http://nud-reit.co.jp/en
Urbannet Nakano Building

41 Semiannual ReportstFiscal Period

Ended April 30, 2023

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

FEATURES OF
NTT UD REIT INVESTMENT CORPORATION

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

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

2

Compound Portfolio with Office Buildings and Residential Properties
as Main Investment Targets■ Mitigates the impact of economic fluctuations by combining asset types that have low correlation to each otherin terms of market rent fluctuations■ Diversifies the tenant base into different types such as corporations and individuals
Portfolio Distribution by Asset Type(As of April 30, 2023)

Residence

OfficeStability

Profitability

Stable demands evenin a receding economy

Exerts strengths when theeconomy is recovering

28.4%

71.6%

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

Portfolio Focused in the Tokyo Economic Bloc

■ Focuses investments in the Tokyo Economic Bloc, which enjoys an established economic base due to a highconcentration of population and industry■ Partially expands the target investment area to Major Regional Cities (strengthening ties with NTT UD)
Results of Property Acquisitions through NTT UD’s Pipelines

Portfolio Distribution by Geographical Area

(As of April 30, 2023)(As of April 30, 2023)

Other

8.7%

NTT Urban Development

17.5

82.3%

18.1 bn yen

Major Regional Cities

4.0%(Chiyoda Ward, Chuo Ward, Minato Ward,
Shinjuku Ward and Shibuya Ward)

Urban Areas Surrounding Tokyo

69.5%

bn yenOther sponsors

9.0%
165.0
bn yen1

Total acquisition pricesince May 2010

200.6 billion yen

5 Central Wards of Tokyo

3.7%
Other 18 Wards of Tokyo

22.9%

2

41ST FISCAL PERIODPERFORMANCE HIGHLIGHTSMESSAGE TO OUR UNITHOLDERS

Financial Results Highlights
Distribution per Unit (Note 1)

Takeshi Oodera

Yutaka Torigoe

Executive Director

President and CEO

NTT UD REIT Investment Corporation(NUD)(Asset management company)
NTT Urban Development Asset Management Corporation(UDAM)On behalf of NTT UD REIT Investment Corporation (NUD), I would like to express our sincere gratitude for the loyal
patronage of our unitholders.
With NTT Urban Development Corporation becoming its sole sponsor in October 2020, the Investment Corporation
changed its name to NTT UD REIT Investment Corporation in April 2021. Since then, we have continued to ensure
steady growth of the portfolio and secure stable earnings by further leveraging support from the sponsor.
In the 41st fiscal period that ended April 2023, NUD conducted an asset replacement transaction. Rokubancho
Building, from which the sole tenant moved out during the period, was transferred to the sponsor (part of theownership interest will be transferred in the 42nd fiscal period) and Urbannet Nakano Building, a property operating
at stable occupancy, was acquired. Thanks to the support of the sponsor, NUD was able to achieve an earlyrecovery in earnings and utilize unrealized gains for returns to unitholders.
As for the owned properties other than the replaced ones, the occupancy rate remained stable at over 95% forboth office buildings and residential properties. As a result, NUD posted operating revenues of 12,346 million yen
and net income of 5,007 million yen for the 41st fiscal period. Distribution per unit came to 3,216 yen, whichsurpassed the forecast of 3,150 yen for the period announced as of February 24, 2023. NUD’s owned assets as ofApril 30, 2023, comprise 60 properties with 28 office buildings and 32 residential properties amounting to 275.1
billion yen in total.
Looking ahead, we at NUD will continue our utmost efforts to meet the expectations of our unitholders by realizing
steady growth of assets and stable management over the medium to long term in line with the growth strategy of
the NTT Group. We appreciate and request your continued support and encouragement.

Table
of
Contents

3

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

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

27
29
30
31
32
47

Strategic Policies 

51

Independent Auditor’s Report 59¥ 3,216

41st Fiscal Period (ended April 2023)¥ 3,150 (forecast)

42nd Fiscal Period (ending October 2023) (Note 2)(Note 1)	Number of outstanding investment units at
end of period:		
40th Fiscal Period: 1,401,635 units		
41st Fiscal Period: 1,401,635 units		42nd Fiscal Period: 1,401,635 units (forecast)(Note 2)	The figure is based on what was announced
in the Financial Report for the 41st Fiscal
Period Ended April 30, 2023 (November 1,
2022 – April 30, 2023) dated June 15, 2023.

40th Fiscal Period

41st Fiscal Period(as of October 31, 2022)(as of April 30, 2023)

Operating Revenues

10,618 million yen

12,346 million yen

Operating Income

4,339 million yen

5,447 million yen

Ordinary Income

3,909 million yen

5,007 million yen

Net Income

3,907 million yen

5,007 million yen

Total Assets

277,449 million yen

277,216 million yen

Net Assets

137,656 million yen

138,756 million yen

Net Assets Ratio

49.6%

50.1%

Net Assets per Unit

98,211 yen

98,996 yen

Total assets basis

45.4%

45.0%

Market value basis

38.8%

38.1%

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

Monthly Occupancy Rate for the 41st Fiscal Period
(%)
100

98

Features of NTT UD REIT Investment Corporation 
Message to Our Unitholders 
41st Fiscal Period Performance Highlights 
Status of External Growth Collaboration with the NTT Group 
Initiatives on ESG Awareness Management Status in the 41st Fiscal Period 
Financial Status in the 41st Fiscal Period Property Portfolio Overview of Properties Owned Organization of NUD 
Information for Unitholders ¥ 2,787

40th Fiscal Period (ended October 2022)

96

96.6%
96.4%
96.4%

96.5%
96.3%

96.6%
96.4%

96.3%

96.3%

96.8%

94.1%

96.5%

94.3%

92.7%

Total
95.1%

93.2%

94.5%
Officebuildings

End of Mar. 2023

End of Apr. 2023

94

92

Residential
properties
96.2%

90

End of Nov. 2022

End of Dec. 2022

End of Jan. 2023

End of Feb. 2023

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

4

(41st Fiscal Period Performance Highlights)

STATUS OF EXTERNAL GROWTH

Portfolio Status

Property Replacement (41st Fiscal Period to 42nd Fiscal Period)
40th Fiscal Period

41st Fiscal Period(as of October 31, 2022)(as of April 30, 2023)

No. of properties

59 properties

60 properties

Acquisition price272.6 billion yen

275.1 billion yen

Average building age (Note 1)

23.6 years

24.2 years

Occupancy rate at end of period

96.3%

95.1%

3,972

3,954

5.2%

4.9%

4.0%

3.7%

No. of tenants
NOI yield (Note 2)
Yield after depreciation(Note 3)Distribution by asset type

28.6%

Overview of Office Properties Replacement
Property Acquired in 41st Fiscal Period

Property transferred in 41st Fiscal Period
to 42nd Fiscal Period

Urbannet Nakano Building

Rokubancho Building

Nakano Ward, Tokyo

Chiyoda Ward, TokyoNTT Urban Development

NTT Urban Development

Acquisition/transfer date

March 14, 2023

First: April 7, 2023
Second: May 26, 2023

Acquisition/transfer price6,400 million yen

First: 5,250 million yen

28.4%
71.4%

■ Office Buildings

Leveraged sponsor support from NTT UD to replace Rokubancho Building, of which profitability is predicted toworsen significantly due to the move-out of the sole tenant, with Urbannet Nakano Building, which has been
operating at stable occupancy. The transaction allowed NUD to secure stable revenue and expand its acquisition
capacity.

71.6%■ Residential Properties

3.7%

4.0%

3.7%

4.0%

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

20.7%

71.5%

22.9%

69.5%

■ Urban Areas Surrounding Tokyo

Location
Seller/buyer■ Major Regional Cities(Note 1) Average building age is calculated by adding the building age of Akihabara UDX (that backs the preferred securities in which NUD holds 19.0% ownership).
(Note 2)	NOI yield is calculated by using the following formulas.
NOI yield = annualized rental NOI* / investment value**		*	Annualized rental NOI = sum total of [(real estate rental income + depreciation + dividend income from preferred securities) x 2] of owned assets (including preferred
securities) for each fiscal period		** Investment value = sum total of book value as of the end of each fiscal period of owned assets (including preferred securities) for each fiscal period(Note 3)	Yield after depreciation is calculated by using the following formulas.
Yield after depreciation = annualized real estate rental income* / investment value**		*	Annualized real estate rental income = sum total of [(real estate rental income + dividend income from preferred securities) x 2] for owned assets (including preferred
securities) for each fiscal period		** Investment value = sum total of book value as of the end of each fiscal period of owned assets (including preferred securities) for each fiscal period

10,500 million yen
Second: 5,250 million yen

Appraisal value

6,520 million yen

Gain on sale—

NOI/year (Note 1)

298 million yen

NOI yield (Note 2)

4.7%

10,500 million yen
41st Fiscal Period actual:
1,471 million yen
42nd Fiscal Period forecast:
1,475 million yen

445 million yen
Book value yield: 5.9%
Fair value yield: 4.2%

(Note 1) Appraisal NOI is indicated for the acquired property, while annualized actual NOI for the 40th fiscal period is indicated for the transferred property.
(Note 2)	The NOI yield of the acquired property is calculated by dividing the appraisal NOI (annual) by the acquisition price. For the transferred property, the book value yield is calculatedby dividing the actual NOI (annual) for the 40th fiscal period by the book value at end of the 40th fiscal period, and the fair value yield is calculated by dividing the actual NOI (annual)for the 40th fiscal period by the appraisal value.

5

6

(Status of External Growth)

COLLABORATIONWITH THE NTT GROUP

Overview of Urbannet Nakano Building

Changes in Asset Size
Land area
2,812.61 m2

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

(bn yen)NTT Urban Development Corporation

Other sponsors

272.6 272.6 275.1

Total floor space
9,268.73 m2
Standard floor space

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

Approx. 440 tsubo

139.3
46.9

146.0

224.4

216.3

243.7 243.7 243.7 246.7

45.2 45.2

41.2

60.2 60.2

59.4 60.2 60.2
60.2 60.2 60.2 60.2
44.4 44.4 44.4 44.4 44.4

44.4
89.2 89.2

89.2

91.0 89.2
102.3 96.1 96.1 96.1 96.1 96.1 96.1 96.1 91.0 910 91.0 91.0

46.9 46.9
110.5

46.9

102.3

110.5 110.5 110.5 110.5

Occupancy rate
100.0%(As of April 30, 2023)

249.0 246.4 246.4
235.8 233.2 235.9 235.9 234.0

44.4
165.8 165.8 44.4 44.4 44.4

October 1988

Reinforced concrete
structure
Six stories with flat roof

261.8 260.0

196.5 196.5 196.5 199.4 44.4

Completed

Structure

Other

138.2 138.2 144.6

104.6 104.6
92.4 99.1
69.4 69.4

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

110.6 110.6

41.5 41.5 41.5 44.4
14.3 14.3

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

Top 10 Tenants Occupying NUD’s Office Buildings (as of April 30, 2023)
NTT Group

Rank

Tenant nameLeasedfloor space

Ratio

Property(Note 1)

1

NTT Facilities, Inc.

10,994 m2

5.9%

Urban Ace Higobashi Building, etc.

2

DOCOMO CS, Inc.

10,525 m2

5.7%

Urbannet Ikebukuro Building

3

NTT Business Associe East Co., Ltd.

7,488 m2

4.0%

Urbannet Omori Building

Location characteristics

4

Tokyo Legal Mind K.K.

7,139 m2

3.8%

Urbannet Nakano Building■ The area around the North side of Nakano Station where the property is located is close to Central Tokyo but

5

NTT Finance Corporation

6,248 m2

3.4%

Urbannet Ikebukuro Building, etc.

includes an urban planning park of approx. 21,000 m (Shikinomori Park), making it an area that combines
cutting-edge facilities with lush greenery and nature. With large-scale redevelopments planned in surrounding
areas, further business concentration is expected in the future.

6

MIRAIT ONE Corporation

5,325 m2

2.9%

Urbannet Gotanda NN Building, etc.

7

Nippon Telegraph and Telephone East Corporation

5,159 m2

2.8%

Tokyo Opera City Building■ The property faces Waseda-dori street and features good visibility, and can expect greater convenience as

8

NTT Learning Systems Corporation

4,801 m2

2.6%

Urbannet Azabu Building

9

NTT DATA Corporation

3,552 m2

1.9%

Urbannet Mita Building

10

NTT Communications Corporation

2,817 m2

1.5%

Granpark

Total

64,053 m2

34.5%

2

Nakano Ward Office is planned to be relocated to the adjacent land in 2024.

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

7

8

INITIATIVES ON ESG AWARENESS
Environment

Case 2: NTT CRED Okayama Building and others■ 2022 GRESB Real Estate Assessment and GRESB Public Disclosure■ Installed AI cameras and digital signage in smoking areas

Global/Listed/Diversified
Asian Region/Diversified(Office/Residential)

GRESB Rating

GRESB Public Disclosure“Sector Leader”“5 Stars”“A” assessment (highest rank)• Congestion is monitored in real time with AI cameras and can be checkedon a dedicated website at any time
• Recorded advertising revenue from distributing advertisements on thedigital signage■ Support for Artistic and Cultural Activities■ Sponsored “The story of Orpheus” by Philippe Jaroussky
at Tokyo Opera City Concert HallTokyo Opera City Cultural Foundation

Governance■ Acquisition of Environmental Certifications■ Basic Policy on Customer-Oriented Business Conduct■ In the 41st fiscal period, newly acquired DBJ Green Building Certification for 3■ NTT Urban Development Asset Management Corporation, the Asset Manager of NUD, adopted the Principles

properties (3 Stars: Premier Stage Shibakoen, Premier Stage Shibakoen II, PremierStage Azabu-Juban)

for Customer-Oriented Business Conduct, announced by the Financial Services Agency on March 30, 2017

■ Positioning the unitholders as customers, it formulated and publicized the policy to realize customer-oriented■ Urbannet Nakano Building, acquired in the 41st fiscal period, obtained 3 Stars ofbusiness conduct, while disclosing the status of such initiatives at any time

BELS Certification in 2018

■ Updated the status of the initiatives (for fiscal 2022) in April 2023, and will continue to implement business

Status of Acquisition of Environmental Certifications for Individual Properties (as of April 30, 2023)
Number ofproperties acquiringcertifications

Acquisition ratio(by number ofproperties)

Floor space ofproperties acquiringcertifications (Note)

Acquisition ratio(by total floor space)

CASBEE for Real Estate

19

32.2%

180,319.40 m2

41.6%

DBJ Green Building Certification

20

33.9%

101,445.19 m

23.4%

BELS

3

5.1%

30,526.91 m2

7.0%

Low-Carbon Model Building

6

10.2%

48,277.58 m2

11.1%(Note) Calculated by taking into account NUD’s substantial co-ownership interests in the buildings of respective properties.

Society■ Improvement of Tenant Satisfaction
Case 1: Urbannet Mita Building■ Conducted renovation of restrooms for2(Note)

conduct earnestly and justly, putting the unitholder interest first, as the “sole asset management company of
the NTT UD Group” entrusted for asset management of listed/private REITs and funds<Details of the Basic Policy and Status of Initiatives>
http://www.nttud-am.co.jp/en/fiduciary-duty/index.html<List of Financial Business Operators that Announced Policies Based on the “Principles for Customer-Oriented
Business Conduct”, etc. (as of October 31, 2022) (website of the Financial Services Agency)> (Japanese)
https://www.fsa.go.jp/news/r4/kokyakuhoni/20230120/fd_20230120.html■ Status of Major Initiatives Taken in Fiscal 2022
Acquisition of major professional certifications

Number of news releases, etc. by NUD

Registered real estate brokers

28

Information on financials

16

Real estate securitization masters

17

Information on management, etc. of properties

16

Real estate appraisers

2

Information on fund procurement

21

First-class registered architects

1

Other

25

Certified building administrators

14

cleanliness and comfort for users, such as
newly installing automatic soap dispensers aswell as accessory cases and fitting boards inthe women’s restrooms

9

10

MANAGEMENT STATUS
IN THE 41ST FISCAL PERIOD
Changes in Occupancy Rates

Changes in Asset Size
Office buildings

(%)
100

97.8%
97.4%

98.4%
97.6%

98.8%

Office buildings(bn yen)Residential properties

300

98.6%

98.2%

96.8%

96.6%

96.1%

97.2%

94.7%

95

96.2%

96.8%

250

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

96.2%

96.0%

94.5%

60 properties 59 properties 59 properties 59 properties 59 properties
246.4 bn yen 243.7 bn yen 243.7 bn yen 243.7 bn yen 246.7 bn yen

Residential properties

200

94.5%
93.4%

93.4%

150

100

90

50

0

85
End of32nd period

End of
33rd period

End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

End of32nd period

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

(%)
6

5.2%

5,969
3

mm yen5.1%

5,867
mm yen5.4%

6,093
mm yen5.5%

6,199
mm yenEnd of
33rd period

End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

70.0

71.0

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

5.3%

6,134
mm yen4.9%
6,035
mm yen

4.9%

5,964

4.9%
6,286

NOI yield (Note) (left axis)

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

Unrealized gains or losses (left axis)

70

65.1

4.9%
60

6,302

mm yenbn yenbn yen(%)
70

bn yen52.7

mm yenmm yenUnrealized gains or losses as % of total value (right axis)

6,000

48.1

50

bn yen54.3

57.1
bn yen58.3

60

bn yenbn yen50

bn yen40.2
bn yen

40
0

4,000

40

29.4
30

bn yen

23.2%

25.4%

25.8%

25.4%

26.2%

27.7%

29.9%

30.0%

19.3%

20

20

14.0%

2,000
10

0
End of32nd period

End of
33rd period

End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period

30

10

0

0
End of32nd period

End of
33rd period

End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period(Note) NOI yield = annualized rental NOI* / investment value*** Annualized rental NOI = sum total of [(real estate rental income + depreciation + dividend income from preferred securities) x 2] of owned assets (including preferred securities) for
each fiscal period** Investment value = sum total of book value as of the end of each fiscal period of owned assets (including preferred securities) for each fiscal period

1112FINANCIAL STATUS
IN THE 41ST FISCAL PERIOD
Status of Interest-Bearing Liabilities (as of April 30, 2023)

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

Borrowings (Note)

Rate Borrowings

5

4.8

years

Average remaining period to maturity (left axis)

4.6

4.6

years

4.2

4.0

years

3.0%

3.0%

(%)
1.5

years

years

Floating interest rate

Short-term interest-bearing
liabilities

Average interest rate on debt financing (right axis)

4.7

years

3.7

4

4.2

4.0

years

years

3.7

years

1.2

years

3

0.64%

Long-terminterest-bearing liabilities

Fixed interest rate

97.0%

97.0%

0.63%

0.61%

0.61%

0.60%

2

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

0.58%

0.58%

0.57%

0.57%

0.60%

0.0

0
End of32nd period

Others

14.5%

Sumitomo Mitsui Trust Bank

0.6

0.3

1

■ Breakdown of Lenders

End of
33rd period

End of34th period

End of35th period

End of36th period

End of37th period

End of38th period

End of39th period

End of40th period

End of
41st period(Note) Average interest rate is an average weighted by balances outstanding as of the end of the period for each nominal interest rate

25.2%

Resona Bank

5.7%

As of April 30, 2023

MUFG Bank

Total Loans

Repayment Schedule of Interest-Bearing Liabilities
NUD works to reduce the refinancing risk by diversifying repayment dates of interest-bearing liabilities.

113.6

9.7%

Mizuho Bank

billion yen

20.4%

NTT TC Leasing

12.1%

Borrowings(bn yen)

Corporate bonds

Green bonds

20

Sumitomo Mitsui Banking
Corporation

12.5%


15

(mm yen)

Lenders
Sumitomo Mitsui Trust Bank, Limited

Long-term

Short-term

27,540

1,100

Total
28,640Mizuho Bank, Ltd.

21,4901,700

23,190Sumitomo Mitsui Banking Corporation

13,850300

14,150NTT TC Leasing Co., Ltd.

13,400300

13,700MUFG Bank, Ltd.

10,770300

11,070Resona Bank, Limited

6,450

−

6,450

Development Bank of Japan Inc.

5,000

−

5,000

Aozora Bank, Ltd.

4,450

−

4,450

The Norinchukin Bank

2,500

−

2,500

The Bank of Fukuoka, Ltd.

2,000

−

2,000

The 77 Bank, Ltd.

1,000

−

1,000

The Nomura Trust and Banking Co., Ltd.

1,000

−

1,000

500

−

500

109,950

3,700

113,650HIGASHI-NIPPON BANK, Ltd.
Total

13

0.9

10

9.7

bn yen

8.9

9.0

8.3

bn yenbn yen6.4

6.2 6.0

bn yen8.7

bn yenbn yenbn yenbn yen

5

7.6

6.4

6.3

bn yen7.1

bn yenbn yenbn yenbn yen6.0

4.9 5.0

4.4

4.2

3.3

bn yen3.2

bn yenbn yenbn yenbn yen3.0

bn yenbn yen0

42nd
period43rd
period44th
period45th
period46th
period47th
period48th
period49th
period50th
period51st
period52nd
periodCredit Rating Status
NUD has been granted an issuer rating of AA- by Japan
Credit Rating Agency, Ltd. (JCR).

53rd
period54th
period55th
period56th
period57th
period58th
period59th
period60th
period61st
periodJapan Credit Rating Agency, Ltd. (JCR)

AA- Positive

14

PROPERTY PORTFOLIO (as of April 30, 2023)
(cont.)No

Area

Property Name (Note 1)

AcquisitionPrice(mm yen)(Note 2)

Share(%)
(Note 3)

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

PML
Value
(%)

A02

5 Central
Wards of
Tokyo

A03

(Note 2)

D16

5 Central
Wards of
Tokyo

(Note 3)

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

PML
Value
(%)
(Note 4)

Premier Stage Ichigayakawadacho

1,460

0.5

94.4

47

17

29

13.1

Walk Akasaka

2,043

0.7

100.0

55

28

27

13.9

Premier Stage Shibakoen

1,585

0.6

90.7

45

18

27

16.1

Landic Shimbashi Building

6,341

2.3

100.0

208

82

125

10.6

D17

Landic Shimbashi 2 Building

7,045

2.6

88.1

223

94

128

12.9

D18

Premier Dogenzaka Building

1,727

0.6

100.0

90

36

53

5.5

D19

MEW

1,556

0.6

84.3

39

17

21

13.9

Shibaura Island Air Tower

7,590

2.8

96.0

370

254

115

11.2

A04

KN Shibuya No.3

5,348

1.9

100.0

275

127

148

10.6

A05

Takadanobaba Center Building

5,118

1.9

100.0

268

185

83

2.0

D21

Storia Akasaka

3,930

1.4

92.9

100

38

62

11.7

A06

Rokubancho Building

3,930

1.4

−

(Note 5)(Note 5)

387

10.8

D22

Renai Shinjuku-Gyoen Tower

6,500

2.4

96.0

192

132

59

7.2

A10

Urbannet Mita Building

10,300

3.7

94.1

314

208

105

7.2

D23

Shibaura Island Bloom Tower

5,500

2.0

96.1

297

187

109

10.0

A11

Urbannet Azabu Building

5,000

1.8

100.0

(Note 5)(Note 5)

36

10.5

D24

Questcourt Harajuku

4,500

1.6

96.7

157

106

51

12.7

Urbancourt Ichigaya

1,385

0.5

97.4

65

29

35

12.0

A15

Granpark

11,490

4.2

96.3

460

252

207

12.0

D25

A17

Otemachi Financial City Grand Cube

4,680

1.7

98.5

(Note 6)(Note 6)

56

8.6

D26

Premier Stage Azabu-Juban

1,420

0.5

100.0

39

16

22

14.6

A18

Shinagawa Season Terrace

18,6876.8

97.7(Note 6)(Note 6)

198

4.7

D27

Premier Stage Sasazuka

1,080

0.4

96.4

32

15

16

10.5

A19

Tokyo Opera City Building

22,0008.0

95.3(Note 6)(Note 6)

397

9.0

E01

Premier Stage Osaki

1,072

0.4

100.0

37

16

21

12.1

A20

Urbannet Uchisaiwaicho Building

5,640

2.1

98.9

(Note 6)(Note 6)

84

8.5

E02

Premier Garden Hongo

975

0.4

100.0

35

14

20

12.1

Premier Grande Magome

1,560

0.6

97.0

44

21

23

15.7

Other 18
Wards ofTokyo

Premier Toyocho Building

4,310

1.6

100.0

100

56

44

16.2

E03

Ueno TH Building

4,380

1.6

87.1

118

80

38

12.8

E04

Premier Nozze Yutenji

1,525

0.6

93.3

42

20

22

13.6

B04

Gotanda NT Building

4,100

1.5

100.0

103

45

58

14.3

E05

Premier Stage Yushima

1,803

0.7

97.1

52

29

22

17.2

B05

Ueno Tosei Building

5,900

2.1

100.0

215

102

113

10.7

E06

Premier Stage Komagome

1,830

0.7

97.4

54

28

25

18.0

Premier Stage Otsuka

1,310

0.5

98.3

44

16

27

22.5

B02

Other 18
Wards of
Tokyo

B06

Urbannet Ikebukuro Building

13,600

4.9

100.0

756

485

271

13.0

E07

B07

Urbannet Omori Building

4,800

1.7

100.0

252

158

94

6.8

E08

Premier Stage Honjo-Azumabashi

2,640

1.0

95.7

82

35

46

14.7

B09

Urbannet Gotanda NN Building

5,250

1.9

100.0

200

123

77

9.7

E09

Premier Stage Ryogoku

1,496

0.5

97.7

49

67

(18)

12.8

B10

Urbannet Nakano Building

6,400

2.3

100.0

(Note 5)(Note 5)46

10.1

32 properties

78,054

28.4

96.2

2,664

1,440

1,223

−

10.2

UDX Special Purpose Company Preferred
Securities (Akihabara UDX) (Note 7)

19,940

7.2

−

−

−

−

−

SubtotalPreferred Securities (Office Building)

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

3,558

1.3

100.0

160

72

88

6,556

2.4

85.5

391

449

(58)

10.4

G02

NTT CRED Okayama Building

3,600

1.3

91.9

279

252

26

14.4

Urbannet Shizuoka Ote-machi Building

1,628

0.6

95.4

107

57

50

9.0

Subtotal

1 properties

19,940

7.2

−

−

−

−

−

G04

Urbannet Shizuoka Building

1,119

0.4

90.5

77

39

37

9.0

Total

60 properties

275,102

100.0

95.1

10,387

6,133

4,253

8.4

G05

Urban Ace Higobashi Building

4,600

1.7

100.0

253

128

125

6.3

177,107

64.4

94.5

7,723

4,693

3,029

−

G03

Major
Regional
CitiesSubtotal

27 properties

D01
D02
D04

5 Central
Wards of
Tokyo

Z01

5 Central
Wards of
Tokyo

(Note 1)	NUD owns properties in the form of either beneficiary interests in real estate trust or preferred securities.
(Note 2)	The acquisition price represents the transaction price before taxes, not including various expenses required for the acquisition of the property.
(Note 3) 	The indicated shares represent the ratio of the acquisition price of respective properties to the total acquisition price of all properties.

Residential Properties

15

Property Name (Note 1)

Share
(%)

D20

B03



Area

(Note 4)

Office Buildings
A01

No

AcquisitionPrice(mm yen)Park Axis Yotsuya Stage

5,208

1.9

96.0

163

64

98

7.4

Park Axis Meiji-Jingumae

2,604

0.9

94.2

56

22

33

9.9

Cabin Arena Akasaka

1,330

0.5

100.0

42

14

28

10.1

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

D05

Cabin Arena Minami-Aoyama

1,070

0.4

94.3

34

17

16

11.2

D08

Roppongi Green Terrace

4,678

1.7

100.0

147

62

84

10.3

(Note 5)	The rental revenues from a leasing contract with a single major tenant constitute more than 80% of the total rental revenues for this property, and the major tenant has not agreed
to disclose the rental revenues. Accordingly, NUD does not indicate these figures due to this unavoidable reason.

D09

Premier Stage Shibakoen II

2,181

0.8

96.4

58

24

33

11.5

(Note 6)	Detailed information on revenues and expenses is not indicated as no consent to disclosure has been obtained from quasi co-ownership holders, etc.

D11

Langue Tower Kyobashi

927

0.3

93.2

35

14

21

12.5

(Note 7)	The property owned by UDX Special Purpose Company, the issuer of the preferred securities, comprises an entire office building and its site, and the property name is Akihabara
UDX.

D12

Premier Stage MitaKeidaimae

1,580

0.6

98.4

52

16

35

14.3

D13

Premier Rosso

1,662

0.6

94.5

57

27

30

14.0

D14

Premier Blanc Yoyogikouen

2,330

0.8

91.1

72

38

33

13.1

D15

Premier Stage Uchikanda

1,723

0.6

98.3

60

24

35

13.8

(continued on next page)

16

OVERVIEW OF PROPERTIES OWNED (as of April 30, 2023)
Distribution of Portfolio Properties
5 Central Wards of Tokyo
Arakawa Ward

E06

B06 E07

Toshima Ward

E02
Bunkyo Ward

B05

Taito Ward

Nakano Ward

B03
E05

A05

B10

Z01

Shinjuku Ward

D16

Shinjuku
Station

D22

D01

D25

Chiyoda Ward

A06

A19
D27

E08
Akihabara
Station

D14
D13

A20
A02 A01

D08
A03

ShibuyaStation

D05

A04

MinatoWard

A11

Setagaya Ward

D26

D18
D09
D12

D18 Premier Stage Shibakoen

A03 Premier Dogenzaka Building

D02 Park Axis Meiji-Jingumae

D19 MEW

A04 KN Shibuya No.3

D04 Cabin Arena Akasaka

D20 Shibaura Island Air Tower

A05 Takadanobaba Center Building

D05 Cabin Arena Minami-Aoyama

D21 Storia Akasaka

A06 Rokubancho Building

D08 Roppongi Green Terrace

D22 Renai Shinjuku-Gyoen Tower

A10 Urbannet Mita Building

D09 Premier Stage Shibakoen II

D23 Shibaura Island Bloom Tower

A11 Urbannet Azabu Building

D11 Langue Tower Kyobashi

D24 Questcourt Harajuku

A15 Granpark

D12 Premier Stage MitaKeidaimae

D25 Urbancourt Ichigaya

A17 Otemachi Financial City Grand Cube

D13 Premier Rosso

D26 Premier Stage Azabu-Juban

A18 Shinagawa Season Terrace

D14 Premier Blanc Yoyogikouen

D27 Premier Stage Sasazuka

A19 Tokyo Opera City Building

D15 Premier Stage Uchikanda

Z01	UDX Special Purpose Company

B02

B02 Premier Toyocho Building

B09 Urbannet Gotanda NN Building

E05 Premier Stage Yushima

B03 Ueno TH Building

B10 Urbannet Nakano Building

E06 Premier Stage Komagome

B04 Gotanda NT Building

E01 Premier Stage Osaki

E07 Premier Stage Otsuka

B05 Ueno Tosei Building

E02 Premier Garden Hongo

E08 Premier Stage Honjo-Azumabashi

B06 Urbannet Ikebukuro Building

E03 Premier Grande Magome

E09 Premier Stage Ryogoku

B07 Urbannet Omori Building

E04 Premier Nozze Yutenji

Chuo Ward

Urban Areas Surrounding Tokyo

Hamamatsucho
StationKawasaki C02
City

B09

G05
Osaka

Yokohama
City

G03
G04

Aichi

Shinagawa Ward

Shizuoka

JR lines
Ginza Line

E03

Marunouchi Line
Hibiya Line
Ota Ward

Hyogo

C01
Kanagawa

Shinagawa
Station

B04
E01

Okayama

G02

A18

Meguro Ward

Major Regional Cities

Tokyo

A10 A15 D20
D23
D19

E04

Preferred Securities (Akihabara UDX)

D16 Premier Stage Ichigayakawadacho

Other 18 Wards of Tokyo

Koto Ward

D04
D17D21D02

D17 Walk Akasaka

D01 Park Axis Yotsuya Stage

E09

D15
A17

D11
D24

A20 Urbannet Uchisaiwaicho Building

A02 Landic Shimbashi 2 Building

Sumida WardTokyo
StationShibuya Ward

A01 Landic Shimbashi Building

B07

C01 Premier Yokohama Nishiguchi Building

G02 NTT CRED Okayama Building

C02 The Kanagawa Science Park R&D Building

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

Hanzomon Line
Nanboku Line

17

18

(Overview of Properties Owned (as of April 30, 2023))

Preferred Securities (Office Building)

5 Central Wardsof Tokyo

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

Z01


OfficeBuildings
A01

5 Central Wards of Tokyo
A02

Office Buildings
A18

5 Central Wards of Tokyo
A19

A20

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





Photo by Kawasumi Architectural OfficeLandic Shimbashi Building

Landic Shimbashi 2 Building

Shinagawa Season Terrace

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

Forward Stroke Inc.

Urbannet Uchisaiwaicho
Building(Minato Ward, Tokyo)



5 Central Wards of Tokyo
OfficeBuildings

A03

A04

A05

A06

Premier Dogenzaka Building

KN Shibuya No.3

Takadanobaba Center Building

Rokubancho Building

Premier Toyocho Building

Ueno TH Building

Gotanda NT Building

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



5 Central Wards of Tokyo

A10

A11

A15

A17

Urbannet Mita Building

Urbannet Azabu Building

Granpark(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Minato Ward, Tokyo)

Otemachi Financial City Grand
Cube

B02

Other 18 Wards of Tokyo
B03

B04


B06

B05

Other 18 Wards of Tokyo
B07

B09

B10

Urbannet Ikebukuro Building

Urbannet Omori Building

Urbannet Gotanda NN Building

Urbannet Nakano Building(Toshima Ward, Tokyo)(Ota Ward, Tokyo)(Shinagawa Ward, Tokyo)(Nakano Ward, Tokyo)(Chiyoda Ward, Tokyo)

19

20

(Overview of Properties Owned (as of April 30, 2023))


OfficeBuildings

Urban Areas Surrounding Tokyo

Residential Properties

5 Central Wards of Tokyo

C01

C02

D08

D09

D11

D12

Premier Yokohama Nishiguchi
Building

The Kanagawa Science Park
R&D Building

Roppongi Green Terrace

Premier Stage Shibakoen II

Langue Tower Kyobashi

Premier Stage MitaKeidaimae(Minato Ward, Tokyo)(Minato Ward, Tokyo)(Chuo Ward, Tokyo)(Minato Ward, Tokyo)(Yokohama City, Kanagawa)(Kawasaki City, Kanagawa)

OfficeBuildings


Major Regional Cities

5 Central Wards of Tokyo

G02

G03

G04

G05

D13

D14

D15

D16

NTT CRED Okayama Building

Urbannet Shizuoka Ote-machi
Building

Urbannet Shizuoka Building

Urban Ace Higobashi Building

Premier Rosso

Premier Blanc Yoyogikouen

Premier Stage Uchikanda(Shizuoka City, Shizuoka)(Osaka City, Osaka)(Shibuya Ward, Tokyo)(Shibuya Ward, Tokyo)(Chiyoda Ward, Tokyo)

Premier Stage
Ichigayakawadacho(Okayama City, Okayama)(Shizuoka City, Shizuoka)(Shinjuku Ward, Tokyo)

Residential
Properties21

5 Central Wards of Tokyo

5 Central Wards of Tokyo

D01

D02

D04

D05

D17

D18

D19

D20

Park Axis Yotsuya Stage

Park Axis Meiji-Jingumae

Cabin Arena Akasaka

Cabin Arena Minami-Aoyama

Walk Akasaka

Premier Stage Shibakoen

MEW

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

22

(Overview of Properties Owned (as of April 30, 2023))

Residential
Properties

5 Central Wards of Tokyo

Residential Properties
E05

Other 18 Wards of Tokyo

D21

D22

D23

D24

E06

E07

Storia Akasaka

Renai Shinjuku-Gyoen Tower

Shibaura Island Bloom Tower

Questcourt Harajuku

Premier Stage Yushima

Premier Stage Komagome

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

E08

Premier Stage
Honjo-Azumabashi(Sumida Ward, Tokyo)



5 Central Wards of Tokyo

D25

D26

D27

Urbancourt Ichigaya

Premier Stage Azabu-Juban

Premier Stage Sasazuka

Premier Stage Ryogoku(Shinjuku Ward, Tokyo)(Minato Ward, Tokyo)(Shibuya Ward, Tokyo)(Sumida Ward, Tokyo)Residential
Properties
E01

23



Other 18 Wards of Tokyo

E09

Other 18 Wards of Tokyo
E02

E03

E04

Premier Stage Osaki

Premier Garden Hongo

Premier Grande Magome

Premier Nozze Yutenji(Shinagawa Ward, Tokyo)(Bunkyo Ward, Tokyo)(Ota Ward, Tokyo)(Setagaya Ward, Tokyo)

24

ORGANIZATION OF NUDINFORMATION FOR UNITHOLDERS

Structure of NUD

Changes in Investment Unit Price of NUD

NTT Urban Development AssetManagement Corporation

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

37th Fiscal Period

38th Fiscal PeriodMarket capitalization: 183,754 million yen
Investment unit price at the end of the 41st Fiscal Period: 131,100 yen
(as of April 30, 2023)

39th Fiscal Period

40th Fiscal Period(units)

41st Fiscal Period

80,000150,000

Investment(Securities)

Corporate bondinvestors

60,000Principal andinterest repayment(Loans)Financial
institutions, etc.

Equityinvestment

Unitholders’capital50,000Tokyo
Stock Exchange

Distribution

Investment

40,000Principal andinterest repayment

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

100,000

Lending

Liabilities

20,000Unitholders
0

Rental revenues

2020

Unitholders

Sumitomo Mitsui Trust Bankand others0

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

2021

2022

2023

Real estate

Number of Investment Units by Unitholders and Number of Unitholders (as of April 30, 2023)
Foreign corporations, etc.

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

Individuals and others

15.2%

12.2%

Other domestic corporations

Foreign corporations, etc.

1.9%

1.4%

Financial institutions

Overview of Asset Manager

Other domestic
corporations

6.3%

Trade name

NTT Urban Development Asset Management Corporation

Paid-in capital

100 million yen

Line of business

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

Shareholder composition(including securities
companies)

Number ofinvestment units
by unitholders
Total

0.9%

1,401,635
Units

NTT Urban Development Corporation (100.0%)

Number ofUnitholders
Total

15,598Financial institutions(including securities
companies)

Individuals and others

66.1%

95.5%

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

Shareholders’ Meeting

Annual Schedule

Statutory Auditors
Board of Directors
Compliance Committee

Apr.

Acquisition Priority Review Meeting

Settlement monthfor the fiscal periods
ending April

Investment Committee
President and CEO

Internal Audit Office

Investment
Marketing
Department

25

Operation I
Department

Compliance Office

Operation II
Department

Operation III
Department

Finance
Department

Corporate
Administration
Department

Oct.
Engineering andSustainability
Management Office

Settlement monthfor the fiscal periods
ending October

May

Jun.
Announce financial
results for the fiscal
periods ending April

Nov.

Dec.
Announce financial
results for the fiscal
periods ending
October

Jul.

Aug.

Sep.

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

Jan.

Feb.

Mar.

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

26

BALANCE SHEETS
as of October 31, 2022 and April 30, 2023
Thousands of yen
October 31, 2022

Thousands of yen

April 30, 2023

October 31, 2022

ASSETSLIABILITIESCURRENT ASSETSCURRENT LIABILITIESCash and deposits

(Note-5)

4,459,435

Accounts payable

Cash and deposits held in trust(Note-5)

13,862,777

13,609,977

Short-term loans payable

Tenant receivables

979,906

945,934

Prepaid expenses

158,899

Income taxes refund receivables

102,893¥

Consumption taxes refund receivables
Other current assets


TOTAL CURRENT ASSETS

6,762,774¥¥

2,315,439

April 30, 2023¥

2,919,656−

3,700,000

Long-term loans payable due within one year

(Note-9) (Note-16)

23,500,000

10,950,000

184,795

Corporate bonds due within one year

(Note-8) (Note-16)

2,000,000

4,000,000

98,106

Accrued expenses

118,707

123,954−

3,813

Distributions payable

12,873

15,17730,40254,303

Income taxes payable

605

1,415

21,897,654

19,356,365

377,419−

Consumption taxes payable

LONG-TERM ASSETSBusiness office taxes payable

Property and equipment

7,286

14,135

1,011,124997,774

55,24650,427TOTAL CURRENT LIABILITIES

29,398,703

22,772,539

Long-term loans payable

(Note-9) (Note-16)

91,250,000

99,000,000

Corporate bonds

(Note-8) (Note-16)

9,200,000

7,200,000

Tenant security deposits

1,474,296

1,537,557

Tenant security deposits held in trust

8,470,137

7,949,971

Rents received in advance

Buildings

(Note-6)

6,499,874

6,663,660

Structures

(Note-6)

19,76019,760

Machinery and equipment

(Note-6)

6,363

6,363

LONG-TERM LIABILITIES

Tools, furniture and fixtures

(Note-6)

4,439

4,439

Land

(Note-6)

16,273,040

16,273,040

Construction in progress

(Note-6)

7,308

6,593

Buildings held in trust(Note-6)

96,064,538

96,504,836

Structures held in trust(Note-6)

2,203,004

2,287,285



TOTAL LONG-TERM LIABILITIES

110,394,433

115,687,528

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

852,932

878,521



TOTAL LIABILITIES

139,793,136

138,460,068

Land held in trust(Note-6)

135,083,204

137,614,725

NET ASSETS(Note-6)(37,839,150)(38,802,779)

UNITHOLDERS' EQUITY

Total property and equipment, net

219,175,316

221,456,447

Unitholders’ capital

132,637,845

132,637,845

Reserve for reduction entry

1,110,784

1,110,784

Unappropriated retained earnings

3,907,377

5,008,274

137,656,006

138,756,904

Less accumulated depreciation

Deposits received

Intangible fixed assets

Units authorized – 10,000,000 units as of October 31, 2022

Leasehold held in trust(Note-6)

14,998,573

14,998,573

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

238

215

Other intangible fixed assets

(Note-6)

6,555

6,557

Total intangible fixed assets

15,005,367

15,005,346

(Note-7)– 10,000,000 units as of April 30, 2023
Units issued and outstanding – 1,401,635 units as of October 31, 2022
– 1,401,635 units as of April 30, 2023
SurplusInvestments and other assets
Investment securities
Deferred tax assets

(Note-16) (Note-17)

20,035,175

20,035,175(Note-12)

2,292

4,604



TOTAL UNITHOLDERS’ EQUITYOther deposits

17,252

17,252

TOTAL NET ASSETS

Other deposits held in trust

819,166

819,166



TOTAL LIABILITIES AND NET ASSETS

Long-term prepaid expenses

444,489

479,572Total investment and other assets

21,318,375

21,355,769



TOTAL LONG-TERM ASSETS

255,499,060

257,817,563

New investment unit issuance costs

17,67013,252

Corporate bond issuance costs

34,75829,79052,42843,043

137,656,006¥

277,449,143

138,756,904¥

277,216,972

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

DEFERRED ASSETSTOTAL DEFERRED ASSETSTOTAL ASSETS¥

277,449,143¥

277,216,972

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

27

28

PROFIT AND LOSS STATEMENTS

STATEMENTS OF CHANGES IN
UNITHOLDERS’ EQUITY

For the six months ended October 31, 2022 and April 30, 2023

For the six months ended October 31, 2022 and April 30, 2023
Thousands of yen
October 31, 2022

Thousands of yen
Unitholders’ Equity

April 30, 2023

SurplusOPERATING REVENUES AND EXPENSES
Operating revenues
Rental revenues

(Note-10)

Other rental revenues

(Note-10)

1,147,076

1,380,018

Gains from sale of properties

(Note-11)−

1,471,319

503,805

487,701

5,590,235

6,133,642

Asset management fees

423,775

485,723

Directors’ compensation

4,200

4,200

Custodian fees

12,716

12,761

Administration fees

105,199

96,127

9,350

9,775

134,043

157,208

4,339,102

5,447,153¥

Dividend income

8,967,739¥

Property operating expenses

(Note-1)

BALANCE AT APRIL 30, 2022

¥ 132,637,845

Reserve for
Reduction
Entry

Total
Voluntary
Retained
Earnings¥¥

1,111,640

1,111,640

Total
Surplus

Total
Unitholders’EquityTotal
Net Assets

6,793,352¥ 139,431,198¥ 139,431,198

855

−

−

−

(5,682,228)(5,682,228)(5,682,228)(5,682,228)

UnappropriatedRetained
Earnings¥

5,681,712¥

Changes during the period(Note-10)

Audit fees
Other expensesUnitholders’Capital9,007,552

Operating expenses

Voluntary Retained
Earnings

Operating income

NON-OPERATING REVENUES AND EXPENSES

Reversal of reserve for
reduction entry

Net income
Total changes during the period

110

98

Return of unclaimed distribution

1,155

1,108

Other non-operating revenues

1,040

38

Interest expenses

397,650

406,134

Interest expenses on corporate bonds

22,85522,544

Amortization of corporate bond issuance costs

4,968

4,968

Amortization of new investment unit issuance costs

4,417

4,417

Other non-operating expenses

2,502

2,479

3,909,015

5,007,853

3,909,015

5,007,853

Current

605

2,912

Deferred

1,373(2,311)

Net income

3,907,037

5,007,253

340

1,020

−

BALANCE AT OCTOBER 31, 2022 ¥ 132,637,845

(855)
¥

1,110,784(855)¥

1,110,784¥

3,907,037

3,907,037

3,907,037

3,907,037(1,774,335)(1,775,191)(1,775,191)(1,775,191)

5,018,161¥ 137,656,006¥ 137,656,006(3,906,356)(3,906,356)(3,906,356)

3,907,377¥

Changes during the period
Cash distributions paid

(3,906,356)

Net income

BALANCE AT APRIL 30, 2023

Interest income(855)

Cash distributions paid

Total changes during the period

Non-operating revenues

(855)

−
¥ 132,637,845−¥

1,110,784−¥

1,110,784¥

5,007,253

5,007,253

5,007,253

5,007,253

1,100,897

1,100,897

1,100,897

1,100,897

6,119,058¥ 138,756,904¥ 138,756,904

5,008,274¥

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

Non-operating expenses



Ordinary income

Income before income taxes
Income taxes

(Note-12)

Income carried forward
UNAPPROPRIATED RETAINED EARNINGS¥

3,907,377¥

5,008,274

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

2930

CASH FLOW STATEMENTSNOTES TO FINANCIAL STATEMENTS

For the six months ended October 31, 2022 and April 30, 2023

For the six months ended October 31, 2022 and April 30, 2023
Note-1. Organization and basis of presentation

Thousands of yen
October 31, 2022

April 30, 2023

CASH FLOW FROM OPERATING ACTIVITIESIncome before income taxes¥

Depreciation

3,909,015¥

5,007,853(a)	Organization - NTT UD REIT Investment Corporation (hereinafter, “NUD”) is an investment corporation established in May 2002 under the
Act on Investment Trusts and Investment Corporations (hereinafter, “Investment Trusts Act”) with an initial capital of 200,000 thousand yen(400 units), and it is listed on the Tokyo Stock Exchange. NTT Urban Development Asset Management Corporation (hereinafter, “UDAM”)
is the asset manager of NUD.

1,593,488

1,561,393

Amortization of corporate bond issuance costs

4,968

4,968

Amortization of new investment unit issuance costs

4,417

4,417

Interest income

(110)

(98)

(1,155)(1,108)Interest expenses

420,505

428,679

Decrease (increase) in tenant receivables(180,780)

34,604

Increase (decrease) in accounts payable(353,933)

638,017

Decrease (increase) in consumption taxes refund receivables

385,085(3,813)

Increase (decrease) in consumption taxes payable

377,419(377,419)

As of April 30, 2023, NUD had total unitholders’ capital of 132,637,845 thousand yen with 1,401,635 units outstanding.

Increase (decrease) in rents received in advance(96,257)(13,350)

Increase (decrease) in deposits received(82,934)(4,818)

As of April 30, 2023, NUD owned a portfolio of 27 office buildings, 32 residential properties and preferred securities of an SPC (60properties in total).

−

3,759,907

5,230(25,361)

5,984,958

11,013,871

110

98

(489,252)(476,088)(1,931)

2,685

5,493,885

10,540,566

Payments for purchases of property and equipment(11,238)(180,194)

Payments for purchases of property and equipment held in trust(588,472)(7,455,069)

Payments for purchases of intangible fixed assets(2,108)(959)

Proceeds from tenant security deposits

9,130

91,903

Payments of tenant security deposits(61,236)(28,641)

Proceeds from tenant security deposits held in trust

373,727

423,735

Payments of tenant security deposits held in trust(329,574)(944,534)

Net cash provided by (used in) investing activities(609,773)(8,093,761)−

8,700,000

Return of unclaimed distributions

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

Furthermore, equity financing NUD made in the past five years through the end of the 41st fiscal period (April 30, 2023) is summarized
below.

Date

Description

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

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

BalanceNovember 1, 2021

Public offering

80,6001,397,595

11,701132,051

November 29, 2021

Third-party allotment

4,040

1,401,635

586

132,637

Total acquisition costs of those properties were 275,102 million yen, with the investment ratio by asset type standing at 64.4% for officebuildings, 28.4% for residential properties and 7.2% for others (preferred securities).
(b)	Basis of presentation - The financial statements of NUD have been prepared in accordance with the provisions set forth in the Financial
Instruments and Exchange Act and other related regulations of Japan and in conformity with accounting principles and practices generally
accepted in Japan, which are different in certain respects from the application and disclosure requirements of International Financial
Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements that were prepared for Japanese domestic
purposes from the accounts and records maintained by NUD and were filed with the Kanto Local Finance Bureau of the Ministry of Financeas required by the Financial Instruments and Exchange Act. Certain items presented in the financial statements have been reclassified forthe convenience of readers outside Japan. NUD does not prepare consolidated financial statements as NUD has no subsidiaries.
NUD’s fiscal period is six months, which respectively ends in April and October of each year.

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from short-term loans payable
Repayments of short-term loans payable

¥

−

¥

(5,000,000)

Proceeds from long-term loans payable

14,500,000

11,000,000

Repayments of long-term loans payable(16,300,000)(15,800,000)

Payments of distributions(5,679,264)(3,902,944)

Net cash provided by (used in) financing activities(7,479,264)(5,002,944)

NET CHANGE IN CASH AND CASH EQUIVALENTS(2,595,152)(2,556,139)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

23,220,704

20,625,552

CASH AND CASH EQUIVALENTS AT END OF PERIODThere was no change in the number of investment units outstanding or unitholders’ capital for the six months ended April 30, 2023.

(Note-5)¥

20,625,552¥

18,069,412

Amounts less than 1 thousand yen have been omitted. As a result, the total shown in the financial statements and notes thereto do notnecessarily agree with the sum of the individual account balances.

Note-2. Summary of significant accounting policies(a)	Cash and cash equivalents - Cash and cash equivalents consist of cash, demand deposits, cash and deposits held in trust, and short-term
investments. Short-term investments are highly liquid, readily convertible to cash, have an insignificant risk of change in value, and an
original maturity of three months or less.
(b)	Valuation standard and method for securities Available-for-sale investment securities - Stocks and other securities with no market prices are stated at cost being determined by themoving average method.
(c)	Depreciation and amortization Property and equipment (including those held in trust) - Property and equipment are carried at cost, less accumulated depreciation.
Depreciation of property and equipment, except for land, is computed by using the straight-line method at rates based on estimateduseful lives.
The ranges of useful lives used in the computation of depreciation are generally as follows:
Buildings ............................................... 3-68 years
Structures ............................................... 3-58 years
Machinery and equipment ......................... 11 years
Tools, furniture and fixtures ................... 3-15 years
In accordance with the amended Japanese tax law, properties and equipment acquired on or after April 1, 2007 are depreciated with theresidual value of 1 yen recognized at the end of the useful lives.

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

31

32

(Notes to Financial Statements cont.)

Properties and equipment acquired before March 31, 2007 are depreciated with the residual value of 5% of acquisition costs over useful
lives based on the tax law at that time. However, in accordance with the amended Japanese tax law, such properties and equipment are
depreciated with the residual value of 1 yen over five years from the following fiscal years after they are depreciated to the residual value
of 5% of acquisition costs.

Note-3. Significant accounting estimates
Impairment of long-term assets(1) Amounts recorded on the financial statements

Long-term prepaid expenses - Prepaid expenses are amortized using the straight-line method.

Thousands of yen

New investment unit issuance costs - New investment unit issuance costs are amortized using the straight-line method over three years.
Corporate bond issuance costs - Corporate bond issuance costs are amortized using the straight-line method over the period through theredemption of the bonds.
(d)	Income taxes - Income taxes are accounted for financial reporting purposes. The tax effect of temporary differences for the carrying
amount of assets and liabilities between accounting basis and tax basis is recognized as deferred taxes.
(e) Revenue recognition Sale of properties - NUD recognizes revenues from sale of properties when the purchaser who is a customer obtains control of the relevant
property following the seller fulfilling its delivery obligations stipulated in the transaction agreement of the property. On the profit and loss
statements, the amount obtained by deducting cost of properties, which is the book value of sold properties, and other expenses for sale,
which are expenses directly related to the sale, from revenues from sale of properties, which are the proceeds from the sale of theproperties, is indicated as gains (losses) from sale of properties.
Lease of properties - NUD owns and operates office buildings and residential properties that are rented to tenants. Revenues from leasing
the office and residential spaces are recognized on an accrual basis based on the lease agreements. Rental revenues include fixed rental
revenues, recoveries of utility charges, and other income.
(f)	Property-related taxes - Property-related taxes (i.e., property tax, city planning tax and depreciable property tax) are imposed on properties
on a calendar year basis. The amount of taxes paid in the period is charged to income as property operating expenses. In accordance withJapanese business practice, at the time of disposal, the seller of the property is generally liable for property-related taxes on the property
from the date of disposal to the end of the calendar year in which the property is disposed. The seller, however, is reimbursed by thepurchaser of the property for the accrued property-related tax liabilities, and the amount of the settlement reflects this adjustment. NUD
is allocated the portion of the property-related taxes for the period from the purchase date of each property through the end of thecalendar year. The amounts of those allocated portions of the property-related taxes are capitalized as part of the acquisition costs of those
properties. Capitalized property-related taxes totaled 469 thousand yen for the six months ended October 31, 2022 and 24,416 thousand
yen for the six months ended April 30, 2023.
(g)	Method of hedge accounting - Special accounting is applied for interest rate swap transactions that satisfy the requirements for special
accounting.
Hedging instruments and hedged items - Hedging instruments: interest rate swap transactions, Hedged items: interest expenses on loans
payable.
Hedging policy - NUD conducts derivative transactions to hedge interest rate fluctuation risks for loans payable with floating interest rates
based on the “Asset Management Target and Policy” provided in its Articles of Incorporation and the risk management regulations onderivative transactions.
Method for assessing the effectiveness of hedging - Assessment of the effectiveness of hedging is omitted as requirements are satisfied
for special accounting for interest rate swap transactions.
(h)	Accounting treatment of beneficiary interest in trust accounts, including real estate - For beneficiary interests in real estate trust, which
are commonly utilized in the ownership of commercial properties in Japan and through which NUD holds all of its properties, all accountsof assets and liabilities held in trust, as well as all income generated and expenses incurred from assets in trust, are recognized in therelevant balance sheet and profit and loss statement.
Furthermore, the following material accounts are separately stated on the balance sheet for assets in trust recognized in relevant accounts.
(1) Cash and deposits held in trust(2)	Buildings held in trust, structures held in trust, tools, furniture and fixtures held in trust, land held in trust, and construction inprogress held in trust(3) Leasehold held in trust(4) Other intangible fixed assets held in trust(5) Other deposits held in trust(6) Tenant security deposits held in trust(i)	Accounting for consumption taxes - Non-deductible consumption taxes on property acquisitions are capitalized with the acquisition costsof the individual properties.

33

October 31, 2022
Property and equipment¥

Intangible fixed assets

219,168,008

April 30, 2023¥

221,449,853

14,998,812

14,998,789(2)	Information on the details of the significant accounting estimates for identified items
In accordance with the Accounting Standard for Impairment of Fixed Assets, NUD has adopted the accounting treatment to reduce thebook value of long-term assets to a recoverable amount when the invested amount is deemed to be unrecoverable due to lowered
profitability.
In adopting the accounting treatment, the respective properties owned by NUD are regarded as a single asset group, and judgment ismade whether it is required to recognize impairment losses when indications of impairment are deemed to exist for the group due tocontinuous operating losses, a significant drop in the market value and significant deterioration of the business environment, etc.
Future cash flow estimates are used to determine whether or not to recognize impairment losses. When it is determined that impairment
losses should be recognized, the book value is reduced to the recoverable amount based on the real estate appraisal values by external
appraisers, and the reduced amount is recorded as impairment losses.
In calculating the future cash flow, the underlying rent, occupancy rate and real estate rental expenses, etc. are determined bycomprehensively taking into account the market trends and transaction cases of similar properties, etc.
The performance and the market value of each property may be affected by the trends in the real estate rental market and real estatetransaction market. Accordingly, when changes arise to the assumptions of the estimate, they may affect the financial position and resultsof operation of NUD in the following fiscal period.

Note-4. Revenue recognition
Six months ended October 31, 2022 [May 1, 2022 - October 31, 2022]
1. Breakdown information on revenues from contracts with customers:
For the breakdown information on revenues from contracts with customers, refer to Note-10 and Note-11.
Note that Note-10 includes revenues in accordance with the Accounting Standard for Lease Transactions (ASBJ Statement No.13).
Moreover, revenues generated from contracts with major customers comprise of gains from sale of properties and utilities income.
Six months ended April 30, 2023 [November 1, 2022 - April 30, 2023]
1. Breakdown information on revenues from contracts with customers:
For the breakdown information on revenues from contracts with customers, refer to Note-10 and Note-11.
Note that Note-10 includes revenues in accordance with the Accounting Standard for Lease Transactions (ASBJ Statement No.13).
Moreover, revenues generated from contracts with major customers comprise of gains from sale of properties and utilities income.

Note-5. Cash and cash equivalents
Cash and cash equivalents as of October 31, 2022 and April 30, 2023 consisted of the following:Thousands of yen
October 31, 2022
Cash and deposits¥

Cash and deposits held in trust
CASH AND CASH EQUIVALENTS

6,762,774

April 30, 2023¥

13,862,777¥

20,625,552

4,459,435
13,609,977¥

18,069,412

34

(Notes to Financial Statements cont.)

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

Note-8. Corporate bonds

Property and equipment and intangible fixed assets as of October 31, 2022 and April 30, 2023 consisted of the following:

Corporate bonds for the six months ended October 31, 2022 and April 30, 2023 were as follows:

Thousands of yen

Thousands of yen

October 31, 2022
Acquisition
costs

April 30, 2023

Accumulated
depreciation

Acquisition
costsBook value

Accumulated
depreciation

Book value

Unsecured bond No.7 (issued on July 24, 2018 and due on July 24, 2023)

Property and equipment
Buildings and structures
Buildings¥

Structures

6,499,874¥

204,164¥

6,295,709¥

6,663,660¥

319,555¥

6,344,104

19,760573

19,187

19,760869

18,890Machinery and equipment

6,363

292

6,070

6,363

585

5,778

Tools, furniture and fixtures

4,439

124

4,314

4,439

497

3,941

16,273,040−

16,273,040

16,273,040-

16,273,040

7,308

−

7,308

6,593

-

6,593

Land
Construction in progress

October 31, 2022
(Amount)

April 30, 2023
(Amount)¥¥

2,000,000

Interest
rate(%)

2,000,000

0.25

Unsecured bond No.8 (issued on July 24, 2018 and due on July 24, 2028)

4,000,000

4,000,000

0.58

Unsecured bond No.9 (issued on April 27, 2021 and due on April 26, 2024)(green bond)

2,000,000

2,000,000

0.06

Unsecured bond No.10 (issued on April 27, 2021 and due on April 25, 2031)(green bond)

3,200,000

3,200,000

0.50

11,200,000−

TOTAL

¥

11,200,000¥* The anticipated maturities of corporate bonds for the following five years beginning May 1, starting in 2023 are as follows:(thousands of yen)
One year or less

Property and equipment held in
trust

¥

More than one year andtwo years or less

4,000,000

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

−

−

−

−

Buildings and structures
Buildings
Structures
Tools, furniture and fixtures
Land
SUBTOTAL¥

96,064,538¥

35,746,125

2,203,004

1,362,986¥

60,318,413
840,018¥

96,504,836¥

36,516,575

2,287,285

1,391,013¥

59,988,261
896,272

852,932

524,883

328,049

878,521573,683

304,837

135,083,204−

135,083,204

137,614,725−

137,614,725

257,014,467

37,839,150

219,175,316

260,259,227

38,802,779

221,456,447

Note-9. Short-term and long-term loans
Short-term and long-term loans as of October 31, 2022 and April 30, 2023 consisted of the following:Thousands of yen
LenderIntangible fixed assets held in
trust
Leasehold14,998,573−

14,998,573

14,998,573−

14,998,573

6,469

6,230

238

6,469

6,253

215

43,71337,157

6,555

44,672

38,115

6,557

SUBTOTAL

15,048,756

43,38815,005,367

15,049,715

44,36915,005,346

TOTAL¥ 272,063,223

37,882,538¥ 234,180,684¥ 275,308,943

38,847,149¥ 236,461,793

Other intangible fixed assets
Other

¥

¥

October 31,
2022(Amount)

Increase

April 30,
2023
(Amount)

Decrease

Averageinterest
rate *1(%)

Repay­
ment

0.19773

Apr. 10,2023

0.20267

Mar. 29,2024

0.22267

Mar. 29,2024

Unsecured andnon-guaranteed
Floating rate

0.73875

Nov. 30,
2022

Unsecured andnon-guaranteed
Fixed rate

0.72875

Nov. 30,
2022

Unsecured andnon-guaranteed
Fixed rate

Use offunds

Remarks

SHORT-TERM LOANS
Sumitomo Mitsui Trust Bank, Limited−

5,000,000

5,000,000−

Mizuho Bank, Ltd.

−1,700,000−

1,700,000

Sumitomo Mitsui Trust Bank, Limited−

1,100,000−

1,100,000

MUFG Bank, Ltd.

−

300,000−

300,000

A government subsidy of 19,834 thousand yen, granted for the capital expenditures at The Kanagawa Science Park R&D Building in 2006, has

Sumitomo Mitsui Banking Corporation−

300,000−

300,000

been deducted from the acquisition cost of the building held in trust.

NTT TC Leasing Co., Ltd.

−

300,000−

300,000

8,700,000

5,000,000

3,700,000

SUBTOTAL

Unsecured andnon-guaranteed
Floating rate*2

Unsecured andnon-guaranteed
Floating rate

LONG-TERM LOANS *3 *4

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



35

Aozora Bank, Ltd.

3,000,000−

3,000,000−

NTT TC Leasing Co., Ltd.

3,000,000−

3,000,000−

Resona Bank, Limited

3,000,000−

3,000,000−

Mitsui Sumitomo Insurance Company,
Limited1,000,000−

1,000,000

Sumitomo Mitsui Trust Bank, Limited

1,000,000−

1,000,000−

Sumitomo Mitsui Banking Corporation

1,000,000−−

1,000,000

Sumitomo Mitsui Trust Bank, Limited

550,000−−

550,000

Aozora Bank, Ltd.

700,000−−

700,000

Mizuho Bank, Ltd.

2,040,000−−

2,040,000

Sumitomo Mitsui Trust Bank, Limited

1,140,000−−

1,140,000−*20.52380

Aug. 30,
2024

Unsecured andnon-guaranteed
Fixed rate

0.52380

Aug. 30,
2024

Unsecured andnon-guaranteed
Fixed rate

0.62380

Oct. 30,
2026

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

(Notes to Financial Statements cont.)(cont.)Thousands of yen
LenderDecrease

1,220,000−−

1,220,000

Sumitomo Mitsui Trust Bank, Limited

4,000,000−−

4,000,000

Sumitomo Mitsui Banking Corporation

3,000,000−−

3,000,000

Mizuho Bank, Ltd.

2,000,000−−

2,000,000

NTT TC Leasing Co., Ltd.

2,700,000

4,000,000

−

−

−

−

2,700,000

4,000,000

Thousands of yen

Averageinterest
rate *1(%)

Repay­
ment

0.623800.73500

0.42875

0.53250

April 30,
2023
(Amount)

Averageinterest
rate *1(%)

Repay­
ment

Oct. 30,
2026

Unsecured andnon-guaranteed
Fixed rate

Sumitomo Mitsui Trust Bank, Limited

3,000,000−−

3,000,000

0.29755

Nov. 29,2024

Nov. 30,
2026

Unsecured andnon-guaranteed
Fixed rate

Sumitomo Mitsui Trust Bank, Limited

1,000,000−−

1,000,000

0.46500

Nov. 30,
2028

Mizuho Bank, Ltd.

3,000,000−−

3,000,000

0.49755

Nov. 30,
2029

NTT TC Leasing Co., Ltd.

2,000,000−−

2,000,000

0.51755

Nov. 30,
2029

NTT TC Leasing Co., Ltd.

2,500,000−−

2,500,000

0.61304

Aug. 31,2029

Sumitomo Mitsui Trust Bank, Limited

1,500,000−−

1,500,000

0.28380

Mar. 31,2025

Mizuho Bank, Ltd.

1,300,000−−

1,300,000

0.55943

Sep. 28,2029

700,000−−

700,000

0.61005

Mar. 29,2030

Sumitomo Mitsui Banking Corporation

3,200,000−−

3,200,000

0.41505

May 31,
2028

Mizuho Bank, Ltd.

1,800,000−−

1,800,000

0.52375

May 31,2030

Mizuho Bank, Ltd.

2,400,000−−

2,400,000

0.57250

Sep. 30,2031

Mizuho Bank, Ltd.

1,700,000−

1,700,000−

Sumitomo Mitsui Trust Bank, Limited

1,100,000−

1,100,000−

0.19691

Mar. 31,2023

Sumitomo Mitsui Banking Corporation

300,000−

300,000−

NTT TC Leasing Co., Ltd.

300,000−

300,000−

MUFG Bank, Ltd.

300,000−

300,000−

Sumitomo Mitsui Trust Bank, Limited

1,950,000−−

Sumitomo Mitsui Banking Corporation

1,950,000−

Sumitomo Mitsui Banking Corporation

1,200,000

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

May 31,
2023
May 31,
2024
May 30,2025−−

3,300,000

The Bank of Fukuoka, Ltd.

2,000,000−−

2,000,000

The 77 Bank, Ltd.

1,000,000−−

1,000,000

The Nomura Trust and Banking Co.,Ltd.

1,000,000−−

1,000,000

HIGASHI-NIPPON BANK, Ltd.

500,000−−

500,000

Sumitomo Mitsui Trust Bank, Limited

500,000−−

500,000

Aozora Bank, Ltd.

1,100,000−

1,100,000−

0.40005

Mar. 27,2023

Sumitomo Mitsui Banking Corporation

1,500,000−−

1,500,000

0.54505

Mar. 27,2025

Sumitomo Mitsui Trust Bank, Limited

2,600,000−−

2,600,000

Resona Bank, Limited

1,200,000−−

1,200,000

0.61125

Mar. 27,2026

MUFG Bank, Ltd.

1,500,000−−

1,500,000

0.61125

Mar. 27,2026

0.28875

October 31,
2022(Amount)

Lender3,300,000

0.59880

Use offunds

Remarks

Sumitomo Mitsui Trust Bank, Limited

Unsecured andnon-guaranteed
Fixed rate

Aug. 31,2023

NTT TC Leasing Co., Ltd.

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate*2

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

Increase

Decrease

Use offunds

Remarks

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Floating rate
*20.21691

Mar. 31,2023

1,950,000

0.78500

Apr. 30,2030−

1,950,000

0.71625

Apr. 27,
2029

−

−

1,200,000

0.54204

Jan. 31,2028

Unsecured andnon-guaranteed
Floating rate

0.66649

Apr. 30,2026

0.76755

Jul. 24,2028

750,000

0.49877

Feb. 29,2024−

1,250,000

0.76880

Aug. 31,
2027

−

−

1,500,000−−

3,500,000

0.75625

Jul. 31,2030−

1,500,000

Unsecured andnon-guaranteed
Fixed rate

3,500,000−

Aug. 31,2027

Sumitomo Mitsui Trust Bank, Limited

1,500,000

0.76880

1,500,000−−

1,500,000

0.23375

Mar. 29,2024

Unsecured andnon-guaranteed
Fixed rate

The Norinchukin Bank

2,500,000−−

2,500,000

0.73000

Aug. 31,2029

Mizuho Bank, Ltd.

750,000−−

750,000−−

1,800,000

0.77969

May 31,2030

750,000−−

750,000

Unsecured andnon-guaranteed
Fixed rate

1,800,000

Resona Bank, Limited

Mar. 30,2029

MUFG Bank, Ltd.

0.65125−−2,500,000

0.86250−

1,000,000

0.19520

Aug. 29,2031

MUFG Bank, Ltd.

3,000,000−−

3,000,000

0.92875

0.37880

Sep. 30,2026

Aug. 31,
2032

Aozora Bank, Ltd.

−1,500,000−

1,500,000

0.45065

Mar. 31,2028

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

2,500,000−

Mar. 29,2024

Mizuho Bank, Ltd.

1,000,000

NTT TC Leasing Co., Ltd.

−1,500,000−

1,500,000

1.03500

Nov. 28,2031

Resona Bank, Limited−

1,500,000−

1,500,000

Unsecured andnon-guaranteed
Fixed rate

0.45065

Mar. 31,2028

Sumitomo Mitsui Trust Bank, Limited−

500,000−

500,000

1.01500

Nov. 28,
2031

Unsecured andnon-guaranteed
Fixed rate

Development Bank of Japan Inc.

3,000,000−−

3,000,000

Mizuho Bank, Ltd.

1,000,000−−

1,000,000

Sumitomo Mitsui Trust Bank, Limited

500,000−−

500,000

Aozora Bank, Ltd.

750,000−−

MUFG Bank, Ltd.

1,250,000−

Mizuho Bank, Ltd.

1,500,000

Resona Bank, Limited
Sumitomo Mitsui Trust Bank, Limited

Sumitomo Mitsui Trust Bank, Limited

Sumitomo Mitsui Banking Corporation

37

Increase

April 30,
2023
(Amount)

MUFG Bank, Ltd.

Mizuho Bank, Ltd.



October 31,
2022(Amount)(cont.)2,000,000−−

2,000,000

NTT TC Leasing Co., Ltd.

1,200,000−−

1,200,000

Development Bank of Japan Inc.

2,000,000−−

2,000,000

MUFG Bank, Ltd.

2,000,000−−

2,000,000

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

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

Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate
Unsecured andnon-guaranteed
Fixed rate(continued on next page)38

(Notes to Financial Statements cont.)(cont.)Thousands of yen
LenderOctober 31,
2022(Amount)

Increase

April 30,
2023
(Amount)

Decrease

Aozora Bank, Ltd.

−1,500,000−

1,500,000

NTT TC Leasing Co., Ltd.

−1,500,000−

1,500,000

Resona Bank, Limited−

1,500,000−

1,500,000

Sumitomo Mitsui Trust Bank, Limited−

1,000,000−

1,000,000

Mizuho Bank, Ltd.

−

500,000−

500,000

SUBTOTAL

114,750,000

TOTAL¥ 114,750,000

11,000,000¥

19,700,000¥

15,800,000

109,950,000

20,800,000¥ 113,650,000

Note-10. Rental revenues and expenses

Averageinterest
rate *1(%)

Repay­
ment

1.11125

Nov. 30,
2032

Use offunds

Remarks

Rental revenues and expenses for the six months ended October 31, 2022 and April 30, 2023 were as follows:
Thousands of yen
October 31, 2022

*2

1.10125

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

Nov. 30,
2032

April 30, 2023

REAL ESTATE RENTAL REVENUES
Rental revenues
Rents

¥

7,730,716

Common area charges
Subtotal¥

7,799,596

1,237,022

1,207,955

8,967,739

9,007,552

Other rental revenues
Utilities income

583,120

570,533*1	Floating interest rates in the table above represent the weighted average interest rates for the period. For loans for which NUD conducted interest rate swap transactions in order to reducethe interest rate fluctuation risk, the fixed rate interests obtained by taking into account the effect of the interest rate swaps are indicated.

Parking fees

241,934

240,571*2	All the loans are used for such purposes as purchasing beneficiary interests in real estate trust, repaying existing borrowings and redeeming corporate bonds.

Facility fees

122,326

131,643*3	Long-term loans payable due within one year on the balance sheets are included in long-term loans in the table above for the purpose of indicating the loans in accordance with respective
loan agreements.

Other incidental revenues

49,99751,000*4	The anticipated maturities of long-term loans for the following five years beginning May 1, starting in 2023 are as follows:

Miscellaneous income

149,696386,269

Subtotal

1,147,076

1,380,018



10,114,816

10,387,571

1,258,433

1,285,361

Utilities

814,695

883,565

Real estate taxes

694,015

676,076

Insurance

17,005

17,344Maintenance and repairs

581,096

1,091,427

Trust fees

28,59826,705

Depreciation

1,592,636

1,560,435

Rent expenses

476,433

482,397

Miscellaneous expenses

127,321110,327

5,590,235

6,133,642

(thousands of yen)
One year or less¥

10,950,000

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

12,250,000

11,600,000

15,400,000

10,650,000

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



TOTAL REAL ESTATE RENTAL EXPENSES

REAL ESTATE RENTAL INCOME¥

4,524,580¥

4,253,929

Note-11. Gains and losses from sale of properties
There were no gains and losses from sale of properties for the six months ended October 31, 2022.
Gains from sale of properties for the six months ended April 30, 2023 were as follows:
Thousands of yen
April 30, 2023
Rokubancho Building(50% quasi co-ownershipinterest)
Revenues from sale of properties¥

Cost of properties

3,759,907

Other expenses for sale
GAINS FROM SALE OF PROPERTIES

39

5,250,000

18,773¥

1,471,319

40

(Notes to Financial Statements cont.)

Note-12. Income taxes

Note-14. Leases

Income taxes in Japan applicable to NUD consist of corporate income tax, enterprise tax, and inhabitant tax. The following is reconciliation
between the statutory income tax rate in Japan and the effective tax rate reflected in the accompanying financial statements for the six months
ended October 31, 2022 and April 30, 2023:

NUD leases some properties to tenants under non-cancellable operating leases. As of October 31, 2022 and April 30, 2023, the future lease
expenses and revenues under the non-cancellable operating leases were as follows:

October 31, 2022
Statutory tax rate

Operating leases (as lessee)

April 30, 2023

Thousands of yen

31.46%

31.46%(31.43)(28.32)

Due after one year

0.02

(3.13)

TOTAL

0.05%

0.01%

Adjustments

October 31, 2022
Due within one year

Deductible cash distributions
Other
EFFECTIVE TAX RATE¥

550,264

April 30, 2023¥

594,524

11,738,980¥

12,289,245

12,385,935¥

12,980,460

Operating leases (as lessor)
Under NUD’s distribution policy, cash distributions are made in excess of 90% of distributable income as defined in the Special Taxation
Measures Law of Japan for the fiscal period to qualify for conditions as set forth in the Special Taxation Measures Law to achieve a deductionof cash distributions for income tax purposes. Based on such policy, NUD treated the cash distributions as tax deductions allowed in theSpecial Taxation Measures Law.
The tax effects of significant temporary differences that resulted in net deferred tax assets or liabilities as of October 31, 2022 and April 30,
2023 were as follows:

Thousands of yen
October 31, 2022
Due within one year¥

2,229,691¥

7,497,846

Due after one year
TOTAL

April 30, 2023¥

2,352,776¥

7,365,267

5,268,154

5,012,490

Thousands of yen
October 31, 2022

April 30, 2023

Deferred tax assets
Enterprise taxes

Note-15. Distribution information¥

Total of deferred tax assets
NET DEFERRED TAX ASSETS

2,292

¥

4,604

2,292
¥

2,292

4,604
¥

4,604

Pursuant to the distribution policy set forth in Article 13, Paragraph 1 of NUD’s Article of Incorporation, the maximum distribution amountcannot exceed the unappropriated retained earnings, and this amount must exceed 90% of the “distributable income” which is defined in
Article 67-15 of the Special Taxation Measures Law of Japan. No cash distributions exceeding the unappropriated retained earnings as set
forth in Article 13, Paragraph 2 of the NUD’s Article of Incorporation were made.
[October 31, 2022]

Note-13. Per unit information
The following table summarizes the net assets per unit as of October 31, 2022 and April 30, 2023 and the net income per unit for the six
months ended October 31, 2022 and April 30, 2023:
October 31, 2022
Net assets per unit¥

Net income per unit

98,211

April 30, 2023¥

98,996

2,787

3,572

*1	The net income per unit is calculated by dividing the net income by the weighted-average number of units outstanding for the respective six-month period. Diluted net income per unit is
not presented since no warrants and convertible bonds were outstanding during the six months ended October 31, 2022 and April 30, 2023.

In accordance with this policy, NUD declared a total distribution of 3,906,356,745 yen as distribution of income for the 40th fiscal period(payment to start on January 20, 2023), which was the maximum value arrived at when the number of units outstanding (1,401,635 units) was
multiplied by an integer, within the limit of the unappropriated retained earnings for the 40th fiscal period.
[April 30, 2023]
In accordance with this policy, NUD declared a total distribution of 4,507,658,160 yen as distribution of income for the 41st fiscal period(payment to start on July 14, 2023), which was the maximum value of unappropriated retained earnings after deducting provision of reserve
for reduction entry, in application of the Special Provisions for Taxation in Cases of Repurchase of Specified Assets (Article 65-7 of the Special
Taxation Measures Law of Japan), arrived at when the number of units outstanding (1,401,635 units) was multiplied by an integer.
Income carried forward after the distributions for the six months ended October 31, 2022 and April 30, 2023 were as follows:
October 31, 2022

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

Unappropriated retained earnings

Thousands of yen
October 31, 2022
Net income
Amount not attributable to ordinary unitholders
Net income related to ordinary unit
Average number of units during the period

41¥

3,907,037

Cash distributions declared

April 30, 2023¥¥

5,007,253−−

3,907,037

5,007,253

1,401,635 units

1,401,635 units(Cash distribution declared per unit)

3,907,377,517

April 30, 2023¥

5,008,274,553

3,906,356,745

4,507,658,160(2,787)(3,216)−500,600,000

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

1,020,772¥

16,39342

(Notes to Financial Statements cont.)

Note-16. Financial instruments*3 Planned repayment and redemption amounts of loans and corporate bonds as of October 31, 2022 and April 30, 2023 are as follows:

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

October 31, 2022

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

Long-term loans payable

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

TOTAL

Within one year

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

¥

¥

¥

Corporate bonds

23,500,000

9,500,000

2,000,000¥

25,500,000¥

9,300,000

2,000,000¥

11,500,000¥

9,300,000

In addition, although loans with floating interest rates are exposed to interest rate fluctuation risk, NUD manages the risk by adjusting theratio of the balance of loans with floating interest rates to the entire loans in accordance with the financing environment, as well as utilizing
derivative transactions (interest rate swap transactions) as hedging instruments.
The investment securities (preferred securities backed by the cash flow gained from real estate) are exposed to liquidity risk, credit risk of
the issuer, etc., in addition to investment risks specific to real estate. However, NUD will manage such risks by maintaining the ratio of theinvestment securities to its total assets at a certain level, and by employing such measures as assessing the financial status on a regularbasis.
Supplemental explanation on items concerning fair value of financial instruments - Since calculation of the fair value of financial instruments
uses certain assumptions and conditions, the calculated prices may differ if different assumptions and conditions are used. As for thecontract amount and other conditions of derivative transactions indicated in “(b) Items concerning fair value of financial instruments”
below, the contract amount is not an indicator of the market risks related to such derivative transactions.
(b)	Items concerning fair value of financial instruments - The book values recorded on the balance sheets, fair values and their difference asof October 31, 2022 and April 30, 2023 were as follows. Furthermore, notes on “Cash and deposits,” “Cash and deposits held in trust”
and “Short-term loans payable” are omitted as these are settled with cash and within a short period of time and thus the fair value
approximates the book value.
Thousands of yen(1) L ong-term loans payable due within
one year

Fair value

23,500,000

23,524,164

Book value

Fair value

24,164

10,950,000

10,955,135

5,135

2,000,000

1,999,580(420)

4,000,000

3,997,620(2,380)(3) Long-term loans payable

91,250,000

90,436,297(813,702)

99,000,000

98,471,364(528,635)(4) Corporate bonds

9,200,000

9,086,212(113,788)

7,200,000

7,087,776(112,224)

¥

−

¥

−

¥

14,700,000

¥

−

¥

−

¥

−

−
¥

44,500,000
7,200,000

13,250,000¥

Long-term loans payable

Within one year

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

¥

¥

¥

Corporate bonds

10,950,000

12,250,000

4,000,000

TOTAL

¥

14,950,000¥

11,600,000−¥

12,250,000¥

15,400,000−¥

11,600,000¥−(1) Long-term loans payable due within one year and (3) long-term loans payable - For long-term loans payable with floating interest rates, book values are used to determine their fairvalues as the fair values are considered to approximate the book values because these instruments reflect market interest rates over the short term. However, fair values of certain
long-term loans payable with floating interest rates that qualify for the special accounting of interest rate swaps (refer to Note-18. Derivative Transactions below) are based on themethod of calculating by discounting the sum of their principal and interest payments net of any cash flows from the interest-rate swap by estimated rates assumed in the event that
NUD borrows new loans corresponding to the remaining periods. Moreover, fair values of long-term loans payable with fixed interest rates are based on the method of calculating bydiscounting the sum of their principal and interest by the rates assumed in the event that NUD borrows new loans corresponding to the remaining periods.

¥

15,400,000

51,700,000(5) Derivative Transactions - Refer to Note-18. Derivative Transactions below.
	
Investment securities - The preferred securities (recorded on the Balance Sheets at 20,035,175 thousand yen as of October 31, 2022 and April 30, 2023, respectively) are excluded from thedisclosure of fair value of financial instruments in accordance with Paragraph 5 of Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No.
19 (revised 2020) issued on March 31, 2020).

More than
five years¥−¥

49,100,000
7,200,000

10,650,000¥

56,300,000

Note-17. Investment securities
Investment securities represent the preferred securities issued by UDX Special Purpose Company, which are backed by cash flows from Real
Estate Property managed by UDX Special Purpose Company. NUD owns 53,580 units (19.0% equity) of the preferred securities (282,000 units
in total) as of October 31, 2022 and April 30, 2023, respectively.
These securities are excluded from the disclosure of fair value in accordance with Paragraph 5 of Implementation Guidance on Disclosuresabout Fair Value of Financial Instruments (ASBJ Guidance No. 19 (revised 2020) issued on March 31, 2020).

Note-18. Derivative transactions(a)	Derivatives to which hedge accounting is not applied - Not applicable for the six months ended October 31, 2022 and April 30, 2023.
(b)	Derivatives to which hedge accounting is applied - For the six months ended October 31, 2022 and April 30, 2023, the following tableshows the contract amount or amount equivalent to the principal provided in the contract as of the closing date for each method of hedge
accounting.
Thousands of yen
October 31, 2022
Type of hedge
accounting

Type of derivativetransactions, etc.

Major
hedged item

Special accounting forinterest rate swaps

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

Of which,exceeding
one year

Fair
value

Calculation
methodfor the fairvalue

¥ 67,630,000¥ 51,930,000*−

Thousands of yen
April 30, 2023
Type of hedge
accounting

Type of derivativetransactions, etc.

Major
hedged item

Special accounting forinterest rate swaps

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

Of which,exceeding
one year

Fair
value

Calculation
methodfor the fairvalue

¥ 59,630,000¥ 49,430,000*−(2) Corporate bonds due within one year and (4) Corporate bonds - Fair values of these instruments are calculated based on their market prices.
*2 Stocks and other securities with no market prices:

10,650,000−*1 The following methods are used to estimate the fair value of financial instruments:

43¥

April 30, 2023

Difference(2) C orporate bonds due within one year(5) Derivative Transactions−

April 30, 2023
Difference

13,250,000

Thousands of yen

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

Book value

14,700,000−

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

October 31, 2022¥

More than
five years* Transactions for which special accounting for interest rate swaps is applied are combined with long-term loans payable for accounting purposes. Accordingly, their fair value is included in
the fair value of the relevant long-term loans payable.

44

(Notes to Financial Statements cont.)

Note-19. Rental property

Six months ended April 30, 2023 [November 1, 2022 - April 30, 2023]

NUD owns office buildings and residential properties for rental purposes mainly in the 23 wards of Tokyo. The book values of these rental
properties recorded on the balance sheets as of October 31, 2022 and April 30, 2023, the changes during the fiscal period and their fair values
are as follows:(i)	Information by product/service category - Description has been omitted because operating revenues from external customers in asingle product/service category account for over 90% of the operating revenues on the profit and loss statements.
(ii)	Information on geographical area Operating revenues - Description has been omitted because operating revenues from external customers in Japan account for over
90% of the operating revenues on the profit and loss statements.

Thousands of yen
October 31, 2022
*2

*1

Office buildings

TOTAL

*3

*2

*1

*1

Fair value at
October 31,
2022

Increase andBook value atBook value atNovember 1, Decrease during
April 30,
the period
2022
2023

Fair value atApril 30,2023

¥ 169,882,528¥

65,105,184¥ 234,987,712¥(470,321)¥ 169,412,207¥ 212,108,000¥ 169,412,207(350,570)

64,754,613

92,060,000

64,754,613(820,892)¥ 234,166,820¥ 304,168,000¥ 234,166,820¥¥

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

*3 *4Increase andBook value atBook value at
Decrease during October 31,
May 1,
the period
2022
2022

Residential properties

April 30, 2023
*12,522,293¥ 171,934,500¥ 211,792,000(240,471)

64,514,142

95,670,000

2,281,822¥ 236,448,643¥ 307,462,000(iii)	Information by major customer Customer’s nameOperating revenues (thousands of yen)

Related segment

NTT Urban Development Corporation¥ 1,471,319

Real estate rental business*1	The book values recorded on the balance sheets represent the amounts obtained by deducting the accumulated depreciation from the acquisition prices (including incidental expenses
accompanying the acquisitions). Note that construction in progress and construction in progress held in trust are not included.

Note-21. Subsequent events*2	Of the increases and decreases in rental properties during the period, major increases in the six months ended October 31, 2022 are due to the capital expenditures (784,773 thousandyen) for owned properties, and major decreases are due to the depreciation (1,592,636 thousand yen). Major increases in the six months ended April 30, 2023 are due to the acquisition of
Urbannet Nakano Building (6,462,978 thousand yen) and the capital expenditures (1,139,186 thousand yen) for owned properties, and major decreases are due to the partial sale ofRokubancho Building (3,759,907 thousand yen) and the depreciation (1,560,435 thousand yen).

Sale of Properties - Pursuant to the basic investment policy and other policies, NUD sold the following property:*3	The fair values at the end of the fiscal periods in the above table are appraisal values based on external real estate appraisers.

OVERVIEW OF SALE OF PROPERTY*4	With regard to Rokubancho Building, which NUD sold as of May 26, 2023, the sale price indicated in the trust beneficiary interests transaction agreement is used for the fair value at April
30, 2023.

Type of property

Beneficiary interest in a real estate trust (50% quasi co-ownership interest)

Sale price5,250 million yen

In addition, the operating revenues and expenses of the rental properties for the six months ended October 31, 2022 and April 30, 2023 are
as follows:

Office buildings

Appraisal value

5,250 million yen (as of February 1, 2023) [Appraiser] Japan Real Estate Institute

Buyer

NTT Urban Development Corporation

Real estate
rental income

Real estate
rental revenues

Real estate
rental expenses

Real estate
rental income

¥

¥

¥

¥

¥

¥

Residential properties


TOTAL

2,630,929¥

10,114,816

1,350,950¥

5,590,235

3,244,601
1,279,978¥4,524,580

7,723,061
2,664,509¥

10,387,571

3,759 million yen (as of April 30, 2023)

April 30, 2023

Real estate
rental expenses
4,239,285

Book value*2

NUD plans to record 1,475 million yen in gain on sale of properties as operating
revenues for the six months ending October 31, 2023.

Real estate
rental revenues
7,483,887*1

Impact on income

Thousands of yen
October 31, 2022

Rokubancho Building

4,693,120
1,440,521¥

6,133,642¥

Contract dateFebruary 24, 2023

3,029,941

Sale date

May 26, 2023

1,223,988

OVERVIEW OF THE PROPERTY HELD IN TRUST

4,253,929

Location (residential indication)

6-28 Rokubancho, Chiyoda Ward, Tokyo

Use of building *3

OfficeLand area

2,036.66m2* The real estate rental revenues and real estate rental expenses are rental revenues and corresponding expenses (depreciation, property management fees, utilities, etc.), and are recorded
in “Operating revenues” and “Operating expense,” respectively.

Note-20. Segment information(a) Segment information - Description has been omitted because the real estate business constitutes NUD’s sole business segment.
(b) Related information Six months ended October 31, 2022 [May 1, 2022 - October 31, 2022]*3

Total floor space of building *3

9,339.42m2

Structure of building *3

Steel frame and steel-framed reinforced concrete structure with a flat-topped roof;
7 floors with 1 basement floor

Construction completion *3

April 1987

Total leasable space

3,436.39m2*4(i)	Information by product/service category - Description has been omitted because operating revenues from external customers in asingle product/service category account for over 90% of the operating revenues on the profit and loss statements.

*1 “Sale price” represents the transaction price before consumption taxes, not subtracting various expenses (such as real estate taxes) required for the transfer of the property.

(ii)	Information on geographical area -*3	The descriptions for “Use of building,” “Land area, “Total floor space of building,” “Structure of building” and “Construction completion” are based on the information indicated in thecertificate of registered matters.

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

*2	“Book value” indicates the figure calculated by multiplying the figure of the entire property by the quasi co-ownership interest ratio (ownership ratio: 50/100) of the trust beneficiary interest
that NUD transferred.

*4	“Total leasable space” indicates the figure calculated by multiplying the figure of the entire property by the quasi co-ownership interest ratio (ownership ratio: 50/100) of the trust
beneficiary interest that NUD transferred.

Property and equipment - Description has been omitted because the amount of property and equipment located in Japan accounts
for over 90% of the amount of property and equipment on the balance sheets.
(iii)	Information by major customer - Description has been omitted because the operating revenues from a single external customer
accounts for less than 10% of the operating revenues on the profit and loss statements.

45

46

OTHER INFORMATION (UNAUDITED)For the six months ended October 31, 2022 and April 30, 2023

CAPITAL EXPENDITURES

2. Capital Expenditures during the 41st Fiscal Period

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

Address

PurposeScheduled Period
Total

Urbannet
Ikebukuro Building

AmountAmountPaid during Paid before
the 41st
the 41st
Fiscal Period Fiscal Period

The following is an overview of major construction classified as capital expenditures during the 41st fiscal period (November 1, 2022 - April
30, 2023) for the portfolio owned by NUD. Capital expenditures during the period totaled 1,139,186 thousand yen. This amount, combinedwith maintenance and repair expenditures of 1,091,427 thousand yen, was classified as operating expenses for the period, aggregating a totalof 2,230,613 thousand yen representing renovation expenditures.
Name

Address

Purpose

PeriodAmount Paid
(thousands of yen)

Urban Ace Higobashi Building

Nishi Ward,
Osaka City, Osaka

Renovation of elevator
equipment

July 2022 –April 2023

73,296

Urbannet Ikebukuro Building

Toshima Ward, Tokyo

Renovation of elevator
equipment

June 2022 –
March 2023

60,119Urbannet Mita Building

Minato Ward, Tokyo

Renovation of sanitary facilities

December 2022 –April 2023

54,674

The Kanagawa Science Park
R&D Building

Takatsu Ward,
Kawasaki City, Kanagawa

Renovation of air-conditioning
systems

March 2022 –
February 2023

51,081NTT CRED Okayama Building

Kita Ward,
Okayama City, Okayama

Renovation of heat source
equipment and facilities

July 2022 –
March 2023

50,373

NTT CRED Okayama Building

Kita Ward,
Okayama City, Okayama

Renovation and construction
work

December 2022 –
March 2023

46,305

The Kanagawa Science Park
R&D Building

Takatsu Ward,
Kawasaki City, Kanagawa

Renovation of air-conditioning
systems

March 2022 –
February 2023

44,843

The Kanagawa Science Park
R&D Building

Takatsu Ward,
Kawasaki City, Kanagawa

Renovation of air-conditioning
systems

August 2022 –
February 2023

44,221

Takadanobaba Center
Building

Shinjuku Ward, Tokyo

Renovation of mechanicalparking system

August 2022 –April 2023

26,242

Urbannet Ikebukuro Building

Toshima Ward, Tokyo

Renovation of mechanicalparking system

July 2022 –April 2023

25,039Toshima Ward, Tokyo

Renovation of elevator
equipment

May 2023 –October 2023

122,267−−

Takadanobaba
Center Building

Shinjuku Ward, Tokyo

Renovation of elevator
equipment

November 2022 –
May 2023

65,737−−

Premier Yokohama
Nishiguchi Building

Nishi Ward,
Renovation of airYokohama City, Kanagawa conditioning systems

June 2023 –October 2023

58,503

Urban Ace
Higobashi Building

Nishi Ward,
Osaka City, Osaka

Renovation of mechanical February 2023 –parking system
October 2023

47,324−−

Minato Ward, Tokyo

Renovation of emergency August 2023 –power generators
 September 2023

37,230−−

Minato Ward, Tokyo

Renovation of hot watersupply rooms

May 2023 –October 2023

29,719−−Shibaura Island
Air Tower

Minato Ward, Tokyo

Renovation of
telecommunications
equipment

March 2023 –June 2023

25,990−−NTT CRED
Okayama Building

Kita Ward,
Okayama City, Okayama

Renovation of automatic
fire alarm systems

December 2022 –June 2023

24,006−−

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of entrance hall

November 2022 –
March 2023

22,401

Questcourt Harajuku

Shibuya Ward, Tokyo

Renovation of mechanical June 2023 –parking systemJune 2023

22,295−−

Tokyo Opera City Building

Shinjuku Ward, Tokyo

Renovation of drainage facilities

November 2022 –
March 2023

21,590

Questcourt Harajuku

Shibuya Ward, Tokyo

Renovation of exteriorwalls

21,327−−

Other construction

Urbannet
Mita Building
Urbannet
Mita Building

April 2023 – September 2023−−

618,997

TOTAL

1,139,186

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

41st Fiscal Period(November 1, 2022 – April 30, 2023)

Deposits at end of the preceding period

622,224

636,547

Deposits made during the period

14,323

14,323−

12,500636,547

638,370

Amounts used from deposits during the period
Deposits carried forward to the next period

47

Thousands of yen
40th Fiscal Period(May 1, 2022 – October 31, 2022)

48

(Other Information (Unaudited) cont.)

OVERVIEW OF FUND PROCUREMENT

As a result of the above, NUD’s interest-bearing liabilities totaled 124,850 million yen as of April 30, 2023. The breakdown is as follows: 3,700
million yen in short-term loans, 109,950 million yen in long-term loans (including long-term loans due within one year) and 11,200 million yen
in corporate bonds (including corporate bonds due within one year). Of the total interest-bearing liabilities, the ratio of long-term interestbearing liabilities* was 97.0%.

1. Borrowing of Funds, etc.
(1)	NUD refinanced the 11,000 million yen in long-term loans borrowed on December 8, 2015 into long-term loans on November 30, 2022.
The breakdown of lenders, etc. of the 11,000 million yen in these long-term loans is as follows:
Lenders

Aozora Bank, Ltd.

NTT TC Leasing
Co., Ltd.

Resona Bank,
LimitedSumitomo Mitsui
Trust Bank, Limited

Amount of Debt Finance

1,500 million yen

1,500 million yen

1,500 million yen

500 million yen* Ratio of long-term interest-bearing liabilities = total long-term interest-bearing liabilities/total interest-bearing liabilities x 100%

2. Credit Ratings
NUD has been granted the following issuer and bond credit ratings.

Drawdown Date

November 30, 2022

Principal Repayment Date

November 28, 2031

Rating Agency

Principal Repayment Method

Lump-sum repayment upon maturity

Japan Credit Rating Agency, Ltd. (JCR)

Interest Rate

Fixed rate:(1.03500%)

Fixed rate:(1.01500%)

Collateral/Guarantee

Unsecured and non-guaranteed

Issuer rating (Rating outlook)

Bond rating

AA- (Positive) *1

AA- *2*1	Japan Credit Rating Agency, Ltd. (JCR) announced that it changed NUD’s rating outlook as described below as of November 29, 2022.
• Issuer rating (Rating outlook): AA- (Stable) → AA- (Positive)*2	The bond rating has been granted to the 8th Unsecured Corporate Bonds, the 9th Unsecured Corporate Bonds (with pari passu conditions among specified investment corporation bonds)(green bonds) and the 10th Unsecured Corporate Bonds (with pari passu conditions among specified investment corporation bonds) (green bonds).

Lenders

Aozora Bank, Ltd.

NTT TC Leasing
Co., Ltd.

Resona Bank,
LimitedSumitomo Mitsui
Trust Bank, Limited

Mizuho Bank, Ltd.

Amount of Debt Finance

1,500 million yen

1,500 million yen

1,500 million yen

1,000 million yen

500 million yen

Drawdown Date

RatingNovember 30, 2022

Principal Repayment Date

November 30, 2032

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate

Fixed rate:(1.11125%)

Fixed rate:(1.10125%)

Collateral/Guarantee

Unsecured and non-guaranteed(2)	NUD borrowed 5,000 million yen in total in a short-term loan to partly fund the acquisition of the beneficiary interest in a real estate trust
for Urbannet Nakano Building, which NUD acquired as of March 14, 2023. The breakdown of lender, etc. of the 5,000 million yen in the
short-term loan is as follows:
LenderSumitomo Mitsui Trust Bank, Limited

Amount of Debt Finance

5,000 million yen

Drawdown Date

March 14, 2023

Principal Repayment Date

April 10, 2023

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate

Floating rate
(1-month TIBOR + 0.13500%)

Collateral/Guarantee

Unsecured and non-guaranteed(3)	NUD refinanced the 3,700 million yen in long-term loans borrowed on March 28, 2022 into 3,700 million yen in short-term loans on March
31, 2023. The breakdown of lenders, etc. of the 3,700 million yen in the short-term loans is as follows:
Lenders

Mizuho Bank, Ltd.

Sumitomo Mitsui
Trust Bank, Limited

MUFG Bank, Ltd.

Sumitomo Mitsui
Banking
Corporation

NTT TC Leasing
Co., Ltd.

Amount of Debt Finance

1,700 million yen

1,100 million yen

300 million yen

300 million yen

300 million yen

Drawdown Date

March 31, 2023

Principal Repayment Date

March 29, 2024

Principal Repayment Method

Lump-sum repayment upon maturity

Interest Rate
Collateral/Guarantee

49

Floating rate
(1-month TIBOR + 0.14000%)

Floating rate
(1-month TIBOR + 0.16000%)

Unsecured and non-guaranteed

50

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

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

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

51

status of insurance and other factors, andselect investments after considering theimportance of these assets in the portfolio
structure. In doing so, steps shall be taken to
construct a portfolio that clearly classifies
the strategic position of these investment
assets.
B) Use ➠ see table on page 52a.	NUD shall invest in real estate, its leasehold interest or surface rights (chijo-ken),real estate in trust underlying its beneficial interests, its leasehold interest or
surface rights, and real estate underlying
equity investments in real estate backed
securities or anonymous partnerships(hereinafter, “Real Estate Backed
Securities, etc.”), its leasehold interests
or surface rights (collectively referred toas “Investment Real Estate”), all of whichshall be primarily for office and residential uses. However, such properties may
in some cases be used partially for retailor other purposes. Consequently, theoffice buildings and residential properties acquired by NUD may include properties that are partially used for retail orother purposes.
b.	In consideration of the characteristics ofeach real estate use indicated in thetable on page 52, NUD works to ensure
diversification of property uses by investing primarily in both office buildings andresidential properties while assigning a
relatively high importance to office buildings, aiming to minimize the effects ofchanges in economic and social conditions on NUD’s earnings and ensure creation of stable cash flow over the medium
to long term.
C) Areas ➠ see table on page 53
a.	As noted earlier, NUD’s investments arefocused primarily in the Tokyo Economic
Bloc, which is characterized by high concentrations of people and industries andan established economic foundation, andin Major Regional Cities.
b.	Specifically, by dividing the investment
target areas into the categories of the 5Central Wards of Tokyo, the Other 18
Wards of Tokyo, the Urban Areas
Surrounding Tokyo and the Major
Regional Cities, and by considering thebalance between those categories while
concentrating on the 5 Central Wards ofTokyo, NUD seeks to achieve a portfolio
diversified by asset type comprising
office buildings and residential properties. NUD diversifies its investment targeting to achieve a geographical split asindicated in the table on page 53 forboth office buildings and residential
properties (each of which is set at 100%in the table).

Use
Use

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

OfficeBuildings

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

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

are the investment targets.

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

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

In principle, residential properties of thesizes indicated in the table on page 53
are the investment targets (in accordancewith the classifications by unit type).

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

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

E) Due Diligence ➠ see table on page 54
NUD decides on whether or not it will
acquire investment assets in a comprehensive manner after conducting economic,
physical and legal inspections of the assets.
The table on page 54 lists the items that are,in principle, investigated in conducting sucheconomic, physical and legal inspections.
However, since the importance of each item
listed in the table in deciding on the acquisition of investment assets may differ depending on the use of the Investment Real Estateor the type and nature of the investment
assets, NUD will not necessarily examine allof the said items before acquiring the investment assets. In addition, the investment
assets acquired by NUD may not in the end
satisfy all of the standards of such items,
which are intended for the inspections andinvestigations for deciding on the acquisition of the investment assets.

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

a. Office buildings

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

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

D) Asset Size per Property➠ see table on page 53
In principle, office buildings with leasable
floor space of approximately 2,000m2(approximately 700 tsubos) or more, andstandard floor sizes of approximately
300m2 (approximately 90 tsubos) or more,

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

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

DINKs

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

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

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

52

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

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

Due Diligence
Item

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

Tenantinspection

Economic Market research
Inspection

5 Central
Wards ofTokyo

Other 18
Wards ofTokyo

Urban Areas
Surrounding
Tokyo (Note 1)

Major
Regional
Cities (Note 2)

Office buildings

50% or more

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

Residential properties

50% or more

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

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

Dedicated
Use Area per
Rental Unit

Number of
Rental Units

Wide

80m2 or more

10 or more

Family60m or more

20 or more

DINKs

40-80m2

20 or more

Single25-40m2

30 or more

2Standards for Tenant Selection
Classification

Check Items (Details)

Location

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

Construction,
facilities andspecifications

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

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

Property
management

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

Environment,
groundcharacteristics,etc.

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

Title, etc.

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

Property line
inspection

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

Tenant attributes

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

Legal
Inspection

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

Individuals

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

53

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

Income-related

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

Corporations

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

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

PhysicalInspection

Asset Size per Property

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

54

(Strategic Policies cont.)

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

Classification

Strategic SignificanceCore Assets

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

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

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

where

sale

will

be

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

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

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

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

Investment Real Estate is development
properties.

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

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

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

operationsof

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

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

B) Issuance ofSubscription

Investment

Units

for

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

3. Property Management PolicyA) In managing real estate, NUD intends tomaintain and enhance the value and competitiveness of its assets through continuous
capital expenditures made from a medium
to long-term perspective, and aims toachieve steady growth in investment returns
through higher earnings (e.g., increases inrents, decreases in vacancy rates, and prolonging and fixing the terms of agreements)
and reduced expenses (e.g., reduction in
outsourcing fees, utility expenses and otherfees and expenses).
B) UDAM shall select an appropriate party tocontract with for the provision of property
management services for each acquired
investment property by considering thedetails of the items listed below (see table on
page 57). If such a party falls under the category of interested parties as stipulated in theRegulations on Transactions with Interested
Parties, UDAM shall consign the property
management services to the party only
when the standards and procedures stipulated in the said Regulations are satisfied, on
top of the following requirements.
In renewing the property managementagreement, NUD shall consider the detailsof the following items, in addition to (1)through (7) listed below, to make comprehensive judgment. Furthermore, UDAM will

56

(Strategic Policies cont.)

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

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

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

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

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

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

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

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

Standards for Selection of Property Manager
Item

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

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

(2) Financial standing

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

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

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

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

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

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

57

58

INDEPENDENT AUDITOR’S REPORT

59

60

(Independent Auditor’s Report cont.)

DISCLAIMER
This English document contains selected information including apartial translation of certain documents originally prepared inaccordance with the Financial Instruments and Exchange Act ofJapan or the Law Concerning Investment Trusts and Investments
Corporation of Japan. This document was prepared solely for theconvenience of readers outside Japan, and the content of thisdocument does not constitute an offer to sell, or a solicitation of an
offer to buy or sell, any securities of NUD or otherwise, nor is it
advice or the recommendation of NUD to enter into any transaction.
Unless otherwise specified, the information contained herein does
not constitute disclosure documents or management reports
stipulated by the Financial Instruments and Exchange Act or Law
Concerning Investment Trusts and Investments Corporation, or
requested by the listing regulations of the Tokyo Stock Exchange orother related rules and regulations. When purchasing investment
units of NUD, investors are kindly requested to make investment
decisions based on their own judgment and responsibility.
English terms for Japanese legal, accounting, tax and businessconcepts used herein may not be precisely identical to the conceptof the equivalent Japanese terms. With respect to any and all terms
herein, if there exist any discrepancies in the meaning or interpretation
thereof between the original Japanese documents and English
translation contained herein, the Japanese documents will always
govern the meaning and interpretation. Neither NUD, UDAM nor
any of their respective directors, officers, employees, partners,
shareholders, agents, affiliates or their advisors will be responsible or
liable for the completeness, appropriateness or accuracy of English
translations contained herein. No person has been authorized togive any information or make any representations, other than thosecontained in this document, in relation to the matters set out in thisdocument, and if such information is given or representations are
made, such information or representations must not be relied upon
as having been authorized by NUD, UDAM or any of their respective
directors, officers, employees, partners, shareholders, agents,
affiliates or their advisors.
The financial statements of NUD have been prepared in accordancewith generally accepted accounting principles in Japan (Japanese61GAAP), which may differ materially, in certain respects, from generally
accepted accounting principles in other jurisdictions.
This document contains forward-looking statements. In some cases,
readers of this document can identify forward-looking statements byterms such as “may,” “will,” “should,” “would,” “expect,” “plan,”“anticipate,” “believe,” “estimate,” “potential,” or the negative of
these terms or other similar terminology. These statements discuss
expectations, indicate our intent or belief, identify strategies, containprojections of results of operations or of NUD’s financial condition, orstate other forward-looking information. These statements are notguarantees of future performance and are subject to various risks
and uncertainties. Actual results, performance or achievements, or
those of the industries in which we operate, may differ materiallyfrom any future results, performance or achievements expressed or
implied by these forward-looking statements. In addition, theseforward-looking statements are necessarily dependent uponassumptions, estimates and data that may be incorrect or imprecise
and involve known and unknown risks and uncertainties. Accordingly,
readers of this document should not interpret the forward-looking
statements included herein as predictions or representations of
future events or circumstances. NUD and UDAM do not intend anddisclaim any duty or obligation to update or revise any forwardlooking statements contained in this document to reflect new
information, future events or otherwise.
NUD takes the utmost care to ensure that the information provided
herein has no errors or omissions. However, this document has been
prepared for the convenience of quick and easy reference, and theinformation provided may include inaccurate descriptions or
typographical errors. In addition, the information provided is subject
to change without notice. NUD shall not be liable for the accuracy,completeness, appropriateness and fairness of the information
contained herein.
Use and perusal of this document shall be made at the responsibilityof the reader. NUD and other related parties involved in the
preparation and disclosure, etc. of this document shall not be liable
for any damages (regardless of whether direct or indirect, or bywhatever cause) that arise from the use of this document.