Asset Management Report for the 29th Period(Semi-Annual Report for the 29th Period)
From July 1, 2020, to December 31, 2020

I. Greetings
To Our Unitholders
We would like to express our sincere gratitude for your continued support of Japan Excellent, Inc. (JEI) and Japan Excellent
Asset Management Co., Ltd.
We hereby report the financial results of JEI for the 29th period (from July 1, 2020, to December 31, 2020).
During the 29th period, the asset replacement that we worked on over three periods under the aim of improving portfolio
quality was completed, marking a record-high unrealized gain of 62.6 billion yen.
On the leasing front, the occupancy rate of the entire portfolio resulted in a level almost as planned at 98.0%, and as forrent revision, we realized upward rent revision of +3.5%, which exceeded our plan, for 41.7% of the area subject to rent
revision.
On the financial front, JEI became the first J-REIT to borrow through a sustainability loan, a type of loan that takes into
consideration the environment and society. In addition, JEI issued the second green bond in a flexible manner. Throughsuch measures, we realized fixed interest rates, extension of remaining period of debt, and diversification of repayment
dates.
Moreover, we worked to enhance our financial strengths by building up reserve for reduction entry to 451 million yen
through utilization of gain on sales of real estate.
As a result, in the 29th period, JEI recorded operating revenue of 11,043 million yen, operating income of 4,924 million
yen, and net income of 4,290 million yen, and distribution per unit increased by 40 yen from the previous period to reach
3,000 yen.

About Future Asset Management
Although transaction prices in the real estate market have remained steady backed by a strong appetite for investment bymarket participants and other factors under the government's monetary easing stance, JEI believes that it is necessary to
pay close attention to economic trends due to the impact of the COVID-19 crisis.
Under such environment, JEI intends to acquire competitive properties by means of well-balanced investments based on
size and target area with an aim to expand the asset size over the medium to long term. JEI will interact with core sponsors
to steadily pursue property acquisitions while having the asset management company newly cultivate and refine sourcesof property information in an effort to seize the right business opportunities.
In the office building leasing market, we think there is a need for continued close monitoring of matters that could have an
impact on future office demand, such as trends in corporate performance and changes in tenant needs due to the spread of
remote work, among other factors, amid the rising trend of vacancy rates. By making the most of JEI’s features, including
the characteristics of its portfolio centered on properties near stations, large buildings, and ESG-conscious properties; awide customer base; office development functions; and cooperation with the sponsor group companies that have a large
number of property management experience, we will stive to provide "offices of choice" that match the needs people
require in future offices.
In terms of finance, JEI will strive to conduct stable financial management based on its basic policy of continuing to reduce
financing costs, fixing the interest rates of loans, extending borrowing periods, and diversifying maturity dates.
In regard to ESG, we will further accelerate our initiatives and aim to collaborate in concert with our unitholders and wide
range of stakeholders to resolve social issues.
Finally, as always, JEI remains committed to strict adherence to the Financial Instruments and Exchange Act and otherlaws and regulations, and in addition to promoting compliance, we also disclose information on the status of our operations
to our unitholders in an accurate and easy-to-understand manner.
We kindly ask for your continued understanding and support.

Shuichiro Kayama
Executive Director, Japan Excellent, Inc.
President, Japan Excellent Asset Management Co., Ltd.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

1II. Asset Management Report
1. Outline of Asset Management Operation(1) Operating Results and Financial Position of the Investment Corporation
Fiscal period(Millions of yen)
Operating revenue(Millions of yen)
(Rental revenues)(Millions of yen)
Operating expenses(Property operating expenses) (Millions of yen)
(Millions of yen)
Operating income(Millions of yen)
Ordinary income(Millions of yen)
Net income(Millions of yen)
Total assets(%)(Period-on-period change)(Millions of yen)
Net assets(%)(Period-on-period change)(Millions of yen)
Unitholders’ capital (Note 1)
Total outstanding investment(units)units(yen)
Net assets per unit(yen)
Net income per unit (Note 2)(Millions of yen)
Total distribution(yen)Distribution per unit(yen)(Profit distribution per unit)(Distribution in excess of(yen)earnings per unit)(Note 3)(%)
Return on assets (Note 4)(%)(Annualized rate)(%)
Return on equity (Note 5)(%)(Annualized rate)(%)
Capital ratio (Note 6)(%)(Period-on-period change)(%)
Payout ratio (Note 7)
Number of investment(properties)
properties(tenants)
Number of tenants(m2)
Total leasable area (Note 8, 9)(%)
Occupancy rate
(Millions of yen)
Depreciation(Millions of yen)
Capital expenditure
Net operating income (NOI)(Millions of yen)
(Note 10)Funds from operation (FFO) per(yen)unit (Note 11)(times)FFO multiples (Note 12)
Debt service coverage ratio(times)(DSCR) (Note 13)(Millions of yen)Interest-bearing debt(%)
Loan-to-value (Note 14)(days)
Number of days in operation

25th Period
27th Period
29th Period
26th Period
28th Period
July 1, 2018,
July 1, 2019,
July 1, 2020,
January 1, 2019,
January 1, 2020,
to December 31,
to December 31,
to December 31,
to June 30, 2019
to June 30, 2020
2018
2019
2020
10,657

10,668

10,89012,717

11,043(10,657)(10,668)(10,890)(11,013)(10,729)

6,373

6,349

7,978

6,426

6,119

(5,780)(5,747)(5,906)(5,697)(5,487)

4,284

4,318

2,912

6,290

4,924

3,597

3,691

2,247

5,631

4,291

3,596

3,690

2,246

5,631

4,290

285,400

286,172

288,790

293,532

294,004

(0.1)

(0.3)

(0.9)

(1.6)

(0.2)

143,727

143,822

142,377

152,133

152,418(-0.0)(0.1)(-1.0)

(6.9)

(0.2)

139,972

139,972

139,972

147,907

147,9071,305,700

1,305,700

1,305,700

1,353,000

1,353,000

110,076

110,149

109,042

112,441

112,652

2,754

2,826

1,720

4,179

3,171

3,595

3,691

3,810

4,004

4,059

2,754

2,827

2,918

2,960

3,000

(2,754)(2,827)(1,841)(2,960)(3,000)(－)(－)(1,077)

(－)

(－)

1.3

1.3

0.8

1.9

1.5

(2.5)

(2.6)

(1.6)

(3.9)

(2.9)

2.5

2.6

1.6

3.8

2.8

(5.0)

(5.2)

(3.1)

(7.7)

(5.6)
51.8

50.4

50.3

49.3

51.8

(-0.1)(-0.1)(-1.0)

(2.5)

(0.0)

100.0

100.0

107.0

71.1

94.6

31

31

33

35

34

204

204

200

193

191

343,830

343,830

345,940

332,702331,112

99.6

99.4

99.6

99.6

98.0

1,920

1,935

1,929

1,946

1,824

809

1,285

1,726

806

1,127

6,797

6,856

6,913

7,263

7,066

4,225

4,309

4,367

4,341

4,287

17.7

18.2

20.3

14.4

15.0

11.7

12.5

9.4

17.0

13.9

126,600

126,600

129,600

125,600

125,600

44.4

44.2

44.9

42.8

42.7

184

181

184

182

184

(Note 1) Unitholders’ capital does not account for the changes in unitholders’ capital due to the implementation of distribution in excessof earnings related to the allowance for temporary difference adjustments, etc.
(Note 2) Net income per unit is calculated by dividing the net income by the weighted-average number of units outstanding during thesix months period.
(Note 3) Distribution in excess of earnings per unit in the 27th period is from reserve for temporary difference adjustments.
(Note 4) Return on assets = Ordinary income / [(Period beginning total assets) + (Period end total assets) / 2] × 100

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)2

(Note 5) Return on equity = Net income / [(Period beginning net assets) + (Period end net assets)/ 2] × 100(Note 6) Capital ratio = Period end net assets / Period end total assets × 100(Note 7) Payout ratio = (Distribution per unit (not including distribution in excess of earnings per unit) / Net income per unit) × 100(Figures are rounded to the first decimal place.)
As new investment units were issued in the 28th period, the formula below was used to calculate the amount.
Payout ratio ＝ (Total distributions (not including distribution in excess of earnings / Net income) × 100
In addition, when accounting for reversal of allowance for temporary difference adjustments with the following formula, thepayout ratio is 94.8%.
(Total distributions (not including distribution in excess of earnings) / (Net income － Reversal of allowance for temporary
difference adjustments)) × 100(Note 8) For properties with joint ownership (including quasi co-ownership of trust beneficiary interest), a figure obtained bymultiplying the leasable area of the entire property by the ownership ratio is indicated as JEI’s leasable area. The same shallapply hereinafter.
(Note 9) Spaces are rounded to the nearest specified unit. The same applies hereinafter.
(Note 10) NOI = Rental revenues – Property operating expenses + Depreciation(Note 11) FFO per unit = (Net income + Depreciation – Gain on sale of real estate + Loss on sale of real estate + Impairment loss) /Total number of outstanding investment units (the figure is rounded down to the whole number).
(Note 12) FFO multiples = Period end investment unit price / Annualized FFO per unit
(Note 13) DSCR = (Net income before interest and taxes + Depreciation (*)) / (Interest expenses + Interest expense on investment
corporation bonds)* Includes depreciation except for property operating expenses.
(Note 14) Loan-to-value = Period end interest-bearing debt / Period end total assets × 100

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

3

(2) Asset Management Development
Japan Excellent, Inc. (JEI) was founded on February 20, 2006, under the Law Concerning Investment Trusts andInvestment Corporations of Japan (Law No. 198 of 1951, as amended; hereinafter referred to as the “Investment
Trust Law”). On March 15, 2006, it completed the corporate registration to the Kanto Finance Bureau (registration
number 52, issued by the Head of the Kanto Local Finance Bureau) and listed on the Real Estate Investment Trust
Section of the Tokyo Stock Exchange (Securities Code: 8987) on June 27, 2006. Since the listing, JEI has continued
investment management primarily in office buildings with the aim of maintaining sound corporate growth and stablerevenues from the medium- to long-term perspectives. On December 31, 2020, JEI settled its twenty-ninth period.
1) Business conditions and results
In the 29th period (ended December 2020), the world economy experienced a downturn as economic activity
was suppressed due to measures such as lockdowns aimed at preventing the resurgence of the novel coronavirus(COVID-19). On the other hand, with various countries around the world implementing fiscal policies tosupport their economies and economic activity resuming, economic indicators have temporarily shown signs ofimprovement. However, concerns about further spread of infection are rising again.
In the U.S., as the Federal Reserve Board continues its posture of monetary easing, volatility among long-term
interest rates has increased, such as 10-year government bonds turning upward, due to the shift in economic
measures brought about by the change in President as well as anticipation for economic recovery backed by thestart of vaccinations.
In Japan, while there are some trends of volatility of over-10-year government bonds rising, the Bank of Japanis keeping a close eye on the impact that the deterioration of the real economy could have on the stability of thefinancial system and maintains its stance on monetary easing, in addition to keeping the yield on 10-year
Japanese Government Bonds hovering around zero.
In the real estate transaction market, with no signs of change in the environment for fund procurement, theinvestment appetite of market players has continued to be strong and thus transaction prices have continued toremain high.
In the office building leasing market, the vacancy rate in the five central wards of Tokyo published by Miki
Shoji Co., Ltd. showed an upward trend, standing at 4.4% as of the end of December 2020, up 2.5% from theend of June 2020. The average unit rent has turned downward since July 2020, and that for December 2020
dropped by 3.9% compared with that for June 2020. Under these circumstances, while capturing demand by
existing tenants for floor expansions within same buildings, demand for offices by new tenants, etc.,
cancellation due to consolidation of offices and such increased towards the end of the year. As a result, theoccupancy rate (Note 1) at the end of the period under review was 98.0%, down 1.6% from the end of theprevious period.
The total number of properties owned and managed by JEI at the end of the period under review was 34 with a
total acquisition price of 272.3 billion yen and total leasable area of 331,111.56 m2 (100,161.24 tsubos).
2) Fund procurement highlights
JEI will work on stable and sound financial operations with a basic policy of procuring funds for the long term
at fixed interest rates.
In the 29th period, in July, JEI sold 15% of JEI Nishi-Honmachi Building, which is the remaining portion after
the partial transfer conducted in the 27th and 28th periods. This provided a clear outlook for improving thequality of the portfolio while JEI increased liquidity on hand to prepare for the unforeseeable future due to the
spread of COVID-19. Furthermore, JEI refinanced 2 billion yen of green loans that matured in September witha sustainability loan (borrowing period of 2 years, 2 billion yen), the first case of such loan for a J-REIT. In
addition, with the favorable environment in the investment corporation bond market, JEI issued 15-year green
bonds of 5 billion yen, the largest amount ever for a J-REIT, at 0.75% in October, and prepaid 5 billion yen in
short-term loans using the proceeds.
As a result, as of the end of the 29th period, the average remaining period of interest-bearing debt (Note 2) was
4.6 years (extended by 0.1 years from the end of the previous period), the period-end average interest-bearing
debt interest rate (Note 3) was 0.77% (up 0.02% from the end of the previous period), and the loan-to-value
ratio of total assets (total assets-based LTV) (Note 4) was 42.7% (down 0.1% from the end of the previous
period).
In addition, JEI continues to have commitment lines of 14.0 billion yen with a credit limit to reduce refinancing
risk and enhance stability for fund procurement, etc.
Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

4The ratings granted to JEI by the following rating agencies are shown below:(Ratings as of December 31, 2020)
Credit rating agency
Japan Credit Rating Agency, Ltd.
(JCR)
Moody’s Japan

Issuer rating (outlook)
Long-term issuer rating
AA- (Stable)
Issuer rating
A3 (Stable)

Individual debt issue rating(Note 5)AA―3) Sustainability initiatives
JEI has worked to reduce the environmental burden and to cooperate/collaborate with stakeholders to achieve asustainable society through corporate social responsibility, while recognizing the importance of consideration
for the environment, society and governance (ESG) in the real estate investment management business.
In order to reduce our environmental impact, JEI has set targets to reduce energy consumption, CO 2 emission
and water consumption intensities by 1% per year compared with the previous period, and over the medium tolong term, we aim to reduce average energy consumption and emission intensities by 5% or more whencomparing the rates between fiscal 2015 and fiscal 2019 against the rates between fiscal 2020 and fiscal 2024.
Examples to verify such include upgrading of properties by adopting LED lighting and air-conditioning
equipment with excellent energy-saving performance. Furthermore, JEI has continuously promoted theacquisition of DBJ Green Building Certification and the number of certified properties stands at 19, or 78.1%of the entire portfolio (as of December 31, 2020; based on leasable area excluding land with leasehold interest).
In addition, we developed a Sustainability Finance Framework that takes our ESG initiatives one step further
by adding social aspects to our environmentally friendly green bond framework, and we refinanced our debt
with a sustainability loan in September 2020. Moreover, JEI issued investment corporation bonds (2nd JEIGreen Bond) in October 2020 and allocated the funds to part of prepayment of existing short-term loans.
Such initiatives for sustainability by JEI earned high recognition including a sixth consecutive “Green Star”
rating (Note 7) in the Global Real Estate Sustainability Benchmark (GRESB) (Note 6) Real Estate Assessment
conducted in 2020, as well as “5 Star” in “GRESB Rating” (Note 8), a rating of overall score according to global
ranking.
Furthermore, JEI’s asset management company, Japan Excellent Asset Management Co., Ltd. (hereinafter,“JEAM”) endorsed the basic tenets of the Principles for Responsible Investment (PRI), which aims to enhance
the long-term investment performance of beneficiaries and better fulfill its fiduciary responsibilities byintegrating ESG factors into investment decision-making processes, signed onto the PRI in June 2020 andbecame a signatory institution in July 2020. In addition, JEAM published “ESG Report,” which summarizes
various ESG initiatives, policies, etc. of JEI and JEAM, in November 2020, and disclosed it on JEI’s website.
4) Financial results and distribution highlights
For the period under review, JEI posted 11,043 million yen in operating revenue, 4,924 million yen in operating
income, 4,291 million yen in ordinary income, and 4,290 million yen in net income
Concerning distributions in the period under review, by applying the special provisions of the tax system on
investment corporations (Section 67-15 of the Special Taxation Measures Law), JEI conducted a reserve for
reduction entry under the special provisions of the tax system in the case of the replacement of specified assets(Section 65-7 of the Special Taxation Measures Law) with the purpose of stabilizing distribution levels.
As a result, distribution per unit was 3,000 yen as JEI decided to distribute the entire amount of the period-end
unappropriated retained earnings, excluding fraction portions of less than one yen per unit, to the extent that theamount does not exceed the period-end unappropriated retained earnings after subtracting 232 million yen forreserve for reduction entry.
(Note 1) Occupancy rate is a percentage of total leased area to total leasable area of each real estate or real estate in trust.
(Note 2) Average remaining period of interest-bearing debt is calculated by applying a weighted average of theremaining period until the repayment date or redemption date of borrowings and investment corporation bonds
at the end of the period to the balance of each interest-bearing debt, for all interest-bearing debt.
(Note 3) Period-end average interest-bearing debt interest rate is calculated by applying a weighted average of interestat the end of the period under review to the balance of each interest-bearing debt, for all interest-bearing debt.
(Note 4) Loan-to-value ratio of total assets ＝ (Period end interest-bearing debt / Period end total assets) ×100

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)5

(Note 5) The rating is for 7th series unsecured investment corporation bonds, 8th series unsecured investment
corporation bonds, 9th series unsecured investment corporation bonds, 10th series unsecured investment
corporation bonds, 11th series unsecured investment corporation bonds, 12th series unsecured investment
corporation bonds, 13th series unsecured investment corporation bonds, 14th series unsecured investment
corporation bonds, 15th series unsecured investment corporation bonds and 16th series unsecured investment
corporation bonds.
(Note 6) A benchmark established by a European pension fund group that measures ESG considerations of real estatecompanies and management institutions which is used by major European, American, and Asian institutional
investors for decision-making on investments.
(Note 7) “Green Star” is given when a high evaluation with a score exceeding 50% is made in the two evaluation axes(“Management Policy” and “Implementation & Measurement).
(Note 8) “GRESB Rating” is a rating of the overall score according to the global ranking, and “5 Star” is given to the
top 20% of participants, “4 Star” to the following 20% and so forth.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

6

(3) Capital Increase
The outline of the changes in the total number of outstanding investment units and unitholders’ capital until the endof the period under review are as follows:
Unitholders’ capital
Capital transaction (units)
Remarks(Millions of yen) (Note 1)
Paid-up Date
Capital transaction
ChangeBalance
ChangeBalance
Private placement
February 20, 2006
400
400
200
200
(Note 2)for incorporation
June 26, 2006
Public offering
128,000
128,400
64,23064,430(Note 3)
Third-party
July 21, 2006
6,400
134,800
3,211
67,641(Note 4)
allotment
July 11, 2007
Public offering
19,000
153,800
18,702
86,344(Note 5)
Third-party
August 8, 2007
750
154,550738
87,083(Note 6)
allotment
January 31, 2011
Public offering
31,000185,550
13,608100,691(Note 7)
Third-party
February 28, 2011
3,100
188,650
1,360
102,052(Note 8)allotment
January 30, 2013
Public offering
33,000221,650
14,408116,460(Note 9)
Third-party
February 27, 2013
3,300
224,950
1,440
117,901(Note 10)allotment
Split of investment
January 1, 2014
899,800
1,124,750–
117,901(Note 11)
unit
January 27, 2014
Public offering
80,0001,204,750
9,135
127,036(Note 12)
Third-party
February 26, 2014
8,000
1,212,750
913
127,950(Note 13)
allotment
July 13, 2015
Public offering(Note 14)47,0001,259,750
5,894
133,845
Third-party
August 12, 2015
(Note 15)4,700
1,264,450
589
134,434
allotment
July 11, 2016
Public offering(Note 16)
37,5001,301,950
5,034
139,469
Third-party
August 10, 2016
(Note 17)3,750
1,305,700
503
139,972
allotment
January 21, 2020
Public offering(Note 18)
43,0001,348,700
7,213
147,186
Third-party
February 13, 2020
(Note 19)4,300
1,353,000
721
147,907
allotment(Note 1) Does not account for the changes in unitholders’ capital due to the implementation of distribution in excess of earnings related
to the allowance for temporary difference adjustments.
(Note 2) JEI was incorporated through private placement at a price of 500,000 yen per unit.
(Note 3) New investment units were issued at an issue price of 520,000 yen per unit (purchase price of 501,800 yen per unit) througha public offering in order to fund acquisition of new properties which were acquired at the time of the listing.
(Note 4) New investment units were issued at a purchase price of 501,800 yen per unit through third-party allotment in order to partiallyfund new property acquisitions.
(Note 5) New investment units were issued at an issue price of 1,019,200 yen per unit (purchase price of 984,360 yen per unit) througha public offering in order to partially repay debts procured to acquire properties.
(Note 6) New investment units were issued at a purchase price of 984,360 yen per unit through third-party allotment in order to partially
repay debts procured to acquire properties.
(Note 7) New investment units were issued at an issue price of 454,930 yen per unit (purchase price of 438,984 yen per unit) througha public offering in order to repay short-term loans procured to acquire properties and to fund acquisition of a new property.
(Note 8) New investment units were issued at a purchase price of 438,984 yen per unit through third-party allotment in order to repay
short-term loans procured to acquire new properties and to fund acquisition of a new property.
(Note 9) New investment units were issued at an issue price of 451,425 yen per unit (purchase price of 436,609 yen per unit) througha public offering in order to fund acquisition of new properties.
(Note 10) New investment units were issued at a purchase price of 436,609 yen per unit through third-party allotment in order to fundacquisition of properties.
(Note 11) With December 31, 2013, as the record date, JEI implemented a 5-for-1 split of its investment units held by Unitholders statedor recorded on that date’s final unitholder registry with January 1, 2014, as the effective date.
(Note 12) New investment units were issued at an issue price of 118,072 yen per unit (purchase price of 114,196 yen per unit) througha public offering in order to fund acquisition of new properties.
(Note 13) New investment units were issued at a purchase price of 114,196 yen per unit through third-party allotment in order to partiallyfund future acquisitions of specified assets or repayment of loans and redemption of investment corporation bonds.
(Note 14) New investment units were issued at an issue price of 129,675 yen per unit (purchase price of 125,419 yen per unit) througha public offering in order to partially repay debts procured to acquire properties.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)7

(Note 15) New investment units were issued at a purchase price of 125,419 yen per unit through third-party allotment in order to partiallyfund future acquisitions of specified assets or partially fund repayment of loans.
(Note 16) New investment units were issued at an issue price of 138,742 yen per unit (purchase price of 134,259 yen per unit) througha public offering in order to partially repay debts procured to acquire properties.
(Note 17) New investment units were issued at a purchase price of 134,259 yen per unit through third-party allotment in order to partiallyfund future acquisitions of specified assets or partially fund repayment of loans.
(Note 18) New investment units were issued at an issue price of 173,355 yen per unit (purchase price of 167,754 yen per unit) througha public offering in order to repay debts procured to acquire properties and partially fund property acquisitions.
(Note 19) New investment units were issued at a purchase price of 167,754 yen per unit through third-party allotment in order to partiallyfund future acquisitions of specified assets or partially fund repayment of loans.
(Note 20) At JEI, there exist no investment units held by JEI (investment units without voting rights provided in Article 308-2 of the
Corporate Law which will be applied mutatis mutandis pursuant to Article 94 of the Investment Trust Law) or cross-heldinvestment units (investment units without voting rights provided in Article 160 of the Investment Trust Enforcement
Ordinance) as of the end of 29th period.

[Market price of the investment securities]
The period-on-period fluctuations in the highest and lowest (closing) prices of JEI’s investment units listed on theReal Estate Investment Trust Section of the Tokyo Stock Exchange during each period is as follows:
Fiscal period
25th period
26th period
27th period
28th period
29th period(closing date) (December 2018) (June 2019) (December 2019) (June 2020) (December 2020)
Investment
unit market Highest (yen)156,200
164,500
189,600
200,600
127,900
price
Lowest (yen)141,000
147,600
159,600
75,400110,600(Note)The highest and lowest prices of investment units refer to the closing prices on the Real Estate Investment Trust Section of
the Tokyo Stock Exchange.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)8

(4) Distributions Paid
Concerning distributions in the period under review, JEI applied the special provisions of the tax system on investment
corporations (Section 67-15 of the Special Taxation Measures Law), and determined that it would distribute the entire
amount of the period-end unappropriated retained earnings, excluding fraction portions of less than one yen per unit, tothe extent that the amount does not exceed the period-end unappropriated retained earnings after subtracting
232,196,582 yen for reserve for reduction entry, which resulted in a distribution per unit of 3,000 yen.
Fiscal period
Accounting period
Unappropriated retained
earnings at end of period(Thousands of yen)
Retained income(Thousands of yen)
Total cash distribution
amount (Thousands of yen)
(Cash distributions per unit)(yen)
Of which, total profit
distributions(Thousands of yen)
(Profit distribution per unit)(yen)
Of which, total refund ofinvestment equity(Refund of investment
equity per unit)
Of total refund of investment
equity, total distribution
amount from reserve fortemporary difference
adjustments(Of refund of investment
equity per unit, distribution
amount per unit from reserve
for temporary difference
adjustments)
Of total refund of investment
equity, total distribution
amount from distribution
reducing unitholders’ capitalfor tax purpose(Of refund of investment
equity per unit, distribution
amount per unit from
distribution reducing
unitholders’ capital for tax
purpose)25th period

26th period

27th period

28th period

29th period

July 1, 2018, to January 1, 2019, to July 1, 2019, to January 1, 2020, to July 1, 2020, toDecember 31, 2018 June 30, 2019 December 31, 2019 June 30, 2020 December 31, 2020
3,596,244

3,691,310

2,246,223

5,631,594

4,291,443

346

97

469

220,475

232,4433,595,897

3,691,213

3,810,032

4,004,880

4,059,000(2,754)(2,827)(2,918)(2,960)(3,000)3,595,897

3,691,213

2,403,793

4,004,880

4,059,000(2,754)(2,827)(1,841)(2,960)(3,000)－－1,406,238

－

－

(－)

(－)

(1,077)

(－)

(－)

－

－

1,406,238

－

－

(－)

(－)

(1,077)

(－)

(－)

－

－

－

－

－

(－)

(－)

(－)

(－)

(－)

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

9(5) Policy and Issues on Future Investment Management
1) Outlook for business environment
In the real estate market, although real estate transaction prices are expected to remain high for the time being backed
by factors such as continuation of the monetary easing trend and vigorous appetite for investment by market
participants, we believe that there is a need to closely monitor the impacts of the spread of COVID-19.
In the office building leasing market, with the current increase in the vacancy rate and decrease in the new contract
rent, we need to pay close attention to trends in earnings of companies impacted by the spread of COVID-19 andthe impact on the office demand resulting from a shift towards remote work and such. As for leasing, the situation
is likely to continue to be somewhat difficult because of the wider options for tenants and anticipation for lower
rents due to more vacancies.
2) Policy and issues on future investment management
A. External growth
JEI intends to acquire competitive properties by means of well-balanced investments based on size and area while
gradually shifting its focus from asset replacement to expansion of asset size for external growth. JEI will continue
to have the asset management company newly cultivate and refine property information sources in an effort topromptly gain access to market information on disposition of properties and thereby keep seizing the right business
opportunities while maintaining a focus on cooperation with sponsor companies.
B. Internal growth
JEI will continue to make efforts to capture the needs of existing tenants in a timely manner by further strengthening
finely-tuned relationships. In addition to promoting such initiatives and setting new rents based on market trends,
JEI will, amid the leasing environment which is likely to become even more severe, work to prevent tenants’ moveouts by further strengthening finely tuned relationships with existing tenants and negotiating on rent flexibly while
capturing their needs in a timely manner. As to properties with vacancies at present or with expected vacancies, JEI
will strive to eliminate those vacancies at an early stage by exploring existing tenants’ needs for floor expansion andalso proactively approaching appropriate tenant candidates that have been narrowed down based on the location andcharacteristics of the properties through corporation and collaboration with real estate management companies andbrokerage companies for the properties.
Over the medium to long term, JEI aims to enhance earnings of the entire portfolio and improve its ESG evaluationby continuously making additional strategic investments that consider energy conservation and BCP measures inorder to maintain asset value and improve property competitiveness.
Concerning the impact of the spread of COVID-19, we will continue to monitor the situation closely as the state of
emergency was declared again in January 2021 and such.
C. Financial strategy
JEI will consistently work on stable and sound financial operations by continuing to procure funds based on thebasic policy to fix interest rates of loans, extend borrowing periods, and diversify maturity dates while continuing
to reduce interest rates. In addition, JEI will consider new procurement methods such as green bonds andsustainability loans from the perspective of maintaining and strengthening its financial base through diversificationof fund procurement means while carefully monitoring the environment of the financial market.
JEI will set the upper limit of total assets-based LTV at 60% and manage it at around 35% to 50%. Furthermore, JEI
will conduct financial operations that emphasize stability by reducing refinancing risks through diversification of
maturity dates of interest-bearing debt.
D. Sustainability initiatives
JEI will work to reduce the environmental burden and to cooperate/collaborate with stakeholders to achieve asustainable society through corporate social responsibility.

(6) Subsequent Events
Not applicable.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)10

2. Outline of the Investment Corporation(1) Investment Units
Fiscal period
Total number of units
authorized
Total number of units
issued and outstanding

25th
27th
29th
26th
28th
As of December 31,
As of December 31,
As of December 31,
As of June 30, 2019
As of June 30, 2020
2018
2019
2020
10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

1,305,700 units

1,305,700 units

1,305,700 units

1,353,000 units

1,353,000 units

139,972
139,972
139,972
147,907
147,907
million yen
million yen
million yen
million yen
million yen
6,741
6,393
6,046
6,746
6,914
Number of unitholders
individuals
individuals
individuals
individuals
individuals(Note) Does not account for the changes in unitholders’ capital due to the implementation of distribution in excess of earnings related
to the allowance for temporary difference adjustments.
Unitholders’ capital(2) Unitholders
Major unitholders as of December 31, 2020, are as follows:
Number ofunits held
(Units)Ratio of number ofunits held tooutstanding
investment units(%)

1-8-12 Harumi, Chuo-ku, Tokyo

344,195

25.44

2-11-3 Hamamatsu-cho, Minato-ku, Tokyo

212,335

15.69

1-8-1 Akasaka, Minato-ku, Tokyo

71,5605.29

2-2-2 Otemachi, Chiyoda-ku, Tokyo

61,265

4.53

1-8-12 Harumi, Chuo-ku, Tokyo

59,246

4.38

1-13-1 Yuraku-cho, Chiyoda-ku, Tokyo

20,660

1.53

STATE STREET BANK WEST
CLIENT - TREATY 505234

1776 HERITAGE DRIVE, NORTHQUINCY, MA 02171, U.S.A.

18,836

1.39

SSBTC CLIENT OMNIBUS
ACCOUNTONE LINCOLN STREET, BOSTON MA
USA 02111

14,127

1.04

Nomura Securities Co., Ltd.

1-13-1 Nihonbashi, Chuo-ku, Tokyo

13,782

1.02

JP MORGAN CHASE BANK
38577125 BANK STREET, CANARY WHARF,LONDON, E14 5JP, UNITED KINGDOM

13,500

1.00

Total

829,506

61.31

Name

Custody Bank of Japan, Ltd.
(Trust Account) (Note)
The Master Trust Bank of Japan,
Ltd. (Trust Account)
Nippon Steel Kowa Real EstateCo., Ltd.
The Nomura Trust and Banking
Co., Ltd.
(Investment trust account)
Custody Bank of Japan, Ltd.
(Securities Investment Trust
Account) (Note)
The Dai-ichi Life Insurance
Company, Limited(Note)

Address

Effective July 27, 2020, Trust & Custody Services Bank, Ltd. and JTC Holdings, Ltd. merged with Japan Trustee Services
Bank, Ltd. in an absorption-type merger with the latter company as the surviving entity, and as of the same day, Japan Trustee
Services Bank, Ltd. changed its name to Custody Bank of Japan, Ltd.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

11

(3) Officers
1) Directors and accounting auditor
Post
Executive
Director
Supervisory
Director
Supervisory
Director
Supervisory
Director
Accounting
Auditor

Name

Compensation or fee forthe six months ended
December 31, 2020
(Thousands of yen)

Major additional post

Shuichiro Kayama

President, Japan Excellent Asset Management
Co., Ltd.

Osamu Hirakawa

Advisor, Anderson, Mori & Tomotsune

Shunichi Maekawa

Professor, Sugiyama Jogakuen University, Schoolof Modern Management

Eiji Takagi

Eiji Takagi Certified Public Accounting Office

Ernst & Young
ShinNihon LLC

–

–

5,580

17,201(Note 2)

(Note 1) There are no investment units of JEI held by either the Executive Director or the Supervisory Directors. Although Supervisory
Directors may have additional posts in companies other than those listed above, there are no conflicts of interest between thosecompanies, including those listed above, and JEI.
(Note 2) The total amount of compensation or fee shown above is an estimated amount and includes the amount paid as compensation
for auditing during the 29th period (11,000 thousand yen), the fee for the English financial statements audit, the preparationof a comfort letter upon the issuance of the 16th Series Unsecured Investment Corporation Bonds in October 2020 and thirdparty assurance engagements.

2) Policy on dismissal and discontinuation of re-election of accounting auditor
The board of directors of JEI shall deliberate dismissal of accounting auditor in accordance with the provisions set
out in the Investment Trust Law, and deliberate discontinuation of re-election based on circumstances in all respects.

(4) Asset Management Company, Asset Custodian, and Administrative Agents
JEI’s asset management company, asset custodian, and administrative agents as of December 31, 2020, are as follows:
Classification

Name

Asset management company

Japan Excellent Asset Management Co., Ltd.

Asset custodian

Mizuho Trust & Banking Co., Ltd.

Administrative agent(Transfer agent and other administrative work for accounting Mizuho Trust & Banking Co., Ltd.
and institution operation)
Administrative agent(Investment corporation bonds)

Mizuho Bank, Ltd.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)12

3. Investment Portfolio of the Investment Corporation(1) Investment Portfolio by Area
28th Period(As of June 30, 2020)

29th Period(As of December 31, 2020)

Total
acquisition
price(Millions of yen)
(Note 2)

Investment
ratio inportfolio
(%)

Total
acquisition
price(Millions of yen)
(Note 2)

Investment
ratio inportfolio(%)

Area I

10,966

3.7

10,960

3.7

Area II

5,532

1.9

5,467

1.9

Area IV

1,633

0.6

1,632

0.6

Area I104,63135.6

104,208

35.4

Area II

11,818

4.0

10,772

3.7

Area III

84,14028.7

84,14928.6

Area IV

21,158

7.2

21,094

7.2

OthersTrust beneficiary(commercial
interest in real
Area I
facilities,
estateresidence, etc.)

17,305

5.9

17,178

5.8

Total

257,18687.6

255,463

86.9

Deposits in bank and other assets

36,346

12.4

38,54013.1

Total assets

293,532100.0

294,004

100.0

Classification

Use

Real estate
property
Officebuilding
Trust beneficiaryinterest in realestateArea(Note 1)

(Note 1) Areas are classified as follows:
Area I: Six central wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya)
Area II: Central Osaka (Umeda, Dojima, Nakanoshima, Yodoyabashi, Honmachi, etc.), Central Nagoya (Meieki, Fushimi,
Sakae, etc.), and Central Fukuoka (Tenjin, Hakata-ekimae, etc.).
* Central Osaka refers to the areas within about a 10-minute walk of Osaka Station (JR), Osaka-Umeda Station(Hankyu Railway, Hanshin Electric Railway), Umeda Station (Osaka Metro), Yodoyabashi Station (Osaka
Metro), or Honmachi Station (Osaka Metro), respectively. Central Nagoya refers to the areas within about a 10minute walk of Nagoya Station (JR, Nagoya City Subway, and Nagoya Railroad), Fushimi Station (Nagoya City
Subway), or Sakae Station (Nagoya City Subway and Nagoya Railroad), respectively. Central Fukuoka refers to
the areas within about a 10- minute walk of Hakata Station (JR and Fukuoka City Subway), Tenjin Station(Fukuoka City Subway), and Nishitetsu Fukuoka Station (Nishi-Nippon Railroad), respectively. They are,however, not always in line with administrative districts.
Area III: Tokyo other than Area I, and its vicinity (Kanagawa, Saitama, and Chiba)
Area IV: Areas in Osaka, Nagoya and Fukuoka other than Area II, and other government designated cities.
The same applies hereinafter.
(Note 2) Total acquisition price is based on the amounts accounted for in the balance sheets as of the settlement date (amounts of realestate property and trust beneficiary interest in real estate are based on the book value after depreciations).

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

13

(2) Major Properties
The principal properties (top ten properties in net book value) owned by JEI as of December 31, 2020, are as
follows.
Ratio of rental
Occupancy
Leasable area Leased area
revenue to total
Book
value
Name
rate
Major use
(Millions of yen) (m ) (Note 1)(m ) (Note 2)
rental revenues(%) (Note 3)(%)
OfficeAKASAKA INTERCITY
26,67911,021.03
11,021.03
100.0
5.7
building
Nisseki Yokohama
Office22,68640,440.72
40,440.72
100.0
11.1
Buildingbuilding
OfficeOmori Bellport D
20,65525,801.66
25,801.66
100.0
8.6
building
Kowa Kawasaki
Office19,11324,944.17
24,944.17
100.0
6.0
Nishiguchi Buildingbuilding
2

2

HAMARIKYUINTERCITY

17,17819,718.11

19,437.56

98.6

Other
(commercial
7.1
facilities,
residence, etc.)

Musashikosugi Tower
Place

12,34625,043.93

25,043.93

100.0

7.6

Mansard Daikanyama

11,2085,420.80

5,102.72

94.1

2.9

10,9608,949.04

8,343.41

93.2(Note 4)

10,357

18,612.72

18,612.72

100.0(Note 4)

9,502

12,122.85

12,122.85

100.0

3.1

Officebuilding
Officebuilding
Officebuilding
Officebuilding
Officebuilding

160,688

192,075.03

190,870.77

99.4

－

－

Kowa Nishi-Shimbashi
Building
Kowa Kawasaki
Higashiguchi Building
Daiba Garden City
Building
Total(Note 1) Leasable area refers to area available for lease of which ownership is attributable to JEI as of December 31, 2020. For
properties with joint ownership, the value is obtained by multiplying the total leasable area of the shared property by thepercentage of the interest owned by JEI, regarding the figure as JEI’s leasable area.
(Note 2) Leased area refers to area with lease contracts or master lease agreements that guarantee a certain amount of fixed rent payment
concluded with end tenants as of December 31, 2020. For properties with joint ownership, the value is obtained by multiplying
the total leased area of the property by the percentage of the co-ownership interest owned by JEI, regarding the figure as JEI’sleased area. For properties which are used for profit by the master lease company, leased area refers to the portion used, andthe figures indicate area which can be reasonably calculated based on the lease agreement on the master leasing. The leased
area of end tenants who terminated their lease arrangement but have not yet moved out as of the end of period is included in
the leased area. This also applies to any figure which is calculated based on “leased area” in this document.
(Note 3) Occupancy rate is a percentage of total leased area to total leasable area as of December 31, 2020.
(Note 4) The values of Kowa Nishi-Shimbashi Building and Kowa Kawasaki Higashiguchi Building are not disclosed as consent on
disclosure from the end tenants have not been obtained.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

14

(3) Portfolio Ownership Breakdown
Real estate properties and their forms of ownership as of December 31, 2020, are as follows:
Property
No.

Property nameLocation (Residential address)

Ⅰ-1

Omori Bellport D

6-26-3 Minami-Oi, Shinagawa-ku, Tokyo

Ⅰ-2

Shiba 2-Chome Building

2-6-1 Shiba, Minato-ku, Tokyo

Ⅰ-3

JEI Hamamatsucho Building

2-2-12 Hamamatsu-cho, Minato-ku, Tokyo

Ⅰ-8

AKASAKA INTERCITY

1-11-44 Akasaka, Minato-ku, Tokyo

Ⅰ-9

Kowa Shirokanedai Building

3-19-1 Shirokanedai, Minato-ku, Tokyo

I-10

Daiba Garden City Building

2-3-5 Daiba, Minato-ku, Tokyo

Ⅰ-12

HAMARIKYU INTERCITY

1-9-1 and 15 Kaigan, Minato-ku, Tokyo

Ⅰ-13

Shintomicho Building

3-10-9 Irifune, Chuo-ku, Tokyo

Ⅰ-14

Kowa Nishi-Shimbashi Building

2-1-1 Nishi-Shimbashi, Minato-ku, Tokyo

Ⅰ-15

Mansard Daikanyama

10-1 Sarugakucho, Shibuya-ku, Tokyo

I-16

AKASAKA INTERCITY AIR

1-8-1Akasaka, Minato-ku, Tokyo

I-17

Bizcore Akasaka-mitsuke

3-1-2 Akasaka, Minato-ku, Tokyo

Ⅱ-1
Ⅱ-3

NHK Nagoya Housou-Center
Building
Osaka Kogin Building (Land with
Leasehold Interest)

Form of ownership
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estateAppraisal value
at end of period Net book value(Millions of yen) (Millions of yen)
(Note)
25,90020,655

13,600

8,982

9,040

8,084

30,20026,679

5,010

4,654

10,1009,502

25,90017,178

2,200

1,729

13,60010,96013,900

11,208

7,780

6,522

6,630

6,189

163,860

132,347

Real estate

6,170

5,467

4-1-1 Koraibashi, Chuo-ku, Osaka-shi, Osaka

Trust beneficiaryinterest in real estate

2,470

1,865

Area I
1-13-3 Higashi-Sakura, Higashi-ku,
Nagoya-shi, Aichi

Ⅱ-4

GRAND FRONT OSAKA (Umekita
Plaza·South Building)

4-1 Ohbuka-cho, Kita-ku, Osaka City, Osaka(Umekita Plaza)
4-20 Ohbuka-cho, Kita-ku, Osaka City, Osaka(South Building)Trust beneficiaryinterest in real estate

5,000

4,888

Ⅱ-5

GRAND FRONT OSAKA (North
Building)

3-1 Ohbuka-cho, Kita-ku, Osaka City, Osaka

Trust beneficiaryinterest in real estate

3,870

4,018
16,239Musashikosugi Tower Place

21,50012,346

Ⅲ-2

Kowa Kawasaki Higashiguchi
Building

Area II
1-403 Kosugi-machi, Nakahara-ku,
Kawasaki-shi, Kanagawa
1-53 Nisshin-cho Kawasaki-ku,
Kawasaki-shi, Kanagawa

17,510Ⅲ-1

10,40010,357

Ⅲ-3

JEI Hongo Building

2-38-16 Hongo, Bunkyo-ku, Tokyo

4,650

4,941

Ⅲ-5

Kawasaki Nisshincho Building

7-1 Nisshin-cho, Kawasaki-ku, Kawasaki-shi,
Kanagawa

4,660

4,153

Ⅲ-7

JEI Ryogoku Building

3-25-5 Ryogoku, Sumida-ku, Tokyo

2,650

2,189

Ⅲ-9

Kowa Kawasaki Nishiguchi Building

66-2 Horikawa-cho, Saiwai-ku, Kawasaki-shi,
Kanagawa

16,30019,113

Ⅲ-10

Pacific Square Sengoku

2-29-24 Hon-Komagome, Bunkyo-ku, Tokyo

1,580

1,620

Ⅲ-11

Core City Tachikawa

2-37-7 Akebono-cho, Tachikawa-shi, Tokyo

9,400

6,063

31,00022,686

Ⅲ-12

Nisseki Yokohama Building

Ⅲ-13

Yokohama Bentendori Dai-ichi
Seimei Building

1-1-8 Sakuragi-cho, Naka-ku, Yokohama-shi,
Kanagawa
4-59 Bentendori, Naka-ku, Yokohama-shi,
Kanagawa
Area III
2-2-48 Kata-machi, Tsushima-ku, Osaka-shi,Osaka
14-4 Hacchobori, Naka-ku, Hiroshima-shi,
Hiroshima
1-1-2 Kitananajonishi, Kita-ku, Sapporo-shi,
Hokkaido

Ⅳ-2

JEI Kyobashi Building

Ⅳ-3

JEI Hiroshima Hacchobori Building

Ⅳ-4

SE Sapporo Building

Ⅳ-5

Aoba-dori Plaza

3-2-1 Chuo, Aoba-ku, Sendai-shi, Miyagi

Ⅳ-6

Daiwa Minami-morimachi Building

2-6, 2-chome Kita Tenjinbashi, Kita-ku,
Osaka-shi, Osaka

Ⅳ-7

JEI Naha Building

2-8-1 Kumoji, Naha-shi, Okinawa

Hiroshima Dai-ichi Seimei OS
Building
Senshin Building

1-2-21 Matoba-cho Minami-ku,
Hiroshima-shi, Hiroshima
1-6-27 Chuo, Aoba-ku, Sendai-shi, Miyagi
Area IV
Total

IV-8
IV-9

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Real estate

672

677

102,812

84,149

4,410

2,779

3,930

2,532

9,060

5,099

4,460

2,194

5,180

4,177

1,950

1,479

3,300

2,831

1,690
33,980318,162

1,632
22,726
255,463

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

15

(Note) Appraisal value at end of period indicates the appraisal value described in the real estate appraisal report prepared by real estateappraisers belonging to Japan Real Estate Institute, Chuo Real Estate Appraisal Co., Ltd., Japan Valuers Co., Ltd., Daiwa Real
Estate Appraisal Co., Ltd. and The Tanizawa Sogo Appraisal Co., Ltd. as of December 31, 2020, pursuant to the articles ofincorporation of JEI and the regulations stipulated by the Investment Trusts Association, Japan. For properties with joint
ownership in the current portfolio, the value is obtained by multiplying the total value of the shared real estate by the percentageof the interest owned by JEI or the trustee.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

16

28th Period
29th Period
January 1, 2020, to June 30, 2020
July 1, 2020, to December 31, 2020
Ratio of rental
Ratio of rental
Property name
Property
Total number of Occupancy Rental revenue revenue to Total number of Occupancy Rental revenue revenue to
No.
rate
rate
tenants
tenants
total rental
total rental(Interim)(Interim)(At end of period) (At end of period) (Millions of yen)
(At end of period) (At end of period) (Millions of yen)revenues
revenues(Note 1)
(Note 1)
(%)
(%)
(%)
(%)
I-1
Omori Bellport D
1
100.0
925
8.4
1
100.0
921
8.6
Ⅰ-2
Shiba 2-Chome Building
2
99.2
373
3.4
2
100.0
373
3.5
JEI Hamamatsucho
Ⅰ-3
1
100.0
244
2.2
1
100.0
245
2.3
Building
AKASAKA
Ⅰ-8
13
100.0
571
5.2
13
100.0
615
5.7
INTERCITY
Kowa Shirokanedai
Ⅰ-9
1
100.0
183
1.7
1
97.3
180
1.7
Building
Daiba Garden City
I-10
1
100.0
333
3.0
1
100.0
331
3.1
Building
HAMARIKYU
Ⅰ-12
1
98.7
762
6.9
1
98.6
759
7.1
INTERCITY
Ⅰ-13
Shintomicho Building
11
100.0
73
0.7
11
100.0
74
0.7
Kowa Nishi-Shimbashi
Ⅰ-14
1
100.0
(Note 2)
(Note 2)1
93.2
(Note 2)
(Note 2)
Building
Ⅰ-15
Mansard Daikanyama
10
97.1
351
3.2
9
94.1
312
2.9
AKASAKA
I-16
1
100.0
(Note 2)
(Note 2)1100.0(Note 2)
(Note 2)
INTERCITY AIR
I-17
Bizcore Akasaka-mitsuke
1
100.0
145
1.3
1
100.0
153
1.4
Area I
44
99.6
43
98.8
NHK Nagoya HousouⅡ-1
36
100.0
382
3.5
35
98.8
382
3.6
Center Building
JEI Nishi-Honmachi
Ⅱ-2
1
97.2
129
1.2
2
0.0
Building (Note 3)
Osaka Kogin Building
Ⅱ-3(Land with Leasehold
1
100.0
89
0.8
1
100.0
89
0.8
Interest)
GRAND FRONTOSAKA (Umekita Plaza
Ⅱ-4
2
99.4
(Note 2)
(Note 2)298.0
(Note 2)
(Note 2)
·South Building)
GRAND FRONT
Ⅱ-5
OSAKA
5
98.8
(Note 2)
(Note 2)597.6
(Note 2)
(Note 2)(North Building)Area II
45
99.5
43
98.6
Musashikosugi Tower
Ⅲ-1
38
100.0
803
7.3
39
100.0
813
7.6
Place
Kowa Kawasaki
Ⅲ-2
1
100.0
(Note 2)
(Note 2)1100.0(Note 2)
(Note 2)
Higashiguchi Building
Ⅲ-3 JEI Hongo Building
1100.0(Note 2)
(Note 2)1100.0(Note 2)
(Note 2)
Kawasaki Nisshincho
Ⅲ-5
1
100.0
226
2.1
1
65.3
204
1.9
Building
Ⅲ-7 JEI Ryogoku Building
1
100.0
114
1.0
1
100.0
117
1.1
Kowa Kawasaki
Ⅲ-9
1
100.0
924
8.4
1
100.0
648
6.0
Nishiguchi Building
Ⅲ-10 Pacific Square Sengoku
1
100.0
60
0.5
1
100.0
60
0.6
Ⅲ-11 Core City Tachikawa
1
100.0
322
2.9
1
100.0
319
3.0
Nisseki Yokohama
Ⅲ-12
1
100.0
1,173
10.7
1
100.0
1,193
11.1
Building
Yokohama Bentendori
Ⅲ-13
1
100.0
41
0.4
1
100.0
42
0.4
Dai-ichi Seimei Building
Area III
47
100.0
48
97.4
Ⅳ-2

JEI Kyobashi Building

1

100.0

175

1.6

1

98.9

187

1.7

Ⅳ-3

JEI Hiroshima
Hacchobori Building

1

96.0

148

1.3

1

94.2

154

1.4

Ⅳ-4

SE Sapporo Building

1

100.0

410

3.7

1

100.0

411

3.8

Ⅳ-5

Aoba-dori Plaza

50

98.8

192

1.7

50

99.4

193

1.8

Ⅳ-6

Daiwa Minamimorimachi Building

1

100.0

196

1.8

1

100.0

198

1.8

Ⅳ-7

JEI Naha Building

1

100.0

86

0.8

1

91.3

76

0.7

IV-8

Hiroshima Dai-ichi
Seimei OS Building

1

95.9

138

1.3

1

97.2

140

1.3

IV-9

Senshin Building

48

0.4

1

92.8

49

0.5

1

91.0

Area IV

57

98.4

-

-

57

97.8

-

-

Total

193

99.6

11,013

100.0

191

98.0

10,729100.0(Note 1) Total number of tenants indicates the total number of tenants in each property as of the end of each period. For properties forwhich master lease agreements have been concluded, the number of tenants is counted as one per property. When a tenant has
multiple tenancies in the same property, it is counted as one tenant, and when in multiple properties, it is counted as multiple
tenants. As for Osaka Kogin Building (Land with Leasehold Interest), total number of tenants is counted as one based on thelease agreement for the leased land.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)17

(Note 2) Rental revenue (interim) and ratio of rental revenue to total rental revenues for Kowa Nishi-Shimbashi Building, Kowa
Kawasaki Higashiguchi Building, and JEI Hongo Building are not disclosed as consent on disclosure of rent from the end
tenants has not been obtained; and those for AKASAKA INTERCITY AIR, GRAND FRONT OSAKA (Umekita Plaza·South
Building), and GRAND FRONT OSAKA (North Building) are not disclosed as consent on disclosure of rents from the coowners has not been obtained.
(Note 3) JEI completed transfer of JEI Nishi-Honmachi Building on July 3, 2020.

(4) Securities Portfolio
None(5) Renewable Power Generation Facility
None(6) Right to Operate Public FacilityNone(7) Other Assets
1) Contract amount and fair value of specified transactions and foreign exchange forwards transactions
Fair value
Contract amount (Thousands of yen) (Note 1)(Thousandsof yen)Classification
Type(Note 2)

Over one year

Over-the-countertransaction

Interest rate swap
transactions
Floating interest ratereceivable
Fixed interest rate
payable46,140,000–

40,390,000(Note 1) Contract amount of swap transactions is calculated based on notional principal.
(Note 2) Fair value is omitted for presentation as over-the-counter transactions meet requirements for special accounting under the
Accounting Standard for Financial Instruments.

2) Shares
Name (Note 1)

KMO

Number ofsharesAcquisition price(Thousands of yen) (Note 4)

Assessed value(Thousands of yen) (Note 5)

Unit price

Unit price833 shares

50

Amount42,06950

Amount42,069Valuation
gains/losses－

Remarks－(Note 1) With the acquisition of GRAND FRONT OSAKA (North Building) (part of trust beneficiary interest in real estate), JEI
purchased 833 common shares of KMO Corporation, an entity that conducts facility management and business development
for Knowledge Capital (Note 2), and acquired the restitution rights of funds (Note 3) of Knowledge Capital’s funds. Moreover,said common shares and restitution rights may not be transferred separately from quasi co-ownership of the trust beneficiaryinterest in GRAND FRONT OSAKA (North Building).
(Note 2) Knowledge Capital, a center for industry-academia collaboration, is one of the main uses of GRAND FRONT OSAKA (North
Building).
(Note 3) The details of the restitution rights of Knowledge Capital’s funds are recorded below under “3) Securities Other than Shares”(Note 4) Acquisition price includes the costs of acquisition.
(Note 5) The assessed value of these unlisted shares is stated as the book value.

3) Securities other than shares
Asset type (Note 1)

Book value (Thousands of yen)

Quantity

Unit price
Restitution rights of
funds

1

－

Amount2,659

Assessed value(Thousands of yen) (Note 2)
Unit priceAmount－2,659

Valuation
gains/losses－

Remarks－(Note 1) With the acquisition of GRAND FRONT OSAKA (North Building) (part of trust beneficiary interest in real estate), JEI acquired the restitution rights offunds of Knowledge Capital’s funds. Moreover, said restitution rights may not be transferred separately from quasi co-ownership of the trust beneficiaryinterest in GRAND FRONT OSAKA (North Building).
(Note 2) The assessed value of the restitution rights of funds states the book value.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)184) Other Assets
Book value (Thousands of yen)
Asset type (Note 1)

Quantity
Unit priceAmountAssessed value(Thousands of yen) (Note 2)
Unit priceAmountValuation
gains/losses

Remarks

Restitution rights of
1
－
454
－
454
－
－
funds
(Note 1) With the acquisition of GRAND FRONT OSAKA (Umekita Plaza·South Building) and GRAND FRONT OSAKA (North
Building), JEI acquired restitution rights of funds concerning GRAND FRONT OSAKA TMO General Incorporated
Association, which runs businesses related to the revitalization of the area centering on GRAND FRONT OSAKA, theimprovement of the environment and the formation of communities.
(Note 2) The assessed value of the restitution rights of funds states the book value.

(8) Status of JEI’s Properties by Country and Region
None for JEI’s properties in countries or regions other than Japan.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)19

4. Capital Expenditures for Owned Properties(1) Scheduled Capital Expenditures
The following table shows major items of scheduled capital expenditures for repairs and maintenance planned for theproperties owned by JEI as of the end of the 29th period (ended December 31, 2020). The values below include
portions to be expensed for accounting purposes.

Property nameLocation

Kowa Kawasaki
Nishiguchi Building

Kawasaki-shi,
Kanagawa

Kowa Kawasaki
Higashiguchi Building

Kawasaki-shi,
Kanagawa

JEI Ryogoku Building

Sumida-ku,
Tokyo

Kowa Kawasaki
Higashiguchi Building

Kawasaki-shi,
Kanagawa

JEI Hiroshima
Hacchobori Building

Hiroshima-shi,

Omori Bellport D

Omori Bellport D

SE Sapporo Building

Hiroshima
Shinagawa-ku,
Tokyo
Shinagawa-ku,
Tokyo
Sapporo-shi,
Hokkaido

PurposeSchedule term

Estimated construction costs(Millions of yen)
Payment for the
Total ofsix months ended
Total
advance
December 31,
payment
2020

Renovation of airFrom July 2020
conditioning systems
To June 2021
(Phase 4)
Renovation of airFrom January 2021
conditioning systems
To June 2021
(Phase 4)
Renovation of airFrom January 2021
conditioning systems
To June 2021
(Phase 1)
Renovation of
From January 2021
restrooms
To June 2021
(Phase 3)
Renovation of airFrom April 2021
conditioning systems
To June 2021
(Phase 1)
Update of heat source
From August 2020
equipment
To March 2021
(Phase 2)Update of extra-highFrom August 2020voltage substation
To March 2021
(Phase 2)
Renovation of multilevel parking lot

234

－

－

163

－

－

146

－

－

138

－

－

66

－

－

57

－

－

37

－

－

From May 2021
To June 2021

37

－

－

35

－

－

32

－

－

Kowa Kawasaki
Nishiguchi Building

Kawasaki-shi,
Kanagawa

Update of ancillarybuildings andFrom January 2021
facilities in line withTo June 2021
renovation of
restrooms

Shintomicho Building

Chuo-ku,Tokyo

Renewal of elevator
control system

From May 2021
To June 2021

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

20

(2) Capital Expenditures for the Six Months Ended December 31, 2020
The following table shows constructions conducted by JEI during the period ended December 31, 2020, and expensed
as capital expenditures. Capital expenditures for the period ended December 31, 2020, were 1,127 million yen and,
when combined with repairs and maintenance costs of 282 million yen classified as expenses in the period underreview, the amount of constructions completed totaled 1,410 million yen.
Property nameLocation

Amount Paid
(Millions of yen)

PurposeScheduled term

Kowa Kawasaki
Kawasaki-shi,
Higashiguchi Building Kanagawa

Renovation of air-conditioning
systems (Phase 3)

From January 2020
To December 2020

458

Kowa Kawasaki
Kawasaki-shi,
Higashiguchi Building Kanagawa

Renovation of restrooms(Phase 2)

From July 2020
To December 2020

139

SE Sapporo Building

Sapporo-shi,
Hokkaido

Renovation of multi-levelparking lot

From September 2020
To December 2020

38

SE Sapporo Building

Sapporo-shi,
Hokkaido

Maintenance of room 101 for
rent

From September 2020
To November 2020

32

JEI Naha Building

Naha-shi,
Okinawa

Update of power receiving and From December 2020
transforming equipment
To December 2020
Update of power receiving andFrom November 2020
transforming equipment
To November 2020
(Phase 1)

Yokohama Bentendori
Yokohama-shi,
Dai-ichi Seimei
Kanagawa
Building

21
8–

Other constructions

429

Total

1,127

(3) Reserved Funds for Long-Term Repairs and Maintenance Plans
Based on the long-term repairs and maintenance plans developed for each property, JEI has set aside the following
cash reserves, derived from depreciation and other excess cash flows, in order to fund large-scale repairs, maintenanceand other construction.
(Unit: Millions of yen)Item

25th Period
26th Period
27th Period
28th Period
29th Period
July 1, 2018, to January 1, 2019, to July 1, 2019, to January 1, 2020, to July 1, 2020, toDecember 31, 2018 June 30, 2019 December 31, 2019 June 30, 2020 December 31, 2020

Reserved funds at
beginning of period

258

290

284

300

473

Increase

469

411

899

1,553

260

Decrease

437

417

884

1,380

484

Reserved funds at theend of period

290

284

300

473

250

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)21

5. Expenses and Liabilities(1) Expenses Associated with Asset Management(Unit: Thousands of yen)Account

28th Period
January 1, 2020, to June 30, 2020

29th Period
July 1, 2020, to December 31, 2020(a) Asset management fees

530,406

470,777(b) Custodian fees

21,515

21,847(c) Administrative service fees

40,72040,065(d) Compensation for directors

5,580

5,580

(e) Accounting auditor fees

11,00011,000(f) Other

120,239

82,428729,461

631,698

Total(2) Borrowings
Borrowings by each financing source as of the end of the 29th period (ended December 31, 2020) are as follows:
Classification
LenderDrawdown
date

Balance at
beginning of
period(Thousands of yen)

Short-term
Mizuho Bank, Ltd.
loans

March 9,2020

Sub Total
September 28,
Mizuho Bank, Ltd.
2018
June 28,
Development Bank of Japan Inc.
2013
July 31,
The Dai-ichi Life Insurance Company
2014
LimitedMizuhoBank,Ltd.
Long-termloans due MUFG Bank, Ltd.
November 29,
within one Sumitomo Mitsui Banking
2016
Corporation
year
Sumitomo Mitsui Trust Bank Limited
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
December 29,
Mizuho Trust & Banking Co., Ltd.
2014

Average
Balance at interest rate
Repayment
Maturity date method
end of period(%)(Thousands of yen)

0.25946

March 9,2021
(Note 3)－0.25276

September 30,
2020

2,000,000

2,000,000

2,000,000

2,000,000

1.60750(Note 2)0.98834(Note 2)June 30,2021－－

520,000
540,000
0.42083

November 29,
2021

0.81875(Note 2)

December 30,
2021

5,000,000－

5,000,000－

2,000,000－

1,080,000－－－－

1,620,000
1,950,000
2,000,000
1,200,000

Resona Bank, Ltd.

－

600,000

Subtotal

6,000,000

13,510,000

Use

Remarks(Note 1)
Lumpsum

Repayment Unsecuredof existingand nonborrowing guaranteed

Lumpsum

Repayment Unsecuredof existingand nonborrowing guaranteed

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

22Classification

LenderDrawdown
date

Balance at
beginning of
period(Thousands of yen)

Average
Balance at interest rate
Repayment
Maturity date method
end of period(%)(Thousands of yen)Mizuho Bank, Ltd.

520,000－

MUFG Bank, Ltd.

540,000－

1,080,000－

Sumitomo Mitsui Trust Bank Limited

1,620,000－

Mizuho Bank, Ltd.

1,950,000－

MUFG Bank, Ltd.

2,000,000－

1,200,000－

Sumitomo Mitsui Banking
Corporation

Mizuho Trust & Banking Co., Ltd.

November 29,
2016

December 29,
2014

Resona Bank, Ltd.
Sompo Japan Insurance Inc.
Tokio Marine & Nichido Fire
Insurance Co., Ltd.
Development Bank of Japan Inc.
Mizuho Bank, Ltd.
Sompo Japan Insurance Inc.
Tokio Marine & Nichido Fire
Insurance Co., Ltd.

January 31,
2017
July 31,2014
September 30,
2020
November 30,
2017

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.

December 29,
2014

Resona Bank, Ltd.
Development Bank of Japan Inc.
Long-term The Dai-ichi Life Insurance
Company Limited
loans
Mizuho Bank, Ltd.

June 30,
2015
June 29,2018

600,000－

2,000,000

2,000,000

1,000,000

1,000,000

2,000,000

2,000,000－

2,000,000

500,000

500,000

500,000

500,000

1,950,000

1,950,000

2,000,000

2,000,000

1,200,000

1,200,000

600,000

600,000

2,000,000

2,000,000

3,000,000

3,000,000

420,000

420,000

MUFG Bank, Ltd.

250,000

250,000

Sumitomo Mitsui Banking
Corporation

140,000

140,000

1,560,000

1,560,000

Mizuho Trust & Banking Co., Ltd.
The Norinchukin Bank

November 30,
2015

1,500,000

1,500,000

Resona Bank, Ltd.

500,000

500,000

Aozora Bank, Ltd.

750,000

750,000

The Bank of Fukuoka, Ltd.

150,000

150,000

1,000,000

1,000,000

3,500,000

3,500,000

500,000

500,000

500,000

500,000

3,500,000

3,500,000

Mizuho Bank, Ltd.

870,000

870,000

MUFG Bank, Ltd.

590,000

590,000

350,000

350,000

1,560,000

1,560,000

Resona Bank, Ltd.

1,000,000

1,000,000

Aozora Bank, Ltd.

750,000

750,000

The Bank of Fukuoka, Ltd.

150,000

150,000

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Resona Bank, Ltd.

November 30,
2017

Aozora Bank, Ltd.
Development Bank of Japan Inc.

Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking Co., Ltd.

November 30,
2015

Use

Remarks(Note 1)0.42083

November 29,
2021

0.81875(Note 2)

December 30
2021

0.35000(Note 2)January 31,
2022

1.15417(Note 2)June 30,
2022
September 30,
0.265862022

0.35000 November 30,(Note 2)2022

0.93625(Note 2)

December 30,
2022

1.20250(Note 2)0.46000(Note 2)June 30,
2023

Lumpsum

Repayment Unsecuredof existingand nonborrowing guaranteed

0.84375 November 30,(Note 2)2023

0.64801 November 30,(Note 2)2023

0.68431(Note 2)

May 31,2024

0.96275 November 30,(Note 2)2024

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

23

Classification

Lender

Nippon Life Insurance Company

Drawdown
date

December 12,
2019

Average
Balance atBalance at interest rate
Repayment
beginning of
Maturity date method
end of period(%)
period(Thousands of yen)(Thousands of yen)
(Note 1)1,000,000

1,000,000

Mizuho Bank, Ltd.

3,700,000

3,700,000

MUFG Bank, Ltd.

1,000,000

1,000,000

400,000

400,000

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation
The Norinchukin Bank

June 29,2018

Shinkin Central Bank

1,000,000

1,000,000

The Bank of Fukuoka, Ltd.

700,000

700,000

Resona Bank, Ltd.

200,000

200,000

Mizuho Bank, Ltd.

850,000

850,000

850,000

850,000

600,000

600,000

The Norinchukin Bank

1,450,000

1,450,000

Mizuho Bank, Ltd.

2,200,000

2,200,000

MUFG Bank, Ltd.

1,750,000

1,750,000

1,100,000

1,100,000

850,000

850,000

500,000

500,000

850,000

850,000

850,000

850,000

600,000

600,000

1,450,000

1,450,000

1,300,000

1,300,000

1,300,000

1,300,000

1,000,000

1,000,000

700,000

700,000

Development Bank of Japan Inc.

2,000,000

2,000,000

Mizuho Bank, Ltd.

1,175,000

1,175,000

1,175,000

1,175,000

1,000,000

1,000,000

Mizuho Trust & Banking Co., Ltd.

1,087,500

1,087,500

The Norinchukin Bank

1,162,500

1,162,500

The Dai-ichi Life Insurance
Company Limited

1,000,000

1,000,000

Subtotal

81,600,000

74,090,000

Total

92,600,000

87,600,000

MUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Banking
Corporation

November 1,
2018

September 29,
2017

The Norinchukin Bank
Long-term
Aozora Bank, Ltd.
loans
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.

March 8,2019

The Norinchukin Bank
Development Bank of Japan Inc.

September 29,
2017

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

June 29,
2018

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

January 31,
2020

0.42000(Note 2)

December 12,
2024

0.67400(Note 2)June 30, 2025

0.70600(Note 2)

November 1,
2025

Use

Remarks

Repaymentof existing
borrowing

Unsecuredand nonguaranteed

0.83441(Note 2)
March 31,2026

Lumpsum

0.57100(Note 2)0.83071 September 30,(Note 2)2026
0.79100(Note 2)

December 30,
2026

0.68778(Note 2)

July 31, 2028

0.71200(Note 2)January 31,2029

0.77000(Note 2)

(Note 1) Average interest rate is calculated by applying a weighted average to the loan balance during the period. Borrowings hedged
by interest rate swaps to avoid interest rate fluctuation risk are calculated by applying a weighted average rate in considerationof the effect of the interest rate swaps.
(Note 2) Loans are fixed-rate loans (including loans with fixed-rate interest using interest rate swaps).
(Note 3) The entire amount was prepaid in full as of October 30, 2020.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

24

(3) Investment Corporation Bonds
The outstanding investment corporation bonds issued by JEI as of December 31, 2020, are as follows:
Classification
Issuancedate

Unsecured investment corporation bonds

Issue(Thousands of yen)

Balance at end ofInterest rate
period(%)

Maturity date(Thousands of yen)

Repayment
methodUse

7th series unsecured
investment corporation bonds

March 10,2014

8,000,000

8,000,000

1.13000

March 11,2024

(Note 1)

8th series unsecured
investment corporation bonds

September 9,2015

5,000,000

5,000,000

1.03000

September 9,2025(Note 2)

9th series unsecured
investment corporation bonds

October 27,
2016

2,000,000

2,000,000

0.45000

October 27,
2026(Note 3)10th series unsecured
investment corporation bonds

December 20,
2016

2,000,000

2,000,000

0.39000

December 20,
2023

11th series unsecured
investment corporation bonds

April 25,2017

7,000,000

7,000,000

0.65000

April 23,2027

2,000,000

2,000,000

0.24000

April 20,2023

2,000,000

2,000,000

0.95000

April 20,2033

1,000,000

1,000,000

1.07000

September 9,2039

29,000,000

29,000,000

August 10,
2018

4,000,000

4,000,000

0.63000

August 10,
2028

October 29,
2020－

5,000,000

0.75000

October 29,
2035

Sub Total

4,000,000

9,000,000

Total

33,000,000

38,000,000

Remarks

Lump-sum (Note 2) (Note 4)

12th series unsecured
investment corporation bonds
13th series unsecured
investment corporation bonds
15th series unsecured
investment corporation bonds

April 20,2018

September 10,
2019

Sub Total

Green bonds

Balance at
beginning of
period14th series unsecured
investment corporation bonds
16th series unsecured
investment corporation bonds(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 3)(Note 2)Lump-sum (Note 2) (Note 4)

The funds were used for redeeming existing investment corporation bonds and repaying existing borrowings.
The funds were used for repaying existing borrowings.
The funds were used for redeeming existing investment corporation bonds.
The bonds are with special pari passu conditions among specified investment corporation bonds.

(4) Short-Term Investment Corporation Bonds
None(5) Subscription Rights for New Investment Units
None

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)25

6. Condition of Investment Transactions(1) Transactions of Property, Asset-Backed Securities, Etc. and Infrastructure Assets, Etc.,
and Infrastructure-Related Assets
Acquisition
Type of asset

Property nameJEI Nishi-honmachi
Trust beneficiary
Building (quasi cointerest in real estate ownership interest
15.0%)
Total

Acquisitiondate

Acquisition
Transfer date
price(Millions of yen)Transfer
Transfer
Net book Gain (loss)
price
value
on transfer(Note 1)
(Note 2)
(Note 3)－－

July 3, 2020

1,351

1,036

314

－

－

－

1,351

1,036

314

(Note 1) The transfer price indicates the amount excluding related expenses (brokerage fee, taxes, etc.) required for the transfer, and is the purchase amountof real estate stated in the trust beneficiary interest purchase agreement.
(Note 2) Net book value at the time of transfer is indicated.
(Note 3) Gain (loss) on transfer indicates the amount obtained by deducting net book value and other transfer expenses from transfer price.

(2) Transactions of Other Assets
None

Asset Management Report for the 29th period (Semi-Annual Report for the 29th Period)

26

(3) Appraisal and Research for Specified Asset Value, Etc.
1) Real estate, etc.
Acquisition
Name of property
or transfer

Transfer

Type ofasset

Acquisition/transfer dateJEI Nishi-honmachi
Trust
Building (quasi co- beneficiaryownership interest
interest in
15.0%)
real estate

July 3, 2020

Acquisition/
Appraisaltransfer pricevalue(Millions of yen)
(Millions of yen)
(Note 1)
1,351

Appraiser

Daiwa Real879
Estate Appraisal(Note 2)
Co., Ltd.

Appraisal
date

October 1,
2019(Note 1) The acquisition/transfer price is the purchase price of the property stated in the purchase agreement (excluding the amount equivalent to
consumption taxes, etc.).
(Note 2) The appraisal value indicates the amount obtained by multiplying the appraisal value for the entire property by 15.0%, which is the quasi coownership trust beneficiary interest subject to transfer.

2) OthersNone(4) Transactions with Interested Parties
1) Transactions
None2) Amounts of fees paid and other expenses(Unit: Thousands of yen)
Breakdown of transactions with interested parties
Classification

Total amount paid (A)B/APaid to

Property management
costs and fees

Total

Amount paid (B)Nippon Steel Kowa Real EstateCo., Ltd.

463,599

33.8%

The Dai-ichi Building Co., Ltd.

482,285

35.2%

Sohgo Housing Co., Ltd. (Note 2)

62,919

4.6%

Akasaka Intercity Management
Co., Ltd.

19,5581.4%–

1,028,363

75.0%

1,371,601

1,371,601(Note 1) Figures indicate fees paid to interested parties of the asset management company with whom JEI had direct transactions during
the six months ended December 31, 2020.
(Note 2) As a result of becoming a subsidiary of Dai-ichi Life Holdings, Inc. on October 1, 2020, Sohgo Housing Co., Ltd. became aninterested party of the asset management company on the same day.
(Note 3) Other than the Total amount paid indicated above, the following payments were made for maintenance and repair work, etc.
which were ordered to interested parties during the period.
Nippon Steel Kowa Real Estate Co., Ltd.
22,930 thousand yen
Kowa Real Estate Facilities Co., Ltd.
274,980 thousand yen
The Dai-ichi Building Co., Ltd.
11,489 thousand yen(5) Transactions with Asset Management Company Concerning the Additional Businessesof the Asset Management Company
The Asset Management Company (Japan Excellent Asset Management Co., Ltd.) does not conduct any additional
business falling under the categories of the type I financial instruments business, type II financial instruments
business, building lots and buildings transaction business, or real estate specified joint enterprise, and had no
applicable transactions.

Asset Management Report for the 29th period (Semi-Annual Report for the 29th Period)27

7. Accounting(1) Assets, Liabilities, Principal, and Profit and Loss
For assets, liabilities, principal, and profit and loss, please refer to the attached Balance Sheets, Statements ofIncome and Retained Earnings, Statements of Changes in Net Assets, Notes to Financial Statements andDistribution Information.

(2) Change in Depreciation Calculation Method
No changes were made during the period.

(3) Change in Asset and Infrastructure Assets, Etc. Valuation Method
No changes were made during the period

Asset Management Report for the 29th period (Semi-Annual Report for the 29th Period)28

8. Others(1) Notice1) General unitholders’ meeting
There were no applicable items during the period.
2) Board of directors’ meeting
There were no applicable items during the period.

(2) Disclosure of Investment Trust Beneficiary Certificates Incorporated by JEIThere were no applicable items during the period.

(3) Disclosure of Juridical Persons Owning Overseas Real Estate and Status of the Owned
Real Estate
There were no applicable items during the period.

(4) Other
Unless otherwise stated, monetary amounts have been rounded down and percentage figures have been rounded
off to the nearest indicated unit in this Report.

Asset Management Report for the 29th period (Semi-Annual Report for the 29th Period)

29

Financial Statements
Japan Excellent, Inc.
For the six-month periods ended
December 31, 2020 and June 30, 2020
with Independent Auditor’s Report

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

30

31

32

33

Japan Excellent, Inc.
Balance Sheets
As of December 31, 2020 and June 30, 2020

As ofDecember 31, 2020

As ofJune 30, 2020

(Thousands of yen)
AssetsCurrent assets:
Cash and cash equivalents including trust accounts(Notes 4 and 5)
Rental receivables
Prepaid expenses and other current assets
Total current assets

36,022,399
325,765
210,063
36,558,228

33,815,385
328,891
189,597
34,333,873

Property and equipment (Note 7) :Buildings and building improvements
Machinery and equipment
Furniture and fixtures
Land
Construction in progress
Buildings and building improvements for trust accounts
Machinery and equipment for trust accounts
Furniture and fixtures for trust accounts
Land for trust accounts
Construction in progress for trust accounts
Less: accumulated depreciation
Net property and equipment

7,698,591
6,253
59,934
10,609,617
1,396
113,248,694
1,030,829
293,163
148,021,777
115,225(34,727,920)
246,357,561

7,657,446
6,253
52,93010,609,617
1,396
112,803,395
951,662
291,508
148,707,325
106,322(33,107,509)
248,080,348

Intangible assets:
Leasehold rights
Leasehold rights for trust accounts
Software
Other intangible assets for trust accounts
Total intangible assets

1,721,607
7,382,016
7,333
2,644
9,113,601

1,721,607
7,382,016
8,433
2,737
9,114,794

Investments and other assets:
Investment securities (Note 5)
Security deposits
Long-term prepaid expenses
Other assets
Total investments and other assets

44,72919,029823,528
921,016
1,808,304

44,72918,181
919,312877,329
1,859,553

166,949
166,949
294,004,645

144,225
144,225
293,532,796

Deferred assets:
Investment corporation bond issuance costs
Total deferred assets
Total assets

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)34

As ofDecember 31, 2020

As ofJune 30, 2020

(Thousands of yen)
Liabilities
Current liabilities:
Accounts payable – trade
Short-term loans (Notes 5 and 8)
Long-term debt due within one year
(Notes 5 and 8)
Accounts payable – otherAccrued expenses
Accrued corporation taxes
Accrued consumption taxes
Advances received
Other current liabilities
Total current liabilities
Long-term liabilities:
Investment corporation bonds (Notes 5 and 9)
Long-term debt (Notes 5 and 8)
Security deposits from tenants (Note 5)
Security deposits from tenants for trust accounts (Note 5)
Total long-term liabilities
Total liabilities
Net assets (Note 10)
Unitholders’ equity:
Unitholders’ capital
Deduction from unitholders’ capital
Allowance for temporary difference adjustment(Note 11)
Total deduction from unitholders’ capital
Unitholders’ capital, net
Surplus
Voluntary reserve
Reserve for advanced depreciation of non-current assets
Retained earnings
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

1,674,407－

1,220,492
5,000,000

13,510,000
466,577
155,114584
119,228
172,768－
16,098,680

6,000,000
554,959
146,620586
533,554
170,345
14,14813,640,707

38,000,000
74,090,000
1,200,885

33,000,000
81,600,000
1,197,748

12,196,393
125,487,278
141,585,958

11,961,335
127,759,084
141,399,791

147,907,649

147,907,649－－
147,907,649(1,406,238)(1,406,238)
146,501,410

219,594
4,291,443
4,511,037
152,418,687
152,418,687
294,004,645－
5,631,594
5,631,594
152,133,005
152,133,005
293,532,796

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

35

Japan Excellent, Inc.
Statements of Income and Retained Earnings
For the periods from July 1, 2020 to December 31, 2020and from January 1, 2020 to June 30, 2020

For the period
from July 1, 2020 to
December 31, 2020

For the period
from January 1, 2020 toJune 30, 2020

(Thousands of yen)
Revenues (Note 14) :Rental business revenues
Other
Gain on sales of real estate properties (Note 15)
Total revenues
Operating expenses (Note 14) :Property operating expenses
Asset management fees
Custodian fees
Administrative service fees
Compensation for directors
Other
Total operating expenses
Operating income
Other income:Interest income
Other
Other expenses:
Interest expense
Loan arrangement fees
New investment unit issuance costs
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
Other
Ordinary income
Income before income taxes
Income taxes (Note 13) :Current
Deferred
Net income
Retained earnings at beginning of period
Retained earnings at end of period

9,998,859
730,694314,238
11,043,792

10,250,100
763,414
1,704,073
12,717,589

5,487,364
470,777
21,84740,065
5,580
93,428
6,119,062
4,924,730

5,697,217
530,406
21,51540,7205,580
131,239
6,426,679
6,290,909

136
403

118
457

336,430
141,088－
139,556
12,276
4,751
4,291,167
4,291,167

342,909148,204
25,351
131,174
11,696367
5,631,780
5,631,780

605－
4,290,562
881
4,291,443

605
50
5,631,125
469
5,631,594

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

36

Japan Excellent, Inc.
Statements of Changes in Net Assets
For the periods from July 1, 2020 to December 31, 2020and from January 1, 2020 to June 30, 2020
For the period from July 1, 2020 to December 31, 2020
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Number ofunits in issue
Balance as of June 30, 2020
Changes during
the fiscal period:
Provision of reserve for
reduction entry
Distributions from retained
earnings
Reversal of reserve for temporary
difference adjustment
Net income
Total changes during the fiscal
periodBalance as of December 31, 2020

Unitholders’capitalAllowance fortemporary difference
adjustment

Total deduction
from unitholders’capitalUnitholders’capital, net

1,353,000

147,907,649(Thousands of yen)
(1,406,238)(1,406,238)

146,501,410

－
－

－

－

－

－

－
－

－

－

－

－

－
－
－
－

－
－

1,406,238－

1,406,238－

1,406,238－－－
1,353,000－
147,907,649

1,406,238－

1,406,238－

1,406,238
147,907,649

For the period from July 1, 2020 to December 31, 2020
Net assets
Unitholders’ equity
Surplus
Voluntary
reserve
Reserve foradvanceddepreciation of
non-current
assetsBalance as of June 30, 2020
Changes during
the fiscal period:
Provision of reserve for
reduction entry
Distributions fromretained earnings
Reversal of reserve for temporary
difference adjustment
Net income
Total changes during the fiscal
periodBalance as of December 31, 2020

Retainedearnings－

5,631,594

Total surplus(Thousands of yen)
5,631,594

219,594(219,594)－

Total unitholders’equityTotal net
assets152,133,005

152,133,005

－

－

－

(4,004,880)(4,004,880)(4,004,880)(4,004,880)－－(1,406,238)
4,290,562(1,406,238)
4,290,562－
4,290,562－
4,290,562

219,594
219,594(1,340,151)
4,291,443(1,120,556)
4,511,037

285,682
152,418,687

285,682
152,418,687

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

37

For the period from January 1, 2020 to June 30, 2020
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital

Number ofunits in issue

Unitholders’capitalAllowance fortemporary difference
adjustment

Total deduction
from unitholders’capitalUnitholders’capital, net(Thousands of yen)
1,305,700

139,972,885－－

139,972,885

47,3007,934,764－－

7,934,764

－
－

－

－

－

－

Distributions from retained earnings

－
－

－

－

－

－

Dividend in excess of earnings using
reserve for temporary difference
adjustments－－－(1,406,238)(1,406,238)(1,406,238)

Net income

－
－

－

－

－

－

47,3007,934,764(1,406,238)(1,406,238)

6,528,525

1,353,000

147,907,649(1,406,238)(1,406,238)

146,501,410

Balance as of December 31, 2019
Changes during the fiscal period:
Issuance of new units
Reversal of reserve for reduction
entry

Total changes during the fiscal period
Balance as of June 30, 2020

For the period from January 1, 2020 to June 30, 2020
Net assets
Unitholders’ equity
Surplus
Voluntary
reserve
Reserve foradvanceddepreciation of
non-current
assetsRetainedearnings

Total surplus(Thousands of yen)

Total unitholders’equityTotal net assets

158,0392,246,223

2,404,262

142,377,147

142,377,147

－

－

－

7,934,764

7,934,764(158,039)

158,039－－－

Distributions from retained earnings－(2,403,793)(2,403,793)(2,403,793)(2,403,793)

Dividend in excess of earnings using
reserve for temporary difference
adjustments

－

－

－

(1,406,238)(1,406,238)

Net income－

5,631,125

5,631,125

5,631,125

5,631,125(158,039)

3,385,371

3,227,331

9,755,857

9,755,857－

5,631,594

5,631,594

152,133,005

152,133,005

Balance as of December 31, 2019
Changes during the fiscal period:
Issuance of new units
Reversal of reserve for reduction
entry

Total changes during the fiscal period
Balance as of June 30, 2020

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

38

Japan Excellent, Inc.
Statements of Cash Flows
For the periods from July 1, 2020 to December 31, 2020and from January 1, 2020 to June 30, 2020
For the period
from July 1, 2020 to
December 31, 2020

For the period
from January 1, 2020 toJune 30, 2020

(Thousands of yen)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
New unit issuance costs
Interest income
Interest expense
Decrease (increase) in rental receivables
Decrease (increase) in prepaid expense
Increase (decrease) in accounts payable – trade
Increase (decrease) in accounts payable – other
Increase (decrease) in unpaid consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Decrease in property and equipment for trust accounts due to sale
Decrease in property and intangible assets for trust accounts due
to saleOther, net
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of Investment securities
Purchases of property and equipment
Purchases of property and equipment for trust accounts
Payments for lease and guarantee deposits
Proceeds from security deposits from tenants
Payments for security deposits to tenants
Proceeds from security deposits in trust accounts from tenants
Payments for security deposits in trust accounts to tenants
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans
Repayment for short-term loans
Proceeds from long-term debt
Repayment for long-term debt
Proceeds from issuance of investment units
Proceeds from issuance of investment corporation bonds
Distributions to unitholders
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period (Note 4)

4,291,167
1,825,686
12,276－(136)
475,986
3,125(23,890)(68,139)(88,063)(414,325)
2,422
95,783
1,036,839

5,631,780
1,947,843
11,69625,351(118)
474,084
51,12026,166(112,593)
149,503456,321(29,986)(98,425)
13,058,874

－

1,101

(54,835)
7,093,897
136(467,492)(586)
6,625,954(7,575)
21,585,144
118(480,864)(1,514)
21,102,883－(16,478)(600,013)(848)
47,550(44,414)596,892(361,834)－(379,145)(44,729)(16,757)(10,711,613)(3,000)34,358(10,804)
303,617(822,329)(454)(11,271,713)－(5,000,000)
2,000,000(2,000,000)－
4,965,000(4,004,794)(4,039,794)
2,207,014
33,815,385
36,022,399

5,000,000(9,000,000)
8,600,000(8,600,000)
7,909,412－(3,809,625)
99,7879,930,957
23,884,427
33,815,385

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

39

Japan Excellent, Inc.
Notes to Financial Statements
For the periods from July 1, 2020 to December 31, 2020and from January 1, 2020 to June 30, 2020

1.

Organization

Japan Excellent, Inc. (hereinafter, “JEI”), established on February 20, 2006 under the Law
Concerning Investment Trusts and Investment Corporations of Japan (the “Investment TrustLaw”), is a real estate investment corporation which primarily invests in office buildings.
JEI is externally managed by a licensed asset management company, Japan Excellent AssetManagement (“JEAM”). JEAM was originally owned 45% by NIPPON STEEL KOWA REALESTATE CO., LTD., 20% by The Dai-ichi Life Insurance Company, Limited, 15% by Sekisui
House, Co., LTD., and 20% by other corporations. Due to the transfer of ownership by Sekisui
House, Co., LTD., on May 12, 2014, ownership interests of 9% and 6% were each acquired by
NIPPON STEEL KOWA REAL ESTATE CO., LTD., and The Dai-ichi Life Insurance
Company, Limited, respectively.
JEI was listed on the Tokyo Stock Exchange on June 27, 2006. As of December 31, 2020, JEI
held 34 properties with 331,111.56 square meters of total leasable space and had leases with
191 tenants excluding residential tenants.

2.

Basis of Presentation

JEI maintains its accounting records and prepares its financial statements in accordance withaccounting principles generally accepted in Japan (“Japanese GAAP”), including provisions set
forth in the Investment Trust Law, the Corporation Law of Japan, the Financial Instruments andExchange Law of Japan and related regulations, which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the financial statements of JEI,
which were prepared in accordance with Japanese GAAP and presented in the securities reportof JEI filed with the Kanto Local Finance Bureau. In preparing the accompanying financial
statements, certain reclassifications and modifications have been made for the convenience ofreaders outside Japan. In addition, the notes to the financial statements include information thatmight not be required under Japanese GAAP but is presented here in as additional information.
The amounts have been rounded down to the nearest thousand yen in the accompanying
financial statements in accordance with the financial statements originally prepared in Japaneseand filed with the regulatory authorities in Japan.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

40

3.

Summary of Significant Accounting Policies

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 into cash with an insignificant risk ofprice fluctuation and with an original maturity of three months or less.
Investment securities
Available-for-sale securities without market value are stated at cost determined by the moving
average method.
Property and equipment including trust accounts
Depreciation is computed by the straight-line method over the estimated useful lives of therespective assets as follows:
Buildings and building improvements
Machinery and equipment
Furniture and fixtures

2 – 60 years
6 – 16 years
3 – 15 years

Intangible assets
Depreciation is computed by the straight-line method over the estimated useful lives of therespective assets as follows:
Software5 years

Deferred assets
Investment corporation bond issuance costs are amortized using the straight-line method over
the amortization periods.
Income taxes
Income taxes are accounted for on the basis of taxable income for financial statement purposes.
The asset and liability method is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the carrying amounts andthe tax bases of assets and liabilities.
Consumption taxes
Consumption taxes received and paid are not included in the accompanying statements ofincome and retained earnings. Consumption tax related to properties, which has not been
deducted, is included in the cost of the properties.
Property-related taxes
Principally, property-related taxes including property taxes, urban planning taxes anddepreciable property taxes are imposed on a calendar-year basis and are expensed as property
and other taxes (refer to Note 14).
Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

41

3.

Summary of Significant Accounting Policies (continued)

JEI capitalizes the property-related taxes allocated to the sellers of properties to JEI at the timeof acquisition of such properties including trust accounts.
No property-related taxes were capitalized for the period from July 1, 2020 to December 31,
2020. The capitalized amount for the period from January 1, 2020 to June 30, 2020 was¥61,820 thousand.
Revenue recognition
Rental revenues are generally recognized on an accrual basis over the life of each lease.
Derivatives and hedge accounting
JEI utilizes interest-rate swap agreements as derivative financial instruments solely for the
purpose of hedging its exposure against fluctuation risk in interest rates. JEI has therefore
entered into certain interest-rate swap contracts in order to hedge the risk of variable rates for
its long-term debt obligations.
Each corresponding interest-rate swap is not required to be re-measured to fair value, because
it meets the criteria for the special hedge accounting treatment under Japanese GAAP, which
JEI applies to each interest-rate swap agreement.
Under this special hedge accounting treatment, the differentials paid or received under the swap
agreements are recognized and included in interest expense of the hedged loans, and theinterest-rate swaps are not required to be measured at fair value separately. For interest-rate
swaps that meet the specific criteria for the special accounting treatment, assessments of hedge
effectiveness are not performed.
Properties in trust accounts
All assets and liabilities held in trust, for which real estate in possession of JEI was entrusted,
and all earnings and expenses resulting from such trust, are properly reflected in theaccompanying balance sheets and statements of income and retained earnings, respectively.

4.

Cash and Cash Equivalents

Cash and cash equivalents including trust accounts in the accompanying balance sheets andcash and cash equivalents in the accompanying statements of cash flows at December 31, 2020and June 30, 2020 consisted of the following:

Cash and cash deposits
Cash and deposits in trust
Cash and cash equivalents including trust accounts

As of
As of
Decmber 31, 2020
June 30, 2020
(Thousands of yen)
19,651,182
17,620,815
16,371,216
16,194,569
36,022,399
33,815,385

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42

5.

Financial Instruments

For the periods from July 1, 2020 to December 31, 2020 from January 1, 2020 to June30, 2020
Overview(1) Policy for Financial Instruments
JEI borrows from banks, issues investment corporation bonds and issues investment units
to procure funds required to grow its assets under management and to repay liabilities,
based on the financial policy set forth by JEAM and the JEI’s Annual Funding Procurement
Plan. When procuring funds by means of interest-bearing debt, matters such as seeking
longer durations and maturities, securing fixed interest rates over the entire term of the
instrument in order to benefit from the recent favorable financial environment with low
interest rates, and diversifying maturity dates are taken into consideration to achieve a morestable financial situation and avoid the risk of future interest rate hikes. Surplus funds may
be invested in deposits and safe, liquid financial assets and investment securities, but are,in principle, placed in fixed-rate term deposits. Derivative transactions are used solely forthe purpose of hedging against the risk of fluctuations in interest rates of borrowings andinvestment corporation bonds.
(2) Types of Financial Instruments, Related Risks and Risk Management System(a) Market Risks (Interest rate fluctuation risk)
Borrowings and investment corporation bonds are primarily used to acquire properties
or to refinance existing borrowings or bonds. Some of such debt were floating rate
instruments and thus were exposed to the risk of interest rate fluctuations. Based oninterest rate forecasts developed through constant financial market monitoring
activities, JEI has concentrated on hedging against the risk of interest rate fluctuations
principally using interest-rate swaps, through which a floating interest rate is swapped
for a fixed interest rate, which finally led to 95.4% of existing borrowings being
covered by a fixed interest rate swap for the entire maturity as of December 31, 2020.
To reduce credit risk, derivative transactions (interest-rate swaps) are entered into
exclusively with counterparties that are financial institutions with high credit ratings.
For hedging accounting methods, hedging instruments, hedged items, hedging
policies and methods for evaluation of the effectiveness of hedging activities, see“Derivatives and hedge accounting” under Summary of Significant Accounting
Policies.
(b) Liquidity Risk (Risk of being unable to procure funds required for repayments)
Borrowings and investment corporation bonds are exposed to liquidity risk. This risk
is reduced through diversification of maturity dates and funding sources, andarrangement of commitment line agreements (as described in Note 8, “Short-Term
Loans and Long-Term Debt,” there is no balance outstanding under the facility
agreements as of December 31, 2020). Liquidity risk is also mitigated through theconstant management of liquidity on hand.

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43

5.

Financial Instruments (continued)(3) Supplementary Explanation of the Estimated Fair Value of Financial Instruments
The fair value of financial instruments is based on their quoted market price, if available.
When there is no quoted market price available, fair value is reasonably estimated. Sincevarious assumptions and factors are reflected in estimating the fair value, different
assumptions and factors could result in a different fair value.
Fair value of financial instruments
The following are carrying values and fair values as of December 31, 2020 and June 30, 2020of financial instruments and the differences between them. When fair value is extremely
difficult to ascertain, it is excluded from the following table (Note B).

As of December 31, 2020
Carrying
Fair value
Difference
value(Note A)
(1) Cash and cash deposits(2) Cash and deposits in trust
Total assets(3) Short-term loans (Note C)(4) Investment corporation bonds
due within one year (Note C)(5) Long-term debt
due within one year (Note C)(6) Investment corporation bonds(Note C)
(7) Long-term debt (Note C)
Total liabilities(8) Derivative transactions *19,651,182
16,371,216
36,022,399－

19,651,182
16,371,216
36,022,399－－

As of June 30, 2020
Carrying
Fair value
Difference
value(Note A)

(Thousands of yen)
17,620,815－
16,194,569－－
33,815,385

17,620,815
16,194,569
33,815,385

－
－
－

－

5,000,000

5,000,000

－

－

－

－

－

－

13,510,000

13,567,552

57,5526,000,000

6,042,447

42,44738,000,000
74,090,000
125,600,000

38,127,360
75,380,152
127,075,065

127,360
1,290,152
1,475,065

33,000,000
81,600,000
125,600,000

33,075,225
82,901,849
127,019,521

75,2251,301,849
1,419,521

－

－

－

－

－

－

* The value of assets and liabilities arising from derivative transactions is shown at net value.

(Note A)
Methods for calculating the fair value of financial instruments and matters related toderivatives transactions
Assets(1) Cash and cash deposits and(2) Cash and deposits in trust
Carrying value approximates fair value because of the short maturities of these instruments.

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5.

Financial Instruments (continued)

Liabilities(3) Short-term loans
Carrying value approximates fair value because of the short maturities of these instruments.
(5) Long-term debt due within one year and(7) Long-term debt
Where floating rates apply, book value is generally considered appropriate as fair value.
The fair value of such liabilities is considered to approximate book value, since floating
rates reflect market interest rates within a short period of time.
If the loan is part of long-term debt, in the case of floating-rate debt hedged by an interestrate swap, the fair value is calculated in a similar manner using the total principal andinterest amount, treated in combination with the interest-rate swap, given that the interestrate swap is subject to the special treatment of interest-rate swaps under Japanese GAAP.
The fair value of long-term fixed-rate debt and long-term fixed-rate debt due within one
year are calculated by applying a reasonably assumed interest rate as a discount rate, which
was determined to be applicable for the borrowings under similar conditions.
(4) Investment corporation bonds due within one year and(6) Investment corporation bonds
The fair value of investment corporation bonds issued by JEI is based on quoted market
prices.
(8) Derivative transactions
Please refer to Note 18, “Derivative Transactions.”(Note B)・Financial instruments for which fair value is deemed extremely difficult to determine
The fair values of investment securities,security deposits from tenants and security deposits
from tenants for trust accounts are as follows:① Investment securities*② Security deposits from tenants**③ Security deposits from tenants for trust accounts**
*

As of
As of
Decmber 31, 2020
June 30, 2020
(Thousands of yen)
44,72944,7291,200,885
1,197,748
12,196,393
11,961,335

Investment securities are not subject to fair value disclosure, since such financial instruments have no market
price and measuring their fair value is considered extremely difficult.

** Security deposits from tenants and security deposits for trust accounts from tenants inleased properties are not subject to fair value disclosure, since such deposits have nomarket price. Furthermore, due to their characteristics, it is extremely difficult to estimate
the fair value of security deposits in advance because of the uncertainty of the timing
when the tenant vacates. As a result, it is therefore impossible to rationally estimate theexact cash flow from such security deposits.

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5.

Financial Instruments (continued)

・The scheduled redemption amounts of financial assets after the balance sheet dateCash and cash deposits
Cash and deposits in trust
Total

Cash and cash deposits
Cash and deposits in trust
Total

1 year or less

1 to 2 years

19,651,182
16,371,216
36,022,399－－－

1 year or less

1 to 2 years

17,620,815
16,194,569
33,815,385－－－

As of December 31, 2020
2 to 3 years
3 to 4 years(Thousands of yen)
－
－
－
－
－
－
As of June 30, 2020
2 to 3 years
3 to 4 years(Thousands of yen)－－－

4 to 5 years

Over 5 years

－
－
－

－
－
－

4 to 5 years

Over 5 years

－
－
－

－
－
－

－
－
－

(Note C)The scheduled redemption amounts of borrowings, investment corporation bonds and otherinterest-bearing debt after the balance sheet date

Short-term loans
Investment corporation bonds
due within one year
Long-term debt
due within one year
Investment corporation bonds
Long-term debt
Total

Short-term loans
Investment corporation bonds
due within one year
Long-term debt
due within one year
Investment corporation bonds
Long-term debt
Total

As of December 31, 2020
2 to 3 years
3 to 4 years(Thousands of yen)－－

1 year or less

1 to 2 years

－

－

－

－

－

13,510,000－－
13,510,000－－
13,750,000
13,750,000－
4,000,000
15,770,000
19,770,000

1 year or less

1 to 2 years

5,000,000

－

－

－

－

6,000,000－－
11,000,000－－
14,510,000
14,510,000－
2,000,000
11,750,000
13,750,000

4 to 5 years

Over 5 years

－

－

－

－

－

－
8,000,000
9,770,000
17,770,000－
5,000,000
11,750,000
16,750,000－
21,000,000
23,050,000
44,050,000

4 to 5 years

Over 5 years

－

－

－

－

－

－
10,000,000
14,270,000
24,270,000－－
14,270,000
14,270,000－
21,000,000
26,800,000
47,800,000

As of June 30, 2020
2 to 3 years
3 to 4 years(Thousands of yen)－－

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6.

Investment and Rental Property

For the periods from July 1, 2020 to December 31, 2020 from January 1, 2020 to June30, 2020
JEI owns rental office buildings and other properties in Tokyo and other regions for the purposeof generating rental income. The following is the carrying value and fair value as of December
31, 2020 and June 30, 2020 for such real estate for lease.

Carrying value
As of
Change during period
As ofJuly 1, 2020(*1)
Decmber 31, 2020
(Thousands of yen)
257,186,710(1,722,880)
255,463,830
Carrying value
Change during period
As of
(*2)
June 30, 2020
(Thousands of yen)
262,443,280(5,256,569)
257,186,710

As ofJanuary 1, 2020

Fair value
As of
Decmber 31, 2020
318,162,000

Fair value
As ofJune 30, 2020
318,853,500

A) Carrying value represents the acquisition cost less accumulated depreciation.
B) Details of change during period:(*1)The decrease of ¥1,722,880 thousand during the period is mainly due to a decrease of¥1,036,839 thousand related to the disposal of JEI Nishi-Honmachi Building and adecrease of ¥1,824,586 thousand for depreciation costs.
(*2) The decrease of ¥5,256,569 thousand during the period is mainly due to an increase of¥4,901,720 thousand related to the acquisition of GRAND FRONT OSAKA (Umekita
Plaza・ South Building), an increase of ¥4,027,111 thousand related to the acquisitionof GRAND FRONT OSAKA (North Building), and a decrease of ¥7,499,453 thousand
related to the part disposal of Kowa Kawasaki Nishiguchi Building, a decrease of¥5,560,522 thousand related to the part disposal of JEI Nishi-Honmachi Building and adecrease of ¥1,946,743 thousand for depreciation costs.
C) Fair value
Fair value as of December 31, 2020 and June 30, 2020 is appraisal value provided by thirdparty real estate appraisers.

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7.

Property and Equipment

Property and equipment at December 31, 2020 and June 30, 2020 consisted of the following:
As of December 31, 2020
Acquisition
cost

Accumulated
depreciation

As of June 30, 2020

Netbook value

Acquisition
cost

Accumulated
depreciation

Netbook value(Thousands of yen)
Buildings and building
improvements
Machinery and equipment
Furniture and fixtures
Land
Construction in progress
Buildings and building
improvements for trust
accounts
Machinery and equipment
for trust accounts
Furniture and fixtures
for trust accounts
Land for trust accounts
Construction in progress
for trust accounts
Total

7,698,591
6,253
59,934
10,609,617
1,396(2,007,160)(4,224)(25,558)－－

5,691,431
2,028
34,375
10,609,617
1,396

7,657,446
6,253
52,93010,609,617
1,396(1,890,646)(3,943)(21,761)－－

5,766,799
2,309
31,16910,609,617
1,396

113,248,694(31,995,824)

81,252,869

112,803,395(30,535,340)

82,268,055

1,030,829(523,993)

506,836

951,662(497,773)

453,889

293,163
148,021,777(171,158)－

122,004
148,021,777

291,508
148,707,325(158,044)－

133,463
148,707,325

115,225
281,085,482－(34,727,920)

115,225
246,357,561

106,322
281,187,858－(33,107,509)

106,322
248,080,348

8. Short-Term Loans and Long-Term Debt
Short-term loans and long-term debt as of December 31, 2020 and June 30, 2020 consisted of
the following:
As of December 31, 2020
Weighted-averageAmountinterest rate (*1)
Short-term loans:(Thousands of yen)Unsecured loans from a bank due on March 9,
2021
Subtotal－

As of June 30, 2020
Weighted-averageAmountinterest rate (*1)
(Thousands of yen)

0.25946%－

5,000,000

0.26949%

5,000,000

Long-term debt due within one year:
Unsecured loans from a bank due on September
30, 2020
Unsecured loans from a bank due on June 30,
2021
Unsecured loans from an insurance company due
on June 30, 2021
Unsecured loans from banks due on November
29, 2021
Unsecured loans from banks due on December
30, 2021
Subtotal－

0.25276%

2,000,000

0.26841%2,000,000

1.60750% (*2)

2,000,000

1.60750% (*2)

2,000,000

0.98834% (*2)

2,000,000

0.98834% (*2)

3,760,000

0.42083%－

0.41965%

5,750,000

0.81875% (*2)－

0.81875% (*2)

13,510,000

6,000,000

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8.

Short-Term Loans and Long-Term Debt (continued)

Long-term debt:
Unsecured loans from banks due on November
29, 2021
Unsecured loans from banks due on December
30, 2021
Unsecured loans from insurance companies due
on January 31, 2022
Unsecured loans from a bank due on June 30,
2022
Unsecured loans from a bank due on September
30, 2022
Unsecured loans from insurance companies dueon November 30, 2022
Unsecured loans from banks due on December
30, 2022
Unsecured loans from a bank due on June 30,2023
Unsecured loans from an insurance company due
on June 30, 2023
Unsecured loans from banks due on November
30, 2023
Unsecured loans from banks due on November
30, 2023
Unsecured loans from a bank due on May 31,
2024
Unsecured loans from banks due on November
30, 2024
Unsecured loans from an insurance company dueon December 12, 2024
Unsecured loans from banks due on June 30,
2025
Unsecured loans from banks due on November 1,
2025
Unsecured loans from banks due on March 31,
2026
Unsecured loans from banks due on March 31,
2026
Unsecured loans from a bank due on September
30, 2026
Unsecured loans from banks due on December
30, 2026
Unsecured loans from a bank due on July 31,
2028
Unsecured loans from banks due on January 31,
2029
Unsecured loans from an insurance company due
on January 31, 2029
Subtotal
Total－

0.42083%

3,760,000

0.41965%－

0.81875% (*2)

5,750,000

0.81875% (*2)

3,000,000

0.35000% (*2)

3,000,000

0.35000% (*2)

2,000,000

1.15417% (*2)

2,000,000

1.15417% (*2)

2,000,000

0.26586%

1,000,000

0.35000% (*2)

1,000,000

0.35000% (*2)

5,750,000

0.93625% (*2)

5,750,000

0.93625% (*2)

2,000,000

1.20250% (*2)

2,000,000

1.20250% (*2)

3,000,000

0.46000% (*2)

3,000,000

0.46000% (*2)

5,270,000

0.84375% (*2)

5,270,000

0.84375% (*2)

5,500,000

0.64801% (*2)

5,500,000

0.64801% (*2)

3,500,000

0.68431% (*2)

3,500,000

0.68431% (*2)

5,270,000

0.96275% (*2)

5,270,000

0.96275% (*2)

1,000,000

0.42000% (*2)

1,000,000

0.42000% (*2)

8,000,000

0.67400% (*2)

8,000,000

0.67400% (*2)

3,750,000

0.70600% (*2)

3,750,000

0.70600% (*2)

6,400,000

0.83441% (*2)

6,400,000

0.83441% (*2)

3,750,000

0.57100% (*2)

3,750,000

0.57100% (*2)

1,300,000

0.83071% (*2)

1,300,000

0.83071% (*2)

3,000,000

0.79100% (*2)

3,000,000

0.79100% (*2)

2,000,000

0.68778% (*2)

2,000,000

0.68778% (*2)

5,600,000

0.71200% (*2)

5,600,000

0.71200% (*2)

1,000,000

0.77000% (*2)

1,000,000

0.77000% (*2)－

74,090,000

81,600,000

87,600,000

92,600,000－(*1)The weighted-average interest rate is weighted-average figures during the period. As for the borrowings hedged by interestrate swaps for the purpose of mitigating interest rate fluctuation risk, the fixed interest rates after entering into the interest rate
swap transactions are used to calculate the weighted-average interest rate.
(*2) These are fixed-rate debt (incl. fixed-rate debt through each interest-rate swap agreement).

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

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The scheduled repayment amounts of long-term debt as of December 31, 2020 are as follows:
1 year or less 1 to 2 years(Thousands of yen)
13,510,000
13,750,000

Long-term debt

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years

15,770,000

9,770,000

11,750,000

23,050,000

JEI has commitment lines of ¥14,000,000 thousand with three financial institutions to mitigate
refinancing risk and enhance financial stability. As of December 31, 2020, these commitment
lines have never been utilized.
9.

Investment Corporation Bonds

Details of total investment corporation bonds outstanding as of December 31, 2020 and June30, 2020 are summarized as follows:
As of December 31, 2020
Weighted-averageinterest rate
Amount(Thousands of yen)Unsecured bond #7
due on March 11, 2024
Unsecured bond #8
due on September 9, 2025
Unsecured bond #9
due on October 27, 2026
Unsecured bond #10
due on December 20, 2023
Unsecured bond #11
due on April 23, 2027
Unsecured bond #12
due on April 20, 2023
Unsecured bond #13
due on April 20, 2033
Unsecured bond #14
due on August 10, 2028
Unsecured bond #15
due on September 9, 2039
Unsecured bond #16
due on October 29, 2035
Total

As of June 30, 2020
Weighted-averageinterest rate
Amount(Thousands of yen)

8,000,000

1.13000%

8,000,000

1.13000%

5,000,000

1.03000%

5,000,000

1.03000%

2,000,000

0.45000%

2,000,000

0.45000%

2,000,000

0.39000%

2,000,000

0.39000%

7,000,000

0.65000%

7,000,000

0.65000%

2,000,000

0.24000%

2,000,000

0.24000%

2,000,000

0.95000%

2,000,000

0.95000%

4,000,000

0.63000%

4,000,000

0.63000%

1,000,000

1.07000%

1,000,000

1.07000%

5,000,000

0.75000%－－

38,000,000

33,000,000

The scheduled redemption amounts of investment corporation bonds as of December 31, 2020are as follows:
Investment corporation bonds

10.

1 year or less

1 to 2 years－－

2 to 3 years
3 to 4 years(Thousands of yen)
4,000,000
8,000,000

4 to 5 years

Over 5 years

5,000,000

21,000,000

Net Assets

In accordance with the Investment Trust Law, JEI issues only non-par value investment units
and maintains net assets of at least ¥50,000 thousand.

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11．Allowance for Temporary Difference Adjustment
For the Period from July 1,2020 to December 31, 2020
(1) Reason for recording reserve, related assets, initial difference and reserve amount(Thousands of yen)
Related assets

Reason forrecordingreserve

Buildings andbuilding
improvements
for trustaccounts
Land for trust
accounts

Impairment
loss

Initialdifference

Balance
as of July
1, 2020

Reserve

Reversal－ 1,406,238

1,406,238 1,406,238

Balance
as ofDecember31, 2020

Reasonforreversal

Sale of－ relevant
asset(2) Method of reversal
Impairment loss
Upon sale, the corresponding amount was reversed.
For the Period from January 1,2020 to June 30, 2020
(1) Reason for recording reserve, related assets, initial difference and reserve amount(Thousands of yen)
Reason forrecordingreserve

Initialdifference

Balance
as ofJanuary
1,2020

Buildings andbuilding
improvements
Impairment
for trust accounts loss
Land for trust
accounts

1,406,238－

Related assets

Reserve

1,406,238

Balance
as of June
30,2020

Reasonforreversal－ 1,406,238－

Reversal(2) Method of reversal
Impairment loss
Upon sale, the corresponding amount is scheduled to be reversed.

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12.

Per Unit Information

Net assets per unit as of December 31, 2020 and June 30, 2020 were calculated based on thenumber of units outstanding as of each date, (1,353,000 units) and (1,353,000 units),
respectively.
Net income per unit for the periods from July 1, 2020 to December 31, 2020 and January 1,
2020 to June 30, 2020 was calculated based on the weighted-average number of units
outstanding during the corresponding periods, (1,353,000 units) and (1,347,258 units),
respectively.
Accordingly, net assets per unit were ¥112,652 as of December 31, 2020 and ¥112,441 as ofJune 30, 2020. Net income per unit was ¥3,171 for the period from July 1, 2020 to December
31, 2020 and ¥4,179 for the period from January 1, 2020 to June 30, 2020.
13.

Income Taxes

JEI is subject to income taxes in Japan.
JEI’s policy is to make dividend distributions in excess of 90% of distributable income for eachfiscal period in order to meet the condition set forth in the Special Taxation Measures Law ofJapan concerning the deductibility of cash dividends paid for income tax purposes.
A reconciliation of the differences between the statutory tax rate and the effective tax rate forthe periods from July 1, 2020 to December 31, 2020 and January 1, 2020 to June 30, 2020 is asfollows:

Statutory tax rate
Reconciliation:
Deductible distributions paid
Increase(decrease) in valuation reserve
Reversal of reserve for reduction entry
Other
Effective tax rate

For the period
from July 1, 2020
to December 31,
2020
31.46%For the period
from January 1,
2020 to June 30,
2020
31.46%(29.76%)－(1.70%)
0.01%
0.01%

(22.37%)(7.86%)(1.23%)
0.01%
0.01%

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14.

Breakdown of Revenues and Expenses
For the period
from July 1, 2020 to
December 31, 2020

For the period
from January 1, 2020
to June 30, 2020

(Thousands of yen)
Revenues:
Rental business revenues
Rental revenues
Common area revenues
Other rental revenues
Subtotal
Other
Utilities revenues
Other revenues
Subtotal
Total rental revenues
Property operating expenses:
Property management costs and fees
Utilities expenses
Property and other taxes
Insurance
Repairs and maintenance
Depreciation
Other
Total property operating expenses
Profit8,484,786
1,249,688
264,384
9,998,859

8,712,571
1,266,554
270,975
10,250,100

654,642
76,052730,694
10,729,554

642,291
121,123
763,414
11,013,515

1,371,601
831,159
919,625
20,494
282,172
1,824,586
237,725
5,487,364
5,242,190

1,455,588
864,406
963,729
22,556
214,894
1,946,743
229,299
5,697,217
5,316,297

15. Breakdown of Gain or Loss on Sales of Real Estate Properties

For the period
For the period
from July 1, 2020 to from January 1, 2020
December 31, 2020
to June 30, 2020
(Thousands of yen)
JEI Nishi-Honmachi Building
Proceeds from sale of real estate
Cost of sales of real estate
Other related sale expenses
Gain on sale of real estate

1,351,500
1,036,839
421
314,238

7,208,000
5,560,522
2,250
1,645,227

For the period
For the period
from July 1, 2020 to from January 1, 2020
December 31, 2020
to June 30, 2020
(Thousands of yen)
Kowa KawasakiNishiguchi Building
Proceeds from sale of real estate
Cost of sales of real estate
Other related sale expenses
Gain / Loss on sale of real estate

－
－
－
－

7,560,857
7,499,453
2,557
58,846

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16．Leases
JEI leases properties on which rental revenues are earned. At December 31, 2020 and June 30,
2020, future lease revenues under non-cancelable operating leases are summarized as follows:
As of
December 31, 2020

As ofJune 30, 2020

(Thousands of yen)
Due within one year
Due after one year

1,965,230
3,316,667
5,281,898

Total

1,922,735
3,717,302
5,640,038

17. Derivative Transactions
Derivative Transactions as of December 31, 2020
(1) Transactions to which hedge accounting is not applied:
Not applicable.
(2) Transactions to which hedge accounting is applied:
The following are the contract values or values corresponding to the principal amount as
stipulated by contracts as of December 31, 2020 for each hedge accounting method applied.
Hedge
accounting
methodSpecialtreatment ofinterest-rate
swaps

Type of derivativetransaction

Interest-rate swap
Receive floating,pay fixed

Contract amount
Fair value
More than
one year(Thousands of yen)

Hedgeditem

Long-term
debt

46,140,000

40,390,000

Method ofcalculating
the fair value** Since the above interest-rate swap meets the criteria for the special hedge accounting treatment underJapanese GAAP and therefore qualifies for hedge accounting, the swap is not revalued at fair value on theaccompanying balance sheets, as described in the summary of significant accounting policies.
In addition, since the swap and the long-term debt hedged by the swap are accounted for as a unit, the fairvalue of the swap is disclosed as part of the fair value of the hedged long-term debt in the fair value disclosurein Note 5, “Financial Instruments.”

Derivative Transactions as of June 30, 2020
(1) Transactions to which hedge accounting is not applied:
Not applicable.
(2) Transactions to which hedge accounting is applied:
The following are the contract values or values corresponding to the principal amount as
stipulated by contracts as of June 30, 2020 for each hedge accounting method applied.

Asset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)54

Hedgeaccounting
methodSpecialtreatment ofinterest-rate
swaps

Type of derivativetransaction

Interest-rate swap
Receive floating,pay fixed

Hedgeditem

Long-term
debt

Contract amount
Fair value
More than
one year(Thousands of yen)

46,140,000

46,140,000

Method ofcalculating
the fair value** Since the above interest-rate swap meets the criteria for the special hedge accounting treatment underJapanese GAAP and therefore qualifies for hedge accounting, the swap is not revalued at fair value on theaccompanying balance sheets, as described in the summary of significant accounting policies.
In addition, since the swap and the long-term debt hedged by the swap are accounted for as a unit, the fairvalue of the swap is disclosed as part of the fair value of the hedged long-term debt in the fair value disclosurein Note 5, “Financial Instruments.”

18.

Related Party Transactions

For the period from July 1, 2020 to December 31, 2020
(1) Parent Company and Major Corporate Unitholders
Not applicable.
(2) Subsidiaries and Affiliated Companies
Not applicable.
(3) Sister Companies
Not applicable.
(4) Directors and Major Individual Unitholders
Account

Balance at the endof period(Thousands ofyen)

Accounts
payable399,036

Account

Balance at the endof period(Thousands ofyen)

Accounts
payable465,200

AmountName

Description of transaction(Thousands of yen)

Shuichiro
KayamaPayment of asset
management fees to JEAM

470,777

For the period from January 1, 2020 to June 30, 2020
(1) Parent Company and Major Corporate Unitholders
Not applicable.
(2) Subsidiaries and Affiliated Companies
Not applicable.
(3) Sister Companies
Not applicable.
(4) Directors and Major Individual Unitholders
AmountName

Description of transaction(Thousands of yen)

Hidehiko
Ogawa

Payment of asset
management fees to JEAM

530,406

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19. Segment Information
For the periods from July 1, 2020 to December 31, 2020 from January 1, 2020 to June30, 2020
Since JEI has been engaged in the real-estate leasing business as a single segment, segment
information has been omitted.
Information about products and services
Since revenues from external customers for a single segment of similar products and services
accounted for more than 90% of total operating revenues, information about products andservices has been omitted.
Information about geographic area
(1) Revenues
Since 100% of the total operating revenues were generated from external customers within
Japan, geographical breakdown of revenues has been omitted.
(2) Property and equipment
Since 100% of total property and equipment on the balance sheet are located within Japan,
geographical breakdown of such property and equipment has been omitted.
Information about major clients
Since no single external client represents 10% or more of JEI’s total operating revenues,
information about major clients has been omitted.

20.

Distribution Information

In accordance with Section 33.1.2 of the bylaws set forth by JEI for distributions of cash
dividends, the amount of dividends payable, which is limited by the amount of retained earnings
at end of period, shall be in excess of 90% of its distributable income for the fiscal period as set
forth in Section 67.15 of the Special Taxation Measures Law.
JEI determined to distribute the whole amount obtained by deducting the reversal of Allowancefor temporary difference adjustment and provision of reserve for reduction entry due to thetransfer of real estate properties in accordance with Section 65.7 of the Special Taxation
Measures Law from unappropriated surplus.
Consequently, JEI set income available for distributions of dividends at ¥4,059,000,000, whichis the maximum integral multiple of the 1,353,000 units issued, but not exceeding¥4,059,247,002, which is the amount of retained earnings at December 31, 2020.
No cash distribution exceeding the income amount set forth in Section 33.1.4 of the bylaws of
JEI shall be made.
On February 17, 2021, the Board of Directors approved a resolution to make a cash distributionof ¥3,000 per unit aggregating to ¥4,059,000,000 to unitholders of record as of December 31,
2020.

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21.

Accounting Standards Issued But Not Yet Applied

As of December 31, 2020, JEI has not yet applied the following accounting standards and theirimplementation guidance.
(1) Accounting Standard for Revenue Recognition and its Implementation Guidance“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan(“ASBJ”) Statement No.29, March 31, 2020)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ
Guidance No. 30, March 31, 2020)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No. 19, March 31, 2020)(a) Overview
Conducting a joint project to clarify the comprehensive principles for recognizing
revenues, the International Accounting Standards Board (“IASB”) and the Financial
Accounting Standards Board (“FASB”) in the U.S. issued “Revenue from Contracts with
Customers” (IFRS 15 by IASB and Topic 606 by FASB) in May 2014. IFRS 15 became
effective from fiscal periods beginning on or after January 1, 2018 and Topic 606 became
effective from fiscal periods beginning after December 15, 2017. Under thesecircumstances, ASBJ also developed a comprehensive accounting standard for revenue
recognition and issued a new standard together with its implementation guidance.
As a basic policy for the development of the new standard, ASBJ determined to adopt
the core principles of IFRS 15 in order to enhance comparability of financial statements,
which is one of the benefits of consistency with IFRS 15. In addition, for any item to beconsidered arising from business practices in Japan, alternative treatments shall be added
to the extent that comparability is not impaired.
(b) Scheduled date of application
JEI will apply the aforementioned standard and guidance from the beginning of the
fiscal period ending December 31, 2021.
(c) Effect of application of the new accounting standard
The effect of application of the aforementioned standard on JEI’s financial statements
is currently under evaluation.
(2) Accounting Standard for Fair Value Measurement and its Implementation Guidance“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, July 4, 2019)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No. 19, March 31, 2020)(a) Overview
Developing accounting standards for fair value measurement, IASB and FASB issued
new common fair value measurement in May 2011 (IFRS 13 by IASB and update to
Topic 820 by FASB). IFRS 13 became effective from fiscal periods beginning on or afterJanuary 1, 2013 and Topic 820 became effective from fiscal periods beginning after
December 15, 2011. Under these circumstances, ASBJ also developed an accounting
standard for fair value measurement and issued a new standard together with its
implementation guidance.
As a basic policy for the development of the new standard, ASBJ determined toAsset Management Report for the 29th Period (Semi-Annual Report for the 29th Period)

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generally adopt all the principles of IFRS 13 in order to enhance comparability offinancial statements among domestic and overseas companies, by applying the consistentmeasurement methods. However, for any item to be considered arising from businesspractices in Japan, other treatment for the item shall be determined to the extent thatcomparability is not impaired.
(b) Scheduled date of application
JEI will apply the aforementioned standard and guidance from the beginning of the
fiscal period ending December 31, 2021.
(c) Effect of application of the new accounting standard
The effect of application of the aforementioned standard on JEI’s financial statements
is currently under evaluation.
(3)

Accounting Standard for Disclosure of Accounting Estimates“Accounting Standard for Disclosure of Accounting Estimates”(ASBJ Statement
No.31,March 31,2020)(a) Overview
The ASBJ issued this accounting standard in response to requests to develop an
accounting standard which requires a footnote information similar to the disclosure
requirement as to “key sources of estimation uncertainty” prescribed in Paragraph 125of the international Accounting Standard(“IAS”) 1 “Presentation of Financial
Statements” issued in 2003, since it is very useful information for users of financial
statements.
The basic policy of the ASBJ in developing this accounting standard is not to expand
the number of individual notes, but to set out the disclosure principles. Thus, the entity
shall jude the specific content of disclosure details based on the purpose of disclosure.
In developing this standard, the ASBJ referred to the provisions of Paragraph 125 of
IAS 1.
(b) Scheduled date of application
JEI will apply the aforementioned standard from the end of the fiscal period ending June30, 2021.

(4) Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error
Corerections“Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error
Corrections”(ASBJ Statement No.24, March 31,2020)(a) Overview
This accounting standard was developed to enhance the footnote information as tothe accounting principles and procedures adopted in cases where related provisions ofaccounting standards are not clear. The accounting standard requires to take over theprovisions of the explanatory paragraph of Corporate Accounting Principles(Note 12) in order not to affect the current practice when related provisions of accounting
standards are clear.
(b) Scheduled date of application
JEI will apply the aforementioned standard from the end of the fiscal period ending
June 30, 2021.
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22.

Significant Subsequent Event

Not applicable.
23.

Additional Information

Not applicable.
24.

Information on Allowance for Temporary Difference Adjustment

For the period from July 1, 2020 to December 31, 2020
Not applicable.
For the period from January 1, 2020 to June 30, 2020
(1) Reason for reversal, related assets and amounts

Related assets

Buildings and building improvements for trust accounts
Land for trust accounts(Thousands of yen)
Provision ofallowance
Reason offorreversal
temporarydifference
adjustment
Sales(1,406,238)(2) Method of reversal
Impairment loss
Upon sale, the corresponding amount is scheduled to be reversed.

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