Creating peace of mind through honest and committed management.

December 18, 2014

FINANCIAL REPORT FOR THE FISCAL PERIOD ENDING OCTOBER 2014
(May 1, 2014 – October 31, 2014)
Ichigo Real Estate Investment Corporation (“Ichigo REIT” Tokyo Stock Exchange, 8975)
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-reit.co.jp/english
Ichigo Real Estate Investment Advisors Co., Ltd. (Ichigo REIT Asset Management Company)
Representative: Wataru Orii, President & Representative Statutory Executive Officer
Inquiries: Masanori Kubota, Statutory Executive Officer (Finance, Accounting)Telephone: +81-3-3502-4891
Submission of Financial Report (Yuka Shoken Hokokusho): January 27, 2015 (expected)
Dividend Payment: January 23, 2015 (expected)
Supplemental Material to Financial and Business Results: Yes (Corporate Presentation)
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1. Financial Results for the Fiscal Period Ending October 2014
(Monetary figures are rounded down to the nearest million yen)

(1) Earnings(million yen; period-on-period change)

Operating
Revenue

ChangeOperating
ProfitChangeRecurring
ProfitChangeNet
IncomeChangeOctober 2014

4,615

(0.5 %)

2,139(2.2%)

1,410

7.9%

1,409

7.9%

April 2014

4,637

1.4 %

2,187

(4.6%)

1,307(12.3%)

1,306(12.3%)Net Income per Share(yen)

Ratio of Net Income
to Equity

Ratio of Recurring Profit
to Total Assets

Ratio of Recurring Profit
to Operating Revenue

October 2014

1,373

2.3%

1.1%

30.6%

April 2014

1,295

2.2%

1.1%

28.2%

(2) Dividends
Dividend per
Share(not including
dividends in excessof earnings)

Total
Dividends

Dividend per Sharein Excess of
Earnings

Total Dividends in
Excess of Earnings

PayoutRatio

Ratio of
Dividends to
Net Assets(yen)(million yen)

(yen)(million yen)

(%)

(%)

October 2014

1,547

1,587

0

0

112.6

2.6

April 2014

1,541

1,581

0

0

121.0

2.6

(Note 1) The April 2014 dividend reflects a 275 million yen dividend reserve reversal and thus differs from Net
Income.
(Note 2) The October 2014 dividend includes a dividend reserve reversal of 177 million yen and thus differsfrom Net Income.

(3) Assets and Equity
Total Assets(million yen)

Net Assets(million yen)

Equity Ratio(%)

Net Assets per Share(yen)

October 2014

123,668

61,09849.4

59,531

April 2014

124,399

61,27049.3

59,698Cash Flow fromOperating Activities

Cash Flow from
Investment Activities

Cash Flow from
Financing Activities(4) Cash Flow(million yen)(million yen)(million yen)

Cash and Cash
Equivalents at End of the
Period(million yen)

October 2014

2,923

(578)

(2,054)

10,485

April 2014

8,111

(8,447)854

10,195

2. Earnings Forecast for the Fiscal Period ending April 2015 (November 1, 2014 to April 30, 2015)(million yen; period-on-period change)

April 2015

Operating
Revenue

ChangeOperating
IncomeChangeRecurring
ProfitChangeNet
IncomeChange

4,973

7.7%

2,278

6.5%

1,265

(10.3%)

1,264(10.3%)(yen)

Dividend per Share(not including dividends in excess of earnings)

April 2015

(Note 1)
(Note 2)

1,590

Dividend per Share in Excess of Earnings
0

The forecast Net Income per share for April 2015 is 1,118 yen.
The April 2015 dividend includes a dividend reserve reversal of 537 million yen and thus differsfrom Net Income.

2

3. Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement(i) Changes Accompanying Amendments to Accounting Standards:(ii) Changes Not Listed in (i):(iii) Changes in Accounting Estimates:(iv) Retrospective Restatement:

None
None
None
None

(2) Number of Shares Issued and Outstanding(i) The number of shares issued and outstanding (including treasury shares) was 1,026,323 shares atthe end of April 2014 and at the end of October 2014.
(ii) There were no treasury shares at either the end of April 2014 or at the end of October 2014.
Completion Status of Auditing ProceduresThis document is not subject to the auditing requirements set forth in the Financial Instruments and Exchange
Law of Japan. The auditing procedures in accordance with those requirements have thus not been completed asof the date of the publication of this document.
Appropriate Use of Performance Forecasts and Other Matters of Special Note
The forecasts presented above are current figures based on certain preconditions. Accordingly, the actual
operating revenue, operating income, recurring profit, net income, dividend per share, and dividend per share inexcess of earnings may vary due to changes in circumstances. Moreover, these forecasts should not be construed
as a guarantee of such performance or results.
For details on preconditions, please refer to the “Preconditions for Earnings Forecast of the Fiscal Period ending
April 2015” on page 4.
This English version is a translation of the original Japanese notice and is provided solely for informational
purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shallprevail.

3

Preconditions for Earnings Forecast for the Fiscal Period ending April 2015
Item
PeriodPortfolio Assets

Number of Shares

Operating Revenue

Operating Expenses

Preconditions
November 1, 2014 – April 30, 2015 (181 days)
 66 assets in total. 70 assets as of October 31, 2014 and the 11 assets to be newly acquired, minus 15
assets to be sold, as announced in the release “Asset Acquisitions and Sales” on November 14, 2014.
The forecast assumes there will be no additional acquisitions or sales before the end of April 2015.
 The number of assets may change due to acquisitions or sales.
 1,130,323 shares: the sum of 1,122,003 shares issued and outstanding as of December 18, 2014 plus a
maximum of 8,320 shares to be issued from a third-party allotment. The forecast assumes there will be
no additional new issuance before the end of April 2015.
 Rent revenue is calculated conservatively based on lease contracts that are in effect as of October 31,
2014 while taking into consideration such factors as historical rents, the competitiveness of theproperties, and market conditions.
 Among rental activity expenses, Ichigo REIT’s principal operating expenses and expenses other thandepreciation are calculated based on historical data while taking into consideration variable expenses.
 The anticipated amount of property tax and city planning tax is 324 million yen for the April 2015
period. The prorated property tax and city planning tax related to these acquisitions will be included in
the acquisition cost and shall be excluded from operating expenses.
 The amount for building maintenance and repair expenses is estimated to be 99 million yen for the
April 2015 period. However, expenses for each period could differ significantly from these estimatedamounts for reasons including the variability of maintenance and repair expenses, costs due to
unexpected building damage, etc.
 Service provider expenses including property management fees, etc., are estimated to be 461 million
yen for the April 2015 period.
 Depreciation has been calculated using the straight-line method. Depreciation is calculated byincluding the depreciation for future additional capital expenditures in the amortization amount.
Depreciation of 663 million yen has been anticipated for the April 2015 period.
 Actual operating expenses may differ significantly from assumptions due to unforeseeable factors.

Non-operating
Expenses Interest expenses of 416 million yen are anticipated for the April 2015 period.
 Borrowing-related expenses of 569 million yen are anticipated for the April 2015 period.
 Expenses related to the new share issuance of 28 million yen are anticipated for the April 2015 period.

Borrowings

 Ichigo REIT’s balance of loans payable stands at 55,936 million yen as of October 31, 2014.
 5,500 million yen of new borrowing occurred on December 10, 2014.
 7,000 million yen of new borrowing occurred on December 15, 2014.
 1,500 million yen of new borrowing on January 9, 2015 is assumed.
 8,771 million yen from the sales of 15 assets will be used for partial loan prepayment.
 1,100 million yen of partial prepayment on January 31, 2015 is assumed.
 The maturities of the Aozora Bank Syndicate Loan (4,525 million yen) and SMBC Syndicate Loan I(4,992 million yen) arrive during the April 2015 period. The forecast assumes refinancings of the sameamounts.

Dividend per Share Dividends are based on the assumption that distribution will comply with the dividend distribution
policy stipulated in Ichigo REIT’s Articles of Incorporation.
 The dividend for April 2015 is assumed to be 1,802 million yen, which is the total amount of retained
earnings of 1,264 million yen plus a dividend reserve reversal of 537 million yen.
 The dividend per share is subject to change due to factors such as changes in rental revenue associatedwith tenant turnover, the occurrence of unexpected maintenance and repair costs, fluctuations ininterest rates, as well as additional share issuance.

Dividend in Excess of
Earnings per Share Ichigo REIT does not plan on making any dividend distribution in excess of earnings per share or
retained earnings.

4

Other Performance forecasts are based on the assumption that impactful revisions will not be made to laws
and ordinances, the tax system, accounting standards, listing rules, and rules of the Investment Trusts
Association, Japan, etc.
 Performance forecasts are also based on the assumption that there will be no unexpected materialchange in general economic trends, real estate market conditions, etc.

5Financial Statements(1) Balance Sheet(Thousand yen)
April 2014(as of April 30, 2014)

October 2014(as of October 31, 2014)

AssetsCurrent assets
Cash and deposits

4,580,896

4,961,374

Cash and deposits in trust

5,642,712

5,556,132

Operating accounts receivable

25,98849,147

Prepaid expenses

310,710

258,899

Deposit paid

387,267-

Other
Total current assets

4,984

4,936

10,952,559

10,830,491

Noncurrent assets
Property, plant, and equipment
Buildings

8,665,447

8,691,090

Accumulated depreciation(637,619)(764,033)

Buildings, net

8,027,828

7,927,057

Structures
Accumulated depreciation
Structures, net

35,88235,882(11,440)(13,659)

24,442

22,222

263,166

263,899

Accumulated depreciation(51,338)(62,048)

Structures, net

211,828

201,850

Machinery and equipment

FixturesAccumulated depreciation
Fixtures, net
Land
Buildings in trust

52,55458,482(16,804)(21,782)

35,75036,70019,555,504

19,555,504

28,261,033

28,462,782

Accumulated depreciation(2,662,911)(3,079,859)

Buildings in trust, net

25,598,122

25,382,922

Structures in trust
Accumulated depreciation
Structures in trust, net

69,90372,649(13,864)(15,393)

56,03957,255

Machinery and equipment in trust

237,226

255,300

Accumulated depreciation(62,834)(75,535)

Machinery and equipment in trust, net

174,391

179,765

Fixtures in trust
Accumulated depreciation
Fixtures in trust, net

663,541

677,481(191,039)(209,765)

472,502467,71554,371,985

54,108,394

2,785

3,206

108,531,180

107,942,596

Leasehold rights in trust

4,494,579

4,494,579

Total Intangible assets

4,494,579

4,494,579

Land in trust
Construction in progress in trust
Total property, plant, and equipment
Intangible assets

6

(Thousand yen)
April 2014(as of April 30, 2014)

October 2014(as of October 31, 2014)

Investments and other assets
Tenant leasehold and security deposits

15,227

15,227Long-term prepaid expenses

400,515375,687

Other
Total investments and other assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Accounts payable – others
Accrued expenses
Income taxes payable, etc.
Accrued consumption taxes, etc.
Advances received
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Shareholders’ capital
SurplusCapital surplus
Dividend reserve
Unappropriated retained earnings /loss
Total surplus
Total shareholders’ equity
Total net assets
Total liabilities and net assets

7

5,378

9,482

421,120

400,397

113,446,881

112,837,572

124,399,440

123,668,064

389,423
10,633,000
288,992
59,131
605
52,163680,062
16,423
12,119,801

188,335
17,345,410
278,806
44,607605
133,230
749,636
13,57618,754,207

45,776,883
1,764,447
3,463,403
4,782
51,009,517
63,129,318

38,591,161
1,771,515
3,447,888
4,799
43,815,364
62,569,572

25,782,839

25,782,839

20,566,420
13,613,797
1,307,064
35,487,282
61,270,121
61,270,121
124,399,440

20,566,420
13,338,498
1,410,732
35,315,652
61,098,491
61,098,491
123,668,064

(2) Income Statement(Thousand yen)
April 2014
(November 1, 2013 toApril 30, 2014)

October 2014
(May 1, 2014 to
October 31, 2014)

Operating revenue
Rental revenue
Other rental revenue

4,151,072

4,080,532

432,086

477,585

Gain on sales of real estate

54,28257,807

Total operating revenue

4,637,441

4,615,924

1,911,499

1,982,518

412,529

383,510

Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee

9,315

9,463

Administrative service fees

30,401

33,565

Directors’ compensation

6,300

5,929

Other operating expenses

79,48561,641

Total operating expenses

2,449,531

2,476,627

2,187,910

2,139,296

Operating profit
Non-operating income
Interest income

1,009

1,018

Reversal of distribution payable

469

548

Insurance Income

303

25

Interest on tax refund

797

384

2,579

1,977

Interest expenses

553,529457,393

Borrowing related expenses

303,141

273,341

Share issuance expenses

26,753-

Total non-operating income
Non-operating expenses

Total non-operating expenses

883,425

730,735

Recurring profit

1,307,064

1,410,538

Income (losses) before income taxes

1,307,064

1,410,538

605

605

Income taxes – current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings/loss

8

605

605

1,306,459

1,409,933

604

799

1,307,064

1,410,732

(3) Statement of Shareholders’ Equity
April 2014 (November 1, 2013 to April 30, 2014)(Thousand yen)
Shareholders’ equity

Surplus
Shareholders’capitalBalance at start of the period

20,360,120

CapitalsurplusDividend
reserve

Unappropriatedretainedearnings/loss

20,566,420

13,558,219

1,489,931

Total
surplus35,614,571

Total
shareholders’equityBalance atstart of theperiod55,974,691

55,974,691

5,422,719

5,422,719

Changes during the period
Issuance of new shares

5,422,719

Reversal of dividend reserve(55,577)―――

Dividends from surplus

55,577(1,433,748)(1,433,748)(1,433,748)(1,433,748)

Net income

1,306,459

1,306,459

1,306,459

1,306,459

Total changes during the period

5,422,719―

55,577(182,866)(127,289)

5,295,430

5,295,430

Balance at end of the period

25,782,839

20,566,420

13,613,797

1,307,064

35,487,282

61,270,121

61,270,121

October 2014 (May 1, 2014 to October 31, 2014)(Thousand yen)
Shareholders’ equity

Surplus
Shareholders’capitalBalance at start of the period

25,782,839

Total
shareholders’ equity

Balance atstart of theperiodCapitalsurplusDividend
reserve

Unappropriatedretainedearnings/loss

20,566,420

13,613,797

1,307,064

35,487,282

61,270,121

61,270,121(275,298)

275,298―――(1,581,563)(1,581,563)(1,581,563)(1,581,563)

Total
surplus

Changes during the period
Reversal of dividend reserve
Dividends from surplus
Net income
Total changes during the period
Balance at end of the period

1,409,933

1,409,933

1,409,933

1,409,933――(275,298)

103,668(171,630)(171,630)(171,630)

25,782,839

20,566,420

13,338,498

1.410,732

35,315,652

61,098,491

61,098,491

9

(4) Cash Flow Statement(Thousand yen)
October 2014
(May 1, 2014 to
October 31, 2014)

April 2014
(November 1, 2013 toApril 30, 2014)
Cash flows from operating activities
Income before income taxes

1,307,064

1,410,538

Depreciation and amortization

591,914605,639

Share issuance expenses

26,753-

Interest income(1,009)(1,018)Interest expenses

553,529457,393(23,159)

Decrease (increase) in operating accounts receivable(11,875)

Decrease (increase) in consumption taxes receivable

94,383-

Decrease (increase) in prepaid expenses

16,34451,810Decrease (increase) in long-term advance charges
Decrease (increase) in deposit paid

67,411

24,828(140,686)

387,267

Increase (decrease) in accrued consumption taxes

38,33981,067

Increase (decrease) in operating accounts payable

4,175(22,278)

Increase (decrease) in accounts payable – others

23,083(10,186)

Increase (decrease) in advances received
Decrease by sale of property, plant, and equipment in trust

25,647

69,844

6,095,227

377,532

Other, net(4,847)(13,915)

Subtotal

8,685,457

3,395,363

Interest income received
Interest expenses paid
Income taxes paid

1,009

1,018

(574,190)(471,917)

(605)

(605)

8,111,670

2,923,859(100,093)(38,552)

Purchase of property, plant, and equipment in trust(3,946,343)(534,296)

Purchase of intangible assets in trust(4,494,579)-

Increase in tenant leasehold and security deposits

50,05457,362

Decrease in tenant leasehold and security deposits(40,213)(47,793)

Net cash provided by (used in) operating activities
Cash flows from investment activities
Purchase of property, plant, and equipment

Increase in tenant leasehold and security deposits in trust

469,301

94,962

Decrease in tenant leasehold and security deposits in trust(385,293)(110,432)(8,447,167)(578,749)

Net cash provided by (used in) investment activities
Cash flows from financing activities
Increase in long-term loans payable

6,000,000

6,500,000

Decrease in long-term loans payable(9,109,250)(6,973,312)

Proceeds from issuance of shares

5,395,966-

Dividends paid

(1,432,689)(1,581,233)

854,027(2,054,545)

Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents

518,529

290,564

Cash and cash equivalents at beginning of the period

9,676,732

10,195,262

Cash and cash equivalents at end of the period

10,195,262

10,485,827

10