February 18, 2019

CRE Logistics REIT, Inc.
Summary of Financial Results (Unaudited)
For the 5th Fiscal Period Ended December 31, 2018
(For the Reporting Period from July 1, 2018 to December 31, 2018)(Translated from the Japanese original)
Corporate Information
Code: 3487 Listing: Tokyo Stock Exchange(URL: https://cre-reit.co.jp/en/)
Representative: Tsuyoshi Ito, Executive Director
Asset management company:
Representative:
Person of Contact:
Tel:

CRE REIT Advisers, Inc.
Tsuyoshi Ito, President
Hirohisa Toda, Head of Corporate Planning+81-3-5575-3600

Scheduled date to file securities report:
Scheduled date to commence payment of distributions:Preparation of supplementary material on financial results:
Financial report presentation meeting:March 28, 2019
March 22, 2019
Yes
Yes (for institutional investors and analysts)(Amounts truncated to the nearest million yen, except for the basic earnings per unit)
1. 5th Fiscal Period ended December 31, 2018 (July 1, 2018-December 31, 2018)(1) Operating results(Percentages represent changes from corresponding period of previous period)
Operating revenues
Operating income
Ordinary income
Net income
Fiscal period ended

December 31, 2018
June 30, 2018

Million yen%

Million yen%

Million yen%

Million yen

%

1,413
1,186

19.1
156.8

811
668

21.4
193.1

689
523

31.7
192.8

688
522

31.8
193.8

Return on
unitholders’ equity

Net income per unit

Ordinary income tototal assets

Ordinary income on
operating revenues

Fiscal period ended

Yen

%

%

%

December 31, 2018
June 30, 2018

2,978
2,623

2.8
3.3

1.4
1.5

48.8
44.1

(Note) The Investment Corporation issued 161,150 new investment units on February 6, 2018. Net income per unit for the fiscal period ended June 30,2018 is calculated by dividing net income by the weighted average number of investment units (199,098 units) based on the number of days
during the period.

(2) Distributions
Distributions
per unit(excluding
surplus
distributions)

Total
distributions(excluding
surplus
distributions)Fiscal period ended

Yen

Million yen

Yen

December 31, 2018
June 30, 2018

2,979
2,259

688
522

372
326

Surplus
distributions
per unit

Distributions
per unit(including
surplus
distributions)

Total
distributions(including
surplus
distributions)

Million yen

Yen

Million yen

%

%

85
75

3,351
2,585

774
597

100.0
100.0

2.8
2.2

Total surplus
distributions

Payout ratio

Distributions to
net assets ratio(Note 1) The entire amount of total surplus distributions is the return of contributions that falls under the distribution associated with the investment
decrease for tax purposes.
(Note 2) The percentage of decreased surplus as a result of surplus distributions (the return of contributions that falls under the distribution associatedwith the investment decrease for tax purposes) in the fiscal period ended June 30, 2018 and the fiscal period ended December 31, 2018 was
0.004, respectively. The calculation of the percentage of decreased surplus is based on Article 23, Paragraph 1, Item 4 of the Order for
Enforcement of the Corporation Tax Act.
(Note 3) The payout ratio in the fiscal period ended June 30, 2018 is calculated based on the following formula because the Investment Corporation
issued new investment units.
Payout ratio = Total amount of distributions (excluding surplus distributions) ÷ Net income × 100(3) Financial position
Total assets
As ofDecember 31, 2018
June 30, 2018

Unitholders’ equity ratio

Net assets

Net assets per unit

Million yen

Million yen%

Yen49,951
51,38024,71924,62849.5
47.9

106,940
106,547‒1‒

(4) Cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of the fiscal period

Fiscal period ended

Million yen

Million yen

Million yen

Million yen

December 31, 2018
June 30, 2018

2,593
(713)

(192)
(30,925)(2,126)32,144

1,627
1,352

2. Forecast for the 6th Fiscal Period ending June 2019 (January 1, 2019-June 30, 2019) and the 7th Fiscal Period ending December
2019 (July 1, 2019-December 31, 2019)(Percentages represent changes from corresponding period of previous period)
Operatingrevenues

OperatingincomeFiscal period ending

Millionyen%June 30, 2019
December 31, 2019

1,410
1,412

(0.2)
0.2

Millionyen

Ordinary
income%716 (11.7)
715 (0.1)

Millionyen

Distributions
Distributions
per unit (including
per unit
surplus(excluding surplus
distributions)distributions)

Net income%

594 (13.7)
594 (0.0)

Millionyen

Surplus
distributions
per unit

%

Yen

Yen

Yen

593 (13.8)
593 (0.0)

2,940
2,940

2,568
2,568

372
372

(Reference) Forecast net income per unit for the 6th Fiscal Period ending June 2019 is 2,568 yen and forecast net income per unit for the 7th Fiscal Period
ending December 2019 is 2,568 yen.

* Other(1) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1. Changes in accounting policies associated with revision of accounting standards, etc.: None
2. Changes in accounting policies associated with other than 1: None
3. Changes in accounting estimates: None
4. Restatements: None

(2) Total number of investment units issued and outstanding
1. Total number of investment units issued
As of December 31,
and outstanding at the end of the fiscal
231,150 units
2018
period (including treasury investment units)

As of June 30, 2018

231,150 units

2. Total number of treasury investment units
at the end of the fiscal period

As of June 30, 2018

0 units

As of December 31,
2018

0 units* Status of audit procedures
As of the time of disclosure of this financial results report, auditing procedures for financial statements in accordance with the
Financial Instruments and Exchange Act have not been completed.
* Remarks on appropriate use of forecasts of performance and other special notes
Forward-looking statements presented in this financial results, including forecasts of performance, are based on information
currently available to the Investment Corporation and on certain assumptions the Investment Corporation deems to be reasonable.
As such, actual operating and other results may differ materially from these forecasts as a consequence of various factors. Moreover,the forecasts set forth herein should not be construed as a guarantee of distribution amounts.
Refer to the section on “Assumptions for Operating Forecasts for the 6th Fiscal Period ending June 2019 (January 1, 2019-June 30,2019) and the 7th Fiscal Period ending December 2019 (July 1, 2019-December 31, 2019)” for details on the underlying
assumptions for the forecasts above.

‒2‒

Assumptions for Operating Forecasts for the 6th Fiscal Period ending June 2019 (January 1, 2019-June 30, 2019) and the 7th Fiscal
Period ending December 2019 (July 1, 2019-December 31, 2019)
Item
Assumptions
Calculation period- 6th Fiscal Period (Ending June 30, 2019): January 1, 2019-June 30, 2019 (181 days)- 7th Fiscal Period (Ending December 31, 2019): July 1, 2019-December 31, 2019 (184 days)

Assets undermanagement- The investment corporation possesses the trust beneficial interests in real estate in a total of seven properties
held as of December 31, 2018 (hereinafter referred to as “assets currently held”). The operating forecasts
herein are based on the assumption that the investment corporation will continue to possess these properties
until December 31, 2019, as well as the assumption that there will be no fluctuations in the trust beneficial
interests in real estate (including newly acquired properties and the disposal of currently-held assets).
- However, there is a possibility that fluctuations in the portfolio will occur due to factors including the newacquisition of properties or the disposal of assets currently held.

Operating revenues- Real estate lease business revenues are calculated based on leasing contracts that are effective as of the dateof submission of this financial results and actual performance in the past.
- The forecasts assume there are no delinquencies or default on rental payments by tenants.

Operating expenses- Expenses other than depreciation that fall under the category of real estate leasing expenses, which is theinvestment corporation’s main operating expenses, are calculated reflecting variables, including forecast
costs (including taxes and public dues, property management fees, casualty insurance expenses, repair
expenses) based on actual performance in the past.
- Property tax and city planning tax, etc. on the currently held assets are expected to be 147 million yen in thefiscal period ending June 30, 2019 and 147 million yen in the fiscal period ending December 31, 2019.
- Depreciation is based on the straight-line method. Depreciation is forecast to be 287 million yen in the fiscal
period ending June 30, 2019 and 287 million yen in the fiscal period ending December 31, 2019.
- Property management fees are expected to be 67 million yen in the fiscal period ending June 30, 2019 and68 million yen in the fiscal period ending December 31, 2019.

Non-operating
expenses- Non-operating expenses for the 6th Fiscal Period are expected to total 121 million yen. Of this, it is estimatedthat 103 million yen is for interest expenses and other financial related costs, 6 million yen is for depreciationof founding costs, and 12 million yen is for depreciation of investment unit issuance costs.
- Non-operating expenses for the 7th Fiscal Period are expected to total 121 million yen. Of this, it is estimatedthat 107 million yen is for interest expenses and other financial related expenses, 6 million yen is fordepreciation of founding costs, and 6 million yen is for depreciation of investment unit issuance costs.

Interest-bearing debt

- The total interest-bearing debt at the end of each fiscal period is as follows: 23,220 million yen as of June30, 2019, and 23,220 million yen as of December 31, 2019. Of 23,820 million yen, which is the balance ofloans as of the date of submission of these financial results, the investment corporation expects to prepay 600
million yen during the fiscal period ending June 30, 2019 using some of its funds on hand.
- The LTV is expected to be around 47.3% as of June 30, 2019, and about 47.4% as of December 31, 2019.
The following equation was used to calculate LTV. The figure is rounded to the second decimal point.
LTV = Interest-bearing debt / Total Assets x 100

Investment units- The assumptions for these forecasts are based on a total number of investment units issued of 231,150, as ofthe submission of these financial results. The forecasts do not factor in any assumption of a change in thenumber of investment units through December 31, 2019 due to factors such as the issuance of new investment
units.
- The distributions per unit (excluding surplus distributions) and the surplus distributions per unit arecalculated based on a total number of investment units issued of 231,150 for the fiscal period ending June30, 2019 and the fiscal period ending December 31, 2019.

Distributions per unit
(excluding surplus
distributions)- The distributions per unit (excluding surplus distributions) is calculated based on the assumption that
distributions are carried out in accordance with the policies for monetary distributions set forth in theregulations of the investment corporation.
- There is a possibility that the amount of the distributions per unit (excluding surplus distributions) couldchange owing to various factors, including changes in rental income, or unexpected maintenance work due
to a change in assets under management or a change in tenants.

Distributions per unitof surplus profit- The surplus distributions per unit is calculated in accordance with the policy stipulated in the operationalguidelines—the regulations of the investment corporation and the internal regulations of the asset
management company. The payout plan for total surplus distributions for the fiscal period ending June 30,
2019 and the fiscal period ending December 31, 2019 is 85 million yen, respectively, with an amountequivalent to 30% of depreciation as a benchmark.
- These assumptions do not include any specific possibility of a substantial deterioration in the economic
climate, real estate market or the financial condition of the investment corporation.
- The policy of the investment corporation is to implement the distribution of surplus profit semiannually inprinciple. The amount of the surplus distribution should be equivalent to 30% of total depreciation.
- Moreover, in the event that the investment unit is expected to temporarily fall below a certain level due todilution in the value of the investment unit or a considerable financial burden owing to the procurement of
capital through the issuance of new investment units or other factors, the investment corporation may
continue to distribute surplus profit plus a one-off distribution that exceeds the profit level in the period forthe purpose of maintaining the ordinary level of the distributions per unit. However, this amount, which‒3‒

includes the ongoing surplus distribution, shall not exceed the equivalent to 60% of total depreciation for the
relevant business period.
- In actuality, the amount of distributions exceeding profit (return of contributions) is likely to fluctuate due tochanges in the economic climate, real estate market trends, asset portfolio, and financial position, and there
is a possibility the investment corporation will not implement distributions (return of contributions) in surplus
distributions for the period.

Other- The forecasts were built based on the assumption that there will be no revisions to laws and ordinances, thetax system, accounting standards, listing regulations set forth by the Tokyo Stock Exchange, Inc., and theregulations stipulated by the Investment Trusts Association, Japan, that would have an impact on the forecasts
stated above.
- The forecasts are also based on the assumption that there will be no unexpected major changes to general
economic trends and the real estate market.

‒4‒

3. Financial Statements(1) Balance Sheet(Thousands of yen)
As of June 30, 2018

As of December 31, 2018

AssetsCurrent assets
Cash and deposits

651,216

1,001,457

1,138,522

1,163,430

Operating accounts receivable

126,549

118,742

Prepaid expenses

81,29582,278Cash and deposits in trust

Consumption taxes receivable

1,472,959－

Total current assets

3,470,543

2,365,909

28,873,918

28,873,918

Non-current assets
Property, plant and equipment
Buildings in trust(571,499)(848,464)

28,302,418

28,025,453

1,341,493

1,341,493(20,189)(30,261)

1,321,303

1,311,231

Tools, furniture and fixtures in trust－

682

Accumulated depreciation

－

(61)

Tools, furniture and fixtures in trust, net－

621

Land in trust

17,969,495

17,969,495

Total property, plant and equipment

47,593,217

47,306,802

Other

3,666

3,266

Total intangible assets

3,666

3,266

Investment securities

10,50010,500Long-term prepaid expenses

214,417

195,08816

10

10,00010,000

Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net

Intangible assets

Investments and other assets

Deferred tax assets
Lease and guarantee deposits
Total investments and other assets

234,933

215,598

47,831,818

47,525,668

Deferred organization expenses

35,331

29,275Investment unit issuance expenses

42,93430,903

Total non-current assets
Deferred assets

Total deferred assets
Total assets‒5‒78,26660,17851,380,627

49,951,756

(Thousands of yen)
As of June 30, 2018

As of December 31, 2018

Liabilities
Current liabilities
Operating accounts payable

175,413

Short-term loans payable

1,330,000－

Current portion of long-term loans payable

3,000,000

6,680,000

97,555

111,640

942

815

Accrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities

84,388－88,722

252,391

252,245

2,710

1,338

4,859,013

7,219,151

21,020,000

17,140,000

873,221873,269

21,893,221

18,013,269

26,752,235

25,232,420

24,106,072

24,106,072－(75,354)

24,106,072

24,030,717

522,320

688,618

522,320

688,618

24,628,392

24,719,335

24,628,392

24,719,335

51,380,627

49,951,756

Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Unitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets‒6‒

(2) Statements of Income(Thousands of yen)
Fiscal period ended
June 30, 2018

Fiscal period ended
December 31, 2018

Operating revenue
Lease business revenue

1,169,871

Other lease business revenue

1,384,615

16,932

28,672

1,186,804

1,413,287

Expenses related to rent business

372,715432,972

Asset management fee

104,365

132,326

651

1,653

Administrative service fees

3,668

11,062

Directors' compensations

4,500

4,500

Other operating expenses

32,18019,223

Total operating expenses

518,081

601,738

668,722

811,549

Interest income

97Interest on refund

－

3,160

Total non-operating income

9

3,167

Interest expenses

52,02365,539Borrowing related expenses

45,63340,801

Total operating revenue
Operating expenses

Asset custody fee

Operating profit
Non-operating income

Non-operating expenses

Amortization of deferred organization expenses

6,056

6,056

Amortization of investment unit issuance expenses

11,093

12,030Investment unit public offering expenses

25,695

－

Other

5,000

1,000

145,503

125,428

Ordinary profit

523,228

689,288

Profit before income taxes

523,228

689,288944

816

Total non-operating expenses

Income taxes - current
Income taxes - deferred(3)

6

Total income taxes

941

822

522,287

688,465

ProfitRetained earnings brought forward
Unappropriated retained earnings (undisposed loss)

‒7‒

32

152

522,320

688,618

(3) Statements of Changes in Net Assets
Fiscal period ended June 30, 2018
(Thousands of yen)
Unitholders' equity
Surplus
Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items during
periodIssuance of new investment
units

7,000,000

Unappropriatedretainedearnings(undisposed
loss)

Total surplus

177,832

177,832

Total net assets

Total unitholders'equity17,106,072

7,177,832

7,177,832

17,106,072

17,106,072

Dividends of surplus(177,800)(177,800)(177,800)(177,800)

Profit522,287

522,287

522,287

522,287

17,106,072

344,487

344,487

17,450,559

17,450,559

24,106,072

522,320522,320

24,628,392

24,628,392

Total changes of items during
periodBalance at end of current
periodFiscal period ended December 31, 2018

(Thousands of yen)
Unitholders' equity
Unitholders' capital

Balance at
beginning ofcurrent period
Changes of items
during period
Distributions inexcess ofretainedearnings
Dividends ofsurplus

Surplus

Unitholders'
capitalUnappropriatedretainedearnings(undisposed
loss)

Total
surplus－24,106,072

522,320522,320(75,354)(75,354)

Unitholders'
capitalDeduction
fromunitholders'
capital24,106,072

ProfitTotal changes of
items during
periodBalance at end ofcurrent period

Totalunitholders'equityTotal net assets

24,628,392

24,628,392(75,354)(75,354)(522,167) (522,167)(522,167)(522,167)

688,465

688,465

688,465

688,465－(75,354)(75,354)

166,298

166,298

90,94390,943

24,106,072(75,354)

24,030,717

688,618

688,618

24,719,335

24,719,335‒8‒

(4) Statements of Cash Flows(Thousands of yen)
Fiscal period ended
June 30, 2018

Fiscal period ended
December 31, 2018

Cash flows from operating activities
Profit before income taxes

523,228

689,288

Depreciation

252,098

287,497

Amortization of deferred organization expenses

6,056

6,056

Amortization of investment unit issuance expenses

11,093

12,030Interest income

(9)

(7)

Interest expenses

52,02365,539(51,909)

7,806(1,472,959)

1,472,959

Decrease (increase) in prepaid expenses(44,712)(983)

Increase (decrease) in operating accounts payable

14,004

374

Increase (decrease) in accrued expenses

46,867

13,938

Increase (decrease) in accrued consumption taxes(15,203)88,722

Increase (decrease) in advances received

167,691(146)

Decrease (increase) in long-term prepaid expenses

Decrease (increase) in operating accounts
receivable
Decrease (increase) in consumption taxes refund
receivable(163,982)

19,328Other, net

2,710(2,646)

Subtotal(673,000)

2,659,759

9

7(39,141)(65,392)

(880)

(944)

(713,013)

2,593,431(31,357,272)(92,081)(4,000)－601,50848

135,856－(301,433)(100,048)(30,925,340)(192,081)

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Proceeds from tenant leasehold and security
deposits in trust
Proceeds from restricted deposits
Payments into restricted deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short-term loans payable

1,330,000－

Decrease in short-term loans payable－(1,330,000)

Proceeds from long-term loans payable

13,920,000

3,000,000

Repayments of long-term loans payable－(3,200,000)

Proceeds from issuance of investment units

17,072,337－

Dividends paid

(177,800)(596,248)

Net cash provided by (used in) financing activities

32,144,537(2,126,248)

Net increase (decrease) in cash and cash equivalents

506,183

275,101

Cash and cash equivalents at beginning of period

846,265

1,352,449

1,352,449

1,627,550

Cash and cash equivalents at end of period‒9‒