DISCLAIMER
This document has been prepared solely for the purpose of providing U.K. and Dutch
investors with certain information under Article 23 of the European Alternative Investment
Fund Managers Directive (European Directive 2011/61/EU) (the “AIFMD”) as implemented
in their respective jurisdictions. Accordingly, you should not use this document for any otherpurpose.
Netherlands
The units of Japan Real Estate Investment Corporation (“JRE” or the “AIF”) are being
marketed in the Netherlands under Section 1:13b of the Netherlands Financial Supervision
Act (Wet op het financieel toezicht, or the “Wft”). In accordance with this provision, Japan
Real Estate Asset Management Co., Ltd. (the “AIFM”) has notified the Dutch Authority for
the Financial Markets (Authoriteit Financiële Markten, the “AFM”) of its intention to offer
these units in the Netherlands. The units of JRE will not, directly or indirectly, be offered,sold, transferred or delivered in the Netherlands, except to or by individuals or entities thatare qualified investors (gekwalificeerde beleggers) within the meaning of Article 1:1 of theWft. As a consequence, neither the AIFM nor JRE is subject to the license requirement forinvestment institutions (beleggingsinstellingen) or their managers pursuant to the Wft.
Consequently, the AIFM and JRE are only subject to the supervision of the Dutch Central
Bank (De Nederlandsche Bank, “DNB”) or the AFM for the compliance with the ongoingregulatory requirements as referred to in the Dutch law implementation of article 42 of the
AIFMD. According to Article 23 prospectus is not subject to approval by the AFM. No
approved prospectus is required to be published in the Netherlands pursuant to Article 3 of
the Regulation (EU) 2017/1129 (the “Prospectus Regulation”) as amended and applicable in
the Netherlands.
United Kingdom
Units of JRE are being marketed in the United Kingdom pursuant to Article 59 of the United
Kingdom Alternative Investment Fund Managers Regulations 2013. In accordance with thisprovision, the AIFM has notified the Financial Conduct Authority (the “FCA”) of its intention
to offer these units in the United Kingdom.
For the purposes of the United Kingdom Financial Services and Markets Act 2000 (“FSMA”)
JRE is an unregulated collective investment scheme which has not been authorized by the
FCA.
Accordingly, any communication of an invitation or inducement to invest in JRE may only bemade to (i) investment professionals falling within Article 19(5) of the Financial Services andMarkets Act 2000 (Financial Promotion) Order 2005, as amended, or “the Order”; or (ii) highnet worth companies falling within Articles 49(2)(a) to (d) of the Order and other persons towhom it may lawfully be communicated (all such persons referred to under (i) and (ii) of thisparagraph, together being referred to as “Relevant Persons”).
In the United Kingdom, this document and its contents are directed only at Relevant Persons
and must not be acted on or relied on by persons who are not Relevant Persons. The
transmission of this document and its contents in the United Kingdom to any person otherthan a Relevant Person is unauthorized and may contravene the FSMA and other United
Kingdom securities laws and regulations.

Prohibition of Sales to UK Retail Investors
In addition to the restrictions under the AIFMD, as retained by the United Kingdom in its
domestic laws, the Units of JRE are not intended to be offered, sold or otherwise madeavailable to and should not be offered, sold or otherwise made available to any retailinvestor in the United Kingdom. For these purposes of this provision, a “retail investor”
means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2
of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European
Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of theprovisions of the FSMA and any rules or regulations made under the FSMA to implement
Directive (EU) 2016/97, where that customer would not qualify as a professional client, as
defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part ofdomestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 ofRegulation (EU) 2017/1129, as it forms part of domestic law by virtue of the EUWA; and theexpression “offer” includes the communication in any form and by any means of sufficient
information on the terms of the offer and the international units to be offered so as toenable an investor to decide to purchase or subscribe the international units.
Consequently no key information document required by Regulation (EU) No 1286/2014, as it
forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”), for offeringor selling the international units or otherwise making them available to retail investors in
the United Kingdom has been prepared and therefore offering or selling the international
units or otherwise making them available to any retail investor in the United Kingdom may
be unlawful under the UK PRIIPs Regulation.
European Economic Area
In addition to the restrictions under the AIFMD, the Units of JRE are not intended to beoffered, sold or otherwise made available to and should not be offered, sold or otherwise
made available to any retail investor in the European Economic Area (“EEA”). For these
purposes, a retail investor means a person who is one (or more) of: (i) a retail client as
defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); (ii) a
customer within the meaning of Directive (EU) 2016/97, where that customer would not
qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not aqualified investor as defined in the Prospectus Regulation, as amended. Consequently no
key information document required by Regulation (EU) No 1286/2014 (the “PRIIPs
Regulation”) for offering or selling the Units of JRE or otherwise making them available toretail investors in the EEA has been prepared and therefore offering or selling the Units of
JRE or otherwise making them available to any retail investor in the EEA may be unlawful
under the PRIIPs Regulation.

Article 23 (1)(a)Objectives of theJapan Real Estate Investment Corporation (“JRE” or the “AIF”) invests in office buildings, and it

AIF

aims to maintain geographical diversity while seeking stable growth and dividends in themedium to long term.

Investment

The investment strategy of JRE aims to assure stable growth and dividends in the medium tostrategy

long term. JRE was the first listed J‐REITs on the Tokyo Stock Exchange, and is able to fully utilize
the expertise of its sponsor, Mitsubishi Estate Co., Ltd., as well as the industry knowledge andfamiliarity that it has cultivated itself, in order to support external growth. JRE investment
strategy focuses on steadily expanding its asset portfolio based on external growth strategies
that aim to increase earnings through the acquisition and transfer of properties as well asinternal growth strategies that seek to optimize earnings from properties already held throughmethods such as focusing on occupancy rates, enhancing rental incomes and enhancing thevalue of properties. JRE conducts these strategies while maintaining a sound financial basethrough its financial strategies of maintaining conservative LTV ratios and high credit ratings.

Types of assets

Real estate, leasehold rights, surface rights, trust beneficiary interests only in the foregoing

the AIF may

assets, real estate securities, specified assets and other assets.

invest inTechniques it

JRE achieves its objective by investing in real estate consisting of buildings primarily used formay employ andoffices. JRE also invests in securities, beneficiary certificates representing beneficial interests inall associatedtrusts and other assets backed by office properties. Although JRE may invest in major cities

risks

nationwide, including in government‐designated cities, it maintains a ratio of more than 70% ofassets being located in the Tokyo metropolitan area (Tokyo, Kanagawa, Chiba and Saitama
Prefectures).
The principal risks with respect to investment in JRE are as follows:

any adverse conditions in the Japanese economy could adversely affect JRE;

JRE may not be able to acquire properties to execute the growth and investment
strategy in a manner that is accretive to earnings;

illiquidity in the real estate market may limit the ability to grow or adjust the portfolio;the past experience of the asset manager (the “AIFM”) in the Japanese real estatemarket is not an indicator or guarantee of future results;

JRE’s reliance on its sponsor company, the AIFM and other third‐party service providers
could have a material adverse effect on business;there are potential conflicts of interest between JRE and its sponsor company as well as
the AIFM;



JRE’s revenues largely comprise leasing revenues from the portfolio properties, which
may be negatively affected by vacancies, decreases in rent and late or missed payments
by tenants;



JRE faces significant competition in seeking tenants and it may be difficult to findreplacement tenants;

increases in interest rates may increase the interest expense and may result in a decline
in the market price of the units;

JRE may suffer large losses if any of the properties incurs direct or indirect damage froma natural or man‐made disaster;most of the properties in the portfolio are concentrated in Tokyo and the Tokyo
metropolitan area;

any inability to obtain financing for future acquisitions could adversely affect the growthof the portfolio;

JRE’s failure to satisfy a complex series of requirements pursuant to Japanese tax
regulations would disqualify JRE from certain taxation benefits and significantly reducethe cash distributions to the unitholders; andownership rights in some of JRE’s properties may be declared invalid or limited.

In addition, JRE is subject to the following risks:risks related to increasing operating costs;

risks related to JRE’s dependence on the efforts of the AIFM’s key personnel;risks related to the restrictive covenants under debt financing arrangement;risks related to entering into forward commitment contracts;risks related to third‐party leasehold interests in the land underlying JRE properties;risks related to holding the property in the form of stratified ownership (kubun shoyū)interests or co‐ownership interests (kyōyū‐mochibun);risks related to holding the property through trust beneficiary interests;risks related to properties not in operation (including properties under development);risks related to the defective title, design and construction, other defects, non‐conformity to the agreement or problems in the properties;risks related to impairment losses relating to the properties;risks related to tenant leasehold deposits and/or security deposits;risks related to tenant’s default as a result of financial difficulty or insolvency;risks related to the insolvency of master lessee;risks related to the insolvency of a property seller following the purchase of a property
by AIF;risks related to relying on expert appraisals and engineering, environmental and seismic
reports as well as industry and market data;risks related to the presence of hazardous or toxic substances in the properties, or the
failure to properly remediate such substances;

risks related to strict environmental liabilities for the properties;risks related to the amendment of applicable administrative laws and local ordinances;

risks related to infringing third party’s intellectual property rights;risks related to holding interests in properties through preferred shares of special
purpose companies (tokutei mokuteki kaisha);

risks related to holding Japanese anonymous association (tokumei kumiai) interests;4risks related to investments in trust beneficiary interests;risks related to the tight supervision by regulatory authorities and compliance withapplicable rules and regulations;risks related to tax authority disagreement with the AIFM’s interpretations of theJapanese tax laws and regulations;risks related to being unable to benefit from reductions in certain real estate taxes
enjoyed by qualified J‐REITs;



risks related to changes in Japanese tax laws;risk of dilution as a result of further issuances of units;risks related to unexpected repair costs; andrisks related to epidemics, natural disasters and wars.

Any applicable

JRE is subject to investment restrictions under Japanese laws and regulations (e.g., the Act on

investment

Investment Trusts and Investment Corporations (the “ITA”), the Financial Instruments andrestrictions

Exchange Act (the “FIEA”)) as well as its articles of incorporation.

JRE must invest primarily in specified assets as defined in the ITA. Specified assets include, but are
not limited to, securities, real estate, leaseholds of real estate, surface rights (chijō‐ken) (i.e., rightto use land for the purpose of having a structure on it) or trust beneficiary interests for securities
or real estate, leaseholds of real estate or surface rights. A listed J‐REIT must invest substantiallyall of its assets in real estate, real estate‐related assets and liquid assets as provided by the listing
requirements. Real estate in this context includes, but is not limited to, real estate, leaseholds ofreal estate, surface rights, and trust beneficiary interests for these assets, and real estate‐related
assets in this context include, but are not limited to, anonymous association (tokumei kumiai)interests for investment in real estate. Pursuant to the ITA, investment corporations may not
independently develop land for housing or to construct buildings, but may outsource suchactivities in certain circumstances.
Circumstances in

JRE may take out loans or issue long‐term or short‐term corporate bonds for the purpose ofwhich the AIF

investing in properties, conducting repairs and related work, funds for debt repayments

may use(including security deposits and guarantees, and funds for debt repayments such as borrowings

leverageand corporate bonds (including short‐term bonds)), as well as for operating capital, etc.;
provided, however, that the utilization or purpose of funds through issuances of short‐termbonds shall be limited to the extent permitted under Japanese laws and regulations.

The types andLoans or investment corporation bonds. Currently, all of JRE’s outstanding long‐ and short‐termsources ofloans as well as outstanding bonds are unsecured and unguaranteed.

leveragepermitted andLoans or investment corporation bonds in which JRE enters or JRE issues may be subject toassociated risks

restrictive covenants in connection with any future indebtedness that may restrict operations
and limit its ability to make cash distributions to unitholders, to dispose of properties or toacquire additional properties. Furthermore, if JRE were to violate such restrictive covenants,
such as with regard to debt service coverage or loan‐to‐value ratios, lenders may be entitled to5require JRE to collateralize portfolio properties or demand that the entire outstanding balance
be paid ahead of the scheduled payments.
In the event of an increase in interest rates, to the extent that JRE has any debt with unhedged
floating rates of interest or JRE incurs new debt, interest payments may increase, which in turn
could reduce the amount of cash available for distributions to unitholders. Higher interest rates
may also limit the capacity for short‐ and long‐term borrowings, which would in turn limit JRE’s
ability to acquire properties, and could cause the market price of the units to decline.
Any restrictions

The aggregate amount of loan and corporate bond issuance will not exceed ¥1 trillion.

on leverage
Any restrictions

No applicable arrangements.

on collateral andasset reusearrangements
Maximum level

JRE has set an upper limit of 65% as a general rule for its loan‐to‐value, or LTV, ratio, which is theof leverage

ratio of (x) the aggregate principal amount of borrowings and investment corporation bonds towhich the AIFM(y) the total assets of JRE’s portfolio, although it strives to maintain a ratio of approximately 30%

is entitled to– 40%. JRE may, however, temporarily exceed such levels as a result of property acquisitions or

employ onother events.

behalf of the AIF
Article 23(1) (b)Procedure by

Amendment of the articles of incorporation. Amendment requires a quorum of a majority of thewhich the AIF

total issued units and at least a two‐thirds vote of the voting rights represented at the meeting.

may change its

Unitholders should note, however that under the ITA and our articles of incorporation,

investment

unitholders who do not attend and exercise their voting rights at a general meeting ofstrategy /unitholders are deemed to be in agreement with proposals submitted at the meeting, except ininvestment

cases where contrary proposals are also being submitted.

policyAdditionally, the guidelines of the AIFM, which provide more detailed policies within JRE’s
overall investment strategy and policy, can be modified without such formal amendment of thearticles of incorporation

6

Article 23(1) (c)Description of

JRE is a corporate‐type investment trust in the form of investment corporation (toshi hojin)

the main legal

provided for under the ITA. Therefore, the relationship between JRE and its unitholders is

implications ofgoverned by JRE’s articles of incorporation (as opposed to individual agreements), which can be

the contractual

amended from time to time upon resolution of a general unitholders’ meeting. JRE’s articles ofrelationshipincorporation stipulate rules relating to general unitholders meetings, including the convocation,entered into forsetting of record date, exercise of voting rights, resolutions and election of JRE’s directors.

the purpose of

The relationship between JRE and its unitholders is also governed by, and is subject to theinvestment,

provisions of, Japanese law, including the ITA.

including

The courts in Japan would recognize as a valid judgment any final and conclusive civil judgment

jurisdiction,

for monetary claims (which, for this purpose, are limited to those of a purely civil nature and do

applicable law,

not include monetary claims of the nature of criminal or administrative sanction, such as

and thepunitive damages, even though they take the form of civil claims) against JRE obtained in aexistence or notforeign court provided that (i) the jurisdiction of such foreign court is admitted under the laws ofof any legal

Japan, (ii) JRE has received service of process for the commencement of the relevant

instruments

proceedings, otherwise than by a public notice or any method comparable thereto, or has

providing for theappeared without any reservation before such foreign court, (iii) neither such judgment nor therecognition andrelevant proceeding is repugnant to public policy as applied in Japan, (iv) there exists reciprocity

enforcement ofas to the recognition by such foreign court of a final judgment obtained in a Japanese court andjudgments in the(v) there is no conflicting judgement on the subject matter by any Japanese court.

territory where
the AIF isestablished

JRE has entered into the following agreements with Mitsubishi Estate Co., Ltd.:

Master lease agreement under which JRE leases properties to Mitsubishi Estate Co., Ltd.,and Mitsubishi Estate Co., Ltd. subleases such properties to subtenants;



Direct lease agreements with Mitsubishi Estate Co., Ltd. as tenant; and

Purchase and sale agreements regarding certain JRE assets originally held by thesponsor, and other contracts with regard to such assets.

All of the above agreements are governed by Japanese law.
JRE is not involved in or threatened by any legal arbitration, administrative or other proceedings,
the results of which might, individually or in the aggregate, be material.
Article 23(1) (d)The identity of
the AIFM, AIF's
depository,
auditor and anyother service
providers and a
description of AIFM (Asset Manager): Japan Real Estate Asset Management Co., Ltd.
The AIFM manages and operates the operating assets.
 Auditor: Ernst & Young ShinNihon LLC
The auditor audits financial statements and prepare audit reports.
 Custodian: Mitsubishi UFJ Trust and Banking Corporation
The custodian provides administrative services related to custody of assets.
 Transfer Agent: Mitsubishi UFJ Trust and Banking Corporation

7

their duties and

The transfer agent provides administrative services related to unitholders’ register, issuancethe investors'of investment securities, management of institutions and addressing unitholders’ claims,

rights thereto

offers and notices.
 Special Accounts Administrator: Mitsubishi UFJ Trust and Banking Corporation
The special accounts administrator provides administrative services including the preparation,
management and custody of the transfer account book and opening, closing andmanagement of the special accounts under the Act on Book‐Entry of Company Bonds, Shares,etc.
 General administrator for operation of administrative instruments and accounting: Mitsubishi
UFJ Trust and Banking Corporation
The general administrator provides administrative services including the services related toaccounting and tax payment, preparation of accounting books and management of JRE’s
administrative instrument.
Service providers owe contractual obligations under their respective agreements with the AIF or
AIFM, as the case may be. In addition, the FIEA provides that an asset manager owes a J‐REIT a
fiduciary duty and must conduct its activities as the asset manager in good faith. The FIEA also
prohibits an asset manager from engaging in certain specified conduct, including entering intotransactions outside the ordinary course of business or with related parties of the asset manager
that are contrary to or violate the J‐REIT’s interests. Pursuant to the ITA, the unitholders havethe right to approve the execution or termination of the asset management agreement at a
general meeting of unitholders.

Article 23(1) (e)Description of

Not applicable.

how the AIFM
complies withtherequirements tocover
professional
liability risks(own funds /professional
indemnity
insurance)
Article 23(1) (f)Description of

Not applicable. There is no delegation of such functions beyond the AIFM, which is responsible

any delegatedfor portfolio and risk management, and the Custodian, which is responsible for safekeeping

management

activities.

function such as

8

portfolio
management or
riskmanagement
and of any
safekeeping
functiondelegated by thedepositary, theidentification of
the delegate andany conflicts ofinterest that
may arise fromsuch delegations

9Article 23(1) (g)Description of the

JRE makes investment decisions based on its investment strategies and in accordance with

AIF’s valuation

its articles of incorporation and based on the results of due diligence, including theprocedure and pricing

valuation of properties and consideration of the property appraisal value. The methods

methodology,

and standards that JRE uses for the evaluation of assets are based on the Regulations

including the methods

Concerning the Calculations of Investment Corporations, as well as the Regulations

used in valuing hard‐

Concerning Real Estate Investment Trusts and Real Estate Investment Corporations andto‐value assets

other regulations stipulated by ITA, in addition to Japanese GAAP. J‐REITs may only use thevaluation methods prescribed in the rules of the Investment Trusts Association, Japan,
which emphasize market price‐based valuation.
Hard‐to‐value assets, include tenant security deposits, which are not subject to fair value
disclosure because they are not marketable, and actual deposit period is not estimable as
leases may be cancelled, renewed or re‐signed even if a lease term is set in the lease
contract. This makes a reasonable estimate of future cash flows difficult. Valuation of such
hard‐to‐value assets is included in the notes to JRE’s financial statements.
If asset valuation methods other than those mentioned in the paragraphs above are to be
used in order to determine values for asset management reports, etc., valuation shall be
conducted in the following manner.
(1) Real estate, real estate leasehold rights and surface rights
In principle, valuation shall be based on the appraisal by a real estate appraiser.
(2) Trust beneficiary interests and equity interests in anonymous associations andvoluntary associations
Valuation shall be made by calculating the value of the equity interests in anonymous
associations or voluntary associations in relation to real estate, real estate leasehold rights
or surface rights, or the value of the trust beneficiary interests obtained by subtracting theamount of liabilities from the aggregate value of assets after (i) determining valuation as
described in (1) above with respect to trust assets or the assets of anonymous associations
composed of real estate, real estate leasehold rights or surface rights and (ii) determining
valuation in accordance with general accepted accounting principles in Japan with respect
to trust assets or the assets of anonymous associations or voluntary associations
composed of financial assets

Article 23(1) (h)Description of the

JRE seeks to manage the capital resources and liquidity sources to provide adequate funds

AIF’s liquidity risk

for current and future financial obligations and other cash needs and acquisitions. JRE has

management,

existing credit lines in the amount of ¥60 billion as of March 31, 2024, and has entered into

including redemptionloans and has issued investment corporation bonds in the past. While loans and bonds arerights in normal andexposed to liquidity risk, such risk is managed in ways such as by diversifying the means of

10

exceptional

funding and lending institutions, dispersing repayment dates, establishing committed

circumstances andcredit lines, and keeping sufficient liquidity in hand.

existing redemption
arrangements with

JRE is a closed‐end investment corporation, and unitholders are not entitled to request theinvestors

redemption of their investment.

Article 23(1) (i)Description of all fees,Compensation: The articles of incorporation provide that the AIF may pay its

charges and expenses

executive and supervisory officers up to ¥800,000 and up to ¥300,000 per month,and a maximum

respectively. The board of officers is responsible for determining a reasonableamount which iscompensation amount for the executive officer and each of the supervisory

directly / indirectly

officers.

borne by the investors

Asset Management Fee: The AIF will pay the Asset Manager asset management
fees comprising NOI‐linked fee, distribution‐linked fee I, distribution‐linked fee II,
acquisition fee, disposition fee and merger fee as follows:

NOI‐linked fee – An amount equivalent to NOI (Net Operating Income) for the current
fiscal period multiplied by 4.0%.
Distribution‐linked fee I – With respect to each fiscal period, the distributable amount
before recognition of gains or losses on sales of real estate (the “adjusted distributableamount”) for such fiscal period, multiplied by 2.5%, multiplied by dividend per unit for such
fiscal period calculated using the adjusted distributable amount, divided by the average ofdividend per unit calculated using the adjusted distributable amount with respect to themost recent six fiscal periods, including such fiscal period.
In calculating the foregoing dividend per unit, certain adjustments for unit‐consolidation,
unit‐splits, unit repurchases and other events affecting the outstanding number of units
will be made.
Distribution‐linked fee II – An amount equal to gains on sales of real estate, minus losses
on sales of real estate, multiplied by 12.5% (unless the result is a negative amount, inwhich case, the distribution‐linked fee II shall be zero).
Acquisition/disposition/merger fee – In the event that Real Estate is newly acquired or
disposed of, compensation equivalent to the total amount of the acquisition or disposition
price of said Real Estate (excluding the acquisition or disposition of interests in tokumei
kumiai) multiplied by up to 0.5%, will in principle, be payable. In the case of a merger, anamount equal to the fair value of the assets obtained through the merger multiplied by
0.5% will be payable.

11

Custodian Fee: The AIF will pay the Custodian as follows:

JRE will pay the Custodian up to the amount calculated according to the table below per
fiscal period.
Total Assets:

Annual Fee¥10 billion or less¥4.2 million

over ¥10 billion to ¥50 billion¥4.2 million + (total assets – ¥10 billion) x
0.030%

over ¥50 billion to ¥100 billion¥16.2 million + (total assets – ¥50 billion) x
0.024%

over ¥100 billion to ¥200 billion¥28.2 million + (total assets – ¥100 billion) x
0.021%

over ¥200 billion to ¥300 billion¥49.2 million + (total assets – ¥200 billion) x
0.018%

over ¥300 billion to ¥500 billion¥67.2 million + (total assets – ¥300 billion) x
0.015%

over ¥500 billion¥97.2 million + (total assets – ¥500 billion) x
0.012%“Total assets” in the table above means total assets listed on JRE’s balance sheetof the immediately preceding fiscal period.


Auditor Fee:

JRE may pay the accounting auditor up to ¥20 million per fiscal period. The board of
officers is responsible for determining the compensation amount for the accounting
auditor.


General Administrator fees (including Transfer Agent Fee and Special Accounts
Administrator Fee)

JRE will pay the General Administrator fees as follows:o

Fee for administration of the unitholders list. The monthly standard fee is one
sixth of the total fee calculated according to the table below, provided thatthe minimum monthly fee is set at ¥220,000.

Number of unitholders

Fee per unitholder

first 5,000 unitholders¥390

over 5,000 to 10,000¥330

over 10,000 to 30,000¥280

over 30,000 to 50,000¥230

over 50,000 to 100,000¥180

over 100,000

¥150

12

o

Fee for dividends up to the amount determined based on the total number ofunitholders and calculated according to the table below, provided that theminimum amount is set at ¥350,000.
Number of unitholders

Fee per unitholder*first 5,000 unitholders¥120

over 5,000 to 10,000¥105

over 10,000 to 30,000¥90

over 30,000 to 50,000¥75

over 50,000 to 100,000¥60

over 100,000¥50*Additional charge of ¥130 per dividend made to a specified bank accounto

Fee for dividend payment up to ¥500 per receipt of dividends;oFee for confirmation of unpaid dividends up to ¥5 per unpaid unitholder as ofthe end of each month;oFee for receipt of requests from unitholders up to ¥250 per request;o

Fee for registry of individual or corporate numbers (kojinbango) up to ¥250
for units included in the book‐entry system or ¥550 for those that are notincluded;o

Fee for maintenance of individual or corporate numbers up to ¥5 per number
as of the end of each month;oFee for mailing of notices up to a certain amount determined based on thenumber, size, and type of notices;o

Fee for handling of returned mail up to ¥250 per mail;o

Fee related to voting ballots up to ¥18 per ballot preparation and ¥50 per
ballot count with a minimum fee of ¥100,000 per one count, in each casewith an additional charge up to ¥50 per ballot where there is a competing
unitholder proposal or non‐unified ballot;o

Fee for preparation of certificates or investigation of transfer account books
up to ¥1,600 per certificate or investigation regarding unit transfers and ¥800
per certificate or investigation regarding units outstanding;o

Fee related to the transfer system up to ¥100 per receipt of generalunitholder notification data, ¥250 per receipt of individual unitholder
notification data and ¥250 per receipt of a request for provision of
information;o

Fee for administration of special accounts. The monthly fee is the total fee
calculated according to the table below, provided that the minimum monthly
fee is set at ¥20,000.
Number of unitholders

Fee per unitholderusing a special accountusing a special account13

first 3,000 unitholders¥150

over 3,000 to 10,000¥125

over 10,000 to 30,000¥100

over 30,000¥75oFees up to the amount calculated according to the table below in connection
with:oBusiness affairs related to the administration of the administrative
instruments (excluding dispatch of documents related to general
meetings of unitholders and counting of voting ballots and proxystatements);oAccounting and book‐keeping administration; andoTax administration

Total Assets:

Annual Fee¥10 billion or less

¥11 million

over ¥10 billion to ¥50 billion¥11 million + (total assets – ¥10 billion)x

0.080%
over ¥50 billion to ¥100 billion¥43 million + (total assets – ¥50 billion)x

0.060%
over ¥100 billion to ¥200 billion¥73 million + (total assets – ¥100 billion)x

0.055%
over ¥200 billion to ¥300 billion¥128 million + (total assets – ¥200 billion)x

0.040%
over ¥300 billion to ¥500 billion¥168 million + (total assets – ¥300 billion)x

0.035%
over ¥500 billion to ¥900 billion¥238 million + (total assets – ¥500 billion)x

0.030%
over ¥900 billion¥358 million + (total assets – ¥900 billion)x

0.020%“Total assets” in the table above means total assets listed on JRE’s balance sheet of
the immediately preceding fiscal period.
The AIF may also incur other miscellaneous fees in connection with the issuance of units,
as well as the operation, acquisition or disposition of properties.
Article 23(1) (j)Description of theUnder Article 77 paragraph 4 of the ITA, which applies the requirements of Article 109

AIFM's procedure to

paragraph 1 of the Companies Act to investment corporations, investment corporations

ensure fair treatment

are required to treat unitholders equally depending on the number and content of units

of investors andheld. In addition, upon liquidation, the allotment of residual assets to unitholders is

details of any

14

preferential treatment

required to be made equally depending on the number units held under Article 77

received by investors,

paragraph 2 item 2 and Article 158 of the ITA.

including detailing thetype of investors andtheir legal or
economic links with
the AIF or AIFM
Article 23(1) (k)The latest annual

Additional information may be found in our most recent semi‐annual report prepared inreport referred to inaccordance with Article 22 of the AIFMD, which is available at JRE’s website.

Article 22(1)Article 23(1) (l)The procedure and

JRE is authorized under the articles of incorporation to issue up to 4 million units. Its units

conditions for thehave been listed on the Tokyo Stock Exchange since September 10, 2001. Secondary

issue and sale of themarket sales and transfers of units will be conducted in accordance with the rules of theunits

Tokyo Stock Exchange. Unit prices on the Tokyo Stock Exchange are determined on a real‐time basis by the equilibrium between bids and offers. The Tokyo Stock Exchange sets daily
price limits, which limit the maximum range of fluctuation within a single trading day. Daily
price limits are set according to the previous day’s closing price or special quote.

Article 23(1) (m)Latest net asset value

JRE’s unit’s latest market price is publicly available at the Tokyo Stock Exchange or fromof the AIF or latest

financial information vendors at https://www.reuters.com/markets/quote/8952.T

market price of theunit or share of the
AIF
Article 23(1) (n)Details of the

The units of JRE were listed on the Tokyo Stock Exchange on September 10, 2001.

historical performance

The most recent five fiscal period performance of the units is as follows.

of the AIF, where

Fiscal period (six months

Total Assets

Total Net Assets

Net Assets per unitavailable

ended)(JPY million)(JPY million)(base value) (JPY)

March 31, 2024

1,090,912

539,965

379,491

September 30, 2023

1,057,291

538,402378,393

March 31, 2023

1,047,158

517,993373,945

September 30, 2022

1,008,970

517,761

373,778

March 31, 2022

1,035,072

516,762

373,057

Article 23(1) (o)Identity of the prime

Not applicable.

broker, any material

15arrangements of the
AIF with its prime
brokers, how conflictsof interest aremanaged with theprime broker and theprovision in thecontract with thedepositary on thepossibility of transfer
and reuse of AIF
assets, andinformation about any
transfer of liability tothe prime broker that
may exist
Article 23(1) (p)Description of how

The AIFM will disclose the matters described in Articles 23(4) and 23(5) periodicallyand when periodic

through the AIF Internet website and semi‐annual report.

disclosures will bemade in relation toleverage, liquidity andrisk profile of theassets, pursuant to
Articles 23(4) and23(5)Article 23(2)The AIFM shall inform

Not applicable.

the investors before
they invest in the AIF
of any arrangement
made by thedepository tocontractuallydischarge itself ofliability in accordancewith Article 21(13)The AIFM shall also

Not applicable.

inform investors of
any changes with16

respect to depositary
liability without delay
Article 23(4)(a)Percentage of the AIF's assets which are

There are no assets that are subject to special arrangements arising

subject to special arrangements arising fromfrom their illiquid nature.

their illiquid nature. The percentage shall becalculated as the net value of those assets
subject to special arrangements divided by
the net asset value of the AIF concerned
Overview of any special arrangements,

There are no such special arrangements.

including whether they relate to side
pockets, gates or other arrangements
Valuation methodology applied to assets

There are no such special arrangements.

which are subject to such arrangements
How management and performance fees

There are no such special arrangements.

apply to such assets
Article 23(4)(b)Any new arrangements for managing the

Any new arrangements or change in applicable arrangements will beliquidity of the AIF

disclosed at an appropriate time.

For each AIF that the AIFM manages that is

Any new arrangements or change in applicable arrangements will be

not an unleveraged closed‐end AIF, notify todisclosed at an appropriate time.

investors whenever they make changes to its
liquidity management systems (which enable
an AIFM to monitor the liquidity risk of the
AIF and to ensure the liquidity profile of theinvestments of the AIF complies with its
underlying obligations) that are material inaccordance with Article 106(1) of Regulation(EU) No 231/2013 (ie. there is a substantial
likelihood that a reasonable investor,
becoming aware of such information, would
reconsider its investment in the AIF,
including because such information could
impact an investor’s ability to exercise its
rights in relation to its investment, orotherwise prejudice the interests of one ormore investors in the AIF).

17Immediately notify investors where they

Any new arrangements or change in applicable arrangements will be

activate gates, side pockets or similar special

disclosed at an appropriate time.

arrangements or where they decide tosuspend redemptions
Overview of changes to liquidity

Any new arrangements or change in applicable arrangements will bearrangements, even if not special

disclosed at an appropriate time.

arrangements
Terms of redemption and circumstances

JRE is a closed‐end investment corporation, and unitholders are notwhere management discretion applies,

entitled to request the redemption of their investment.

where relevant
Also any voting or other restrictions

There are no voting or other restrictions on the rights attaching to

exercisable, the length of any lock‐up or any

units.

provision concerning ‘first in line’ or ‘pro‐rating’ on gates and suspensions shall be
included
Article 23(4)(c)
The current risk profile of the AIF and the

The appropriateness and effectiveness of the risk management

risk management systems employed by the

structure are regularly evaluated and enhanced by the AIFM.

AIFM to manage those risks
Deposits are exposed to risks of failure of the financial institution
holding the deposit and other credit risks, but JRE manages credit
risk by restricting the term of the deposit to relatively short periods
and setting a minimum credit rating requirement for the deposit‐
taking financial institutions.
Funds from debts and investment corporation bonds are mainly used
for asset acquisition or debt repayment, etc. While floating‐rate
short‐term and long‐term loans are exposed to the risk of interest
rate hike, such risk is mitigated by the Company’s low LTV andrelatively high percentage of long‐term fixed‐rate debts within the
total borrowing. Loans and investment corporation bonds involve
liquidity risk at the time of maturity. To manage such liquidity risk,
the Company implements measures such as (i) maintaining andstrengthening its ability to access equity markets to secure funds, (ii)maintaining commitment lines with major financial institutions, and(iii) preparing monthly financial plans. The Company also utilizes
derivative transactions (interest‐rate swap transactions) as a hedge
against interest‐rate risk derived from floating‐rate long‐term loans,
thereby maintaining the overall interest rates on the loans at aneffectively fixed level.

18

Tenant security deposits are exposed to liquidity risk arising fromvacating of properties by tenants due to the termination of contract.
JRE manages this risk by monitoring forecasted cash flows on amonthly basis to ensure it has sufficient funds.
Measures to assess the sensitivity of the

No such measures have been implemented.

AIF’s portfolio to the most relevant risks towhich the AIF is or could be exposed
If risk limits set by the AIFM have been or

No such situation has occurred.

are likely to be exceeded and where theserisk limits have been exceeded a descriptionof the circumstances and the remedial
measures taken
Article 23(5)(a)Any changes to the maximum amount of

Any new arrangements or change in applicable arrangements will be

leverage which the AIFM may employ on

disclosed at an appropriate time.

behalf of the AIF, calculated in accordancewith the gross and commitment methods.
This shall include the original and revised
maximum level of leverage calculated inaccordance with Articles 7 and 8 ofRegulation (EU) No 231/2013, whereby thelevel of leverage shall be calculated as therelevant exposure divided by the net asset
value of the AIF.
Any right of the reuse of collateral or any

No such right or guarantee exists.

guarantee granted under the leveraging
agreement, including the nature of the rights
granted for the reuse of collateral and thenature of the guarantees granted
Details of any change in service providers

Any new arrangements or change in applicable arrangements will be

relating to the above.

disclosed at an appropriate time.

Article 23(5)(b)Information on the total amount of leverage

The aggregate amount of debt with interest is ¥480,193 million as of

employed by the AIF calculated in

March 31, 2024.

accordance with the gross and commitment
methods

19