Summary of Q&A Session
Japan Real Estate Investment Corporation/
Performance Review for the Period ended March 2024 (held on 16 May 2024)
Japan Real Estate Asset Management Co., Ltd.

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It has been stated that the approximately 20% gap between EPU and DPU will be reduced in
the mid to long term. However, I would like to know to what extent this gap will be reduced: will
it be completely eliminated, or will it be reduced to about half through measures such as
improving occupancy rates and promoting rent revisions?
As explained, the plan is to reduce the gap, but it is difficult to clearly state the pace andextent to which it will be reduced, given that a short-term resolution through top-line growth isunlikely. Additionally, since we intend to actively invest in repairs when a gain on the sale of aproperty can be expected, it is also possible that the gap will not necessarily shrink even whenit could. We want to control how much gap we can reduce by looking at the level of DPU
considering factors such as the degree of top-line and cost increases and the presence orabsence of capital gain.
Regarding occupancy rates, there are office REITs maintaining around 98%. What level ofoccupancy rate do you think will be a new normal going forward?
As mentioned previously, we are still aiming for an occupancy rate in the 97% range. We hope
to increase it by approximately one percentage point from the current level.
You mentioned that you are exploring opportunities for capital raise, but can you raise capitalin a way that benefits investors even in the current environment where the NAV multiple isbelow 1? For example, do you foresee being able to acquire high-quality, rare properties at areasonable price? What can you share with us in this regard?
We recognize that it is difficult to raise capital with the current NAV multiple. We consider thatany consideration of a capital raise is based on the premise that the market will improve fromits current state. That being said, even if the NAV multiple does not exceed 1, we would not
rule out the possibility of raising capital if there are extremely rare investment opportunities.
Regarding the LTV of 44.0% as of the end of March 2024, it is expected to decrease to 42.5%
by the end of March 2025 due to the proceeds from the disposition of JRE Dojima Tower. Can
you please explain your thoughts on the future LTV levels?
Going forward, with the anticipated rise in interest rates, borrowing costs are expected toincrease, and raising the LTV level could impact our credit rating. While there may be atemporary increase due to property acquisitions, we aim to maintain the 42% range, as wehave done for some years.
You mentioned that efforts to improve rent revenues will be further strengthened. Can you
please share your thoughts on the target rate of rent increase and the specific measures you
plan to implement?
The extent to which we can raise rents is influenced by the market situation and negotiations
with individual tenants, so it is difficult to specify exact figures. However, while we focus onrent increases, we also aim to prioritize further improving occupancy rates.
The positive effect on monthly contract rents from tenant turnover in the March 2024 period
was modest at +0.2%. I would like to know when the positive effect from tenant turnover isgoing to increase in momentum.
We are starting to feel some momentum even right now, but we believe there are two key
junctures for future momentum. The first juncture will be when the massive supply in 2023 iscompletely absorbed, including secondary vacancies. The second juncture will be when thelow-rent contracts concluded during the period when the leasing market was weakened after
the COVID-19 pandemic in 2020 reach their expiration. Considering these factors, we
anticipate that momentum will pick up around the latter half of this year.

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Is there any change to the trending duration of lease contracts? For example, if inflation stays
elevated and costs such as maintenance expenses increase, is there a policy to shorten theduration of fixed-term leases?
There hasn't been a significant change in the trend of contract durations. While the current
leasing market is relatively favorable, we consider the transition from regular leases to fixedterm leases to be challenging. If inflation were to intensify, rather than shortening the durationof fixed-term leases, we are considering measures such as incorporating clauses for rentadjustments during the lease term.
Based on the sponsor's financial results announcement, I have a question regarding external
growth. If there are likely to be any changes in the trend of properties acquired from thesponsor, please let me know.
We do not anticipate any changes in the trends regarding the size or type of properties weacquire. As seen with the recent acquisition of 3rd MINAMI AOYAMA, we expect to continue tobe presented with high-quality urban properties through the sponsor pipeline going forward. At
the same time, we are constantly considering regional properties through our own sourcing
channels, and we aim to achieve external growth with the combination of both. However, if thecurrent environment, where public offerings (PO) are challenging, continues, we recognizethat it will not be possible to significantly expand our assets under management (AuM).

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