JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

FINANCIAL RESULTS FOR THE FISCAL PERIOD ENDED SEPTEMBER 2023
(REIT)
November 15, 2023
Japan Real Estate Investment Corporation
Tokyo Stock Exchange8952
https://www.j-re.co.jp/en/
Jo Kato, Executive Director
Japan Real Estate Asset Management Co., Ltd.
Shojiro Kojima, President & CEO
Masaru Motooka, Executive Officer & General Manager, Strategic Planning Department/ TEL +81-3-3211-7951
December 25, 2023
December 14, 2023

Name of Issuer:
Stock Exchange Listing:
Securities Code:
URL:
Representative:
Asset Management Company:
Representative:
Contact:
Scheduled Date of Filing Securities Report:
Scheduled Date of Dividend Payment:
Supplementary Materials for Financial
Results:
Holding of a Briefing on Financial Results:

Yes
Yes (primarily for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)

1.

Financial Results for the September 2023 period (April 1, 2023 to September 30, 2023)(Percentages represent increases/decreases compared with results for the previous fiscal period)(1) Operating Results

Operating Revenues
Period ended

September 30, 2023
March 31, 2023

Operating Profit
Millions of yen%

Millions of yen%

Millions of yen%

38,62737,3453.4(0.8)

18,04817,0415.9(5.5)

17,086
16,172

5.7(6.3)

17,075
16,161

5.7
(3.7)

ROE

ROA

(Profit to Unitholders’Equity Ratio)
Yen%(Ordinary Profit to Total
Assets Ratio)%

12,013
11,667

3.2
3.1

1.6
1.6

Period ended

Notes 1:
2:

Profit%Profit per Unit
September 30, 2023
March 31, 2023

Ordinary Profit

Millions of yen

Ordinary Profit toOperating Revenues Ratio
%

44.2
43.3

Profit per unit is calculated by dividing profit by the average number of investment units during the period.
For profit to unitholders’ equity ratio, as new investment units were issued in the fiscal period ended September 2023, mean value is used
for unitholders’ equity taking into account the number of days, and for the fiscal period ended March 2023, the mean value of unitholders’equity at the beginning and end of the period is used.

(2) Dividends
Dividend per Unit
Excluding Excess of
Earnings

Total Cash Dividends
Excluding Excess of
Earnings

Dividend in Excessof Earnings per Unit

Total Dividends in
Excess of Earnings

Yen

Millions of yen

Yen

Millions of yen%%

12,00011,667

17,074
16,161

-

-

100.0
100.0

3.2
3.1

Period ended

September 30, 2023
March 31, 2023
Notes 1:
2:

Payout Ratio

Ratio of Dividends
to Net Assets

The payout ratio is rounded off to the first decimal place.
The payout ratio in the fiscal period ended September 2023 is calculated using the following formula, as new investment units were
issued: Payout ratio = Total dividends / Profit × 100.

(3) Financial Standing
Total Assets
As of

September 30, 2023
March 31, 2023

Net Assets

Equity Ratio

Net Assets per Unit

Millions of yen

Millions of yen%

Yen

1,057,291
1,047,158

538,402517,993

50.9
49.5

378,393373,945

Reference: Total unitholders’ equity is 538,402 million yen for the September 30, 2023 period and 517,993 million yen for the March 31, 2023 period.

1

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(4) Cash Flows
Cash Flows fromOperating Activities
Period ended

September 30, 2023
March 31, 2023

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash Equivalents
at End of Period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

33,694
26,195(22,077)(42,654)(7,003)
21,17236,12031,506

2. Performance Forecasts for the March 2024 period (October 1, 2023 to March 31, 2024)
and the September 2024 period (April 1, 2024 to September 30, 2024)(Percentages represent projected increases/decreases compared with the results for the preceding fiscal period)
Operating Revenues

Operating Profit

Ordinary Profit

Dividend per Unit
Dividend in Excess
Excluding Excessof Earnings per Unitof Earnings

ProfitMillions of yen% Millions of yen% Millions of yen%
Period ending% Millions of yen
March 31, 2024
41,3006.9
19,5308.2
18,5008.3
17,850
4.6
September 30, 2024
34,980 (15.3)
14,280 (26.9)
13,180 (28.8)
14,170 (20.6)

Yen

Yen

11,70011,300-

Reference: Profit per unit forecast = Profit forecast / Number of total investment units forecast for the end of the period(the March 2024 period): 12,550 yen; (the September 2024 period): 9,960 yen.

*Other(1) Changes in Accounting Policy/Changes in Accounting Estimates/Restatements
Changes in accounting policy following revisions to accounting standards, etc.:
Other changes in accounting policy:
Changes in accounting estimates:
Restatements:

None
None
None
None

(2) Number of Units Outstanding
Number of Units Outstanding at End of Period (Including Treasury Units)
As of September 30, 2023
1,422,864 units
As of March 31, 2023
1,385,210 units
Number of Treasury Units at End of Period
As of September 30, 2023
0 units
As of March 31, 2023
0 units
Note: Please refer to the notes regarding per unit information on page 24 for the number of investment units on which the calculations ofprofit per unit are based.

* The Implementation Status of Statutory Audit
At the time of disclosure of these financial results, the audit procedures for the financial statements pursuant to the Financial
Instruments and Exchange Act have not yet finished.

* Explanation regarding the appropriate use of business operations forecasts, and other special remarks
Estimates for the Company’s future operating results contained in the financial results are forward-looking statements and are basedon information currently available to the Company and certain assumptions deemed reasonable. Actual results may differ substantiallyfrom the projections depending on a number of factors. In addition, these forecasts do not guarantee the stated dividends. As forassumptions underlying performance forecasts, please refer to the table entitled “Assumptions Underlying Performance Forecasts for
the March 2024 Period (October 1, 2023 to March 31, 2024) and the September 2024 Period (April 1, 2024 to September 30, 2024)”
on pages 7 and 8.

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JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

1. Business Policy and Operations(1) Business Operations① Results for the Period
Japan Real Estate Investment Corporation (the “Company”) was established on May 11, 2001 pursuant to Japan’s Act on
Investment Trusts and Investment Corporations (“ITA”). The Company was listed on the real estate investment trust marketof the Tokyo Stock Exchange (“TSE”) on September 10, 2001 (Securities Code: 8952). Since its IPO, the size of theCompany’s assets (total acquisition price) has grown steadily, expanding from 92.8 billion yen to 1,133.5 billion yen (Note)
as of September 30, 2023. Over the same period, the Company’s portfolio has also increased from 20 properties to 77
properties.
During the September 2023 period (April 1, 2023 to September 30, 2023), the Japanese economy continued to demonstrate a
gradual recovery on the back of firm capital investment and personal consumption, despite the impacts of inflation. This
mainly owed to the further easing of pandemic restrictions after COVID-19 was downgraded to a Class 5 disease. On the other
hand, the outlook for the future remains uncertain with long-term interest rates in Japan climbing higher, driven mainly by
global monetary tightening and the Bank of Japan’s adoption of greater flexibility in its yield curve control policy. The effectsof rising prices, supply-side constraints, and fluctuations in financial and capital markets will bear watching.
In the office leasing market, despite a significant supply of new office buildings, demand continues to grow for leases driven
by business expansion and relocations aimed at improving location. As a result, the vacancy rate in central Tokyo remains flat.
Rent levels continue to trend slightly downward. In light of the prevailing conditions in the leasing market, the Company isstriving to attract new tenants through strategic leasing activities and to further enhance the satisfaction level of existing tenants
by adding value to its portfolio properties with the aim of securing stable income and maintaining and improving theoccupancy rate across the entire portfolio.
In the real estate trading market, the appetite for property acquisition among both domestic and foreign investors remains
firm because of the interest rate differential with overseas markets and depreciation in the yen. There is still fierce
competition, particularly for high-quality office buildings, and as a result, expected yields remain low.
In this market environment, the Company made sound investments based on its investment policy of providing stabledividends to unitholders, which has remained unchanged since its listing on the TSE. Dividend per unit for the period was
12,000 yen, up 333 yen from the previous period.
Note: The total acquisition price includes a portion of the acquisition price of JRE Jingumae Media Square Building pertaining
to the partially expropriated site and the easement extinguished due to expropriation of part of the adjacent site, andexcludes that of Harumi Front corresponding to an interest transferred in the period until the end of September 2023. The
total acquisition price in the subsequent sections follows the same convention.
② Results of Operations
a. Property Management and Acquisition and Disposition
In the office leasing market in the fiscal period under review, the occupancy rate at the end of the period was 95.0%, decreased
by 0.5% from the end of the previous period. By capturing positive demand mainly from relocations for business expansion
purposes, the Company was able to fill vacancies caused by large tenants moving out.
As for property acquisitions and dispositions, the Company disposed of a 30% quasi co-ownership interest of the trust
beneficiary right in Harumi Front (Chuo-ku, Tokyo) for 11,733 million yen on April 3, 2023. The property will be disposedof in stages over three fiscal periods, with the third and final portion of 45% to be disposed of on January 12, 2024 for 17,599
million yen. In addition, the Company acquired Forecast Sakaisujihonmachi (Osaka-shi, Osaka) for 17,215 million yen on
August 31, 2023.
As a result of the above, the Company’s portfolio at the end of the fiscal period under review (September 30, 2023) consistedof 77 properties, with a total acquisition price of 1.13 trillion yen. Net rentable floor area stood at 888,354 m2 with 1,600
tenants in total. (Note)
Also, the Company plans to acquire, on December 1, 2023, an additional interest in Seavans S Building (Minato-ku, Tokyo),construction of which was completed in January 1991, for 2,290 million yen, which means the Company’s co-ownershipinterest in the property will increase from 13.45% to 17.67%.
Note: Shibuya Cross Tower (land with leasehold interest), in which the Company’s building ownership was disposed of on
January 18, 2018, is included in the above number of properties and total acquisition price, but is not included in net
rentable floor area and total number of tenants.

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JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

b. Finance Activities
According to its financial policy, the Company aims to maintain the LTV ratio (ratio of interest-bearing debt to total assets)
at 30% to 40%, and strives to maintain a sound and conservative financial profile by staggering maturities, extending durations,and diversifying stable lenders, among other measures, taking into consideration borrowing costs and existing relationships
with lenders.
Concerning new loans related to property acquisitions and the refinancing of existing loans, the Company takes out loans
strategically and flexibly after giving due consideration to the above-mentioned means, as well as the possibility of repayment
with funds procured from issuing new investment units.
In the fiscal period under review, the Board of Directors resolved at its meetings held on March 28, 2023 and April 3, 2023
to issue new investment units (35,200 units by public offering and 2,454 units by third-party allotment). Through this issuanceof new investment units, the Company raised approximately 18,224 million yen on April 7, 2023 through the public offeringand approximately 1,270 million yen on May 1, 2023 through the third-party allotment.
The funds raised through the public offering and the third-party allotment were used to partially repay a short-term loan,
which is the refinancing of a short-term loan of 29,000 million yen taken out for the acquisition of the ARGYLE aoyama andToyosu Foresia.
In addition, a short-term loan of 17,500 million yen was borrowed to partially fund the acquisition of Forecast
Sakaisujihonmachi. The Company also borrowed funds for the purpose of repaying existing loans.
As a result of the above financing activities, as of September 30, 2023, the Company’s total interest-bearing debt was 450,193
million yen, down 10,300 million yen from the end of the previous fiscal period. This amount consists of long-term loans
totaling 364,200 million yen (including the current portion of long-term loans totaling 42,300 million yen), short-term loans
totaling 43,000 million yen, and investment corporation bonds totaling 42,993 million yen (including the current portion of
investment corporation bonds totaling 10,000 million yen). The current LTV ratio stands at 42.6%.
The Company’s credit ratings as of September 30, 2023 were as follows:
Rating Agency
Japan Credit Rating Agency, Ltd.

Credit Rating
Long-term: AA+; Outlook: Stable

Rating and Investment Information, Inc.

Rating: AA; Outlook: Stable

S&P Global Ratings Japan Inc.

Long-term: A+; Short-term: A-1; Outlook: Stable③ Summary of Financial Results and Dividends
As a result of the above operations, in the fiscal period under review, the Company’s operating revenues increased 3.4%
compared with the previous period, to 38,627 million yen, while operating profit increased 5.9% to 18,048 million yen. After
deducting expenses for interest payments on loans and other costs, ordinary profit increased 5.7% to 17,086 million yen, andprofit increased 5.7% to 17,075 million yen.
As for dividends in the fiscal period under review, the Company will make cash distributions using earnings based on thedividend policy outlined in Article 32-1 (2) of the Company’s Articles of Incorporation, with an amount that exceeds 90% of
profit available for dividends as required by Article 67-15 of the Act on Special Measures Concerning Taxation. Based on
this policy, the Company decided, without exceeding unappropriated retained earnings for the fiscal period under review andensuring that retained earnings are brought forward, that the total amount of dividends shall be 17,074,368,000 yen for the
fiscal period under review, which is a multiple of 1,422,864, the number of units outstanding as of September 30, 2023.
Accordingly, the dividend per investment unit came to 12,000 yen.
(2) Outlook① Operating Environment
The Japanese economy is expected to recover up ahead on the back of a likely improvement in domestic demand as activities
in society and the economy continue to normalize. On the other hand, the Company will keep a closer eye on developments
in monetary policy and interest rates, especially after the Bank of Japan adopted greater flexibility in its yield curve control
policy in July, while the impact of fluctuations in financial and capital markets, in Japan and overseas, will bear watching.
In the office leasing market, while there is currently brisk demand for leases following the downgrading of COVID-19 to a
Class 5 disease, the impact of a massive supply of new office space in central Tokyo expected to hit the market in the near
future warrants caution. Tenants are becoming more selective about office space because the way people work is changing,
and as such, the Company is aiming to secure stable earnings over the medium to long term and maintain and enhance thevalue of its assets by carrying out strategic repairs and renovations and investing in ESG.
In the real estate trading market, the Company will continue to proactively search for new properties with a key focus on
4

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

collaboration with its sponsor in order to more strategically reshuffle its portfolio while paying close attention to future market
trends brought about by changes in social conditions.
a. Property Management
Based on the conditions stated above, the Company will adhere to the following management policies in order to maintainand improve profitability.
(i) Strengthen relationships of trust with existing tenants
The Company has contracts with numerous property management companies. Each property management company has
developed relationships of trust with their tenants through their daily diligence in managing their respective properties
over the years. The Company will work to further solidify these relationships by anticipating tenants’ needs and providing
tailored services to bolster tenant satisfaction, thereby maintaining and improving occupancy rates and raising rent levels.
(ii) Fill vacancies promptly
In cooperation with the property management companies mentioned above and their leasing brokers, the Company will
actively seek the most appropriate tenants for each property, based on location and features, in order to fill current andanticipated vacancies without delay. Furthermore, the Company will work to identify additional needs for floor area
among the existing tenants.
(iii) Stabilize revenues and income
With the aim of stabilizing revenues and income, the Company will endeavor to promote fixed lease agreements andsecure long-term leasing.
(iv) Reduce management costs
The Company has introduced sound competitive principles to a number of property management companies so that they
perpetually review and improve their management systems and cost structures. Along with this, the Company endeavors
to ensure and enhance tenant satisfaction.
b. Property Acquisitions and Dispositions
The Company has adopted the following policies for acquiring properties.
(i) To access property information quickly, the Company continues to enhance its property information channels while working
to develop new channels.
(ii) In its acquisition activities, the Company continues to meticulously monitor and examine economic, physical, and legal
factors, including rights-related issues, when selecting properties. In particular, with regard to the structure of buildings,
the Company requires buildings to meet or exceed new earthquake-resistant standards, verifies the need for renovations
by capturing current conditions accurately based on engineering reports, and exclusively targets properties capable ofmaintaining a competitive edge in terms of the facilities they offer over the medium to long term.
(iii) In accordance with its acquisition policies, the Company shall maintain its portfolio so that 70% or more of the portfolio
properties are located within the Tokyo metropolitan area, with the remaining 30% or fewer located in other major cities.
Under these policies, the Company will continue to acquire highly competitive properties. At the same time, in order tofurther improve the quality of its portfolio, the Company will remain open to the replacement of portfolio properties withdue consideration afforded to the timing of such decisions.
c. Financial Policies
The Company has adopted the following financial policies.
(i) In principle, the Company shall maintain an LTV ratio (including investment corporation bonds) below 65%. To ensure aneven lower interest-bearing debt ratio, the Company adopts the conservative target level of 30% to 40%.
(ii) The Company shall set the ceiling for the combined total of loans and investment corporation bonds at 1 trillion yen.
5

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(iii) When obtaining a loan, the Company shall only negotiate with qualified institutional investors (limited to those defined
under Article 67-15 of the Act on Special Measures Concerning Taxation) before executing a loan agreement.
(iv) With the purpose of maintaining liquidity at an appropriate level, the Company may establish preliminary borrowing
frameworks, such as commitment line agreements and overdraft agreements, or enter into agreements to reserve
borrowings as needed.
(v) In financial transactions, in order to realize low financing costs, the Company aims to achieve the best execution by making
comprehensive judgments on borrowing terms and conditions, such as interest rate levels and borrowing periods.
② Performance Forecasts
The Company’s forecasts for the March 2024 period (October 1, 2023 to March 31, 2024) are as follows: operating revenues
totaling 41,300 million yen, operating profit totaling 19,530 million yen, ordinary profit totaling 18,500 million yen, andprofit totaling 17,850 million yen. The Company plans to declare a per-unit cash dividend of 11,700 yen.
The Company’s forecasts for the September 2024 period (April 1, 2024 to September 30, 2024) are as follows: operating
revenues totaling 34,980 million yen, operating profit totaling 14,280 million yen, ordinary profit totaling 13,180 million yen,and profit totaling 14,170 million yen. The Company plans to declare a per-unit cash dividend of 11,300 yen.
For the assumptions underlying these forecasts, please see the table “Assumptions Underlying Performance Forecasts for the
March 2024 Period (October 1, 2023 to March 31, 2024) and the September 2024 Period (April 1, 2024 to September 30,2024)” on pages 7 and 8. Operating revenues, operating profit, ordinary profit, profit, and cash dividend per unit might varydepending on changes that could occur in the market situation.

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JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Assumptions Underlying Performance Forecasts for the March 2024 Period (October 1, 2023 to March 31, 2024) and theSeptember 2024 Period (April 1, 2024 to September 30, 2024)
Item
Accounting
periodAssumption
・The March 2024 period: October 1, 2023 to March 31, 2024 (183 days)
・The September 2024 period: April 1, 2024 to September 30, 2024 (183 days)
・In the March 2024 period, the number of properties is assumed to be 76, taking into account the scheduled

Number ofacquisition of additional interest in Seavans S Building on December 1, 2023 and the scheduled disposition of theproperties heldby the45% quasi co-ownership interest in Harumi Front on January 12, 2024, based on 77 properties as of September 30,
2023.
・In the September 2024 period, the Company assumes 76 properties.
・The actual portfolio may differ from this assumption due to additional property acquisitions and dispositions.

Company
Number of units

・The Company assumes the total number of investment units outstanding to be 1,422,864 units as of September

outstanding

30, 2023.
・The Company took out short-term loans of totaling 10.0 billion yen on October 31 to finance the redemption ofexisting investment corporation bonds worth 10.0 billion yen and also took out a long-term loan of 1.0 billion yen
on October 31 to finance the partial early repayment of an existing short-term loan worth 1.0 billion yen. As aresult, the balance of interest-bearing debt was 450,193 million yen as of November 15, 2023.
・In the March 2024 period, the Company will refinance the long-term loans due for repayment during the period

Interest-bearing
debt

totaling 16.0 billion yen (repayment dates: December 19, 2023 and March 26, 2024) and the short-term loans due
for repayment during the period totaling 21.5 billion yen (repayment dates: November 20, 2023, March 7, 2024,
and March 29, 2024), as of November 15, 2023.
・In the September 2024 period, the Company will refinance the long-term loans due for repayment during theperiod totaling 26.3 billion yen (repayment dates: May 29, 2024, June 17, 2024, September 2, 2024, and September
26, 2024) and the short-term loans due for repayment during the period totaling 20.5 billion yen (repayment dates:
April 22, 2024, July 10, 2024, and August 30, 2024), as of November 15, 2023. There are no investment corporation
bonds set to mature in the September 2024 period.

Operating・Revenues from portfolio properties held by the Company are calculated by taking into consideration the newleases and the tenancy terminations confirmed as of November 15, 2023, and by factoring in potential variables

revenuesthat reflect the recent office leasing market landscape, such as rent levels and occupancy rates.

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JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Item

Assumption
・Of the taxes assessed and required to be paid by the Company, property taxes, city planning taxes, and depreciable
property taxes corresponding to the relevant fiscal period have been recorded as property-related expenses. In theevent, however, that a property tax adjustment is incurred by the Company regarding a property that is acquired within
the calendar year that the first day of an accounting period belongs to, the said adjustment is included in the acquisition
cost and therefore not reported as an expense for the accounting period. In addition, the Company assumes the 2024
property taxes, city planning taxes, and depreciable property taxes for properties acquired in 2023 to be as follows:・the ARGYLE aoyama: 122 million yen
・Toyosu Foresia: 38 million yen

Operatingexpenses・Shinjuku Eastside Square (additional acquisition): 29 million yen
・CIRCLES Hirakawacho: 7 million yen
・Forecast Sakaisujihonmachi: 51 million yen
・Seavans S Building (additional acquisition): 13 million yen
・Property and other taxes will be 3,640 million yen in the March 2024 period and 3,870 million yen in the September
2024 period.
・Depreciation will be 6,190 million yen in the March 2024 period and 5,930 million yen in the September 2024
period.
・Repairing expenses may vastly differ from the projected amounts as such costs fluctuate significantly from one
fiscal period to another, and because these costs are not recurring.

Nonoperating
expenses・Non-operating expenses, such as interest expenses on loans and investment corporation bonds, will be 980 million
yen in the March 2024 period and 1,070 million yen in the September 2024 period.
・The gain on the split disposition of Harumi Front will be 6,470 million yen in the March 2024 period. The Company
will make a provision of reserve for reduction entry on part of the gain of 6,470 million yen by applying the “Exceptions

Dividend
amountsof the Taxation in case of the Replacement by Purchase of Specific Assets” under Article 65-7 of the Act on Special
Measures Concerning Taxation.
・The Company expects to draw down on retained earnings to make cash distributions of 2,910 million yen in the
September 2024 period.
・The Company shall not distribute dividends in excess of earnings. Thus, based on its Articles of Incorporation, theCompany shall make cash distributions of the amount that is higher than 90% of profit available for dividends and up

Other

to the amount of profit, including the reserve for reduction entry.
・No revisions will be made in such areas as laws, tax systems, accounting standards, and listing rules as well as
regulations of the Investment Trusts Association, Japan to the extent that impact the above-mentioned forecasts.
・No unprecedented or significant changes will occur to the general market trends or real estate market conditions orother factors.
・In addition to the income taxes deferred related to reversal of reserve for reduction entry, etc., the corporate and othertaxes are calculated by taking into consideration the taxes in relation to the amortization of term leasehold interest forbuildings and asset retirement obligations.

8

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

2. Financial Statements(1) Balance Sheets
Thousands of yen
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes refund receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
LandConstruction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Land leasehold interests
Easement
Other
Total intangible assets

9

As of September 30, 2023

23,341,245
8,165,242
488,615
146,995
599,680
357,296
33,099,076

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

240,356,796(113,694,559)
126,662,236
2,967,724(1,241,158)
1,726,565
3,128,460(2,478,149)
650,311546,613(371,686)
174,927445,794,157
50,129139,109,974(46,809,895)
92,300,079
1,295,426(542,798)
752,628
1,032,422(765,840)
266,581
84,067(57,666)
26,401
335,232,845
53,4101,003,690,274

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

5,548,405
826,648
20,5306,395,584

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

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Thousands of yen
As of March 31, 2023
Investments and other assets
Investment securities
Leasehold and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Current portion of investment corporation bonds
Current portion of long-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term borrowings
Deposits received from tenants
Deferred tax liabilities
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary retained earnings
Reserve for tax purpose reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

10

As of September 30, 2023

660,468
1,580,944
120,406
1,559,134
3,920,953
1,014,006,812

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

52,52552,525
1,047,158,414

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

3,001,178
52,300,000
10,000,000
39,500,000
2,343,077
303,043
11,181–
2,901,407
15,894
110,375,782

3,232,399
43,000,000
10,000,000
42,300,000
2,263,877
326,686
10,202
1,144,312
3,041,293
230,742
105,549,514

32,993,175
325,700,000
57,305,180
2,407,174
374,3419,479
418,789,351
529,165,133

32,993,175
321,900,000
55,656,092
2,407,132
378,113
5,262
413,339,776
518,889,290

497,241,216

516,736,574

4,553,749
4,553,749
16,198,315
20,752,064
517,993,280
517,993,280
1,047,158,414

4,553,749
4,553,749
17,112,180
21,665,930
538,402,505
538,402,505
1,057,291,795

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(2) Statements of Income and Retained Earnings
Thousands of yen
For the period
from October 1, 2022
to March 31, 2023
Operating revenues
Rent revenues
Other lease business revenues
Gain on sales of real estate properties
Total operating revenues
Operating expenses
Expenses related to lease business
Asset management fees
Asset custody fees
Administrative service fees
Directors’ compensations
Commission expenses
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Interest income
Dividend income
Reversal of distributions payable
Interest on tax refund
Gain on receipt of donated non-current assets
Other
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
Investment unit issuance expenses
Other
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings

11

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

33,837,810
119,726
3,387,611
37,345,149

34,131,137
365,999
4,130,837
38,627,974

18,252,786
1,621,876
55,900134,852
7,800
123,266
107,533
20,304,015
17,041,133

18,447,146
1,745,491
47,229139,135
7,800
85,475
107,016
20,579,294
18,048,679

137
–
1,622
–
3,870
200
5,829

158
7,036
2,072
2,944
3,657
–
15,870648,917
174,319

722,153
172,848

12,36012,427–38,862874,458
16,172,504
16,172,504
11,201(5)
11,196
16,161,308
37,007
16,198,315

37,82332,563
977,817
17,086,732
17,086,732
11,664(42)
11,621
17,075,110
37,07017,112,180

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(3) Statements of Changes in Unitholders’ Equity
For the period from October 1, 2022 to March 31, 2023
Thousands of yen

Unitholders’ equity
Surplus
Unitholders’capitalVoluntary retained
earnings

Unappropriated retained
earnings

Total
surplusTotal
unitholders’equityTotal
net assets

Reserve fortax purpose
reduction
entry

Total
voluntary
retainedearnings

3,693,378

3,693,378

16,827,292

20,520,671

517,761,887

517,761,887

860,370

860,370(860,370)–––

Dividends of surplus(15,929,915)(15,929,915)(15,929,915)(15,929,915)

Profit16,161,308

16,161,308

16,161,308

16,161,308

Balance at beginning of theperiod497,241,216

Changes during the period
Provision of reserve for tax
purpose reduction entry

Total changes during theperiodBalance at end of the period–

860,370

860,370(628,977)

231,393

231,393

231,393497,241,216

4,553,749

4,553,749

16,198,315

20,752,064

517,993,280

517,993,280

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

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning of theperiod497,241,216

Voluntary retained
earnings

Unappropriated retained
earnings

Reserve fortax purpose
reduction
entry

Total
voluntary
retainedearnings

4,553,749

4,553,749

16,198,315

Total
surplus20,752,064

Total
unitholders’equityTotal
net assets

517,993,280

517,993,280

19,495,358

19,495,358

Changes during the period
Issuance of new investment
units

19,495,358

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

Profit17,075,110

17,075,110

17,075,110

17,075,110

Total changes during theperiod19,495,358––

913,865

913,865

20,409,224

20,409,224

Balance at end of the period

516,736,574

4,553,749

4,553,749

17,112,180

21,665,930

538,402,505

538,402,505

12

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(4) Statements of Cash Distributions
For the period
From October 1, 2022
to March 31, 2023

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

Amount (Yen)Amount (Yen)I Retained earnings

16,198,315,107

17,112,180,899

Ⅱ Cash distribution

16,161,245,070

17,074,368,000(Dividend per investment unit)(11,667)(12,000)

Ⅲ Retained earnings brought forward

37,070,037

37,812,899

Computation Method for Determining
Dividends

The Company will make cash
distributions using earnings based on the

The Company will make cash
distributions using earnings based on the

cash distribution policy outlined in Article
32-1(2) of the Company’s Articles ofcash distribution policy outlined in Article
32-1(2) of the Company’s Articles ofIncorporation, in an amount that exceeds
90% of the “amount of distributable

Incorporation, in an amount that exceeds
90% of the “amount of distributableprofit” as set forth in Article 67-15 of theSpecial Taxation Measures Act. Based on

profit” as set forth in Article 67-15 of theSpecial Taxation Measures Act. Based on

this policy, the Company has decided thatthe total amount of dividends, which is set

this policy, the Company has decided thatthe total amount of dividends, which is set

not to exceed the unappropriated retained
earnings and also to secure retained

not to exceed the unappropriated retained
earnings and also to secure retained

earnings brought forward, is¥16,161,245,070 for the period underearnings brought forward, is¥17,074,368,000 for the period underreview, which is a multiple of 1,385,210— the number of units outstanding as ofreview, which is a multiple of 1,422,864— the number of units outstanding as ofMarch 31, 2023. Furthermore, theCompany does not pay out dividends that

September 30, 2023. Furthermore, theCompany does not pay out dividends thatexceed earnings as outlined in Article 321(3) of the Company’s Articles of

exceed earnings as outlined in Article 321(3) of the Company’s Articles ofIncorporation.

Incorporation.

13

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(5) Statements of Cash Flows
Thousands of yen
For the period
from October 1, 2022
to March 31, 2023
Cash flows from operating activities
Profit before income taxes
Depreciation
Gain on receipt of donated non-current assets
Amortization of investment corporation bond issuancecosts
Investment unit issuance expenses
Dividend income
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in prepaid expenses
Decrease in property, plant and equipment in trust due tosaleIncrease (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of investment units
Payments of investment unit issuance expenses
Distributions paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period

14

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

16,172,504
6,196,502(3,870)17,086,732
6,263,576(3,273)12,36012,427––(137)
823,236(22,243)

37,823(7,036)(158)
895,002(78,709)(599,680)

599,680

356,075(37,776)

6,280,101

7,472,036

355,603(18,966)(2,324,024)
131
80,093(71,662)(221,386)
27,014,637
137(810,158)(9,229)26,195,387

613,483
66,944
1,144,312(131)
139,886
25,714
340,861
34,571,397
7,195(871,228)(12,642)
33,694,722(2,800,484)(41,332,501)(116)(1,696,708)
3,175,417(42,654,393)(19,472,546)(955,704)(390)(3,725,174)
2,076,087(22,077,728)

94,500,000(63,900,000)
31,500,000(25,000,000)––(15,927,507)
21,172,492
4,713,486
26,793,001
31,506,487

72,500,000(81,800,000)
22,500,000(23,500,000)
19,495,358(37,823)(16,160,706)(7,003,172)
4,613,821
31,506,487
36,120,308

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(6) Notes Concerning Going Concerns Assumption“Not applicable”(7) Summary of Significant Accounting Policies
Investment securities
Non-marketable securities, which have no market prices, classified as other securities are carried at cost. Cost of securities sold isdetermined by the moving average method.
Property and equipment, depreciation and impairment (except for leased assets)
Property and equipment is stated at cost, less accumulated depreciation. The cost of land, buildings and building improvements includes
the purchase price of property and acquisition costs. Depreciation is calculated on a straight-line basis over the estimated useful lives of
the assets ranging as stated below:
Buildings....................................................................... 2-61 years
Structures...................................................................... 2-75 years
Machinery and equipment............................................ 2-18 years
Tools, furniture and fixtures......................................... 2-29 years
Expenditures for repairing expenses are charged to income as incurred. Significant renewals and betterments are capitalized.
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
its fixed assets may not be recoverable. According to the standard set by the Accounting Standards Board of Japan (“ASBJ”), companies
are required to recognize an impairment loss in their statements of income if certain indicators of asset impairment exist and the bookvalue of an asset exceeds the undiscounted sum of future cash flows of the asset. The standard states that impairment losses should bemeasured as the excess of the book value over the higher of (i) the fair market value of the asset, net of disposition costs, and (ii) the
present value of future cash flows arising from ongoing utilization of the asset and from disposal after asset use. The standard covers land,factories, buildings and other forms of property, plant and equipment as well as intangible assets. Fixed assets are grouped at the lowest
level for which there is identifiable cash flows that are independent of cash flows of other groups of assets.
Intangible assets
Intangible assets primarily consist of leasehold rights and easement, which are stated at cost. Amortization of a term leasehold interest forbusiness use is calculated by the straight-line method based on the period of agreement.
Leased assets
Leased assets under finance lease transactions that do not transfer ownership of the leased assets to the lessees are capitalized anddepreciated by the straight-line method over the lease term with no residual value.
Deferred charges
Investment corporation bond issuance costs are amortized using the straight-line method over the redemption periods.
Investment unit issuance expenses are charged to income as incurred. The underwriters’ economic remunerations for underwriting theoffering are not recognized as investment unit issuance expenses in the financial statements since such costs are not paid by the Company
as commission under the so-called “spread-method.”
Under the spread-method, the difference between the offer price (the price paid by the unitholder) and the issue price (the price received
by the Company) is retained by the underwriters as remuneration.
Revenue recognition
The content of main performance obligations related to revenue arising from contracts with customers of the Company and the normal
timing for satisfying such performance obligations (the normal timing for recognizing revenue) are as follows:① Sales of real estate properties
The Company recognizes revenue from the sale of real estate properties when the purchaser, as the customer, obtains control of the realestate property by fulfilling the delivery obligations stipulated in the contract for the sale of real estate property.
② Utilities income
The Company recognizes utilities income based on the supply of electricity, water, etc. to the lessee as the customer, in accordance withthe terms of the real estate lease contract and related agreements. Of utilities income, in the case that the Company determines it is anagent for utilities income, the utilities income is recognized as income at the net amount received as charges for electricity, gas, etc.
supplied by other parties, less the amount paid to such other parties.
Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally charged
to income during the period. The sellers of the properties are liable for property taxes for the calendar year including the period from thedate of purchase by the Company through the end of the year since the taxes are imposed on the owner registered on the record as ofJanuary 1 based on the assessment made by the local government. The Company pays the amount equivalent to the property taxes to thesellers applicable to the period since acquisition and includes the amount equivalent to the taxes in the purchase price of each property
and capitalizes it as a cost of the property.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks, and short-term investments, which are highly liquid, readily
convertible to cash and with insignificant risk of price fluctuation, with original maturity of three months or less.
15

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

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

16

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(8) Notes to Financial Statements(Notes to Balance Sheets)a.
Commitment line agreement
The Company has signed commitment line agreements with three banks.
Thousands of yen
As of March 31, 2023

Total amount of commitment line agreement

60,000,000––

60,000,000

60,000,000

Debt financing balance
Balanceb.

As of September 30, 2023

60,000,000

Reserve for tax purpose reduction entry
Thousands of yen
As of March 31, 2023

Reserve for tax purpose reduction entry
Deferred tax liability for the reserve for tax
purpose reduction entry
Total

As of September 30, 2023

4,553,749

4,553,749

2,408,105

2,408,105

6,961,855

6,961,855

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

c.

Minimum net assets required by Article 67, Paragraph 4 of the ITA
Thousands of yen
As of March 31, 2023

As of September 30, 2023

50,00050,000(Notes to Statements of Income and Retained Earnings)
a. Breakdown of property-related revenues and expenses
Thousands of yen
For the period from October 1, 2022
to March 31, 2023

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

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

33,957,537
33,837,810
28,157,752
2,187,867
700,821
2,791,369
119,726
5,846
113,880

34,497,137
34,131,137
28,515,395
1,999,804
707,0032,908,933
365,999
78,181
287,817

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

18,252,786
18,252,786
3,877,085
3,178,061
3,479,452
43,871
1,271,791
6,196,329
206,195
15,704,750

18,447,146
18,447,146
3,939,312
3,282,000
3,640,240
44,165
1,064,059
6,263,434
213,933
16,049,990

17

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）b.

Breakdown of gain on sales of real estate properties
For the period from October 1, 2022 to March 31, 2023
Thousands of yen

Harumi Front (25% quasi-co-ownership interest)
Revenue from sale of real estate property
Cost of real estate property sold
Other sales expenses
Gain on sales of real estate properties

9,777,500
6,280,101
109,786
3,387,611

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

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

11,733,000
7,461,916
140,246
4,130,837(Changes in Unitholders’ Equity)
Total number of investment units issuable
and number of units outstanding

As of March 31, 2023

As of September 30, 2023

Total number of investment units issuable

4,000,000 units

4,000,000 units

Number of units outstanding

1,385,210 units

1,422,864 units(Supplemental Cash Flow Information)
Cash and cash equivalents
The following table represents a reconciliation of cash and cash equivalents as of March 31, 2023 and September 30, 2023:
Thousands of yen
As of March 31, 2023
As of September 30, 2023

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

23,341,245
8,165,242–
31,506,487

29,088,626
7,031,681–
36,120,308(Financial Instruments)
a. Status of financial instruments(i) Policies for dealing financial instruments
Concerning the financing of property acquisitions, the Company shall use several funding sources including bank loans, the issuanceof investment corporation bonds and the issuance of investment units. When executing such financing activities, the Company
endeavors to retain the ability to secure stable and low-cost financing by maintaining high credit ratings and thereby limiting thefinancial covenants that may restrict the financial flexibility of the Company. To achieve these goals, the Company intends to further
develop and reinforce the confidence of debt holders and rating agencies in the Company by bolstering the capital base and controlling
the loan-to-value ratio (“LTV”) at an adequate level.
In order to hedge against future interest-rate fluctuations, the Company may enter into derivative transactions, which shall be
executed solely for the purpose of hedging against interest-rate fluctuation and other risks, and not for speculative purposes.
With respect to management of excess funds, as a matter of policy the Company uses time deposits as its main vehicle, while
securities and monetary claims are also eligible for such investment.
(ii) Characteristics and risk profile of each financial instrument and risk management system
The Company regularly re-evaluates the appropriateness and effectiveness of its risk management system in order to improve on it.
The characteristics and risk profile of financial instruments and the system in place to manage such risks are as follows:
The deposits, which are typically large time deposits used to manage excess funds, are exposed to the credit risk of the deposittaking financial institutions. The Company manages credit risk by restricting the tenor of the deposit to relatively short periods andsetting a minimum credit rating requirement for the deposit-taking financial institutions.
18

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

The funding proceeds from borrowings and issues of investment corporation bonds are applied mainly to acquire real estate
properties and repay outstanding loans and bonds. While floating-rate short-term and long-term loans are exposed to the risk ofinterest-rate hikes, such risk is mitigated by the Company’s low LTV and relatively high percentage of long-term fixed-rate debts
within the total borrowing. The Company may also exercise hedging by means of derivative transactions (interest-rate swap
transactions) in order to mitigate the risk of fluctuation concerning the floating-rate long-term loans, thereby effectively stabilizing
the overall interest rates on the loans. Foreign currency-denominated loans are also exposed to currency exchange and interest-ratefluctuation risk. However, the Company uses derivative transactions as a method of hedging against these risks (interest-rate andcurrency swap transactions). Foreign currency investment corporation bonds are also exposed to currency exchange risk. However,
the Company uses derivative transactions as a method of hedging against the risks (currency swap transactions). For more detailed
information on the hedge accounting method, please refer to the previous section “(7) Summary of Significant Accounting Policies:
Hedge accounting.”
Loans and investment corporation bonds involve liquidity risk at the time of maturity. To manage such liquidity risk, the Company
implements measures such as ① maintaining and strengthening its ability to access equity markets to secure funds, ② maintaining
commitment lines with major financial institutions (There is no amount outstanding under the facility as of March 31, 2023 andSeptember 30, 2023) and ③ preparing monthly financial plans.
(iii) Supplementary note regarding fair value of financial instruments
Since the fair value of financial instruments is calculated based on certain assumptions, the fair value could differ depending on theassumptions used. In addition, the contract value of derivative transactions, which is presented in the following section entitled“Derivative Transactions,” is not an exact representation of market risk attributable to derivative transactions.
b. Fair value of financial instruments
Fair value of financial instruments, their values carried on the balance sheets and the differences between them as of March 31, 2023 andSeptember 30, 2023 are as follows. Since “Cash and deposits,” “Cash and deposits in trust,” and “Short-term borrowings” are cash anddue to be settled in a short period, and their fair values approximate their book values, the notes are omitted.
Thousands of yen
As of March 31, 2023

Book value
10,000,000
39,500,000
32,993,175
325,700,000
57,305,180–(1) Current portion of investment corporation bonds(2) Current portion of long-term borrowings(3) Investment corporation bonds(4) Long-term borrowings(5) Deposits received from tenants(6) Derivative transactions

Fair value
9,993,600
39,528,745
33,497,882
323,299,927
55,962,507–

Difference(6,400)28,745504,707(2,400,072)(1,342,673)–

Thousands of yen
As of September 30, 2023

Book value
10,000,000
42,300,000
32,993,175
321,900,000
55,656,092–(1) Current portion of investment corporation bonds(2) Current portion of long-term borrowings(3) Investment corporation bonds(4) Long-term borrowings(5) Deposits received from tenants(6) Derivative transactions

Fair value
9,999,200
42,348,471
33,253,995
315,204,422
53,648,467–

Difference(800)
48,471
260,820(6,695,577)(2,007,625)–

Notes: 1. Measurement of fair value of financial instruments and matters concerning derivative transactions(1) Current portion of investment corporation bonds and (3) Investment corporation bonds
Their fair values are based on reference prices published by a financial data provider where available. When reference prices are notavailable, their fair values are calculated by discounting the aggregate of the principal and interest by nominal rates assumed
applicable if the loans were refinanced for the duration of the current maturity. (However, the fair values of investment corporation
bonds (please refer to the following “Derivative Transactions, b. Derivatives designated as hedging instruments”) hedged by acurrency swap subject to allocation treatment are calculated by discounting the aggregate of the principal and interest integrated withthe currency swap by nominal rates assumed applicable if the loans were refinanced for the duration of the current maturity.)(2) Current portion of long-term borrowings and (4) Long-term borrowings
For loans with floating interest rates, since the interest rates on such loans reflect market rates reasonably well over the short term
and their book values are good approximations of their fair values, the book values are presented as their fair values. (However, thefair values of floating-rate long-term loans (please refer to the following “Derivative Transactions, b. Derivatives designated as
hedging instruments”) hedged by an interest-rate and currency swap subject to integrated treatment or by an interest-rate swap subject
to special accounting treatment are calculated by discounting the aggregated principal and interest on such loans using reasonableestimates of the rates that would be applicable if the Company were to refinance the existing loans for the remaining period to maturity
under the prevailing market condition.) The fair values of long-term loans with fixed interest rates are calculated by discounting theaggregated amounts of the principal and the interest of the loans by the rates that are reasonably estimated to be applicable if theCompany were to refinance the existing loans for the remaining period to maturity.
(5) Deposits received from tenants
These fair values of these deposits are the discounted present values by estimated periods until the deposits are returned and discountrates reflected credit risks of the Company.
(6) Derivative transactions
Please refer to the following section entitled “Derivative Transactions.”

19

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

2. Repayment schedule for investment corporation bonds, long-term borrowings and other interest-bearing debt after the closing dateThousands of yen
As of March 31, 2023
Investment corporation bonds
Long-term borrowings
Total

1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years

10,000,000
39,500,000
49,500,000—
54,800,000
54,800,000

20,000,000
52,500,000
72,500,000

10,000,000
28,700,000
38,700,000

2,993,175
23,500,000
26,493,175—
166,200,000
166,200,000

Thousands of yen
As of September 30, 2023
Investment corporation bonds
Long-term borrowings
Total

1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years

10,000,000
42,300,000
52,300,000

10,000,000
57,000,000
67,000,000

10,000,000
36,700,000
46,700,000

10,000,000
24,000,000
34,000,000

2,993,175
18,000,000
20,993,175—
186,200,000
186,200,000

20

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Derivative Transactions)a. Derivatives not designated as hedging instruments
As of March 31, 2023
“Not applicable”
As of September 30, 2023
“Not applicable”
b. Derivatives designated as hedging instruments
As of March 31, 2023
The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative
designated as a hedging instrument is as follows:(Thousands of yen)

Derivative
accounting method
Special Treatment forinterest-rate swap
Integrated Treatment (Special
Treatment and Allocation
Treatment) for interest-rate andcurrency swap

Allocation Treatment for
currency swap

Type ofderivative transaction
Receive floating,pay fixed interest-rate
swap transactions
Receive floating USD,
pay fixed JPY,
interest-rate and currency
swap transactions (withinitial and final exchange)
Receive fixed USD,
pay fixed JPY, currency
swap transactions (withinitial and final exchange)

Hedged item

Contract valueOver one year

Fair value

Measurementof fair value

Long-term
borrowings

9,800,000

6,800,000*1―Long-term
borrowings

10,000,000

―

*1

―

Investment
corporation bonds

2,993,175

2,993,175*2―

As of September 30, 2023
The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative
designated as a hedging instrument is as follows:(Thousands of yen)

Derivative
accounting method
Special Treatment forinterest-rate swap
Integrated Treatment (Special
Treatment and Allocation
Treatment) for interest-rate andcurrency swap

Allocation Treatment for
currency swap

Type ofderivative transaction
Receive floating,pay fixed interest-rate
swap transactions
Receive floating USD,
pay fixed JPY,
interest-rate and currency
swap transactions (withinitial and final exchange)
Receive fixed USD,
pay fixed JPY, currency
swap transactions (withinitial and final exchange)

Hedged item

Contract valueOver one year

Fair value

Measurementof fair value

Long-term
borrowings

6,800,000

3,000,000*1―Long-term
borrowings

10,000,000

―

*1

―

Investment
corporation bonds

2,993,175

2,993,175*2―*1. The derivative transactions eligible for Special Treatment for interest-rate swap and Integrated Treatment (Special Treatment for interest-rate swap
and Allocation Treatment for currency swap) are accounted for as integral parts of the hedged loans, and the fair value of those derivativetransactions is included in that of the underlying long-term borrowings as of March 31, 2023 and September 30, 2023. Please refer to page 19,
Note 1 of the section entitled “b. Fair value of financial instruments” under “Financial Instruments,” as well as subheadings (2) and (4) concerningderivative transactions.
*2. Currency swap transactions eligible for allocation treatment are accounted for as integrated parts of the hedged investment corporation bonds, andthe fair value of the currency swap transactions is included in that of the underlying investment bonds as of March 31, 2023 and September 30,
2023. Please refer to page 19, Note 1 of the section entitled “b. Fair value of financial instruments” under “Financial Instruments,” as well as
subheading (3) concerning derivative transactions.

21

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Income Taxes)
The Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation Measures
Act, an investment corporation is allowed to deduct dividends of earnings or dividend distributions, paid to unitholders from its taxable
income if certain tax requirements are satisfied. Such tax requirements include dividend distributions in excess of 90% of its profit
available for dividends for the fiscal period as stipulated by Article 67-15 of the Special Taxation Measures Act. The significant
components of deferred tax assets and liabilities as of March 31, 2023 and September 30, 2023 were as follows:

Thousands of yen
As of March 31, 2023
As of September 30, 2023

Deferred tax assets:
Accrued enterprise tax
Amortization of a term leasehold interest
Asset retirement obligations
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Asset retirement obligations
Reserve for advanced depreciation of non-current assets
Total deferred tax liabilities
Net deferred tax liabilities

931
133,239
129,484
263,655(161,268)
102,387973
138,715
130,789
270,478(168,048)
102,429

101,455
2,408,105
2,509,561
2,407,174

101,455
2,408,105
2,509,561
2,407,132

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

As of September 30, 2023

34.59%(34.57%)
0.04%
0.00%
0.07%

34.59%(34.56%)
0.04%
0.00%
0.07%

Statutory tax rate
Deductible dividend distribution
Change in valuation allowance
Others
Effective tax rate

(Asset Retirement Obligations)
For the six months ended March 31, 2023 and September 30, 2023
Asset retirement obligations reported on balance sheets
The Company acquired Osaki Front Tower on February 1, 2011 under the term leasehold for business use agreement which, at the expiryof the leasehold, obligates the Company to restore the leased land to its original state. At the inception of a lease with such an obligation,
the Company recognized an asset retirement obligation and a corresponding capital asset in an amount equal to the present value of theestimated demolition cost required for the removal of the properties located on the leased land. The present value is calculated using
2.015% as the discount rate over 42 years, which is the term of the leasehold.
Change in the asset retirement obligations for the six months ended March 31, 2023 and September 30, 2023 consisted of the following:Thousands of yen
For the period from October 1, 2022
For the period from April 1, 2023
to March 31, 2023
to September 30, 2023

Balance at the beginning of the period
Increase in tangible fixed assets
Accretion expense
Balance at the end of the period

370,608–
3,733
374,34122

374,341–
3,771
378,113JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Investment and Rental Property)
For the six months ended March 31, 2023 and September 30, 2023
The Company owns primarily a portfolio of office properties in Tokyo and other prefectures in order to gain rental revenue from them.
The book values on balance sheets as of March 31, 2023 and September 30, 2023 and the fair values as of March 31, 2023 and September
30, 2023 are as follows:
Thousands of yen

Book value

Fair value

As of September 30, 2022

Change during the period

As of March 31, 2023

As of March 31, 2023

977,086,095

32,998,662

1,010,084,757

1,336,442,500

Thousands of yen

Book value

Fair value

As of March 31, 2023

Change during the period

As of September 30, 2023

As of September 30, 2023

1,010,084,757

6,185,328

1,016,270,085

1,341,209,500

Notes: 1. Book value on balance sheets means the acquisition cost less accumulated depreciation.
2. As for the change during the period ended September 30, 2023, the major reason for the increase was the acquisition of Forecast Sakaisujihonmachi(¥17,878,357 thousand), and the major reasons for the decrease were the disposition of Harumi Front (30% quasi-co-ownership interest) (¥7,461,916
thousand) and by depreciation.
3. Fair values as of March 31, 2023 and September 30, 2023 are defined as the appraised values provided by an external qualified professional
appraiser. As of March 31, 2023 and September 30, 2023, Harumi Front, for which the disposition agreement was made dated November 15, 2022,
was valued at the disposition price.

Profits and losses related to investment and rental property are listed in the “Breakdown of property-related revenues and expenses” under“Notes to Statements of Income and Retained Earnings.”(Revenue Recognition)
Breakdown information on revenue from contracts with customers
For the period from October 1, 2022 to March 31, 2023
Thousands of yen

Revenue from contracts with customers *1

Revenue from external customers–
1,945,490 *3–
1,945,490

3,387,611 *2
1,945,490
32,012,046
37,345,149

Sales of real estate properties
Utilities income
Others
Total
*1

*2
*3

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

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

Revenue from contracts with customers *1

Revenue from external customers–
2,053,182 *3–
2,053,182

4,130,837 *2
2,053,182
32,443,954
38,627,974

Sales of real estate properties
Utilities income
Others
Total
*1

*2
*3

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

23

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Segment Information)
For the six months ended March 31, 2023 and September 30, 2023
Since the Company has been engaged in the real estate leasing business using a single segment, segment information has been omitted.
Information on products and services
Since revenues from external customers for a single segment accounted for more than 90% of total operating revenues, segment
information on products and services has been omitted.
Information on geographic area
a. Revenue
Since 100% of total operating revenues was generated from external customers within Japan, a geographical breakdown of revenues
has been omitted.
b. Property and equipment
Since 100% of total property and equipment on the balance sheets was located within Japan, a geographical breakdown of suchproperty and equipment has been omitted.
Information on major clients
Since no single external client represents 10% or more of the Company’s total operating revenues, information on major clients has been
omitted.
(Per Unit Information)
The following table summarizes information about net assets per unit and profit per unit as of March 31, 2023 and September 30, 2023
and for the periods then ended, respectively:
Yen

Net assets per unit
Profit per unit

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

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

373,945
11,667378,393
12,013

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

Thousands of yen
For the period from October 1, 2022
For the period from April 1, 2023
to March 31, 2023
to September 30, 2023

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

16,161,308

17,075,110––

16,161,308

17,075,110

1,385,210 units

1,421,308 units(Subsequent Events)“Not applicable”

24

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(9) Increase/Decrease in Total Number of Units Outstanding
The Company raised proceeds of about 19,495 million yen by a capital increase through a public offering (35,200 units) and thirdparty allotment (2,454 units) in April and May 2023. Changes in the past five years are as follows.

Date

April 7, 2023

*2.

Total Unitholders’ Capital(Millions of yen)

Increase/Decrease Balance

Increase/Decrease Balance

Remarks
Issuance of new investment
units (public offering)

35,200 1,420,410

Issuance of new investment

18,224515,466

Notes

＊

1

＊
2
2,454 1,422,864
1,270
516,736
units (third-party allocation)
New investment units were issued at 534,100 yen (underwriting price of 517,750 yen) per unit for the purpose of funding the partial
repayment of the short-term loan.
New investment units were issued at 517,750 yen per unit for the purpose of funding the partial repayment of the short-term loan.

May 1, 2023
*1.

Number of Units Outstanding

25

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

3. Reference Dataa. Composition of the Company’s Assets
As of March 31, 2023
Asset type

Real property

RegionTotal ofnet book value*1(¥ million)

Ratio tototal assets(%)

Tokyo 23 wards

464,68344.4

463,104

43.8

Tokyo metropolitan area
(excluding Tokyo 23 wards)*2

40,1093.8

39,954

3.8

Other major cities

76,658

7.3

93,814

8.9

581,45155.5

596,873

56.5

321,64930.7

312,78829.6

15,471

1.5

15,4291.5

91,511

8.7

91,1798.6

428,63340.9

419,396

39.7

37,073

3.5

41,021

3.9

(–)

(–)

(–)

(–)

1,047,158

100.0

1,057,291

100.0(1,010,084)(96.5)(1,016,270)(96.1)

Total
Tokyo 23 wards
Tokyo metropolitan area
Real property
in trust

As of September 30, 2023

(excluding Tokyo 23 wards)*2
Other major cities
Total

Total ofnet book value*1(¥ million)

Ratio tototal assets(%)

Savings and other assets

Total amount of assets*1. Totals of net book value as of March 31, 2023 and September 30, 2023 are based on the total amounts from the balance sheets as ofMarch 31, 2023 and September 30, 2023, respectively. Real property and real property in trust present the net book values after
depreciation and amortization.
*2. Tokyo metropolitan area encompasses the prefectures of Tokyo, Kanagawa, Chiba and Saitama throughout this document.
*3. The figures in parentheses indicate the value of real property held. Ratios are rounded to the first decimal place.

26

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

b. Real Estate Investment Property and Trust Beneficiary Rights in Trust of Real Estatei) Outline of real estate and other assets included in the Company’s holdings (quick reference guide)
The table below is a quick reference guide outlining the real estate and other assets included in the Company’s holdings as of,
September 30, 2023.

9,390

8,590

9,520,000

0.8%

94.8%

5,260

4,355

4,810,000

0.4%

*5

Real
property

9

6,269

10

3,687

JRE KandaOgawamachi
Building

Number oftenants*1

100.0%*5

Type ofspecified asset

25,678*5

Ratio

region*2Book value at theend of period(¥ mil)100.0%

8

property(¥ thousand)Ratio byAppraisal value atthe end of period(¥ mil)*3

7.2%

Occupancy rate*2

81,555,500

Leasable floorarea (m2)

68,725

Real

SquareName ofproperty

Region88,400Kitanomaru

Acquisition price*4*2

Kandabashi

RealPark Building

property

OtemachiFinancial City

Real
property

North Tower/TrustOtemachiPark Building

Trust

21

2,372

100.0%

11,30010,02010,175,000

0.9%Nibancho
GardenRealproperty

1
*5

9,316
*5

100.0%*5

18,00011,80914,700,000

1.3%

Real
property

10

11,904100.0%

57,30028,38544,700,000

3.9%

Real
property

1

4,495

100.0%

7,800

5,224

7,000,000

0.6%

15,462,900
11

7,420

87.4%

28,80020,5186,380,000
Total:

1.9%

21,842,900

Mitsubishi
UFJ Trust andBanking
Tokyo metropolitan area

Building
Burex
Tokyo
23
wards

Kojimachi
Building
CIRCLESRealHirakawacho

property

Sanno Grand
Building

Realproperty

76.0%
11

979

100.0%

1,870

1,790

1,780,000

0.2%

10,200,000
44

20,565

81.6%

25,00020,75010,700,000
Total:

1.8%

20,900,000
Yurakucho
Denki
Building

Realproperty

Front Place

Real

Nihonbashi

property

JRE
Kayabacho
2ChomeBuilding
Burex
Kyobashi
Building
JRE Ginza
1Chome East

Trust

Real
property

Trust

7

4,697

63.7%

2

8,468

100.0%

9

4,419

95.5%

1

4,279

8

4,513

Building
27

9,480

7,654

7,200,000

0.6%

17,183

17,560,000

1.5%

5,050

4,011

4,410,000

0.4%

100.0%

7,870

4,379

5,250,000

0.5%

100.0%

8,240

5,854

6,459,000

0.6%

21,900*6

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

19,70017,040(¥ thousand) Ratio*2

16,830,000
5,353,500
2,645,922*7
Total:
7,999,422
31,300,000(7,825,000)(9,390,000)*9
Total:
14,085,000

1.5%Tokyo metropolitan area

JRE Ginza
3ChomeBuilding

Realproperty

9

4,255

100.0%

6,630

7,082

Harumi Front

Trust

6

15,016

3.8%

17,500*8

11,082

Akasaka Park
Building
the ARGYLE
aoyama
JRE Aoyama
Crystal
Building
CloverShiba-koen

Realproperty

35*5

44,999
*5

97.6%
*5

80,50056,69960,800,000

5.4%

Trust

11

7,478

100.0%

24,80024,03823,900,000

2.1%

Real
property

8

4,898

90.2%

9,600

6,940

7,680,000

0.7%

Trust

8

2,550

100.0%

4,910
*6

4,336

4,500,000

0.4%

98,585

21,250,000
54,600,000
10,100,000
10,450,000
10,530,000
Total:
106,930,000

9.4%

JRE Shiba
2ChomeDaimonBuilding
JRE Cosmo
Kanasugibashi
Building
Seavans S
Building
Tamachi Front
Building

Trust

46

44,213

96.6% 121,000

0.7%

1.2%

76.0%

Trust

24

9,549

96.1%

9,100

5,833

4,859,000

0.4%

Trust

6

4,062

87.0%

3,800

2,423

2,808,000

0.2%

16

6,080

97.9%

7,330

5,602

5,400,000

0.5%

10

3,792

100.0%

7,930
*6

5,905

6,210,000

0.5%

Real
propertyRealproperty

23,100,000
6,660,000
25,460,000
8,460,000
8,500,000
Total:
72,180,000
25,025,000
10,100,000
Total:
35,125,000

Shinjuku
Eastside Square

Trust

44

45,619100.0%

83,000*6

66,911

Shinjuku Front
Tower

Trust

41

21,41693.4%

35,900*6

33,862

JRE NishiShinjuku
TerraceRealproperty

12

6,036

100.0%

9,430

7,620

7,830,000

0.7%Tokyo OperaCity
Building*10

Realproperty

27,4159,350,000
22,426,831
Total:
31,776,831

2.8%

103

34,96328

93.9%

35,300

Ratio byregion*2

63.7%

Book value at theend of period(¥ mil)4,326

Appraisal value atthe end of period(¥ mil)*3

Number oftenants*1
10

Occupancy rate*2

Type ofspecified asset
Realproperty

Shiodome
Building
Tokyo 23
wards

Leasable floor area(m2)

Name ofproperty

RegionGinza Sanwa
Building

Acquisition price*4

6.4%

3.1%

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

100.0%

10,100*6

9,155(¥ thousand) Ratio*2
9,250,000

0.8%

2.0%

Real
property

17

9,786

100.0%

25,40022,145

6,670,000(1,170,000)*11
17,300,000
Total:
22,800,000

Real
Property

8

7,745

100.0%

13,9006,534

8,700,000

0.8%

Real
property

5

3,147

100.0%

7,730

4,738

4,885,000

0.4%

Real
property

6

5,558

100.0%

10,30010,594

12,200,000
*12

1.1%

27,186

34,600,000(8,076,000)*14
Total:
26,524,000

2.3%

1.3%

Real
property

*13

*13

*13

46,700Ebisu Neonato

Realproperty

4

8,659

100.0%

19,90013,5593,740,000
360,000
10,512,000
Total:
14,612,000

TIXTOWER
UENO

Real
property

16

15,016100.0%

26,60017,451

22,000,000

1.9%

Toyosu Foresia

Trust

32

6,032

97.1%

8,180

8,112

8,100,000

0.7%

Toyosu Front

Trust

21

17,40798.9%

26,10025,18025,500,000

2.2%

Real
property

4

5,205

100.0%

7,150

4,220

5,500,000

0.5%

Real
property

1

16,856100.0%

17,900*8

6,917

12,300,000

1.1%

Trust

26

7,706

100.0%

6,030

4,674

5,123,000

0.5%

1.0%

JRE Higashi
Gotanda1ChomeBuilding
Osaki Front
Tower*15
JRE Omori-Eki
Higashiguchi
Building

Harmony Tower

Realproperty

23

14,340100.0%

14,9009,390

8,500,000
520,000
2,100,000
Total:
11,120,000

JRE Ikebukuro
2ChomeBuilding

Trust

9

2,186

100.0%

1,990

1,530

1,728,000

0.2%

JRE MinamiIkebukuro
Building

Realproperty

10

5,932

100.0%

6,270

3,861

4,500,000

0.4%

29

Ratio byregion*2Book value at theend of period(¥ mil)4,095

Appraisal value atthe end of period(¥ mil)*3

Tokyo metropolitan areaTokyo
23 wards

2

Occupancy rate*2

Shibuya Cross
Tower(Land)

Leasable floor area
(m2)

JRE Yoyogi
1 Chome
Building
JRE Jingumae
Terrace
JRE Jingumae
Media Square
Building

Realproperty

Number oftenants*1

Link Square
ShinjukuType ofspecified asset

Name ofproperty

RegionFront PlaceMinamiShinjuku

Acquisition price*4

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

93.1%

5,110

4,637

JRE Saitama
Urawa
Building

Realproperty

19

4,510

100.0%

3,290

2,447

MM Park
Building

Realproperty

33

38,415

92.6%

42,10029,26537,400,000

3.3%

Queen’sTower A

Trust

54

26,69695.3%

24,900*6

15,42917,200,000

1.5%Musashi
Kosugi STM
Building

Realproperty

28

5,378

100.0%

4,570

3,604

4,000,000

0.4%

8･3 Square Kita Building

Realproperty

8

12,26596.0%

11,7005,371

7,100,000

0.6%

Jozenji Park Building

Realproperty

19

2,518

98.0%

1,120

916

1,000,000

0.1%

JRE Higashi Nibancho
SquareRealproperty

22

20,526100.0%

15,900*8

7,903

9,950,000

0.9%

0.3%

Tokyo metropolitan areaTokyo
metropolitan
area,excluding
Tokyo
23
wards

(¥ thousand)
3,300,000
2,379,112
Total:
5,679,112
1,232,000
1,342,000
Total:
2,574,000

Ratio
*2
0.5%

0.2%
5.9%

Other major cities

JRE Sendai Honcho
Honma Building

Trust

28

6,234

100.0%

2,780

2,742

2,924,000
250,000
Total:
3,174,000

AER

Real
property

64

23,612

97.2%

18,90017,562

18,640,000

1.6%Daido Seimei
Niigata Building

Realproperty

9

3,928

87.7%

1,860

1,623

1,770,000

0.2%

Kanazawa Park Building

Realproperty

72

20,891

89.7%

7,220

4,541

2,880,000
1,700,000
Total:
4,580,000

0.4%

JRE Kanazawa
Kamitsutsumicho
Building

Realproperty

26

7,213

98.1%

3,000

2,257

2,780,000

0.2%

0.5%

18.1%

Nishiki Park Building*16

Realproperty

63*5

10,338
*5

92.2%
*5

5,470

4,739

3,850,000
1,300,000
650,000
175,000
Total:
5,975,000

JRE Nagoya Hirokoji
Place

Trust

36

13,20096.7%

14,600*6

7,480

8,567,000

0.8%

Nagoya Hirokoji
Building

Realproperty

42

21,37598.0%

13,10014,052

14,533,000

1.3%

JRE Shijo Karasuma
Center Building

Realproperty

16

6,634

100.0%

7,990
*6

3,480

4,400,000

0.4%

30

Ratio byregion*2Book value at theend of period(¥ mil)Appraisal value
at the end of
period (¥ mil)*3

Occupancy rate*2

10,125

Leasable floorarea (m2)Type ofspecified asset

47

Number oftenants*1

Name ofpropertyRealproperty

RegionHachioji First
SquareAcquisition price*4

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Number oftenants*1

Leasable floorarea (m2)Occupancy rate*2

Appraisal value
at the end of
period (¥ mil)*3

Book value at theend of period(¥ mil)

Trust

5

8,462

98.1%

10,700*89,684

9,750,000

0.9%

GRAND FRONTOSAKA (Umekita
Plaza and South
Building)*17

Trust

2

5,186

93.3%

12,200*8

11,242

11,250,000

1.0%

JRE Umeda Square
Building*18

Trust

38

10,375 100.0%

17,00015,56815,523,520

1.4%

JRE Dojima Tower

Trust

47

28,40320,00020,15524,000,000

2.1%

JRE
Sakaisujihonmachi
Building

Realproperty

22

11,520 100.0%

4,360

3,460

2,264,000
1,900,000
Total:
4,164,000

0.4%

Forecast
Sakaisujihonmachi

Realproperty

7

11,913

17,300*8

17,856

17,215,000

1.5%

1.3%

98.0%

92.1%

(¥ thousand)

Ratio
*2

JRE Midosuji Daiwa
Building

Trust

39

20,45096.7%

15,00013,224

6,934,000
7,380,000
Total:
14,314,000

JRE Amagasaki Front
Building

Trust

35

15,498 100.0%

10,5007,805

9,300,000

0.8%

2,256

4,650,000(555,131)*19
Total:
4,094,868

0.4%

0.2%

Lit City Building

Realproperty

NHK Hiroshima
Broadcasting Center
Building

Realproperty

12

9,881

94.8%

3,460

3,075

1,320,000
1,450,000
Total:
2,770,000

JRE Tenjin 3Chome
Building

Realproperty

19

3,995 100.0%

2,060

1,311

1,550,000

0.1%

JRE Tenjin Crystal
Building

Realproperty

29

5,964

98.4%

3,420

3,406

5,000,000

0.4%

Hinode Tenjin
Building

Trust

45,944 100.0%

5,130

3,274

3,657,000

0.3%

Total

1,600

1,341,110

1,016,270

1,133,528,154

29

8,885

888,354

96.8%

95.0%

5,130

Ratio byregion*2Type ofspecified asset

Other major cities*2.
*3.

Name ofproperty

Region*1.

GRAND FRONTOSAKA (North
Building) *17

Acquisition price*4

100.0%The total number of tenants is based on the gross number of tenants in each building. Each instance of occupancy of a single tenantleasing space is considered separately on a per property basis even if said tenant leases floor area in multiple properties. Moreover,a portion of GRAND FRONT OSAKA (North Building) and GRAND FRONT OSAKA (Umekita Plaza and South Building) areleased in bulk through a pass-through master lease system, the number of bulk lessees is defined as the number of tenants. For the
portion of GRAND FRONT OSAKA (North Building) leased in part under a fixed master lease or direct lease, the bulk lessees orend tenants of the said portion are added to the total number of tenants of the same property.
Occupancy rate, ratio of acquisition price and ratio by region are rounded to the nearest first decimal place.
Appraisal value at the end of period is, as a rule, the value assessed by real estate appraisers based on the Company’s Articles of31

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Incorporation and the Cabinet Office Ordinance on Accountings of Investment Corporations. The book closing date is used as theappraisal date and the appraisal value is calculated by Daiwa Real Estate Appraisal Co., Ltd.
*4. Incidental expenses arising from acquisitions are not included in the acquisition price.
*5. Residential portions are not included in the total number of tenants, the occupancy rate or the leasable floor area for Kitanomaru
Square, Nibancho Garden, Akasaka Park Building or Nishiki Park Building. The residential portions for these properties are as
follows: Kitanomaru Square, leasable floor area: 11,694m2, occupancy rate: 91.2%; Nibancho Garden, leasable floor area: 1,686m2,
occupancy rate: 100.0%; Akasaka Park Building, leasable floor area: 10,780m2, occupancy rate: 92.6%; Nishiki Park Building,leasable floor area: 954m2, occupancy rate: 93.6%.
*6. Appraisal values by Japan Real Estate Institute.
*7. This includes the acquisition price of the land and building adjacent to JRE Ginza 3Chome East Building dated July 4, 2008, thecost of the adjacent building’s demolition and the total expense of the construction and expansion of the Ryoshin Ginza East Mirror
Building (excluding brokerage fees and other acquisition-related expenses) after its completion on May 24, 2010.
*8. Appraisal values by Chuo Real Estate Appraisal Co., Ltd.
*9. Because a 25% quasi-co-ownership interest in Harumi Front was disposed of on December 1, 2022 after entering into a real estate
management and disposition trust agreement and establishing the trust and because a 30% quasi-co-ownership interest was disposedof on April 3, 2023, 25% and 30% of the acquisition price of the former real estate as of January 7, 2013 have each been deducted.
*10. Accompanying the acquisition of Tokyo Opera City Building on September 13, 2005, the Company acquired 33 shares of Tokyo
Opera City Building Co., Ltd. (the business that maintains, services and operates the building) at a total acquisition price of 2,797
thousand yen and inherited the 874 thousand yen deposit made to Tokyo Opera City Building Co., Ltd. by the seller. In an additional
acquisition, on March 24, 2010, the Company acquired 91 shares of Tokyo Opera City Building Co., Ltd. at a total acquisition priceof 7,539 thousand yen. Concurrently, the Company acquired 4,931 shares of Tokyo Opera City Heat Supply Co., Ltd. (the supplierof heat to the building) at a total acquisition price of 566,831 thousand yen, inheriting the 2,360 thousand yen deposit made toTokyo Opera City Building Co., Ltd. by the seller.
Regarding the appraisal value at the end of the fiscal period of the above-mentioned shares, the 124 shares of Tokyo Opera City
Building Co., Ltd. are valued at 10,336 thousand yen and the 4,931 shares of Tokyo Opera City Heat Supply Co., Ltd. are valued
at 566,831 thousand yen.
*11. Because the building was disposed on August 23, 2013, the acquisition price of the former building, 1,170 million yen, at the timeof the land and building purchase dated March 24, 2004, has been deducted.
*12. This is the acquisition price dated October 9, 2003, and includes a portion of the site disposed of and a portion of the extinguishedeasement related to the site (liquidation cost, 615 million yen) thereafter.
*13. Because the building portion of Shibuya Cross Tower (land with leasehold interest) was disposed on January 18, 2018, no total
number of tenants, leasable floor area or occupancy rate are provided. Furthermore, the 5,153 m2 portion of land still held is being
rented to the transferee of the building, Mitsubishi Estate Co., Ltd.
*14. Because the building was disposed on January 18, 2018, the acquisition price of the building at the time of the land and building
purchase dated November 30, 2001, has been deducted.
*15. On acquiring Osaki Front Tower, the Company inherited the land renter’s lease deposit of 1,040,000 thousand yen held by the sellerof the building. The value of the lease deposit was appraised at the end of the fiscal period and remained unchanged.
*16. On acquiring Nishiki Park Building on October 2, 2006, the Company inherited the 9,000 thousand yen lease deposit made by theland renters held by the seller of the building.
*17 Accompanying the acquisitions of GRAND FRONT OSAKA (North Building) and GRAND FRONT OSAKA (Umekita Plaza andSouth Building) on October 1, 2021, the Company acquired 1,666 shares of KMO Corporation (planning and management business
related to the “Knowledge Capital” facility) at a total acquisition price of 83,300 thousand yen, a right to claim a refund of funds
related to Knowledge Capital Association (planning and management business related to the “Knowledge Capital” facility) at a
total acquisition price of 4,900 thousand yen, and a right to claim a refund of funds related to GRAND FRONT OSAKA TMO
General Incorporated Association (business related to regional revitalization, etc.) at an acquisition price of 490 thousand yen.
Regarding the appraisal values at the end of the fiscal period for the above-mentioned shares and the rights to claim a refund offunds, the 1,666 shares of KMO Corporation were valued at 83,300 thousand yen, the right to claim a refund of funds related toKnowledge Capital Association was valued at 4,900 thousand yen, and the right to claim a refund of funds related to GRANDFRONT OSAKA TMO General Incorporated Association was valued at 490 thousand yen. On acquiring the property, the Company
inherited the land renter’s lease deposit of 1,696 thousand yen held by the seller of the building.
*18. Trust assets of the trust beneficiary right acquired by the Company include a claim for 500,000 thousand yen of deposit for
construction to connect to underground shopping centers given to Osaka Shigaichi Kaihatsu Co., Ltd., which was held by theprevious owner.
*19. Because the retail units were disposed on September 28, 2018, the acquisition price of the retail units at the time of the land andbuilding purchase dated February 1, 2006, has been deducted.
*20. In the above quick reference guide, if the real estate or other assets are classified as shared ownership or compartmental ownership,
only the real estate or other assets owned by the Company are presented and the portions owned by the other shared owners orcompartmental owners are excluded.

32

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

ii) Breakdown of property-related revenues and expenses for real estate and other assets included in the Company’s holdings
The table below is a quick reference guide outlining the revenues and expenses on each real estate and other assets for the
September 2023 period (April 1, 2023 – September 30, 2023). Furthermore, the income summary is presented based on thepreviously mentioned “Summary of Significant Accounting Policies.”(Millions of Yen)
Revenues / Expenses (April 1, 2023 – September 30, 2023)
Property- Propertyrelated related
revenues expenses
Property management
expensesUtilities expenses

Property and other taxes

Casualty insurance

Repairing expenses

Depreciation①

Other expenses

Kitanomaru Square 1,632
JRE KandaOgawamachi
230
Building
Kandabashi Park
120
Building
Otemachi Financial
367
City North Tower
Otemachi Park
182
Building

617

131

102

102

1

32

247

0

1,015

1,262

68

1,194

97

18

18

24

0

4

31

-

133

164

36

128

43

1

-

19

0

2

20

-

76

96

4

92

281

43

65

69

0

0

101

0

85

187

1

186

97

9

16

34

0

0

37

0

85

122

-

122

Nibancho Garden

496

226

63

40

60

0

3

58

-

270

328

0

328

985

381

58

59

168

0

5

85

3

604

689

0

689

162

52

-

-

15

0

2

34

-

109

144

-

144

26

15

2

1

0

0

-

11

-

11

23

-

23

797

383

101

71

130

0

14

61

2

413

475

67

407

232

124

26

22

52

0

0

20

0

108

129

2

126

403

147

23

23

44

0

1

53

0

256

310

8

301

137

54

10

12

13

0

0

16

-

82

99

-

99

158

60

-

-

12

0

20

26

-

98

125

182

(57)

173

92

15

12

11

0

4

48

-

80

128

4

124

174

184

27

15

101

0

14

25

0

(10)

14

11

3

169

94

12

12

18

0

8

41

-

74

116

22

93

441

290

32

34

38

0

34

148

1

150

298

0

297

2,147

1,271

238

282

286

2

61

396

2

876

1,272

181

1,090

482

156

34

35

(0)

0

-

86

0

325

412

-

412

210

96

14

16

37

0

5

22

0

114

136

-

136

119

41

11

7

7

0

1

13

-

78

91

-

91

Name of property

Mitsubishi UFJ
Trust and Banking
Building
Burex Kojimachi
Building
CIRCLES
Hirakawacho
Sanno Grand
Building
Yurakucho Denki
Building
Front Place
Nihonbashi
JRE Kayabacho
2ChomeBuilding
Burex Kyobashi
Building
JRE Ginza 1Chome
East Building
Ginza Sanwa
Building
JRE Ginza
3ChomeBuilding
Harumi Front*2
Akasaka Park
Building
the ARGYLE
aoyama
JRE Aoyama
Crystal Building
Clover Shiba-koen

33

PropertyNOI
Capitalrelated③(①+②) expend- NCF
profits
itures ③－④②④*1

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Millions of Yen)
Revenues / Expenses (April 1, 2023 – September 30, 2023)
Property- Propertyrelated related
revenues expenses
Property management
expensesUtilities expenses

Property and other taxes

Casualty insurance

Repairing expenses

Depreciation①

Other expenses

999

210

161

212

1

23

389

1

704

1,093

61

1,032

309

203

36

26

44

0

33

62

-

105

168

13

155

111

49

12

6

15

0

0

14

0

61

75

4

71

228

133

36

32

21

0

8

34

0

94

129

42

86

164

67

10

9

14

0

2

29

0

96

126

-

126

1,980

783

131

186

127

1

12

320

1

1,197

1,518

29

1,488

815

449

106

61

91

1

14

173

1

366

539

27

511

254

111

21

16

22

0

11

39

-

143

183

21

161

1,541

1,132

*3

*3

*3

*3

*3

*3

*3

409

*3

66

*3

198

86

15

11

28

0

0

31

0

112

143

-

143

598

280

51

41

53

0

0

132

0

318

450

-

450

350

125

25

23

27

0

7

40

-

225

266

18

247

186

113

10

13

22

0

53

13

-

73

87

-

87

332

203

29

31

68

0

22

50

-

128

178

0

178

542

99

-

-

99

-

-

-

-

443

443

-

443

Ebisu Neonato

488

238

50

35

40

2

2

105

-

250

356

1

354

TIXTOWER
UENO

700

394

63

47

39

1

49

193

-

305

498

-

498

Toyosu Foresia

223

119

38

22

(0)

0

1

56

0

104

161

0

160

Toyosu Front

694

414

113

64

44

0

13

177

0

279

457

3

453

JRE Higashi
Gotanda 1Chome
Building

199

95

13

23

16

0

16

24

0

104

129

98

30

Osaki Front Tower

726

407

68

51

25

0

9

156

96

318

474

36

438

JRE Omori-Eki
Higashiguchi
Building

247

134

29

22

27

0

11

43

-

113

157

58

98

Harmony Tower

507

167

45

-

58

0

12

50

-

339

389

-

389

72

32

7

6

5

0

3

8

0

39

48

-

48

204

81

16

18

17

0

3

25

-

122

147

-

147

Name of property

Shiodome Building 1,703
JRE Shiba 2Chome
Daimon Building
JRE Cosmo
Kanasugibashi
Building
Seavans S Building
Tamachi Front
Building
Shinjuku Eastside
SquareShinjuku Front
Tower
JRE NishiShinjuku Terrace
Tokyo Opera City
Building*3
Front PlaceMinami- Shinjuku
Link Square
Shinjuku
JRE Yoyogi
1Chome Building
JRE Jingumae
Terrace
JRE Jingumae
Media Square
Building
Shibuya Cross
Tower (Land)

JRE Ikebukuro
2Chome Building
JRE MinamiIkebukuro Building

34

CapitalPropertyexpendNOI
relatedNCF
profits ③(①+②) itures
③－④
④*1
②

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Millions of Yen)
Revenues / Expenses (April 1, 2023 – September 30, 2023)
Property- Propertyrelated related
revenues expenses
Property management
expensesUtilities expenses

Property and other taxes

Casualty insurance

Repairing expenses

Depreciation①

Other expenses

243

122

51

11

26

0

(2)

36

0

120

156

-

156

134

114

14

11

9

0

60

18

-

20

38

69

(30)

MM Park Building 1,272

632

134

207

84

1

24

178

1

640

818

36

782

Queen’s Tower A

995

777

212

115

119

2

64

256

6

217

474

213

260

169

69

21

5

13

0

0

28

0

99

128

1

127

383

163

35

57

24

0

8

37

-

219

257

4

253

68

40

9

9

7

0

1

12

-

28

40

0

40

631

300

67

76

44

0

8

101

-

331

433

1

432

149

79

19

17

18

0

5

19

-

69

89

0

88

745

400

97

87

69

0

21

124

0

344

468

29

438

72

56

12

8

6

0

2

27

-

15

43

-

43

522

340

100

56

68

0

21

92

-

181

274

19

255

143

95

18

18

10

0

7

40

-

48

89

31

57

295

201

53

27

26

0

24

62

6

94

156

7

149

425

180

47

40

38

0

4

48

-

244

293

12

280

616

418

90

61

72

0

41

149

2

197

347

18

329

246

119

29

17

12

0

14

46

0

127

173

11

161

*4

*4

*4

*4

*4

*4

*4

*4

*4

73

134

38

96

*4

*4

*4

*4

*4

*4

*4

*4

*4

82

141

104

36

499

254

52

36

56

0

23

84

-

245

329

184

145

793

560

104

104

79

1

13

256

-

232

488

39

449

246

149

42

29

38

0

11

26

-

96

123

22

101

55

30

3

5

0

0

-

22

0

24

47

-

47

560

303

65

57

84

0

10

85

0

256

341

44

296

Name of property

Hachioji First
SquareJRE Saitama
Urawa Building

Musashi Kosugi
STM Building
8･3 Square Kita
Building
Jozenji Park
Building
JRE Higashi
Nibancho Square
JRE Sendai
Honcho Honma
Building
AER
Daido Seimei
Niigata Building
Kanazawa Park
Building
JRE Kanazawa
Kamitsutsumicho
Building
Nishiki Park
Building
JRE Nagoya
Hirokoji Place
Nagoya Hirokoji
Building
JRE Shijo
Karasuma Center
Building
GRAND FRONTOSAKA (North
Building)*4
GRAND FRONTOSAKA (Umekita
Plaza and South
Building)*4
JRE Umeda Square
Building
JRE Dojima Tower
JRE
Sakaisujihonmachi
Building
Forecast
Sakaisujihonmachi
JRE Midosuji
Daiwa Building

35

PropertyCapital
NOI
related
NCF
expendprofits ③(①+②)③－④
itures②④*1

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Millions of Yen)
Revenues / Expenses (April 1, 2023 – September 30, 2023)
Property- Propertyrelated related
revenues expenses
Property management
expensesUtilities expenses

Property and other taxes

Casualty insurance

Repairing expenses

Depreciation①

Other expenses

JRE Amagasaki
Front Building

418

246

64

34

26

0

10

109

0

171

280

15

265

Lit City Building

249

125

35

26

17

1

13

31

-

123

155

-

155

263

212

49

34

24

0

5

70

26

51

122

19

103

102

45

14

6

7

0

3

12

0

56

69

3

66

168

164

23

17

20

0

38

64

0

3

68

33

35

201

73

21

16

16

0

0

18

0

127

146

10

135

18,447 3,939 3,282 3,640

44

1,064 6,263

213

16,04922,313

2,052

20,260Name ofproperty

NHK Hiroshima
Broadcasting
Center Building
JRE Tenjin
3Chome Building
JRE Tenjin Crystal
Building
Hinode Tenjin
Building
Total

34,497

PropertyCapital
NOI
NCF
relatedexpendprofits ③(①+②)③－④
itures②④*1*1. Construction expenses that correspond to capital expenditures incurred during the period under review are listed under capital
expenditures. This does not include expenses capitalized as construction in progress, expenses capitalized as furniture, etc., or such
expenses included in the book value as brokerage fees for acquiring real estate or other assets, real estate acquisition taxes or otheracquisition-related expenses.
*2. The Company disposed of a 30% interest in Harumi Front on April 3, 2023.
*3. Disclosure of NOI and NCF in the breakdown of the expenses of the property leasing business for Tokyo Opera City Building has
been withheld at the request of the joint owners of the relevant real estate.
*4. The Property-related revenues and expenses (including breakdown) of Grand Front Osaka (North Building) and Grand Front Osaka(Umekita Plaza and South Building) have been refrained from disclosure as the consent of the co-owners, etc. has not been obtained.

36

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

c. Condition of Other Assets(i) Shares/Investment Securities(Thousands of Yen)

Acquisition price

Number ofsharesSecurities

Appraisal value

Valuation
gain/loss

Notes

Unit priceAmountUnit priceAmount124

83

10,336

83

10,336

–

*

4,931

114

566,831114

566,831–*

KMO Corporation

1,666

50

83,30050

83,300

–

*

Total

–

–

660,468–

660,468––

Tokyo Opera City
Building Co., Ltd.
Tokyo Opera City Heat
Supply Co., Ltd.

* Appraisal value for relevant non-listed stock are defined as acquisition prices.
(ii) Securities Other Than Shares/Investment Securities
Type

Name

Right to claima refund offunds

Knowledg
Capital
Association
The Asahi
Shinkin Bank
*2

Investment incapital(Thousands of Yen)

Prepayment of
accruedinterest

Appraisalvalue

Valuation
gain/loss

Notes

Total
face value

Book value

Accruedinterest
income

–

4,900

–

–

4,900

–

*1

–

10

–

–

10

–

*1

–

4,910

–

–

4,910

–

–

Total

*1. Appraisal values for the right to claim a refund of funds and investment in capital are defined as book values.
*2. Investment in capital of The Asahi Shinkin Bank is presented in this row for purposes of convenience.
(iii) Other Specified Assets(Thousands of Yen)

Book value
Specified asset type

Appraisal value

Quantity

Valuation
gain/loss

Notes

Unit priceAmountUnit priceAmount

1,040,000

1,040,000

1,040,000––

Monetary claim

1

1,040,000

Right to claima refund of funds

1

–

490

–

490

–

*

Total

–

–

1,040,490–

1,040,490––* Appraisal value for the right to claim a refund of funds is defined as a book value.
Trust beneficiary rights, mainly consisted of the trust asset of real estate, are included in the previous section b. “Real Estate Investment
Property and Trust Beneficiary Rights in Trust of Real Estate.”

37

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

d. Capital Expenditures(i) Schedule for Capital Expenditures
The significant scheduled capital expenditures, such as current plans for repair, maintenance and renovation work on existing
properties, are listed below.
The following scheduled capital expenditures include those accounted for as expenses.
Estimated cost (¥ million)
Name of property(Location)

PurposeScheduled period

Osaki Front Tower(Shinagawa-ku, Tokyo)

Upgrade of
air conditioning
facilities

JRE Nagoya Hirokoji Place(Nagoya, Aichi Prefecture)TotalamountPayment amountfor the fiscal underreview period

Total amountalready paid

From October 2023
To March 2024

391

–

–

Upgrade of
air conditioning
facilities

From June 2023
To May 2024

287

–

–

Elevator renewal
construction

From June 2023
To March 2024

149

–

–

Upgrade of
air conditioning
facilities

From June 2022
To November 2023

80

–

–

From August 2023
To March 2024

33

–

–

(Hiroshima, Hiroshima Prefecture)

Upgrade ofelectricalequipment

JRE Tenjin 3Chome Building(Fukuoka, Fukuoka Prefecture)

Elevator renewal
construction

From August 2023
To March 2024

26

–

–

Daido Seimei
Niigata Building(Niigata, Niigata Prefecture)

Elevator renewal
construction

From April 2023
To December 2023

19

–

–

NHK Hiroshima
Broadcasting Center Building(Hiroshima, Hiroshima Prefecture)

NHK Hiroshima
Broadcasting Center Building(Hiroshima, Hiroshima Prefecture)

NHK Hiroshima
Broadcasting Center Building

38

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(ii) Capital expenditures during the period under review
For acquired real estate and other assets, capital expenditures incurred in the period under review totaled ¥2,052 million and repair,maintenance and renovation expenses classified as expenses in the period under review totaled ¥1,064 million, for a total of ¥3,116
million worth of construction that has been carried out.
The major item in the capital expenditure was the upgrade of electrical equipment of JRE Umeda Square Building.
Name of property(Location)

Purpose

PeriodExpenditures forconstruction (¥ million)

JRE Umeda Square Building(Osaka, Osaka Prefecture)

Upgrade ofelectrical equipment

From June 2022
To September 2023

184

Burex Kyobashi Building(Chuo-ku, Tokyo)

Upgrade of
air conditioning facilities

From September 2022
To May 2023

182

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

Upgrade of
air conditioning facilities

From June 2023
To September 2023

98

JRE Saitama Urawa Building(Saitama, Saitama Prefecture)

Upgrade ofelectrical equipment

From July 2023
To September 2023

66

Other real estate

1,520

Total

2,052

(iii) Money Saved for Long-term Repair Plans“Not applicable”

39

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

e. Expenses and Liabilities(i) Details on Operation-related Expenses
Item

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

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

(a) Asset management fees *1(breakdown) NOI-linked fee
Distribution-linked fee I *2
Distribution-linked fee II *2¥1,621,876 thousand¥876,043 thousand¥322,381 thousand¥423,451 thousand¥1,745,491 thousand¥892,537 thousand¥336,600 thousand¥516,354 thousand(b) Asset custody fees

¥55,900 thousand¥47,229 thousand(c) Administrative service fees

¥134,852 thousand¥139,135 thousand(d) Directors’ compensations¥7,800 thousand¥7,800 thousand(e) Commission expenses¥123,266 thousand¥85,475 thousand(f) Other operating expenses¥107,533 thousand¥107,016 thousand¥2,051,228 thousand¥2,132,148 thousand

Total*1 In addition to the asset management fees listed above, in the case that a property is acquired, an “acquisition fee” is included in theacquisition cost of the property and paid to the asset management company. In the case that a property is sold, a “disposition fee” isincluded in the loss on sale and paid to the asset management company. These fees are calculated by multiplying the buying/selling
price of the property by a fee rate. In the period ended March 31, 2023, the acquisition fee amounted to ¥211,400 thousand, and thedisposition fee amounted to ¥48,887 thousand, and in the period ended September 30, 2023, the acquisition fee amounted to¥86,075 thousand, and the disposition fee amounted to ¥56,498 thousand.
*2 The Company set up “Distribution-linked fee I,” which is mainly linked to leasing business profit, which is a distributable resource ofa regular nature, and “Distribution-linked fee II,” which is linked to gains on the sale of real estate (the positive value after taking into
account the gains and losses on the sale of real estate), which is a distributable resource of a transient nature.

40

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(ii) Borrowings
The condition of loans by financial institutions as of September 30, 2023 is as follows.

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

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

Repayment
date

Mizuho Bank, Ltd.

March 30,2023

8,300,000―

0.0173

April 6,2023

Sumitomo Mitsui
Trust Bank, Limited

April 20,2022

2,000,000―

0.1027

April 20,2023

MUFG Bank, Ltd. *3

February 20,
2023

11,000,000―

0.11455

May 18,2023

MUFG Bank, Ltd.

May 29,2023――

0.08455

June 29,2023

MUFG Bank, Ltd.

June 1,2023――

0.08455

July 3,2023

Mizuho Bank, Ltd.

July 25,2022

2,000,000―

0.09426

July 10,2023

MUFG Bank, Ltd. *4

May 18,2023――

0.11455

August 18,
2023

MUFG Bank, Ltd. *5

August 18,
2023―

11,000,000

0.110

November 20,
2023

MUFG Bank, Ltd.

March 27,2023

29,000,000

1,500,000*60.09729

March 7,2024

MUFG Bank, Ltd.

July 3,2023―

9,000,000*70.0855

March 29,2024

Sumitomo Mitsui
Trust Bank, Limited

April 20,2023―

2,000,000

0.08984

April 22,2024

Mizuho Bank, Ltd.

May 29,2023――

0.0845

May 29,2024*8Mizuho Bank, Ltd.

July 10,2023―

2,000,000

0.0901

July 10,2024

MUFG Bank, Ltd.

August 31,
2023―

9,000,000

0.08674

August 30,
2024

Mizuho Bank, Ltd.

August 31,
2023―

8,500,000

0.08669

August 30,
2024

52,300,000

43,000,000

Classification
LenderShort-term borrowings

SubtotalLong-term borrowings

Sumitomo Mitsui
Banking Corporation

November 29,
2018

3,000,000―

0.1694

May 29,2023

Sumitomo Mitsui
Trust Bank, Limited

November 29,
2018

3,000,000―

0.1694

May 29,2023

MUFG Bank, Ltd.

June 1,
2017

12,000,000―

0.0386*9 *10June 1,
2023

The Chugoku
Bank, Limited

June 15,2015

3,000,000―

0.61175

June 15,2023

The Bank ofFukuoka, Ltd.

June 15,2017

2,500,000―

0.2388June 15,2023

MUFG Bank, Ltd.

December 19,
2014

10,000,000

10,000,000

0.42375*11

MUFG Bank, Ltd.

March 26,2018

5,000,000

5,000,000

0.05305*9 *13

The Hachijuni
Bank, Ltd.

March 26,2018

1,000,000

1,000,000

0.2338

Sumitomo Mitsui
Trust Bank, Limited

May 29,2019

5,000,000

5,000,000

0.075

The Iyo Bank, Ltd.

June 15,2017

2,500,000

2,500,000

0.275

41

December 19,
2023*12
March 26,2024
*12
March 26,2024
*12
May 29,2024*12June 17,2024*12

Repayment
methodUse ofproceeds

Bullet*2

Bullet*2

Notes

Unsecured
Unguaranteed
UnsubordinatedUnsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

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

Repayment
date

The Hachijuni
Bank, Ltd.

June 15,2017

1,000,000

1,000,000

0.275

June 17,2024*12

MUFG Bank, Ltd.

September 1,
2015

3,500,000

3,500,000

0.630

September 2,
2024
*12

Sumitomo Mitsui
Trust Bank, Limited

September 2,
2015

3,800,000

3,800,000

0.536

September 2,
2024
*12

The
Norinchukin Bank

September 1,
2017

5,000,000

5,000,000

0.240

September 2,
2024
*12

Sumitomo Mitsui
Trust Bank, Limited

September 26,
2019

5,500,000

5,500,000

0.105

September 26,
2024
*12

Taiyo Life Insurance
Company

October 1,
2014

2,000,000

2,000,000

0.7825October 1,
2024

Mizuho Bank, Ltd.

October 1,
2015

2,500,000

2,500,000

0.5575October 1,
2024

The Gunma
Bank, Ltd.

November 18,
2019

1,000,000

1,000,000

0.12348*9

November 18,
2024

MUFG Bank, Ltd.

June 1,
2018

10,000,000

10,000,000

0.2544

December 2,
2024

Shinkin Central Bank

January 7,
2020

2,000,000

2,000,000

0.2075January 7,
2025

The Ashikaga
Bank, Ltd.

January 9,
2018

1,000,000

1,000,000

0.285January 9,2025

Mizuho Trust &Banking Co., Ltd.

March 2,2015

3,000,000

3,000,000

0.5585

March 3,2025

MUFG Bank, Ltd.

March 26,2018

2,000,000

2,000,000

0.2725

March 26,2025

Development Bankof Japan Inc.

March 30,2017

5,000,000

5,000,000

0.315

March 31,2025

Taiyo Life Insurance
Company

May 29,2015

1,500,000

1,500,000

0.7375

May 29,2025

Sumitomo Mitsui
Trust Bank, Limited

June 15,2020

7,000,000

7,000,000

0.2075June 16,2025

Sumitomo Mitsui
Banking Corporation

July 20,2021

5,000,000

5,000,000

0.15375

July 22,2025

Sumitomo Mitsui
Trust Bank, Limited

August 31,
2018

3,000,000

3,000,000

0.320

August 29,
2025

Development Bankof Japan Inc.

September 1,
2015

7,000,000

7,000,000

0.7175September 1,
2025

Sumitomo Mitsui
Trust Bank, Limited

September 23,
2020

5,000,000

5,000,000

0.1475September 24,
2025

Mizuho Bank, Ltd.

December 26,
2016

5,000,000

5,000,000

0.3625

December 26,
2025

Sumitomo Mitsui
Trust Bank, Limited

January 29,
2021

2,000,000

2,000,000

0.1625January 29,
2026

MUFG Bank, Ltd.

February 26,
2018

6,500,000

6,500,000

0.3413February 26,
2026

Classification
LenderLong-term borrowings

42

Repayment
methodBulletUse ofproceeds

*2

Notes

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

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

Repayment
date

Mizuho Bank, Ltd.

March 27,2018

5,500,000

5,500,000

0.300

March 27,2026

Shinkin Central Bank

March 30,2017

5,000,000

5,000,000

0.360

March 30,2026

Sumitomo Mitsui
Trust Bank, Limited

June 28,2021

3,700,000

3,700,000

0.17875

June 29,
2026

The
Norinchukin Bank

January 23,
20194,000,000

4,000,000

0.1988July 23,2026

Shinkin Central Bank

September 1,
2017

5,000,000

5,000,000

0.3188September 1,
2026

MUFG Bank, Ltd.

October 31,
2016

3,000,000

3,000,000

0.240

October 30,
2026

Mizuho Bank, Ltd.

December 21,
2016

5,000,000

5,000,000

0.415

December 21,
2026

Shinkin Central Bank

January 23,
20195,000,000

5,000,000

0.2213January 25,
2027

Sumitomo Mitsui
Banking Corporation*14

March 30,2023

3,000,000

3,000,000

0.2375

March 30,2027

Shinkin Central Bank

April 24,2018

6,000,000

6,000,000

0.3675

April 26,
2027

The
Norinchukin Bank

July 3,2020

2,000,000

2,000,000

0.24375

July 5,2027

The Joyo Bank, Ltd.

January 9,
2018

1,000,000

1,000,000

0.4188January 11,2028

Sumitomo Mitsui
Banking Corporation

January 19,
2018

3,000,000

3,000,000

0.4338January 19,
2028

The Bank ofFukuoka, Ltd.

January 29,
2021

2,500,000

2,500,000

0.21875

January 31,
2028

Mizuho Bank, Ltd.

March 30,2018

4,000,000

4,000,000

0.3963

March 30,2028

MUFG Bank, Ltd.

March 30,2018

4,000,000

4,000,000

0.3963

March 30,
2028

Taiyo Life Insurance
Company

March 30,2018

1,000,000

1,000,000

0.3963

March 30,
2028

The Bank ofFukuoka, Ltd.

August 31,
2021

1,500,000

1,500,000

0.20625

August 31,
2028

MUFG Bank, Ltd.

September 29,
2023―

1,000,000

0.5625September 29,
2028

Mizuho Bank, Ltd.

November 15,
2019

8,500,000

8,500,000

0.34875

November 15,
2028

The Nishi-Nippon
City Bank, Ltd.

December 17,
2021

1,000,000

1,000,000

0.27875

December 18,
2028

Shinkin Central Bank

January 15,
2020

5,000,000

5,000,000

0.325

January 15,2029

Mizuho Bank, Ltd.

November 1,
2019

6,000,000

6,000,000

0.35125

November 1,
2029

Classification
LenderLong-term borrowings

43

Repayment
methodBulletUse ofproceeds

*2

Notes

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

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

Repayment
date

MUFG Bank, Ltd.

January 15,
2020

5,500,000

5,500,000

0.3625January 15,
2030

MUFG Bank, Ltd.

April 27,2020

5,000,000

5,000,000

0.35875

April 26,
2030

Mizuho Bank, Ltd.

April 27,2020

5,000,000

5,000,000

0.35875

April 26,2030

MUFG Bank, Ltd.

June 15,2020

4,000,000

4,000,000

0.36125

June 14,2030

The Keiyo Bank, Ltd.

June 29,2023―

1,000,000

0.39875

June 28,2030

MUFG Bank, Ltd.

September 29,
2023―

1,000,000

0.755

September 30,
2030

MUFG Bank, Ltd.

October 20,
2020

5,000,000

5,000,000

0.2925October 18,
2030

MUFG Bank, Ltd.

December 21,
2020

10,000,000

10,000,000

0.2825

December 20,
2030

The Iyo Bank, Ltd.

March 24,2021

2,000,000

2,000,000

0.17443*9

March 24,
2031

The Yamanashi Chuo
Bank, Ltd.

March 26,2019

2,000,000

2,000,000

0.3688March 26,
2031

MUFG Bank, Ltd.

April 5,2021

5,000,000

5,000,000

0.41875

April 4,2031

MUFG Bank, Ltd.

April 26,2021

5,000,000

5,000,000

0.35625

April 25,
2031

Mizuho Bank, Ltd.

June 15,2021

4,000,000

4,000,000

0.28875

June 16,
2031

The
Norinchukin Bank
*15

January 29,
2021

5,000,000

5,000,000

0.34625

July 31,
2031

The Chugoku
Bank, Limited

October 1,
2021

1,000,000

1,000,000

0.345

October 1,
2031

The
Norinchukin Bank
*16

November 15,
2021

5,000,000

5,000,000

0.395

November 17,
2031

Shinkin Central Bank

November 15,
2021

5,000,000

5,000,000

0.405

November 17,
2031

Daishi Hokuetsu
Bank, Ltd.

November 15,
2021

3,200,000

3,200,000

0.395

November 17,
2031

The Chugoku
Bank, Limited

November 15,
2021

1,000,000

1,000,000

0.405

November 17,
2031

The 77 Bank, Ltd.

November 15,
2021

1,000,000

1,000,000

0.395

November 17,
2031

The Hachijuni
Bank, Ltd.

November 15,
2021

1,000,000

1,000,000

0.17341*9

November 17,
2031

The Nishi-Nippon
City Bank, Ltd.

December 17,
2021

1,000,000

1,000,000

0.37375

December 17,
2031

Sumitomo Mitsui
Banking Corporation

January 7,
2022

2,000,000

2,000,000

0.415January 7,
2032

Classification
LenderLong-term borrowings

44

Repayment
methodBulletUse ofproceeds

*2

Notes

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

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

Repayment
date

Mizuho Bank, Ltd.

January 17,
2022

5,000,000

5,000,000

0.4475January 19,
2032

The
Norinchukin Bank
*17

January 29,
2021

5,000,000

5,000,000

0.3675January 30,
2032

The
Norinchukin Bank

January 31,
2022

3,500,000

3,500,000

0.4725January 30,
2032

The Shiga Bank, Ltd.

February 21,
2022

3,000,000

3,000,000

0.440

February 24,
2032

The Chugoku
Bank, Limited

February 21,
2022

1,000,000

1,000,000

0.440

February 24,
2032

The Gunma
Bank, Ltd.

February 21,
2022

1,000,000

1,000,000

0.440

February 24,
2032

The Chugoku
Bank, Limited

June 15,2022

1,000,000

1,000,000

0.57375

June 15,2032

The 77 Bank, Ltd.

June 15,2022

1,000,000

1,000,000

0.57375

June 15,
2032

The
Norinchukin Bank
*18

June 17,2022

3,000,000

3,000,000

0.60625

June 17,2032

3,000,000

3,000,000

1,000,000

1,000,000
0.37875

August 10,
2032

Classification
LenderThe Shinkumi
Federation Bank
Long-term borrowings

The Toho Bank, Ltd.
August 10,
2022
The Keiyo Bank, Ltd.

1,000,000

1,000,000

The Tochigi
Bank, Ltd.

500,000

500,000

BulletDaishi Hokuetsu
Bank, Ltd.

August 10,2022

2,000,000

2,000,000

0.39875

August 10,
2032

The Chugoku
Bank, Limited

August 10,2022

1,000,000

1,000,000

0.39875

August 10,2032

MUFG Bank, Ltd.

September 9,2022

2,000,000

2,000,000

0.555

September 9,
2032

The Nishi-Nippon
City Bank, Ltd.

September 12,
2022

1,000,000

1,000,000

0.5475September 13,
2032

The Tochigi
Bank, Ltd.

December 12,
2022

1,000,000

1,000,000

0.68875

December 13,
2032

The Hachijuni
Bank, Ltd.

December 20,
2022

1,000,000

1,000,000

0.7225

December 20,
2032

Development Bankof Japan Inc.

January 6,
2023

3,000,000

3,000,000

1.0262January 6,
2033

Daishi Hokuetsu
Bank, Ltd.

January 10,2023

1,500,000

1,500,000

0.9725January 11,2033

The 77 Bank, Ltd.

January 10,2023

1,000,000

1,000,000

0.9725January 11,
2033

The Iyo Bank, Ltd.

January 16,
2023

1,000,000

1,000,000

0.17355*9January 17,
2033

45

Repayment
methodUse ofproceeds

*2

Notes

Unsecured
Unguaranteed
UnsubordinatedJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
date

Balance at
beginning ofcurrent period(¥thousand)

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

Repayment
date

The Hachijuni
Bank, Ltd.

January 16,
2023

1,000,000

1,000,000

1.00625

January 17,
2033

The Asahi
Shinkin Bank

January 17,2023

3,000,000

3,000,000

1.125

January 17,
2033

Development Bankof Japan Inc.

January 31,
2023

5,000,000

5,000,000

0.9887January 31,
2033

SBI Shinsei Bank,
Limited*19

March 15,2023

2,500,000

2,500,000

0.80875

March 15,2033

The Chugoku
Bank, Limited

March 27,2023

2,000,000

2,000,000

0.68375

March 25,
2033

The
Norinchukin Bank
*20

March 27,2023

3,500,000

3,500,000

0.72375

March 28,2033

Sumitomo Mitsui
Banking Corporation*21

March 30,2023

3,000,000

3,000,000

0.7087

March 30,2033

Sumitomo Mitsui
Banking Corporation

April 7,2023―

5,000,000

0.750

April 7,2033

The Kiyo Bank, Ltd.

May 8,
2023―

1,000,000

0.66625

May 9,
2033

Saitama Resona
Bank, Limited

June 7,2023―

2,000,000

0.700

June 7,2033

The Bank ofFukuoka, Ltd.

June 15,2023―

4,500,000

0.17391*9June 15,2033

The Chugoku
Bank, Limited

June 15,2023―

3,000,000

0.68125

June 15,2033

Mizuho Bank, Ltd.

June 29,2023―

3,000,000

0.15950*9June 29,
2033

The Gunma
Bank, Ltd.

July 3,2023―

1,000,000

0.17455*9

July 4,2033

Sumitomo Life
Insurance Company

March 26,2019

1,000,000

1,000,000

0.505

March 27,2034

Sumitomo Life
Insurance Company

December 16,
2019

2,000,000

2,000,000

0.490

December 18,
2034

Subtotal

365,200,000

364,200,000

Total

417,500,000

407,200,000

Classification
LenderRepayment
methodLong-term borrowings

Bullet*1.

Use ofproceeds

*2

Notes

Unsecured
Unguaranteed
Unsubordinated

The average for floating interest rates is recorded as the weighted average during the period. The average is rounded off to thefifth decimal place. The weighted average for interest rates of loans for which floating interest rates were swapped to fixed rates
in order to hedge the risk of interest rate fluctuations is calculated taking the effect of this swap into consideration.
*2. The purposes of executing these loans are to purchase real properties or beneficiary right of real estate in trust, to repay existingloans, and to fund the redemption of investment corporation bonds.
*3. As of February 20, 2023, MUFG Bank, Ltd. transferred its loan receivable of ¥5,900 million to Mitsubishi UFJ Trust and Banking
Corporation.
*4. As of May 18, 2023, MUFG Bank, Ltd. transferred its loan receivable of ¥10,200 million to Mitsubishi UFJ Trust and Banking
Corporation.
*5. As of August 18, 2023, MUFG Bank, Ltd. transferred its loan receivable of ¥10,300 million to Mitsubishi UFJ Trust and Banking
Corporation.
*6. The Company made repayments (¥23,200 million, ¥2,300 million and ¥2,000 million) before maturity on April 7, May 8 and June
7, 2023.
*7. The Company made a repayment (¥2,000 million) before maturity on September 29, 2023.
*8. The Company made a full repayment (¥3,000 million) before maturity on June 29, 2023.
*9. These are floating rate borrowings which are not swapped into fixed rates.
*10. The loan was based on floating rate (Base rate (Risk free rate (TONA) compounded in arrears over rate observation period (1 month)

46

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

according to the lookback method + spread adjustment (-0.02923%)) + 0.09%).
*11. In order to hedge the risk of exchange rate and interest rate fluctuations related to foreign currency-denominated loans, the Company
conducted an interest-rate and currency swap transaction, which substantially secured exchange and interest rates. Accordingly, thebalance and the weighted average for interest rates during the period are calculated taking the effect of this interest-rate and currency
swap into consideration.
*12. At the end of the period under review, these loans are accounted for under current liabilities on the balance sheets as the current
portion of long-term borrowings.
*13. The loan was based on floating rate (Base rate (Risk free rate (TONA) compounded in arrears over rate observation period(3 months) according to the lookback method + spread adjustment (0.00835%)) + 0.09%).
*14. The applicable interest rate will be lowered by 0.01% from the original rate of 0.2475% for a corresponding period pursuant to theloan agreement on the condition that the target set for CO2 emissions reduction is achieved. Since the target was achieved at thetime of confirmation at the end of September 2023, the interest rate for the period until the next confirmation was 0.2375%.
*15. The applicable interest rate will be lowered by 0.01% from the original rate of 0.35625% for a corresponding period pursuant to
the loan agreement on the condition that either one of the targets set for CO2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation at the end of
July 2021, the interest rate for the period until the next confirmation was 0.34625%.
*16. The applicable interest rate will be lowered by 0.01% from the original rate of 0.405% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation on May 16, 2022,
the interest rate for the period until the next confirmation was 0.395%.
*17. The applicable interest rate will be lowered by 0.01% from the original rate of 0.3775% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation at the end of
July 2021, the interest rate for the period until the next confirmation was 0.3675%.
*18. The applicable interest rate will be lowered by 0.01% from the original rate of 0.61625% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation on December 19,
2022, the interest rate for the period until the next confirmation was 0.60625%.
*19. The applicable interest rate will be lowered by 0.01% from the original rate of 0.81875% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation on September 16,
2023, the interest rate for the period until the next confirmation was 0.80875%.
*20. The applicable interest rate will be lowered by 0.01% from the original rate of 0.73375% for a corresponding period pursuant to theloan agreement on the condition that either one of the targets set for CO2 emissions reduction or the number of ZEB-certified
buildings the Company owns, respectively, is achieved. Since the target was achieved at the time of confirmation on September 28,
2023, the interest rate for the period until the next confirmation was 0.72375%.
*21. The applicable interest rate will be lowered by 0.01% from the original rate of 0.7187% for a corresponding period pursuant to theloan agreement on the condition that the target set for CO2 emissions reduction is achieved. Since the target was achieved at thetime of confirmation at the end of September 2023, the interest rate for the period until the next confirmation was 0.7087%.

47

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(iii) Investment Corporation Bonds
Outstanding investment corporation bonds as of September 30, 2023 are as follows.
Securities

Date of issue

Balance at
beginning ofcurrent period(¥ thousand)

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

Repayment
periodRepayment
methodUse ofproceeds

Notes

4th unsecured investment
corporation bondSeptember 29,
2005

10,000,000

10,000,0002.56

September 29,
2025

Bullet*1*2

10th unsecured investment
corporation bondMarch 30,2017

10,000,000

10,000,000

0.3975

March 30,
2027

Bullet*1*2 *3

11th unsecured investment
corporation bondOctober 26,
20172,993,175

2,993,175

0.2788October 26,
2027

Bullet*1*2 *3 *4

November 1,
2018

10,000,000

10,000,000

0.23

November 1,
2023

Bullet*1*2

October 26,
2020

10,000,000

10,000,000

0.2

October 24,
2025

Bullet*1*2

42,993,175

42,993,175

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

13th unsecured investment
corporation bondTotal

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

48

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

f. Examination of the Value of Specified Assets(i) Real Estate, etc.
Acquisition
or
Disposition
Acquisition

Property name

Forecast
Sakaisujihonmachi

Date oftransaction

Acquisition/
disposition
cost*1(¥ million)

Real estateappraisalvalue(¥ million)

Appraising
institution

Date ofappraisal

August 31,
2023

17,21517,300Chuo Real
Estate Appraisal
Co., Ltd.

July 1,
2023

Harumi Front
Chuo RealNovember 1,
April 3,
11,733
11,400Estate Appraisal(30% quasi-co-ownership
2022
2023
Co.,
Ltd.
interest)*1. The “acquisition/disposition cost” refers to the amount listed in the sale and purchase contract, and does not include various
expenses necessary in the acquisition or disposition of the property such as trading intermediate fees.
*2. The appraisal value listed above is decided in accordance with the 3rd chapter of the Japanese Real Estate Appraisal Act and Real
Estate Appraisal Standards.
*3. The “real estate appraisal value” of Harumi Front (30% quasi-co-ownership interest) is the amount obtained by multiplying thereal estate appraisal value of the entire property by the quasi-co-ownership interest (30%) of the real estate trust beneficiary rightto be disposed of.
Disposition(ii) Other assets
Value inspections on transactions by the Company that are deemed necessary under Article 201 of the ITA, are entrusted to
Yoshihiro Tanaka CPA Office, excluding ones described in (i) Real Estate, etc. above. During the period from April 1, 2023 to
September 30, 2023, there was no transaction that was subject to such inspections.

49

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

g. Transactions with Interested Parties (from April 1, 2023 to September 30, 2023)(i) Transactions
Buying and selling amounts
Segment

Total Amount

Buying amounts

Selling amounts¥ 17,215,000 thousand¥11,733,000 thousand

Breakdown of Transactions with Interested Parties¥ – thousandTotal¥ – thousand

(–%)

(–%)

* The numerical values within the ( ) represent a percentage of the total buying/selling amounts.

(ii) Amount of Commission Fees and Other Expenses
Segment

Property
management
expensesUtilities
expenses
Other
operatingexpenses

Total amount ofcommission fees andother expenses A¥3,939,312 thousand¥3,282,000 thousand¥187,815 thousand

Breakdown of transactions with interested parties
Payment recipient

Amount paid B

Percentage of
total amount
B/A

Mitsubishi Jisho Property
Management Co., Ltd.

¥2,585,242 thousand

65.6%

Mitsubishi Estate Co., Ltd.

¥163,571 thousand

4.2%¥45,576 thousand

1.2%¥1,087 thousand

0.0%¥102,955 thousand

3.1%¥24,783 thousand

13.2%

Mitsubishi Estate Co., Ltd.

¥366 thousand

0.2%

Mitsubishi Jisho Design Inc.

¥1,200 thousand

0.6%

Mitsubishi Real Estate Services
Co., Ltd.
Mitsubishi Estate Parks Co.,Ltd.
Minato Mirai 21 District
Heating and Cooling Co., Ltd.
Mitsubishi Jisho Property
Management Co., Ltd.

*1. Interested parties refer to interested parties of the asset management company who has concluded consignment agreements with theCompany, as stipulated in Article 123 of the enforcement order of the ITA, and Section 26, Paragraph 1, Item 27 of the Regulationsfor Management Reports Concerning Investment Trusts and Investment Corporations of the Investment Trusts Association, Japan.
*2. In addition to the transactions and commission fees listed above, other amounts paid to interested parties, such as orders placed for
repair work, are listed below.
Mitsubishi Jisho Property Management Co., Ltd.
Mitsubishi Estate Co., Ltd.
Mitsubishi Jisho Design Inc.
Mitsubishi Real Estate Services Co., Ltd.

¥932,130 thousand¥6,807 thousand¥1,290 thousand¥30,055 thousand

50

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

h. Other Announcements
Board of Directors
Below is an overview of the important changes and the conclusions of major contracts that were accepted by the Company’s Board of
Directors.
Date of acceptanceAccepted item

April 3, 2023

Conclusion of a newinvestment unit underwriting
agreement

May 15, 2023

Consignment of a generaladministrative work
concerning the issuance ofinvestment corporation bonds

Overview
For the issuance of new investment units through a public offering(public offering), issuance of new investment units and offering ofinvestment units through third-party allotment (offering by overallotment), which were approved at the Company’s Board of Directors’
meeting held on March 28, 2023, it was approved to conclude a newinvestment unit underwriting agreement with underwriting companies(Note), in order to make underwriting companies purchase andunderwrite all the investment units for a public offering, to entrust
SMBC Nikko Securities Inc. (hereinafter referred to as the“Administrative Lead Manager”) with administration of soliciting thoseto underwrite investment units to be issued, and grant a green-shoe
option for third-party allotment to the Administrative Lead Manager.
In connection with the comprehensive resolution adopted on the samedate on the issuance of investment corporate bonds, the approval was
given to the candidate agents to whom an administrative work for thesaid bonds was consigned. Other items necessary for its operation are
entrusted to the executive directors to decide.

(Note) Underwriting companies are co-lead managers SMBC Nikko Securities Inc., Mitsubishi UFJ Morgan Stanley Securities Co.,
Ltd. and Mizuho Securities Co., Ltd. in addition to Nomura Securities Co., Ltd. and Daiwa Securities Co. Ltd.

51JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Selected Financial Data
Millions of yen
For the period from

For the period from

For the period from

For the period from

For the period from

April 1, 2023 to
September 30, 2023

October 1, 2022 toMarch 31, 2023

April 1, 2022 toSeptember 30, 2022

October 1, 2021 toMarch 31, 2022

April 1, 2021 toSeptember 30, 2021

Operating revenues

38,62737,34537,65436,45336,901

Operating expenses

20,57920,304

19,612

19,346

18,507

Operating profit

18,04817,041

18,042

17,107

18,394

Ordinary profit

17,086

16,172

17,256

16,191

17,477

Profit before income
taxes
Profit17,086

16,172

17,256

16,191

17,477

17,075

16,161

16,79016,045

16,865

1,057,291

1,047,158

1,008,970

1,035,072

1,003,583

Interest-bearing debt

450,193

460,493423,393449,893

419,493

Net assets

538,402517,993

517,761

516,762

516,447

Unitholders’ capital

516,736497,241

497,241

497,241

497,241

Number of units (Units)

1,422,864

1,385,210

1,385,210

1,385,210

1,385,210

Net assets per unit (Yen)378,393373,945

373,778

373,057

372,829

Cash distribution

17,074

16,161

15,92915,791

15,730

Dividend payout ratio(Note 1)Dividend per unit (Yen)

100.0%

100.0%

94.9%

98.4%

93.3%

12,00011,667

11,50011,40011,356

Net operating income(NOI)
Funds from operations(FFO)
Return on assets (ROA)(Note 2)

22,313

21,901

23,08424,07024,204

19,207

18,97019,70021,053

20,583

1.6%

1.6%

1.7%

1.6%

1.7%

(3.2% annualized)(3.2% annualized)(3.4% annualized)(3.2% annualized)(3.5% annualized)

3.2%

3.1%

3.2%

3.1%

3.3%

(6.3% annualized)(6.3% annualized)(6.5% annualized)(6.2% annualized)(6.5% annualized)

EOP equity ratio(Note 4)
EOP interest-bearing
debt ratio on total assets(Note 5)
FFO multiple (Times)

50.9%

49.5%

51.3%

49.9%

51.5%

42.6%

44.0%

42.0%

43.5%

41.8%

21.7

19.2

21.0

21.0

22.5

Debt service coverage
ratio (Times) (Note 6)

27.1

28.2

29.2

26.9

27.7

Total assets

Return on equity (ROE)(Note 3)

Notes:1.
2.
3.

4.
5.
6.

Dividend payout ratio = Dividend per unit / Profit per unit × 100
For the September 2023 period, calculations are made using the following formula, as new investment units were issued.
Dividend payout ratio = Cash distribution / Profit × 100
ROA = Ordinary profit / Average of Total assets during the period × 100
ROE = Profit / Average of Net assets during the period × 100
The number of days for the asset management period is taken into consideration for net assets, as new investment units were
issued in the September 2023 period.
(Annualized portion of the calculation given in Note 2 and Note 3 assumes a fiscal period of 183 days for the period ended
September 30, 2021, 182 days for the period ended March 31, 2022, 183 days for the period ended September 30, 2022, 182 days
for the period ended March 31, 2023 and 183 days for the period ended September 30, 2023.)
EOP equity ratio = (Net assets at the end of period / Total assets at the end of period) × 100
EOP interest-bearing debt ratio on total assets = (Interest-bearing debt at the end of period / Total assets at the end of period) ×100
Debt service coverage ratio = Profit before Interest, Taxes, Depreciation and Amortization / Interest expenses

52