in FY2023. Scope 2 GHG emissions of our properties were 16,046 t-CO2 in FY2022 and 13,216 t-CO2 in FY2023. Scope
3 GHG emissions of our properties were 12,207 t-CO2 in FY2022 and 9,609 t-CO2 in FY2023.
We believe that investment decisions that negatively affect climate or other environment-related resources, or have negative implications for society, can have a significant impact to risk and value creation for our unitholders. To this end, we consider the principal adverse
impacts of our investment decisions on the above sustainability factors throughout all major steps of the investment decision and management process throughout the lifecycle of the properties in our portfolio.
We believe that climate change is more than an environmental issue, which has a major impact on social and industrial infrastructure, and therefore on our business activities. To maintain sustainable and stable earnings over the long term and overcome the oncomingchanges from climate change, we will need to evaluate the risks and opportunities presented by climate change, and reflect such evaluationin our operational policies and asset management. Based on the foregoing, JRE has examined the magnitude of the financial impact of risks
and opportunities presented by climate change for scenarios involving temperature increases between 4°C and 1.5°C, which are scenarios
published by international organizations and other entities that predict the impact of global warming and climate change and of thechanges that may occur in the business environment as a result of long-term policy trends in relation to climate change. We examined theimpact of each scenario for 2030 (medium-term prospects) and 2050 (long-term prospects) for qualitative financial impact analysis. As forquantitative financial impact analysis, we assumed as of 2050 based on the FY2021 operating profit.

Japan Real Estate Investment Corporation

62

What were the top investments of this financial product?

Largest investments

Sector% Assets(based on acquisition price)

Country

Office properties

Real estate

100

Japan

What was the proportion of sustainability-related investments?

As of March 31, 2024, 76.4% of the properties in the portfolio were Green Assets, and 23.6% were nonqualified assets based ongross floor area of owned buildings.

• What was the asset allocation?
Investments of JRE

76.4% is #1 Alignedwith E/S#1B Other E/S characteristics

23.6% qualifies as #2 Other			• In which economic sectors were the investments made?

JRE invests in office buildings in major cities nationwide in Japan with the goal of stable growth in value over a medium- to­long-term period.
To what extent were the sustainable investments with an environmental objective aligned with the EU Taxonomy?

Not applicable.

• Did the financial product invest in fossil gas and/or nuclear energy related activities complying with the EU Taxonomy.
	  Not applicable. JRE does not invest in real estate assets involved in fossil gas and/or nuclear energy related activities.

• What was the share of investments made in transitional and enabling activities?
	  Not applicable.
			• How did the percentage of investments that were aligned with the EU Taxonomy compare with previous reference periods?

	  Not applicable.
What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy?

	  Not applicable.
What was the share of socially sustainable investments?

	  Not applicable.

63

Japan Real Estate Investment Corporation

What investments were included under “other,” what was their purpose and were there any minimum environmental or social safeguards?

As of March 31, 2024, based on gross floor area of owned buildings, 23.6% of our properties were not Green Assets. However, we
implement as appropriate measures to reduce their environmental impact following acquisition, including by obtaining environmental
certifications, installing environmentally-friendly equipment, using renewable energy and undertaking appropriate renovations.
What actions have been taken to meet the environmental and/or social characteristics during the reference period?

As described in greater detail above, we implement various environmental initiatives at our properties including the following:• Environmental Initiative• Environmental Consideration of Portfolio• Tenant Engagement• Employee Health and Well-being at the Asset Manager• International Initiatives and External Evaluations
How did this financial product perform compared to the reference benchmark?

Not applicable.
			• How does the reference benchmark differ from a broad market index?
Not applicable.

			• How did this financial product perform with regard to the sustainability indicators to determine the alignment of the reference benchmark with the environmental or social characteristics promoted?

Not applicable.
			• How did this financial product perform compared with the reference benchmark?
Not applicable.

			• How did this financial product perform compared with the broad market index?
Not applicable.

Japan Real Estate Investment Corporation

64Note Regarding the EU Taxonomy Regulation
As set out above, JRE promotes certain environmental characteristics.
The Asset Manager is required, under Regulation (EU) 2020/852 (the “EU Taxonomy Regulation”), to disclose whether its assets
are aligned with the environmental objectives formulated in the EU Taxonomy regulation. The EU Taxonomy Regulation is to be complemented by technical standards and screening criteria which are currently developed. The technical screening criteria for the first twoenvironmental objectives (climate change mitigation and climate change adaptation) were adopted in December 2021 and amended inJune 2023. The amended criteria have been applied since January 1, 2024.
JRE invests in economic activities that are eligible under the EU Taxonomy Regulation in respect of climate change mitigation and/or climate change adaptation. This means that screening criteria for these investments have been or will be developed. The Asset Manager
expressly states that in view of the fact that the regulations are still under development or have only recently been adopted and/or amended
and the fact that, as a result thereof, data on alignment of JRE’s investments with these environmental objectives and climate related goals
in line with EU Taxonomy Regulation are not sufficiently available, the Asset Manager is not currently in a position to disclose on an accurate and reliable basis to what extent JRE’s investments technically qualify as Taxonomy-aligned or “environmentally sustainable” within
the specific meaning of the EU Taxonomy Regulation. JRE’s investments may have a positive contribution to these environmental objectives and may therefore eventually be considered Taxonomy-aligned, but at this stage, the Asset Manager is required to state that there is no
minimum proportion of JRE’s investments that qualify as such.
The Asset Manager further states that the “do no significant harm” principle applies only to those investments underlying the financial product that takes into account the EU criteria for environmentally sustainable economic activities. The investments underlying theother portion of this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

65

Japan Real Estate Investment Corporation

Corporate Data
As of March 31, 2024

Executives
Executive Director: Jo Kato
Supervisory Directors: Hiroaki Takano
Miyuki Aodai
Paid-in Capital
JPY 516,736,574,500
Number of Units Outstanding
1,422,864
Number of Unitholders
17,828Stock Listing
Tokyo Stock Exchange
Securities Code8952
LEI (Legal Entity Identifier)3538003YAIR3CBGJJ928

Type of Investment Corporation
Closed-end corporate type fundTransfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo 100-8212, Japan
AuditorErnst & Young ShinNihon LLC
Hibiya Mitsui Tower
Tokyo Midtown Hibiya
1-1-2 Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan
Incorporation
May 11, 2001
Executive Office
Japan Real Estate Investment Corporation
1-1-1, Otemachi, Chiyoda-ku, Tokyo 100-0004, JapanFor further information, please contact:
Japan Real Estate Asset Management Co., Ltd.
Strategic Planning Department
Tel: 81-3-3211-7951
E-mail: j-rea-inquiry@j-rea.co.jp

This semiannual report includes translations of documents originally filed under the Japanese Financial Instruments and Exchange Law of Japan.
This report was prepared in English solely for the convenience of readers outside Japan and should not be considered as a disclosure statement.
The original Japanese documents shall take precedence in the event of any discrepancies arising from the translations or interpretations containedin this report.
Estimates for the Company’s future operating results contained in this semiannual report are forward-looking statements and are based on
information currently available to the Company and its Asset Management Company and are subject to risks and uncertainties. Consequently,
these projections should not be relied upon as the sole basis for evaluating the Company. Actual results may differ substantially from the projections
depending on a number of factors.

Japan Real Estate Investment Corporation

66https://www.j-re.co.jp/en/