[Translation]

October 26, 2022

Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties

Issuer of Real Estate Investment Trust Units
Mori Hills REIT Investment Corporation
Hideyuki Isobe, Executive Director(Securities Code: 3234)

Asset Manager
Mori Building Investment Management Co., Ltd.
Hideyuki Isobe, President & CEO
Inquiries: TEL: 03-6234-3234

1. Basic Information(1) Basic Policy concerning Compliance
The directors of Mori Hills REIT Investment Corporation (the “Company”) ensure thorough compliance by complying with the Act on Investment Trusts and Investment
Corporations (Act No. 198 of 1951, as amended) (the “Investment Trust Act”), the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended) (the “Financial
Instruments and Exchange Act”), and other relevant laws and regulations and internal rules. In addition, in order to ensure that the supervisory directors exercise their supervisory1rights and investigative rights, the Company has established a system by which executive directors report to supervisory directors concerning execution of business and ensures that
the Company’s board meetings can be held flexibly (such as by utilizing telephone conference or similar means of communication). With respect to the four supervisory directors,
the Company is making efforts to build a strong governance structure by appointing outside experts, namely as a lawyer, a real estate appraiser and a certified public accountant,and by fully utilizing internal checking functions.
Mori Building Investment Management Co., Ltd. (the “Asset Manager”) is required to perform its business operations in good faith and with due care of a prudent manager for
the Company in line with the purpose of the investment management business, and accordingly performs sincere asset investment and management pertaining to real estate properties
based on an appropriate compliance structure and internal control structure in order for the Company to gain high trust from the securities market and investors.
In addition, well aware that failure to ensure thorough compliance can undermine investors’ trust in the securities market and the corporate management base of the Company
and the Asset Manager, the Asset Manager positions thorough compliance as a basic principle of corporate management and, headed by the Asset Manager’s Board of Directors,
the President & CEO (the person responsible ultimately for compliance), Compliance Department, Compliance Officer (the person responsible for overseeing compliance), and theCompliance Committee make decisions on the various matters concerning compliance and conduct inspections of compliance (inspections of compliance with laws and regulations,etc.) under their respective authority and responsibility.
The “compliance structure” of the Asset Manager is as follows:(i) Asset Manager’s Board of Directors
The Asset Manager’s Board of Directors consists of two directors and one outside director elected from outside the Asset Manager, and in addition to performing themonitoring function of directors with one corporate auditor, establishes and amends the basic policies for compliance, the “compliance manual,” and the “compliance program”
as the decision-making body for basic matters relating to promotion of compliance. The Asset Manager’s Board of Directors receives a report from the Compliance Department
about progress of the compliance program as a general rule once every three months and as necessary. In principle, the acquisition and disposition of properties, the establishment
and amendment of the management policies (including the management guidelines and asset management plan), and related party transactions between the Company and certain
related parties (subject to “2. Management Structure and System of the Company and the Asset Manager – (3) Policies on Transactions Involving Conflicts of Interest – (i)Policy and Management System for Dealing with Transactions Involving Conflicts of Interest – (A) Internal Rules Regarding Prevention of Transactions Involving Conflicts ofInterest” below; the same applies hereafter) require resolutions by the Asset Manager’s Board of Directors.

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(ii) President & CEO
President & CEO is the person ultimately responsible for compliance.

(iii) Compliance Department
The Compliance Department organizes, plans, and promotes compliance in general as a department responsible for overseeing compliance. In addition, if the ComplianceDepartment determines that a problem is arising or likely to arise from compliance viewpoint, the Compliance Department gives related departments necessary opinions or
instructions.

(iv) Compliance Officer
The Compliance Officer is the person responsible for overseeing compliance and the chairman of the Compliance Committee. In addition, at present, the Compliance Officer
concurrently serves as a head of the Compliance Department to organize, plan, and promote compliance in general. With respect to matters to be deliberated at the Compliance
Committee, the Compliance Officer performs certain deliberative functions such as deliberation from the viewpoint of laws and regulations, etc.

(v) Compliance Committee
The Compliance Committee deliberates and resolves matters set forth in “Regulations of the Compliance Committee” in terms of ensuring compliance. For details, pleaserefer to “2. Management Structure and System of the Investment Corporation and the Asset Manager – (3) Policies on Transactions Involving Conflicts of Interest – (i) Policy
and Management System for Dealing with Transactions Involving Conflicts of Interest – (D) Overview of the Compliance Committee” below.

3(2) Unitholders
As of July 31, 2022
Name

Relationship with the Company, the Asset Manager, or the Sponsor

Number of units

Percentage

and the background to the unit holding

owned (units)(%) (Note 1)

Custody Bank of Japan, Ltd. (Trust account)

N/A

480,18525.1

Mori Building Co., Ltd.

The parent company of the Asset Manager. It has concluded a Support
Agreement (Note 2) with the Company and the Asset Manager.

287,472

15.0

The Master Trust Bank of Japan, Ltd. (Trust account)

N/A

261,226

13.6

The Nomura Trust & Banking Co., Ltd. (Investment trust account)

N/A

74,9883.9

SSBTC CLIENT OMNIBUS ACCOUNT

N/A

25,228

1.3

STATE STREET BANK WEST CLIENT-TREATY 505234

N/A

23,477

1.2

Custody Bank of Japan, Ltd. (Money trust taxable account)

N/A

21,868

1.1

N/A

19,542

1.0

The Shinkumi Federation Bank

N/A

18,756

1.0

JP MORGAN CHASE BANK 385781

N/A

17,0830.9

1,229,825

64.2

LEGAL + GENERAL ASSURANCE PENSIONSMANAGEMENT LIMITEDTop 10 unitholders total(Note 1)The “percentage” means the ratio of the number of units owned to the total number of issued units, and is indicated by rounding all numbers down to the first decimal place.

(Note 2)For details, please refer to “(6) Matters concerning the Sponsor – (ii) Agreements on the Supply of Properties and Information Provision with the Sponsor Company Group – (A) Terms of the Support
Agreement” below.

4(3) Major Shareholders of the Asset Manager
As of October 26, 2022

Name

Mori Building Co., Ltd.

Relationship with the Company, the Asset Manager, or the Sponsor andNumber of sharesthe background to the shareholding

held (shares)

The Sponsor. It has concluded a Support Agreement (Note 2) with the Company and the AssetManager. It is a major shareholder of the Asset Manager.

4,000

Percentage(%)(Note 1)100.0

(Note 1)The “percentage” means the ratio of the number of shares held to the total number of issued shares, and is indicated by rounding all numbers down to the first decimal place.

(Note 2)For details, please refer to “(6) Matters concerning the Sponsor – (ii) Agreements on the Supply of Properties and Information Provision with the Sponsor Company Group – (A) Terms of the Support
Agreement” below.

(4) Investment Policy and Investment Targets
Please refer to “Part 1. Fund Information - I. Status of the Fund - 2. Investment Policies” in the Company’s securities report for the 32nd fiscal period (from February 1,
2022 to July 31, 2022) filed on October 26, 2022.
With respect to matters related to tenant selection criteria, in order to secure stable income from the overall portfolio in the medium to long term, the Company shall set
the most appropriate rent and other terms based on an understanding of the market and strive to secure blue-chip tenants. In addition, rent levels shall be determined based onan overall determination of the ratio of the rent revenue to the overall portfolio and type of lease agreement (length of term and whether the term is fixed or not) after confirming
the potential tenant’s creditworthiness and relationship with anti-social forces. Same shall apply for selection of a master lease company.

(5) Matters concerning Overseas Real Estate Investment
Investment stance toward overseas real estate properties
There is no plan to invest in overseas real estate.

5(6) Matters concerning the Sponsor(i) Details of Businesses of Sponsor Company GroupThe major businesses of Mori Building Co., Ltd. and its 26 affiliates (including one parent company, 21 consolidated subsidiaries, two equity-method affiliates and twoother affiliates) are as follows (as of March 31, 2022):

Mori Building Co., Ltd.
Name

Major Business

Mori Building Co., Ltd.

General developer (lease, sales of property, facility operations and overseas)

Parent Company (one company)
Name

Major Business

Mori Kiyo Co., Ltd.

Lease

Consolidated Subsidiaries (21 companies)
Name

Major Business

Mori Hospitality Corporation

Facility operations

Mori Building Investment Management Co., Ltd. (Asset Manager)

Lease

Mori Urban Planning Corporation

Lease

Shanghai World Financial Center Investment Co., Ltd.

Overseas

Shanghai World Financial Center Co., Ltd

Overseas

Mori Building Asia Pte. Ltd.

Overseas

Shanghai World Financial Center Investment No.1 (Cayman) Limited

Overseas

Shanghai World Financial Center Investment No.2 (Cayman) Limited

Overseas

Shanghai World Financial Center Investment No.3 (Cayman) Limited

Overseas6Mori Building China (Shanghai) Co., Ltd.

Overseas

Shanghai Hills Hotel Management Co., Ltd.

Overseas

Shanghai Hills Forum & City View Co., Ltd.

Overseas

Shanghai Senmao International Real Estate Co., Ltd.

Overseas

Mori building Golf Resort Co.,Ltd. (Note)

Facility operation

Toranomon Energy Network Co., Ltd.

Lease

Roppongi Energy Service Co., Ltd.

Lease

ARK Hills Heating & Cooling Supply Co., Ltd.

Lease

Silent Partnership AR ONE

Lease

Silent Partnership Roppongi Hills Financial Corp

Lease

Aomi T specific purpose company

Lease

Aomi S1 specific purpose company

Lease(Note) The company name was changed from Shishido Golf Club Co., Ltd. on May 1, 2022.

Equity-method Affiliates (two companies)
Name

Major Business

Prime Stage Co., Ltd.

Facility operations

Mori Hills REIT Investment Corporation (the Company)

A real estate investment company. Assets are managed by the Asset Manager.

Other Affiliated Companies (two companies)
The other two affiliated companies are omitted since they are not material.

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<Segments Diagram of Major Businesses of Mori Building Co., Ltd. and its affiliates>
Parent Company

Mori Building

Mori Kiyo Co., Ltd.

Co., Ltd.

<Property Sales Business>(Office, Rental Residential, etc. Sales Business for Investors)(Property Sales Business for Individual Customers)<Leasing Business>(Leased Property Management Business)○ Silent Partnership AR ONE○ Silent Partnership Roppongi Hills Financial Corp
○ Aomi T specific purpose company○ Aomi S1 specific purpose company* Mori Hills REIT Investment Corporation

Lease<Facilities Operating Business>(Hotel Management, Membership Club Business)○ Mori Hospitality Corporation(Golf Business)○ Mori building Golf Resort Co.,Ltd.

(Management Contracted Business)○ Mori Building Investment Management Co., Ltd.
○ Mori Urban Planning Corporation

Sales of(Contracted Works Business)

Property(Area heating/air conditioning/electricity supply
businesses)○ Roppongi Energy Service Co., Ltd.
○ ARK Hills Heating & Cooling Supply Co., Ltd.
○Toranomon Energy Network Co., Ltd.
(Other Businesses)
Investment Business, Businesses in observatories, forum
facilities, etc.

(Eldercare Facility Business)* Prime Stage Co., Ltd.

<Overseas Businesses>
Facility
Operations

Overseas(Note) ○: Consolidated subsidiaries, *: Equity-method affiliates

8(Real Estate Development, Leased Property Management
and Investment Business Overseas)○ Shanghai Hills Hotel Management Co., Ltd.
○ Shanghai Hills Forum & City View Co., Ltd.
○ Mori Building China (Shanghai) Co., Ltd.
○ Shanghai World Financial Center Investment No.1
(Cayman) Limited○ Shanghai World Financial Center Investment No.2
(Cayman) Limited○ Shanghai World Financial Center Investment No.3
(Cayman) Limited○ Shanghai World Financial Center Co., Ltd.
○ Shanghai World Financial Center Investment Co., Ltd.
○ Shanghai Senmao International Real Estate Co., Ltd.
○ Mori Building Asia Pte. Ltd.

(ii) Agreements on the Supply of Properties and Information Provision with the Sponsor Company Group(A) Terms of the Support Agreement
The details of the support provided by Mori Building Co., Ltd. to the Company and the Asset Manager under the support agreement dated August 10, 2006 executed
between the Company and the Asset Manager, and Mori Building Co., Ltd. are as set out below.
a. Grant of preferential negotiation rights to the Company and the Asset Manager
With respect to properties (whether before or after completion) owned or developed by Mori Building Co., Ltd., if Mori Building Co., Ltd. intends to disposeof a property that meets the investment criteria of the Company (for types, purpose of use, areas, ages and other matters of the properties, please refer to “Part 1.
Fund Information - I. Status of the Fund - 2. Investment Policies” in the Company’s securities report for the 32nd fiscal period (from February 1, 2022 to July 31,2022) filed on October 26, 2022) or a property that is likely to meet the investment criteria of the Company (including, but not limited to, beneficial interests intrusts and equity interests in anonymous associations (tokumei kumiai) backed by the property) (an “Eligible Property”), or a property that is potential Eligible
Property (including the property under development) (together with the Eligible Property, a “Target Property”), it will provide the information for such property to
the Company and the Asset Manager before providing it to any third party, and grant to the Company preferential negotiating rights (a “First Refusal Right”) in
respect of the property. The period of the First Refusal Right (the “Negotiation Period”) granted by Mori Building Co., Ltd. to the Company is a period separately
determined by the Asset Manager and Mori Building Co., Ltd. to be a reasonable period of time (for ten (10) business days or more from the day on which suchinformation is provided) necessary for the negotiation of sale and purchase. The Asset Manager will notify Mori Building Co., Ltd. whether the Company intends
to purchase the property (in the case of the purchase, including the terms of purchase) within the Negotiation Period. If Mori Building Co., Ltd. agrees to the termsof purchase notified by the Asset Manager, Mori Building Co., Ltd. will consult with the Company and the Asset Manager in good faith with an aim to execute anagreement for the sale and purchase of the property. Mori Building Co., Ltd. will not provide any information relating to such property to any third party and will
not negotiate sale and purchase of such property with any third party during the Negotiation Period (or, if the Asset Manager gives notice of an intention to notpurchase the property before the expiration of the Negotiation Period, until that time). After the expiration of the Negotiation Period, if the negotiation for the
execution of the agreement for the sale and purchase of the property continues between the Company and the Asset Manager, and Mori Building Co., Ltd., the same
will apply to the period separately determined by the Asset Manager and Mori Building Co., Ltd. to be a reasonable period of time necessary for such consultation.
However, the restrictions described above will not apply if the Target Property falls under any of the following:i.

properties developed or acquired by Mori Building Co., Ltd. through a joint venture (including the case where Mori Building Co., Ltd. is involved in the
joint venture as a participating partner, specified constructor, specified business collaborator, etc. of a statutory redevelopment project, or project management

9consignee, business consultant, etc. of a general development project) with any third party, whereby Mori Building Co., Ltd. promises to assign, or grant theFirst Refusal Right of, part of the property to a third party which is entitled under such joint venture (including the case where Mori Building Co., Ltd.
makes such promise after the execution of the relevant support agreement);
ii. properties with respect to which Mori Building Co., Ltd. promises to assign, or grant the First Refusal Right of, co-ownership of the property or equity
interests in corporations holding the property (including, but not limited to, equity interests in anonymous associations (tokumei kumiai), and whether directly
or indirectly invested) under certain conditions to other co-owners of such property or other investors of such corporations (including indirect investors)(including the case where Mori Building Co., Ltd. makes such promise after the execution of the relevant support agreement);
iii. properties that are the subject of any transaction necessary for the business of Mori Building Co., Ltd. (such as an equivalent exchange, a reciprocaltransaction for purchase of specified assets, a sale for redevelopment or a land readjustment project) ; andiv. properties to be sold at the request of any administrative agency.
b. Information provision to the Company and the Asset Manager
If Mori Building Co., Ltd. receives information regarding the sale of properties from a third party, Mori Building Co., Ltd. will decide not to purchase suchproperty at its discretion, and if such property is a Target Property, Mori Building Co., Ltd. will provide information on such property to the Asset Manager and theCompany as soon as practicable only subject to prior approval of the current owner and other concerned parties.
c. Other support
Upon the request of the Asset Manager, Mori Building Co., Ltd. will provide personnel support (including secondees or transferees) and other support to theextent permitted under the Investment Trust Act and other laws or regulations.

(B) Segregation from, or Overlapping with, the Investments of the Sponsor Company Group and the Investment Corporation
Considering the nature of business of Mori Building Co., Ltd. which is a Sponsor, it is possible that the type of properties held by Mori Building Co., Ltd. overlaps
with the type of properties held by the Company.
As described above, however, Mori Building Co., Ltd. and the Company have executed a support agreement, and if Mori Building Co., Ltd. disposes of the property
owned or developed by Mori Building Co., Ltd. that is a Target Property, the Company has the First Refusal Right (with some exceptions), and information regarding
third party property obtained by Mori Building Co., Ltd. in which Mori Building Co., Ltd. decides not to invest and that meets the Company’s investment criteria is tobe provided to the Company.

10With respect to property leases and management, because Mori Building Co., Ltd. conducts the lease and management business of its properties, it is possible thatits properties overlap those held by the Company considering that Mori Building Co., Ltd. and the Company are independent and separate corporations. However, Mori
Building Co., Ltd., which is a property management company of the properties held by the Company, has established a system to avoid conflicts of interest by which a
property manager is not involved in the properties of Mori Building Co., Ltd. and instead dedicated to maintain and improve the performance of the properties held by
the Company performs property management services (the “PM Services”).
In addition, the Asset Manager to which the investment is consigned by the Company executes the check-and-balance system against the possibility, and the leasingof properties held by Mori Building Co., Ltd. is prioritized, by periodically inquiring about the occupancy rate of the properties held by Mori Building Co., Ltd., verifying
the extent of, or reason for, separation comparing the properties held by the Company, and proposing improvements if imbalance arises without reasonable cause.

(C) Terms of Advisory Business Consignment Agreement
The details of the advisory services provided by Mori Building Co., Ltd. to the Asset Manager under the advisory business consignment agreement dated August
10, 2006 executed between the Asset Manager and Mori Building Co., Ltd. are as set out below.
a. Research-related services
Research, analysis and reports on the following matters:i.

Market-related matterstrends in rent (opening and signed contracts)
trends in real estate sale and purchasetrends in supply of new properties
trends in signed contracts and cancellation with large tenants

ii. Tenants’ needs, etc.
tenant satisfaction relating to the location, facilities, conditions of the surrounding area and services
population and traffic in the building and the traffic in the area and of the nearest public transportationiii. Other matters relating to or incidental to the above items
b. Property acquisition and management advisory and support services

11Advice and support on the following matters in connection with properties which the Company considers acquiring or properties currently owned, operated andmanaged by the Company (limited to advice and support when the Asset Manager decides on or determines the acquisition of properties by the Company)i.

due diligenceii. rights such as compartmentalized ownership, leasing and other claims and obligations
iii. various restrictions under laws and regulations
iv. current conditions of buildings, structures and facilities (such as earthquake resistance strength and durable years)
v. value-up plan such as future large-scale repairs or renovations
vi. future rebuilding or redevelopmentvii. design of leased operating plan and establishment of lease conditions
viii. design of facility operation and management plan (establishment of operation and management specifications and costs)
ix. prediction or verification of cost-effectiveness of facility operation and management
x. design of long-term repair plan and budget (establishment of order of priority)
xi. Other matters relating to or incidental to the above items

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2. Management Structure and System of the Investment Corporation and the Asset Manager(1) Investment Corporation(i) Officers of the Investment Corporation (As of October 26, 2022)
Title
Executive
Director

Name
Hideyuki Isobe

Brief profile
April 1993

Joined Mitsui Fudosan Co., Ltd.

May 2002

MBA from Wharton School, University of Pennsylvania

June 2002

Joined Colony Capital Asia PacificNovember 2003

Joined Mori Building Urban Fund Management Co., Ltd. (presently, Mori Building Investment Management Co.,Ltd.)

April 2005

Mori Building Investment Management Co., Ltd, General Manager of Business Development Division

October 2005

Mori Building Investment Management Co., Ltd, General Manager of Investment Department

July 2007

Mori Building Investment Management Co., Ltd., General Manager of Investment Advisory Department

November 2007

Mori Building Co. Ltd., General Manager of Finance Planning Department, Finance Division

April 2008

Mori Building Co. Ltd., General Manager of Business Development Department, Finance Division

June 2010

Mori Building Investment Management Co., Ltd., President & CEO (current post)

April 2011

Mori Hills REIT Investment Corporation, Executive Director (current post)

13

Supervisory

Masakuni Tamura

Director

April 1977

Joined Mitsui Construction Co., Ltd.

September 1985

Seconded to Mitsui Trust Bank, Ltd.(presently, Sumitomo Mitsui Trust Bank, Ltd.), Real Estate Department

October 1986

Joined Sigma Planning Institute, Inc.

February 1990

Registered as Real Estate Appraiser

September 1990

Sigma Planning Institute, Inc., Director

April 1997

ARC Brain, President (current post)

April 2004

Meikai University, Faculty of Real Estate Sciences, Department of Real Estate Sciences and Meikai University,
Graduate School of Real Estate Sciences, Part-Time Lecturer

Supervisory

Koji Nishimura

Director

Supervisory
Director

Miyako Ishijima

February 2006

Mori Hills REIT Investment Corporation, Supervisory Director (current post)

January 2018

Japan Medical Solutions Co., Ltd., Director (current post)

April 1992

Registered as a lawyer

April 1992

Joined Matsuo Law Offices

April 2004

Chuo University Faculty of Law Full-time Lecturer (current post)

November 2004

Matsuo & Kosugi, Partner (current post)

December 2014

Seraku Co., Ltd., External Director (current post)

April 2017

Mori Hills REIT Investment Corporation, Supervisory Director (current post)

June 2018

Ocean Network Express Holdings, Ltd. Auditor (current post)

October 2020

Plus Alpha Consulting Co., Ltd., External Director (current post)

April 1990

Registered as attorney

April 1990

Joined Kizawa Fujiwara Law Offices (presently, Hashimoto Sogo Law Offices)

September 2015

Member of Housing Dispute Examination committee in Tokyo Bar Association (current post)

September 2020

Opened Ishijima Law Office (current post)

April 2021

Mori Hills REIT Investment Corporation, Supervisory Director (current post)

June 2021

Vice Chairperson of Committee on Housing Dispute Settlement Agencies in Japan Federation of Bar Associations(current post)

14

Supervisory
Director(Note)Emi Kitamura

April 1987

Joined Yasuda Trust & Banking Co., Ltd. (presently, Mizuho Trust & Banking Co., Ltd.)

December 1990

Registered as Real Estate Appraiser

September 1995

Joined Mimura Tax & Accounting

December 1998

Registered as Certified Public Accountant

August 1999

Registered as Certified Public Tax Accountant

October 2005

Mimura Tax & consulting, Partner

September 2010

Mimura Tax & consulting, Representative (current post)

June 2013

Miyairi Valve Mfg. Co., Ltd. Auditor (current post)

May 2017

TSUNAGU GROUP HOLDINGS Inc. Auditor (current post)

April 2021

Mori Hills REIT Investment Corporation, Supervisory Director (current post)

The executive director and supervisory directors may be an officer of any corporations other than those described above, but none of those corporations has any interests with the Company.

15

(ii) Reasons for Electing and Concurrently Holding the Position of Officer or Employee of the Asset Manager and the Position of Director of the Investment Corporation, andMeasures for Relationships Involving Conflicts of Interest
Name
Hideyuki Isobe

Title

Reason for electing and concurrently holding

at the Asset Manager

another position at the Asset Manager

President & CEO

Measures for relationships involving conflicts of interest(Reason for election)

While the executive director of the Company concurrently

Mr. Isobe is elected with the expectation that he is able toholds the position as the President & CEO of the Asset Manager,

undertake business management as Executive Director based

he makes decisions as executive director or President & CEO in

on his knowledge and experience, etc. in the real estatesuch respective capacities and seeks to avoid acts of conflicts offinancing business from a broad perspective.

interest as executive director of the Company, and will fulfill his(Reason for concurrent position)

duties faithfully to the interest of unitholders. In addition, theIn the legal framework, investment corporations that hold

Board of Directors of the Company is comprised of one

properties of J-REITs are required to delegate substantially all

executive director and four supervisory directors, and all of theof the activities of their investment management business tosupervisory directors are outside experts, namely a lawyer a real

asset management companies registered by the Financial

estate appraiser, and a certified public accountant so that internalServices Agency. While the principal role of executive

checking functions are fully ensured.

directors and supervisory directors of investment corporations

Furthermore, the Asset Manager is a consolidated subsidiaryis to oversee the asset management business of assetof the Sponsor, but in order to prevent the interest of the

management companies, because of the structure of J-REITs

Company from being prejudiced, the mechanism is establisheddescribed above, executive directors and supervisory directors

to avoid conflicts of interest in transactions with the Sponsor by

are expected to perform their supervisory functions withoutestablishing the “Related Parties Transaction Guidelines” asbeing engaged in any day-to-day management activities.

internal rules.

Accordingly, from the perspective of full understanding ofmanagement of J-REITs, deep communication between the
Asset Manager and the investment corporation and smooth
operation, it is considered appropriate that the executive

16

director of the investment corporation concurrently holds a
position as officer of the Asset Manager and is overseen by thesupervisory directors of the investment corporation.

(iii) Relationships Involving Conflicts of Interest due to Other Positions Held concurrently by Officers of the Investment Corporation (excluding the details described in (ii)above)
Name－

Place where other position is
concurrently held－

Response and initiatives, future policy, etc. for relationships, transactions, etc. involving conflicts of interest
N/A

17

(2) Asset Manager(i) Officers of the Asset Manager (As of October 26, 2022)
Title/
full-time or part-

Interlocking of
Name

Brief profile

post/assignment,time
President & CEO

temporal transfer
Hideyuki Isobe

Please refer to “(1) Company - (i) Officers of the Investment Corporation” described above.

(Full-time)

Mr.

Isobe

holds

the

concurrently
positionofexecutive director of theCompany.
Director(Part-time)

Kojiro Segawa

April 1986

Joined Mori Building Co., Ltd.

August 2003

Mori Building Co. Ltd., Senior Manager of Finance Department, Structured
Finance Group

August 2006

Mori Building Co. Ltd., Senior Manager of Corporate Financial Strategy
Department

November 2006

Mori Building Co. Ltd., Deputy General Manager of Corporate Financial Strategy
Department

December 2007

Mori Building Co. Ltd., General Manager of Structured Finance Department

July 2010

Mori Building Co. Ltd., General Manager of Finance Planning Department

June 2014

Mori Building Co. Ltd., Executive Officer of Finance Planning Department

June 2014

Mori Building Real Estate Investment Advisory Co., Ltd., Director (current post)

Concurrent post

April 2015

Mori Building Co. Ltd., Executive Officer of Finance Department (current post)

Concurrent post

June 2018

Mori Building Investment Management Co., Ltd., Director (current post)

June 2018

Shanghai World Financial Center Investment Co., Ltd., Director (current post)

18

Concurrent post

External Director

Toshio Takano(Part-time)

April 1968

Sapporo District Public Prosecutors Office, Prosecutor

December 1999

Supreme Public Prosecutors Office, Chief of Criminal Investigations

November 2000

Tokyo District Public Prosecutors Office, Chief Public Prosecutor

November 2001

Sendai High Public Prosecutors Office, Superintendent Public Prosecutor

January 2004

Nagoya High Public Prosecutors Office, Superintendent Public Prosecutor

February 2006

Takano Law Office, Lawyer (current post)

September 2006

Mori Building Investment Management Co., Ltd, External Director (current post)

June 2007

Revamp Corporation, External Corporate Auditor

October 2017

Revamp Corporation, External Director, Audit Committee Member (current post)

AuditorAtsushi

October 2002

Joined Mori Building Co., Ltd.

(Part-time)

Suginobu

September 2005

Mori Building Co. Ltd., Senior Manager of Corporate Budget Control

Concurrent post

Concurrent post

Department
November 2011

Mori Building Co. Ltd., General Manager of Budget Control Department

June 2016

Mori Building Real Estate Investment Advisory Co., Ltd. Auditor (current post)

June 2018

Mori Building Investment Management Co., Ltd., Auditor (current post)

June 2018

Prime Stage Co., Ltd. Auditor (current post)

Concurrent post

June 2018

Mori Hospitality Corporation Auditor (current post)

Concurrent post

April 2019

Mori Building Co. Ltd., Senior Manager of Accounting Department Budget

Concurrent post

Control Group
November 2019

Shanghai Hills Hotel Management Co., Ltd. Auditor (current post)

Concurrent post

June 2020

Mori Building Co. Ltd., Senior Manager of Accounting Department Accounting

Concurrent post

Group 1 (current post)

19

(ii) Employees of the Asset Manager (As of October 26, 2022)
Number of employees

Interlocking of assignment

Other than temporary transferees

20－

Total Number of employees of the AssetManager

20－(Note)

Officers are not included in the total number of employees of the Asset Manager described above and no temporary transfers have been accepted.

(iii) Management structure of the Investment Corporation and the Asset Manager (As of October 26, 2022)(A) Management Structure of the Investment Corporation
Please refer to “Part 1. Fund Information - I. Status of the Fund - 1. Overview of the Company - (3) Structure of the Company” in the Company’s securities report forthe 32nd fiscal period (from February 1, 2022 to July 31, 2022) filed on October 26, 2022.

(B) Management Structure of the Asset Manager
The management organization chart of the Asset Manager and the outline of activities of each organization are as follows.

20

a. Management organization chart of the Asset Manager
General Meeting of
Shareholders

Corporate
AuditorBoard ofDirectors

President andCEO

Investment
Committee

Investment Dept.

Asset Management
Dept.

Financial Dept.

Compliance
Committee

Accounting Dept.

21

Administration
Dept.

Planning Dept.

Compliance Dept.

b. Outline of activities of each organization of the Asset Manager
The principal activities of each organization are as follows.
Organization
Investment Department

Outline of the principal activities
・ Activity relating to acquisition and disposition of properties for the investment management business・ Activity relating to establishment and amendment of the management policies (including the management
guidelines and asset management plan) for the investment management business・ Activity relating to establishment of special purpose companies for the purpose of the acquiring ofproperties by the Company and acquisition and disposition of properties by such special purpose
companies
・ Activity of examination and analysis relating to the real estate market
・ Any other activities incidental to the above

Asset Management Department

・ Activity relating to management and administration of properties for the investment management business・ Activity relating to management and administration of properties of the special purpose companies for the
purpose of the acquiring of properties by the Company
・ Activity relating to establishment and amendment of the management policies (including the management
guidelines and asset management plan) for the investment management business・ Activity relating to evaluation of performance for the investment management business・ Activity of examination and analysis relating to the real estate market
・ Any other activities incidental to the above

Financial Department

・ Activity relating to the capital policy and financial strategy of the Company
・ Activity relating to establishment and amendment of the financing policy of the Company
・ Activity relating to establishment and amendment of the annual financing plan of the Company
・ Activity relating to implementation of financing of the Company
・ Activity relating to the obtaining of ratings of the Company
・ Activity relating to establishment and amendment of the management policies (including the management22guidelines and asset management plan) for the investment management business・ Activity of examination and analysis relating to the real estate market
・ Any other activities incidental to the above
Accounting Department

・ Activity relating to accounting affairs of the Asset Manager
・ Activity relating to accounting and tax affairs and fund management of the Company
・ Activity relating to cash distribution by the Company
・ Activity relating to analysis and evaluation of accounts of the Company
・ Activity relating to establishment and amendment of the management policies (including the management
guidelines and asset management plan) for the investment management business・ Any other activities incidental to the above

Administration Department

・ Activity relating to general and personnel affairs of the Asset Manager
・ Activity relating to office of General Meetings of Unitholders and the Board of Directors
・ Any other activities incidental to the above

Planning Department

・ Activity relating to disclosure by the Company
・ Activity relating to IR activities of the Company
・ Activity relating to establishment and amendment of the management policies (including the management
guidelines and asset management plan) for the investment management business・ Activity relating to the Company’s promotion of ESG operations and support
・ Any other activities incidental to the above

Compliance Department

・ Activity relating to establishment and amendment of compliance regulations, compliance programs andcompliance manuals and the others regarding compliance・ Activity of verifying the status of compliance with laws and regulations for operation of activities andtransactions in each department
・ Activity of establishment and implementation of the basic policy for compliance with laws and regulations
・ Activity of reporting the status of compliance with laws and regulations

23

・ Activity of providing opinions or directions for compliance with laws and regulations
・ Activity relating to risk management
・ Activity relating to providing education and training regarding compliance・ Activity relating to complaint handling, etc.
・ Activity relating to internal audits
・ Any other activities incidental to the above
Investment Committee

Please refer to “(3) Policies on Transactions Involving Conflicts of Interest - (i) Policy and Management
System for Dealing with Transactions Involving Conflicts of Interest - (C) Overview of the Investment
Committee” described below.

Compliance Committee

Please refer to “(3) Policies on Transactions Involving Conflicts of Interest - (i) Policy and Management
System for Dealing with Transactions Involving Conflicts of Interest - (D) Overview of the Compliance
Committee” described below.

(3) Policies on Transactions Involving Conflicts of Interest
The Asset Manager shall perform its business in good faith and with due care of a prudent manager for the Company in line with the purpose of the investment managementbusiness, and is fully aware that failure to ensure thorough compliance, especially inappropriate transactions or transactions involving conflicts of interest with the Sponsor
Company Group, may undermine investors’ trust in the securities markets, and the corporate management base of the Company and the Asset Manager. Therefore, the AssetManager will use its efforts to prevent any negative impact from transactions involving conflicts of interest and carry out strict compliance as follows.

(i) Policy and Management System for Dealing with Transactions Involving Conflicts of Interest(A) Internal Rules Regarding Prevention of Transactions Involving Conflicts of Interest
The Asset Manager has established the Related Parties Transaction Guidelines as its internal regulations from the viewpoint of avoiding potential conflicts of interestfor the purpose of ensuring to prevent harm to the interests of the Company and to perform its business in compliance with applicable laws and regulations and the asset
management agreement when the Company enters into transactions with related parties of the Asset Manager.
“Related parties” as prescribed in the Related Parties Transaction Guidelines means the following entities: The same applies hereafter.

24

a. any entity designated as a related party of the Asset Manager under Article 201, Paragraph 1 of the Investment Trust Act, Article 123 of the Enforcement
Ordinance of the Investment Trust Act (Cabinet Order No. 480 of 2000, as amended) (the “Enforcement Ordinance”), and Article 244-3 of the Enforcement
Rules of the Investment Trust Act (Ordinance of Prime Minister’s Office No. 129 of 2000, as amended) (the “Enforcement Rules”);
b. any officers of the Asset Manager or of an entity designated as a related party of the Asset Manager;
c. any corporation (excluding foreign corporation; the same applies in d. and e. below) on which a major shareholder of the Asset Manager as prescribed in Article
29-4, Paragraph 2 of the Financial Instruments and Exchange Act is able to exert significant influence including the cases where such shareholder holds, directly
or indirectly, 15% or more of the voting rights of such corporation, and any officers or employees of such shareholder serve as directors or persons serving inan equivalent role of the corporation;
d. special purpose companies in which the Asset Manager or persons falling under any of a. and c. above are able to exert significant influence such as by having
contributed in total a majority of the capital thereof; ande. any corporation which consigns any person falling under any of a. and c. above to perform management services or advisory or agency services.

Summary of Related Parties Transaction Guidelines
Under the Related Parties Transaction Guidelines, transactions with related parties that are harmful to the interests of the Company or unnecessary transactions areprohibited, and the following provisions must be complied with in relation to each type of such transactions. When the Company conducts the following transactions
with related parties, the Asset Manager shall be required to obtain the approval and resolutions of all the members of the Compliance Committee upon deliberation at
the meeting of the Compliance Committee after the Compliance Officer examines the relevant transactions, and to obtain the approval and resolutions of the AssetManager’s Board of Directors upon deliberation at the meeting of the Asset Manager’s Board of Directors.
a. Acquisition of real estate assets (which means the assets as stipulated in each item of Article 31(2) of the Company’s Articles of Incorporation; the same applies
hereafter) and securities (which means securities as stipulated in Article 2, Paragraph 1 of the Financial Instruments and Exchange Act or the rights deemed as
securities based as stipulated in Paragraph 2 of the same article, and excluding real estate assets; the same applies hereafter.)
Upon the acquisition of real estate assets from related parties, the acquisition price shall not exceed the appraisal value by a real estate appraiser (including a
corporation; the same applies hereafter) which is not a related party. The acquisition price mentioned in this paragraph means the price of the real estate assets,
and does not include the taxes, acquisition costs, costs of creating a trust, reserves in trust accounts, trust earnings and the pro rata portion of real estate taxes. In

25

addition, if a seller acquires such real estate assets for the later acquisition by the Company, the amount equivalent to the costs and expenses necessary for suchacquisition by the seller will be excluded.
When acquiring other specific assets from related parties, the prices of such assets shall be pursuant to the preceding paragraph except for those for which market
value may be obtained, in which case such market value shall apply.
b. Disposition of real estate assets and securities
Upon the disposition of real estate assets to related parties, the disposition price shall not fall below the appraisal value by a real estate appraiser which is not a
related party.
When selling other specific assets from related parties, the prices of such assets shall be pursuant to the preceding paragraph except for those for which market
value may be obtained, in which case such market value shall apply.
c. Execution and amendment of lease agreements on real estate assets and securities except for certain cases
Real estate assets shall be leased to related parties on terms and conditions that are determined to be appropriate after researching market prices and prices inthe surrounding areas and referring to the opinions of third parties who are not related parties.
d. Execution and amendment of property management agreements except for certain cases
When outsourcing property management services to related parties, the Asset Manager shall take into account factors such as the related party’s trustworthinessand its track record as a property manager, and the management fee must be determined based on market rates, and the nature and volume of the services to berendered.
If the Company acquires property that is already being managed by the related parties, property management services after the acquisition may be outsourced
to such related parties. However, the determination of management fees shall be determined as stated above.
e. Execution and amendment of agency agreements regarding acquisition or disposition and lease of real estate assets
When outsourcing agency services for sale and purchase of real estate assets (excluding beneficial interests in trust) to related parties, the compensation shallbe within the range of compensation provided in the Building Lots and Buildings Transaction Business Act (Act No. 176 of 1952, as amended) (the “Building
Lots and Buildings Transaction Business Act”), and shall be determined in consideration of the standard of the sale and purchase price and the difficulty of aparticular transaction.
When outsourcing agency services for sale and purchase of beneficial interests in trust to related parties, the compensation shall be within the range ofcompensation calculated in the same way as provided under the Building Lots and Buildings Transaction Business Act, and shall be determined in consideration26

of the standard of the rent and the difficulty of a particular transaction. When outsourcing agency services for leasing to related parties, the compensation shallbe not exceed the compensation provided in the Building Lots and Buildings Transaction Business Act, and shall be determined in consideration of the standardof the rent and the difficulty of a particular transaction.
f.

Transactions relating to funds such as loan and contribution of funds

g. Other transactions that may be harmful to the interests of the Company other than certain transactions
h. When the Asset Manager decides that the Company will conduct transactions in any of a. to g. above with related parties, such transactions shall be promptly
disclosed when required in accordance with Securities Listing Regulations and other rules set out by the Tokyo Stock Exchange and other rules related to theCompany.

The Asset Manager shall fully verify the conditions of transactions with related parties in compliance with laws, regulations and various rules and the standards
prescribed in the Related Parties Transaction Guidelines so as not to cause disadvantage to the Company in comparison with ordinary similar transactions. At the timeof the internal audit, the Asset Manager confirms and verifies the status of compliance with laws, regulations and various regulations and internal rules in relation to theprevention of conflicts of interest.

27

(B) Decision-making Process for Investment and Management
Matters Relating to Acquisition and Disposition of Assets:
The Asset Manager shall follow the following procedures for decisions on the acquisition of assets from related parties:i.

After selecting investment grade assets, the Investment Department will submit a proposal of the acquisition to the Compliance Officer. The details of the methodof selecting the investment grade assets will be as prescribed in the management guidelines.

ii. The Compliance Officer will review the proposal in light of laws and regulations, and submit the proposal to the Investment Committee together with theoutcome of its review.
iii. After reporting the outcome of the review from the Compliance Officer, the proposal will be resolved by the Investment Committee after its deliberation. If the
proposal is approved by the Investment Committee as a result of the resolution, the proposal will be submitted to the Compliance Committee. The Chairman of
the Investment Committee will report to the Compliance Committee the details of the deliberation at the Investment Committee and the progress thereof.
iv. If the proposal is resolved by the Compliance Committee after its deliberation, the proposal will be submitted by the President & CEO to the Asset Manager’s
Board of Directors. In the event where the director is in the position of the parent company of the Asset Management Company or the director or employee ofthe related party concerned (including when concurrently posted and excluding when seconded to or transferred to the Company), that director is unable toparticipate in the decision of the Board of Directors. The President & CEO will report the details and progress of the deliberation at the Investment Committee
and the Compliance Committee to the Asset Manager’s Board of Directors.
v. If the proposal is resolved by the Asset Manager’s Board of Directors after its deliberation, the proposal will be submitted to the Company’s Board of Directors.
vi. If the proposal is resolved by the Company’s Board of Directors after its deliberation, the acquisition of the investment assets from related parties is approved.
If a proposal is rejected by resolution at any of the above committee or the Asset Manger’s Board of Directors, or is not approved by the Company’s Board of
Directors, the proposal will be passed back to the Investment Department.

The Asset Manager shall follow the same procedures as those for the acquisition of assets from related parties as described above for decisions on the disposition ofassets to related parties.
The Asset Manager must gain consent of the Company beforehand if such falls under transactions as stipulated in Article 201-2, Paragraph 1 of the Investment Trust
Act, and must gain approval of the Board of Directors in order to enable the Executive Director giving such consent.

28

The following chart summarizes the Asset Manager’s decision-making process concerning the acquisition of the assets:

Selection of investment grade properties and preparation of original
proposal by the Investment Department
Submit proposal
Review by the Compliance Officer
Submit proposal
Deliberation and resolution at the Investment Committee
Reject or passback the proposal

Submit proposal
Deliberation and resolution at the Compliance Committee
Submit proposal by the President
Deliberation and resolution at the Asset Manager’s Board of Directors
In the case ofan acquisition
from any
related-party

Submit proposal

Approved by the Company’s Board of Directors

29

Matters Relating to Outsourcing of Real Estate Management Services:
The Asset Manager shall follow the following procedures for decisions on the outsourcing of property management services to related parties:i.

The Asset Management Department will submit a proposal to the Compliance Officer.

ii. The Compliance Officer will review the proposal in light of laws and regulations, and submit the proposal to the Compliance Committee together with theoutcome of its review.
iii. If the proposal is resolved by the Compliance Committee after its deliberation, the proposal will be submitted by the President & CEO to the Asset Manager’s
Board of Directors. The President & CEO will report the details of the deliberation at the Compliance Committee and the progress thereof to the Asset Manager’s
Board of Directors. In the event that the director is in the position of the parent company of the Asset Management Company or the director or employee of therelated party concerned (including when concurrently posted and excluding when seconded to or transferred to the Company), that director is unable to participate
in the decision of the Board of Directors.
iv. If the proposal is resolved by the Asset Manager’s Board of Directors after its deliberation, the decision is finalized.
When outsourcing property management services to related parties, the Asset Manager shall take into account factors such as the related party’s trustworthinessand its track record as a property manager, and the management fee must be determined based on market rates, and the nature and volume of the services to berendered.
If the Company acquires property that is already being managed by the related parties, property management services after the acquisition may be outsourced tosuch related parties. However, the management fees shall be as set out above.

30

(C) Overview of the Investment Committee
Committee

President & CEO (who serves as the Chairman), full-time directors, Executive Officer, Chief General Manager, General Manager of the Investment

members

Department, General Manager of the Asset Management Department, and one external expert skilled in real estate investments who is appointed by the
President & CEO (Note)
However, the Executive Officer and Chief General Manager who constitute the committee shall be those in charge of the Investment Department or the
Asset Management Department.

Matters for・ Acquisition and disposition of assets relating to the investment management businessdeliberation and・ Establishment and amendment of the management policies (including the management guidelines and asset management plan) for the investment

resolution

management business・ Establishment and amendment of asset management regulation and other important regulations for the investment and management of assets relating
to the investment management business・ Other matters deemed to be necessary under the internal regulations or by the Investment Committee

Deliberation

・ Attendance of all of the members will constitute a quorum for the Investment Committee, except for any unavoidable case where all members

method, etc.

present consider that the absence of member(s) is not caused by the intention of such member(s), in which case a majority of the members will
constitute a quorum.
・ Approval of a majority of the members present is required for the resolution of any proposal. If any proposal is rejected, the Chairman of theInvestment Committee will pass such proposal back to the department that originally prepared the proposal.

(Note)

As of the date of this Report, one real estate expert holds the post of an external expert.

(D) Overview of the Compliance Committee
Committee

President & CEO, Compliance Officer (who serves as the Chairman), one external expert (Note)

members
Matters for・ Establishment and revision of the basic polices for compliancedeliberation and・ Establishment and amendment of compliance manuals and compliance programs

resolution

・ Measures for handling complaints that are deemed material

31

・ Acquisition and disposition of assets relating to the investment management business・ Establishment and amendment of the management policies (including the management guidelines and asset management plan) for the investment
management business・ Establishment and amendment of asset management regulation and other important regulations for the investment and management of assets relating
to the investment management business・ The following transactions between the Company and related parties:(i)

Acquisition of real estate assets and securities(ii)

Disposition of real estate assets and securities(iii) Execution and amendment of lease agreements on real estate assets and securities except for certain cases(iv) Execution and amendment of property management agreements except for certain cases(v)

Execution and amendment of agency agreements regarding acquisition or disposition and lease of real estate assets(vi) Transactions relating to funds such as loan and contribution of funds(vii) Other transactions that may be harmful to the interests of the Company other than certain transactions
・ Other matters deemed to be necessary under the internal regulations or by the Compliance Committee
Deliberation

・ Attendance all of the members will constitute a quorum for the Compliance Committee. However, if members other than external experts are unable

method, etc.

to attend the Committee and all other members judge it as unavoidable circumstances, the Committee can be held by attending a majority of its
members.
・

Approval of all of the members is required for the resolution of any proposal. However, if there are members who are unable to attend as above,
resolution can be approved with the approval of all attendance of committee members. If no resolution of approval is made, the Chairman will
remand the proposal to the department that originally prepared the proposal.

(Note)

As of the date of this Report, one lawyer holds the post of an external expert. In addition, if an external expert is temporarily unable to perform one’s duties due to illness, accident or other unavoidable
circumstances, and other all members judge that there is an emergency or other justifiable reason for holding the Compliance Committee, the Chairman is able to appoint other external experts as a substitutefor the external experts.

32

(ii) Reason for Adopting the Investment System (Reason for Considering that the Internal Control System is Appropriate)(A) Role Played by the Executive Director of the Investment Corporation with respect to Transactions with Potential Conflicts of Interest
As set out in “2. Management Structure and System of the Company and the Asset Manager, (1) Company, (ii) Reasons why the Executive Director of the Company
concurrently Holds the Position of Officers or Employee of the Asset Manager and Measures for Relationships Involving Conflicts of Interest” above.

(B) Role Played by the Board of Directors of the Asset Manager with respect to Transactions with Potential Conflicts of Interest
The Board of Directors of the Asset Manager is comprised of three directors including one external director. Currently, Mr. Toshio Takano, a lawyer, is appointed
as an external director. (the officers of the Asset Manager are as set out in “2. Management Structure and System of the Company and the Asset Manager, (2) AssetManager, (i) Officers of the Asset Manager” above). Mr. Takano was elected with the expectation that he would be able to oversee the Company’s management basedon his knowledge and experience, etc. as a lawyer from a broad perspective and to enhance the governance by enabling appropriate deliberations and resolutions
concerning the related party transactions by contributing to decision-makings as a third party to works as a checker from an independent position who does not have a
special relationship with the sponsor company group.

As described above, the Asset Manager has established the “Related Parties Transaction Guidelines” as its internal regulations from the viewpoint of preventing andavoiding potential conflicts of interest, and has established the system to enable the Company to execute only the transactions that satisfy certain conditions in accordancewith the strict procedures when the Company enters into the transactions with related parties.
For example, the Asset Manager endeavors to prevent unfair or murky transactions that may result in conflicts of interest by specifically providing that the sale andpurchase transactions of the real estate assets with the related parties which threaten to cause conflicts of interest are required to be deliberated and resolved at theInvestment Committee (including one external expert), the Compliance Committee (including one external expert ), the Asset Manager’s Board of Directors (including
one external director), and the Company’s Board of Directors (including four supervisory directors), and by including in each decision-making process two or more
external members having check-and-balance functions at multiple levels.

(C) External Members of the Committees
a. Investment Committee

33

The Investment Committee serves as a body to deliberate on and resolve the investment of assets and otherwise appraise the investment in relation to the
execution of the investment management business by the Asset Manager from the viewpoint of appropriateness and reasonableness.
The Investment Committee is currently comprised of four members: the President & CEO (who serves as the Chairman), a full-time director, Executive Officer,
Chief General Manager, the General Manager of the Investment Department, the General Manager of the Asset Management Department, and one external
expert skilled in real estate investments who is appointed by the President & CEO. Attendance (including attendance via telephone, video conference and othermedia) of all of the members will, in principle, constitute a quorum for the Investment Committee, and approval of a majority of the members present is required
for the resolution of any proposal.
Currently, a university professor specializing in real estate holds the post of external member. The external member is expected to be able to participate in theCommittee based on his knowledge, experience, etc. as a real estate expert from a broad perspective. As a third party who can effectuate the check-and-balancesystem in his capacity as being independent of and not having any particular relationships with the Sponsor Company Group, the external member is expected
to exert an influence on decision-making, thereby contributing to the enhancement of governance that realizes, among other matters, appropriate deliberation
and resolution in relation to transactions involving conflicts of interest. In accordance with the agreement whereby the external member is appointed as suchmember, the information of the external member is not disclosed here.

b. Compliance Committee
The Compliance Committee serves as a body to deliberate on and resolve compliance-related matters in relation to the execution of business by the AssetManager from the viewpoint of complying with laws and regulations, and various procedures and otherwise ensuring compliance.
The Compliance Committee is currently comprised of three members: the President & CEO, the Compliance Officer (who serves as the Chairman), one external
expert (lawyer). Attendance (including the attendance via telephone, video conference and other media) of all the members constitute a quorum for theCompliance Committee. Approval of all of the members is required for the resolution of any proposal. These rules ensure the check-and-balance system.
Currently, Mr. Hiroyuki Shimizu, a lawyer, holds the post of external member. Mr. Shimizu is expected to be able to participate in the Committee based on his
knowledge, experience, etc. as a legal professional from a broad perspective. As a third party who can effectuate the check-and-balance system in his capacity
as being independent of and not having any particular relationships with the Sponsor Company Group, he is expected to exert an influence on decision making,thereby contributing to the enhancement of governance that realizes, among other matters, appropriate deliberation and resolutions in relation to transactions
involving conflicts of interest.

34

Job title
Member of the

Name
Hiroyuki Shimizu

Brief biography
April 1985

Compliance

Registered as a lawyer (a member of Daiichi Tokyo Bar Association), and joined Nishimura & Sanada(presently, Nishimura & Asahi)

Committee

September 1991

Debevoice & Plimpton LLP (New York, U.S.A.)(external member)

October 1992

Lawyer, Nishimura & Asahi

June 1993

Partner, Nishimura & Asahi

April 1994

Lawyer, Aoyama Law Office

June 2007

Lawyer, Kasahara International Law Office (presently, Shimizu Sogo Law Office) (current post)

March 2012

Supervisory Director, Nomura Real Estate Private REIT, Inc.

February 2014

External Corporate Auditor, Kokusai Kogyo Co., Ltd. (presently, Kokusai Kogyo Kanri Co., Ltd.) (current
post)

35

(D) Compliance Officer
The Compliance Officer is the supervisory manager for compliance-related matters and chairs the Compliance Committee. Currently, the Compliance Officer is also
the General Manager of the Compliance Department who designs, establishes and promotes the overall compliance. As the supervisory manager for compliance-related
matters, the Compliance Officer examines and otherwise verifies the status of compliance with laws and regulations by the Asset Manager in its capacity as being
independent from other departments under the organization of the Asset Manager. The Compliance Officer also has a role in the check-and-balance system to prevent
transactions involving conflicts of interest by examining in advance, and deliberating and resolving from a fair viewpoint as Chairman of the Compliance Committeeon, the details of the transactions with the Sponsor Company Group.

Job title
General Manager of
the Compliance

Name
Hirohito Ikeda

Brief biography
April 2008

Joined GOLDCREST Co.,Ltd

October 2021

Joined Mori Building Investment Management Co., Ltd.

Department(Compliance
Officer)Manager of the Administration Department and the Compliance Department
July 2022

Mori Building Investment Management Co., Ltd.
General Manager of the Compliance Department (Compliance Officer) (current post)36

3. Transactions with the Sponsor Companies(1) Transactions with Related Parties
The status of transactions including buying and selling with related parties (Note 1) during the 32nd fiscal period (from February 1, 2022 to July 31, 2022) of the Company is
as follows.

(i) Status of Transactions(Unit: thousands of yen)Amounts purchased and soldAmount purchased
Total amount－
Breakdown of transactions with related parties etc.
Mori Building Co., Ltd.
－
Total
－
Classification

Amount sold2,898,000
2,898,000 (100.0%)
2,898,000 (100.0%)(ii) Amount of Fees Paid
(Unit: thousands of yen)Classification

Total amount of fees
paid (A)Property management fees
(Note 1)

1,217,347

Details of transactions with related parties
Payee

Percentage of amount paid to total

Amount paid (B)Mori Building Co., Ltd.

251,762

amount of fees paid (B/A) (%)
20.7

The term “related parties” means (i) any related parties to the Asset Manager with which the Company has executed the asset management agreement and are prescribed in Article 201, Paragraph 1of the Investment Trust Act, Article 123 of the Enforcement Ordinance, and Article 244-3 of the Enforcement Rules, and (ii) any related parties as defined in Article 26 (27) of the Regulations for
Performance Reports Relating to Investment Trust and Investment Corporation set out by The Investment Trusts Association, Japan.

(Note 2)Other than fees paid described above, the following fee paid to the related parties have not been written off as a loss but recorded as assets.
Mori Building Co., Ltd., 38,556 thousand yen

37

(iii) Summary of Transactions
As of July 31, 2022, the Company has executed with Mori Building Co., Ltd., a 100% shareholder and a related party of the Asset Manager, master lease agreements (Note)
regarding the following real estate in trust through the intermediary of the trustee, under which Mori Building Co., Ltd. is a master lease company and is entrusted with theperformance of PM Services regarding all of the real estate in trust excluding Laforet Harajuku (Land).
Property nameLease type

Lease agreement typeRoppongi Hills Mori Tower

Fixed master lease

General building lease agreement

ARK Mori Building

Fixed master lease

General building lease agreement

Koraku Mori Building

Pass-through master lease

Fixed term building lease agreement

Akasaka Tameike Tower

Pass-through master lease

General building lease agreement

ARK Hills South Tower

Pass-through master lease

General building lease agreement

Holland Hills Mori Tower

Pass-through master lease

General building lease agreement

Roppongi First Plaza

Pass-through master lease

Fixed term building lease agreement

Roppongi View Tower

Pass-through master lease

Fixed term building lease agreement(Note)The master lease is a system in which a trustee or the Company leases to a master lessee (sublessor) and the master lessee subleases to the end tenants (sublessees). Master leases can beclassified into pass-through master leases and fixed master leases as described above, and the above table follows that classification.
- Pass-through master leases: a master lease system in which the amount of rent paid by the master lessee and the amount of rent paid by the end tenants are always the same
- Fixed master leases: a master lease system in which the amount of rent paid by the master lessee is fixed to a certain amount without regard to the amount of rent paid to the master lessee by
the end tenants
In the above, the term “master lessee” means a party who rents the property in whole from the trustee or the Company and subleases a section of the property to another third party, and the term
“end tenant” means a party who actually pays to the lessor a rent for the section of the property it rents (including master lessees under fixed master leases).

38

As of July 31, 2022, the Company grants through the intermediary of the trustee the right to lease Atago Green Hills and Toranomon Hills Mori Tower to Mori Building
Co., Ltd., a 100% shareholder, a related party of the Asset Manager, and a joint owner of Atago Green Hills and Toranomon Hills Mori Tower, and the Company receives
payment from such company of a fixed amount in exchange for granting of the right to lease as well as entrusts such company with the performance of PM Services.

As of July 31, 2022, the Company leases through the intermediary of the trustee the following property to Mori Building Co., Ltd., a 100% shareholder and a related partyof the Asset Manager, for the purpose of its own use.
Property nameKoraku Mori Building

Leased section

Purpose of usage by its own
To continue shop operation in theform of entrustment of shop
operations

A section of the second floor

As of July 31, 2022, the Company leases the following property to a related party through the intermediary of the trustee.
Property name

Laforet Harajuku (Land)

Leased section

Land

Related party

Purpose of use

Mori Building Ryutsu
System Co., Ltd.

To own a building used mainly as
commercial facilities and for otherbusiness purposes(2) Status of Property Acquirer, etc.
The status of acquisition and transfer of properties conducted during the 32nd fiscal period (from February 1, 2022 to July 31, 2022) between the Company and any relatedparties, special purpose companies (or subsidiaries) whose decision-making bodies are controlled by related parties, and any parties otherwise having a special relationship with
the Asset Manager (“Parties with Special Interests”) is as follows.

39

Transfer of Property:(Unit: millions of yen)
Property name(location)

Buyer

Investment Corporation

Laforet Harajuku (Land)(3) The Property is land with fixed-term business-use leasehold rights and when the agreement related(1) Mori Building Co., Ltd.

(1-11-6 Jingumae, Shibuya-to the establishment of the leasehold rights terminates in September 2030, as a general rule, the(2) The parent company of theku, Tokyo)

agreement will not be renewed. Because the agreement stipulates that the building is to be removed andAsset Manager

the land returned, MHR must conduct a transfer or take other measures in the future. In addition,
considering the share of the entire portfolio represented by the Property, there will be a relatively large
decrease in rent income after the transfer, and the harm that this will cause to stable dividends is an issue.
MHR conducted a comprehensive review of trends in the economic environment and real estate market
conditions, the impact of the transfer on the portfolio, etc. while taking into account the current asset
management status. As a result, MHR has determined that maintaining and increasing the rent incomeof the entire portfolio, by splitting and transferring a small portion of the Property while using the special
tax treatment for property replacement of specified assets and returning a portion of the gain from thetransfer as dividends while retaining a portion as internal reserves to utilize for acquiring new properties,
will contribute to improving the interests of unitholders. The Property is part of the property acquired
from Mori Building Co., Ltd. for 21,820 million yen on September 15, 2010, and the appraisal value
taking into consideration the quasi co-ownership interest as of January 31, 2022, is 2,898 million yen.
Therefore, the transfer price is believed to be reasonable.
Transfer
priceTime oftransfer(Note)

2,898－

July 2022－

This column describes (1) names of companies or persons, (2) the relationship with Parties with Special Interests, and (3) process or reasons for the transfer.

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4. Others(1) Selection Policy on and Summary of Real Estate Appraiser Agent (As of July 31, 2022)(i) Selection Policy
The real estate appraiser agent is selected from among major appraisal agents who have abundant experience, including in the J-REIT market, and good social credibility.

(ii) Summary
Summary of real estate appraiser agent
Property name

Name

Address

The number of real estateappraisers

Reason for selection

Roppongi Hills Mori Tower

The reason for selecting JapanARK Mori Building

Real Estate Institute is that it has

Koraku Mori Building
Akasaka Tameike Tower
Atago Green Hills
Toranomon Hills Mori Tower
Holland Hills Mori Tower
Roppongi First Plaza

experience in conducting

TOKYO TORANOMONGLOBAL SQUARE.
Japan Real Estate Institute1-3-1 Toranomon,
Minato-Ku,
Tokyo 105-0001

appraisals at the time of273

acquisition and disposal and at(as of May 1, 2022)

the end of fiscal period, and, as
the industry-leading agent, has awealth of achievements in the J-

Roppongi View Tower

REIT market as well as good

Laforet Harajuku (Land)social credibility.

41

The reason for selecting Daiwa
Real Estate Appraisal Co., Ltd. isthat it has experience in
11F Orix Honmachi
ARK Hills South Tower

Daiwa Real Estate Appraisal

Building, 1-4-1

Co., Ltd.

Nishihonmachi, Nishi-ku,
Osaka-shi, Osaka 550-0005

conducting appraisals at the time124
(as of March 1, 2022)of acquisition and at the end of
fiscal periods, and has a wealth ofachievements in the J-REIT
market as a major agent in theindustry, along with good social
credibility.

(2) Selection Policy on and Summary of Engineering Report Preparation Agent (As of July 31, 2022)(i) Selection Policy
The engineering report preparation agent is selected from among agents who have abundant experience, including in the J-REIT market, and good social credibility.

(ii) Summary
Not applicable.

(3) Other Transactions Possibly Involving Conflicts of Interests
Not applicable.

42(4) Status of IR-Related Activities(i) IR Schedule
The IR schedule of the Company is as follows.
- Last month of accounting period:

January and July

- Publication of financial results (Kessan-Tanshin):

March and September- Financial results briefing:

March and September- Dispatch of asset management report:

April and October

The Kessan-Tanshin, materials for financial results briefings, and asset management reports are published on the Company’s website as necessary.

(ii) IR Activity Policy
As to the Company’s IR activities, the Company will endeavor to establish a relationship with its investors by having the executive directors of the Company and thePresident & CEO and general managers of the Asset Manager give briefings on financial results and proactively disclose information on the Company’s management status.
The timing of the main activities are as follows (however, although the IR activities basically follow the policy described in the following items, whether or not to perform theactivities and the timing of the activities will be determined on a case-by-case basis taking market conditions into consideration).
(A) After publication of financial results, regular IR activities (for institutional investors in Japan) will be held at a designated time between late March and May and between
late September and November respectively.
(B) After publication of financial results, regular IR activities (for institutional investors outside Japan) will be held at a designated time between early April and May or
between early October and November respectively.
(C) Additional IR activities for institutional investors both inside and outside Japan will be held from time to time at designated times except for periods from the dates near
the end of accounting periods to the dates of financial results publication.
(D) In addition to the above-mentioned IR activities for institutional investors both inside and outside Japan, a briefing for individual investors will be held.

(iii) Information Disclosure System
In addition to the disclosure required by laws and regulations, from a viewpoint of securing transparency, the Company will endeavor to disclose accurate and non-biased
information to its investors in an appropriate and easy-to-understand way, and as much as possible make voluntary disclosure of the information that the Company considers

43

important or useful for its investors.
The timely disclosure of the information on the Company’s real estate investment trust is entrusted to and made by the Asset Manager. For understanding and managing thefacts and accounting settlement information that would have a material impact on investors’ investment decision and for making timely, appropriate, and fair information
disclosure, the Asset Manager has appointed its Planning Department as the department in charge of information disclosure (the “Disclosure Department”), with the generalmanager of the Planning Department as the person responsible, and has that department undertake the internal process of timely disclosure of information.

(iv) Information Disclosure Process
The internal process for the timely disclosure of information is as follows.
(A) Account Settlement Information
In the case of information relating to the Company’s account settlement, the Disclosure Department will prepare disclosure documents, including the accounts settlement
information approved under the Investment Trust Act, the information relating to distribution expectations, and the Kessan-Tanshin containing management status, and after
the Compliance Officer’s review and upon receiving approval of the President & CEO of the Asser Manager, will disclose the information in question.

(B) Information on Matters Decided and Matters Arisena. If a matter decided on by the Company’s Board of Directors and the Asset Manager’s Board of Directors constitutes a matter required to be disclosed by laws andregulations, then the department in charge of the matter in question will prepare disclosure materials upon making a report to the Disclosure Department in advance.
b. If a matter that arises in relation to the Company or the Asset Manager becomes required to be disclosed by laws and regulations, for example because the matter isfound to have a material impact on the investors’ investment decision, then the department in charge of the matter in question will immediately make a report to theDisclosure Department and prepare disclosure materials.
c. The Disclosure Department will confirm the contents of the disclosure materials prepared by the department in charge of the matter in question, and after theCompliance Officer’s review and upon receiving approval of the President & CEO of the Asset Manager, will disclose the matter in question.
d. If the department in charge of the matter in question and the Disclosure Department find it necessary with respect to the contents of the disclosure materials, they
will seek experts’ opinions from Tokyo Stock Exchange personnel, lawyers, accounting auditors, and tax attorneys as necessary.

(C) Information Designated as Other Important Information

44

The information designated in the Asset Manager’ internal rules as other important information will be also disclosed in accordance with the disclosure process describedin (B) a to (B) d.

(D) Information Not Designated as Information Subject to Disclosure
If a matter that is not designated as information subject to disclosure or is difficult to decide whether to disclose or not arises, then the department in charge of the matterin question and the Disclosure Department will collect information on the matter in question, seek experts’ opinions from Tokyo Stock Exchange personnel, lawyers,
accounting auditors, and tax attorneys as necessary, and discuss whether to disclose and the timing and the contents of the disclosure. If as a result of such discussion it isconcluded that the disclosure is necessary, then the matter in question will be disclosed as voluntary disclosure in accordance with the process described in (B) a to (B) d.
If as a result of such discussion it is concluded that the disclosure is not necessary, then the matter in question, the details of the discussion and the reason for the conclusion
will be recorded and a report will be made to the Compliance Officer and the President & CEO.

(E) Method of Information Disclosure
The disclosure of information constituting matters for which timely disclosure is required under the “Securities Listing Regulations” and the “Enforcement Rules of
Securities Listing Regulations” set out by the Tokyo Stock Exchange will be made, in accordance with those regulations and enforcement rules, by registering suchinformation with the “TDnet (Timely Disclosure network)” run by that exchange. Without delay after the registration to “TDnet,” materials for the timely disclosure will be
published on the Company’s website. The disclosure of information not constituting matters for which timely disclosure is required under the Securities Listing Regulations
will also be made appropriately in accordance with the purpose of the timely disclosure.

(5) Development of Structure for Elimination of Anti-Social Forces
The Asset Manager provides a statement on “severing all ties, including business ties, with anti-social forces” in its “basic rules on response to anti-social forces.”

Accordingly,

the Asset Manager endeavors to develop an internal structure, such as assigning a person responsible for overseeing and managing responses to anti-social forces and a person
responsible for preventing unjust demands, and also ensures that all officers and employees are thoroughly informed of how to respond to anti-social forces, etc. through in-housetraining, etc.

End.

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