Creating peace of mind through honest and committed management.

June 18, 2012

FINANCIAL REPORT FOR
THE FISCAL PERIOD ENDING APRIL 2012
(November 1, 2011 – April 30, 2012)
Ichigo Real Estate Investment Corporation (“Ichigo REIT,” Representative: Yoshihiro Takatsuka, Executive Director,
URL: www.ichigo-reit.co.jp/english) is listed on the Tokyo Stock Exchange with the securities code 8975.
Asset Management Company: Ichigo REIT Management Co., Ltd.
Representative:
Wataru Orii, President & Representative Director
Inquiries:
Masanori Kubota, Director (Finance)
Tel. +81-3-3502-4891
Submission Date for Securities Report:
July 27, 2012 (expected)
Start Date for Dividend Payments:
July 23, 2012 (expected)
Supplement Material to Financial and Business Results: Yes
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1.

Financial Results for the Fiscal Period Ending April 2012
(Monetary amounts are rounded down to the nearest million yen)

(1) Earnings(million yen; period-on-period change)

Fiscal Period
ending April 2012
Fiscal Period
ending October 2011

Fiscal Period
ending April 2012
Fiscal Period
ending October 2011

Operating
Revenue

ChangeOperating
IncomeChangeOrdinary
IncomeChangeNet
IncomeChange4,273

442.4%

1,534

281.6%

526

118.5%

17,089

―

787

3.4%

402

3.3%

240

4.8%

236

5.3%

Net Income per Unit
(yen)

Ratio of Net Income
to Equity

Ratio of Ordinary
Incometo Total Assets

Ratio of Ordinary
Incometo Operating Revenue

20,275

50.4%

0.8%

12.3%

1,031

1.6%

1.0%

30.6%

(Note) Ichigo REIT implemented a 7 for 1 unit split on November 1, 2011. The Net Income per Unit for the
October 2011 period above is calculated based on the assumption that the unit split was effective during the
October 2011 period. Net Income per Unit before the unit split for the October 2011 period was 7,219 yen.
(2) Dividends
Dividend per Unit

Fiscal Period
ending April 2012
Fiscal Period
ending October 2011

(not including
dividends in excessof earnings)

Total
Dividends

Dividend per Unit in
Excess of Earnings

Total Dividends in
Excess of Earnings

PayoutRatio

Ratio of
Dividends to
Net Assets(yen)(million yen)

(yen)(million yen)

(%)

(%)

1,219

1,027

0

0

6.0

3.0

7,220

236

0

0

100.0

1.6

(Note 1) Net Income for the April 2012 period includes negative goodwill of 16,562 million yen in extraordinary
income and therefore the amount differs from the dividend. The dividend is the total amount of retained
earnings less negative goodwill and a dividend reserve of 501 million yen.
(Note 2) Payout Ratio is rounded down to the first decimal place.

(3) Assets and Equity

Fiscal Period
ending April 2012
Fiscal Period
ending October 2011

Total Assets(million yen)

Net Assets(million yen)

Equity Ratio(%)

Net Assets per Unit(yen)

115,226

52,58445.6

62,39024,99915,164

60.7

66,251(Note) Ichigo REIT implemented a 7 for 1 unit split on November 1, 2011. The Net Asset per Unit for the October
2011 period above is calculated based on the assumption that the unit split was effective during the October
2011 period. Net Asset per Unit before unit split for the October 2011 period was 463,758 yen.
(4) Cash Flow
Cash Flow fromOperating Activities

Cash Flow from
Investment Activities

Cash Flow from
Financing Activities(million yen)(million yen)(million yen)

Cash and Cash
Equivalents at End of the
Period(million yen)

4,334

(490)

(3,229)

9,628

311

3

(273)

1,901

Fiscal Period
ending April 2012
Fiscal Period
ending October 20112.

Earnings Forecasts for the Fiscal Periods Ending October 2012 and April 2013
(million yen; period-on-period change)

Fiscal Period
ending October 2012
Fiscal Period
ending April 2013

Operating
Revenue

ChangeOperating
IncomeChangeOrdinary
IncomeChangeNet
IncomeChange4,266(0.2%)

1,746

13.8%

619

17.7%

618

(96.4%)

4,168(2.3%)

1,974

13.1%

1,107

78.7%

1,106

78.8%
(yen)

Dividend per Unit
(not including dividends in excess of earnings)

Fiscal Period
ending October 2012
Fiscal Period
ending April 2013

Dividend per Unit in Excess of Earnings

1,260

0

1,310

0

Reference: The forecast Net Income per unit is 734 yen for the October 2012 period and 1,313 yen for the April
2013 period. The dividend for the October 2012 period is scheduled to include a dividend reserve of
448 million yen.
Note: The Fiscal Period ending October 2011 runs from May 1, 2011 to October 31, 2011.
The Fiscal Period ending April 2012 runs from November 1, 2011 to April 30, 2012.
The Fiscal Period ending October 2012 runs from May 1, 2012 to October 31, 2012.
The Fiscal Period ending April 2013 runs from November 1, 2012 to April 30, 2013.

2

3.

Other
(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement(i) Changes accompanying Amendments to Accounting Standards:(ii) Changes other than (i):(iii) Changes in Accounting Estimates:(iv) Retrospective Restatement:

Yes
No
No
No

(2) Number of Investment Units Issued and Outstanding(i) The number of investment units issued and outstanding (including treasury investment units) was
32,700 units at the end of the October 2011 period and 842,823 units at the end of April 2012 period.
(ii) The number of treasury investment units was 0 units at the end of the October 2011 period and 0 units
at the end of the April 2012 period.
Completion Status of Auditing ProceduresThis document is not subject to the auditing requirements set forth in the Financial Instruments and Exchange
Law of Japan. The auditing procedures in accordance with those requirements have not been completed as of thedate of the publication of this document.
Appropriate Use of Performance Forecasts and Other Matters of Special Note
The forecasts presented above are current figures based on certain preconditions. Accordingly, the actual
operating revenue, operating income, ordinary income, net income, dividend per unit and dividend per unit inexcess of earnings may vary due to changes in circumstances. Moreover, these forecasts should not be
construed as a guarantee of such performance or results.
For details on the preconditions, please refer to the “Preconditions for Earnings Forecasts of the Fiscal Periods
ending October 2012 and April 2013” on pages 4-5.
Ichigo REIT implemented a 7 for 1 unit split with the record date of October 31, 2011 and the effective date ofNovember 1, 2011. The performance forecasts for the October 2012 and April 2013 periods are calculated
based on the post-split investment units.
This English notice is a translation of the original Japanese notice and is provided solely for informational
purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shallprevail.

3

Preconditions for Earnings Forecasts of the Fiscal Periods ending October 2012 and April 2013.
Item

Preconditions

Periods

The Fiscal Period ending October 2012: May 1, 2012 – October 31, 2012 (184 days)
The Fiscal Period ending April 2013: November 1, 2012 – April 30, 2013 (181 days)

Portfolio Assets• 67 properties as of April 30, 2012. Ichigo REIT sold the Solon Keyakidori Building in June 2012. The
forecast assumes acquisition of the M’s SQUARE asset in which Ichigo REIT owns TK equity and has
a preferential negotiation right.
• The anticipated acquisition price of M’s SQUARE is 2,130 million yen, (excluding acquisition related
expenses, fixed asset tax, city planning tax and consumption tax, etc.)• The total number of portfolio assets may change due to acquisition or sale of properties.

Number ofInvestment Units• 842,823 units, the current issued amount.

Operating Revenue

Operating Expenses• Rent revenue is calculated conservatively based on lease contracts that are in effect as of April 30,
2012, while taking into consideration such factors as historical rents, the competitiveness of theproperties and market conditions.
• The anticipated portfolio occupancy is 92.4% at the end of the October 2012 period and 94.0% at theend of the April 2013 period.
• Among expenses related to rental activity, which are Ichigo REIT’s principal operating expenses, thoseother than depreciation are calculated based on historical data, while taking into consideration variable
expenses.
• The anticipated amount of property tax and city planning tax is 329 million yen for the October 2012
period and 335 million yen for the April 2013 period.
• The amount for building maintenance and repair expenses is estimated to be 152 million yen for the
October 2012 period and 76 million yen for the April 2013 period. However, expenses for each period
could differ significantly from these estimated amounts for various reasons due to the irregularity ofmaintenance and repair expenses, costs due to unexpected building damage, etc., and year-to-yearchanges in costs.
• Service provider expenses including property management fees, etc. are estimated to be 388 million
yen for the October 2012 period and 383 million yen for the April 2013 period.
• Depreciation has been calculated using the straight line method. For the existing 67 properties,
depreciation is calculated by including the depreciation for future additional capital expenditures in theamortization amount. Depreciation of 512 million yen has been anticipated for the October 2012
period and 528 million yen for the April 2013 period.
• Capital loss incurred by sale of Solon Keyakidori Building on June 5, 2012 is estimated to be 214
million yen.

Non-operating
Expenses• Interest expenses of 673 million yen are anticipated for the October 2012 period and 641 million yen
for the April 2013 period.
• Borrowing-related expenses of 456 million yen are anticipated for the October 2012 period and 228
million yen for the April 2013 period.

Borrowings• Ichigo REIT’s balance of loans payable stands at 56,256 million yen as of April 30, 2012.
• Ichigo REIT borrowed 10,994 million yen via a syndicated loan, with Sumitomo Mitsui Banking
Corporation (SMBC) and Mizuho Trust & Banking Co., Ltd. as joint arrangers, in order to refinance aloan from ORIX Bank Corporation and loans from The Tokyo Star Bank, Limited on May 9, 2012.
• 3,684 million yen in a loan payable to Aozora Bank, Ltd. will mature during the October 2012 period.
1,425 million yen in a loan payable to The Kagawa Bank, Ltd., 2,910 million yen in a loan payable to
The Tokyo Star Bank, Limited, and 3,800 million yen in a loan payable to The Gibraltar Life InsuranceCo., Ltd. will mature during the April 2013 period. Ichigo REIT assumes refinancing of these loans at
the same amount.
• With the acquisition of the M’s SQUARE asset in October 2012 Period, Ichigo REIT assumes theborrowing of 2,130 million yen as a long-term loan.

4

Dividend per Unit

• Dividends (dividend per unit) are based on the assumption that distribution will comply with thedividend distribution policy stipulated in Ichigo REIT’s Articles of Incorporation.
• Dividend for the October 2012 period is assumed to be 1,067 million yen, which is the total amount ofretained earnings of 618 million yen plus a dividend reserve of 448 million yen.
• Dividend for the April 2013 period is assumed to be paid from retained earnings of 1,106 million yen.
• The amount of the dividend per unit is subject to change due to factors such as changes in rent revenue
associated with changes in tenants, other changes in properties, the occurrence of unexpectedmaintenance and repair costs and other expenses, fluctuations in interest rates, and the issuance ofadditional investment units.

Dividend in Excess of
Earnings per Unit

• Ichigo REIT does not plan on making any dividend distribution exceeding retained earnings (dividendin excess of earnings per unit).

Other• The performance forecasts are based on the assumption that revisions impacting the forecast figures
above will not be made to laws and ordinances, the tax system, accounting standards, listing rules,
rules of the Investment Trusts Association, Japan, etc.
• The performance forecasts are also based on the assumption that there will be no unexpected materialchange in general economic trends, real estate market conditions, etc.

5

1. Financial Statements(1) Balance Sheets(Thousand yen)
Fiscal Period
ending October 2011(as of October 31, 2011)

Fiscal Period
ending April 2012(as of April 30, 2012)

AssetsCurrent assets
Cash and deposits

690,249

4,307,181

1,213,052

5,331,418

Operating accounts receivable

6,857

14,912

Prepaid expenses

33,849397,399

Deferred tax assets

350―

Deposit paid―

638,096

Cash and deposits in trust

Other
Total current assets

9,756

15,1691,954,115

10,704,176

Noncurrent assets
Property, plant and equipment
Buildings

127,405

8,867,457

Accumulated depreciation(15,358)(150,697)

Buildings, net

112,046

8,716,759

2,842

40,078

Accumulated depreciation(449)(2,752)

Structures, net

2,393

37,326―

247,588

Structures

Machinery and equipment
Accumulated depreciation―(9,998)Structures, net―

237,590

Tools, furniture and fixtures

4,827

16,557

Accumulated depreciation(1,127)(2,489)Tools, furniture and fixtures, net
LandConstruction in progress

3,699

14,068329,736

20,944,358

―

1,228

7,148,668

22,424,523

Accumulated depreciation(905,484)(1,228,866)

Buildings in trust, net

6,243,183

21,195,656

42,207

47,127

Accumulated depreciation(6,903)(7,922)

Structures in trust, net

35,304

39,205

Buildings in trust

Structures in trust

Machinery and equipment in trust

62,977

150,649

Accumulated depreciation(11,975)(22,316)

Machinery and equipment in trust, net

51,002

128,333

Tools, furniture and fixtures in trust

575,487

626,779

Accumulated depreciation(114,614)(129,025)

Tools, furniture and fixtures in trust, net

460,872

497,754

15,787,122

52,332,659

Land in trust
Construction in progress in trust

―

3,800

23,025,362

104,148,742

Other

48

―

Total intangible assets

48―

Total property, plant and equipment
Intangible assets

6

(Thousand yen)
Fiscal Period
ending October 2011(as of October 31, 2011)

Fiscal Period
ending April 2012(as of April 30, 2012)

Investments and other assets
Investment securities―

20,014

Tenant leasehold and security deposits

10,00025,227Long-term prepaid expenses

10,032327,977

Total investments and other assets

20,032373,219

23,045,442

104,521,961

24,999,557

115,226,138

20,41998,000―65,54037,1385,201
3,972
66,976980
9,960
308,189

270,422
21,060,384
50,972
254,493
168,957
605
102,229594,868―
11,80322,514,736

9,145,000―
2,164
379,293―
9,526,458
9,834,647

30,460,000
4,685,313
1,962,220
3,012,573
7,052
40,127,159
62,641,896

14,928,800

14,928,800―
236,110
236,110
15,164,910
15,164,910
24,999,557

20,566,420
17,089,021
37,655,442
52,584,242
52,584,242
115,226,138

Total noncurrent assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Current portion of long-term loans payable in trust
Accounts payable – others
Accrued expenses
Income taxes payable, etc.
Accrued consumption taxes, etc.
Advances received
Provision for disaster-related loss
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Long-term loans payable in trust
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations
Total noncurrent liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

7

(2) Income Statement(Thousand yen)
Fiscal Period
ending October 2011
(From May 1, 2011
to October 31, 2011)

Fiscal Period
ending April 2012
(From November 1, 2011
to April 30, 2012)

Operating revenue
Rent revenue – real estate

706,6123,921,370

Other lease business revenue

81,270351,941―

14

787,882

4,273,326

262,899

1,776,731―

464,210

Asset management fee

57,711

367,377

Asset custody fee

2,519

9,913

Administrative service fees

9,877

28,031

Directors’ compensations

10,80010,800

Dividend income from investment in TK equity
Total operating revenue
Operating expenses
Expenses related to rent business
Loss on sales of real estate

Directors' retirement benefits

5,475

―

Other operating expenses

36,567

81,939Total operating expenses

385,850

2,739,003

402,032

1,534,323

Operating income
Non-operating income
Interest income

182

933

Reversal of distribution payable

531

4,205

Insurance Income

―

1,524

Other

―

300

Total non-operating income

713

6,963

Interest expenses

145,774

760,523

Borrowing related expenses

15,801

254,107

Non-operating expenses

Other

183

48

161,759

1,014,679

240,987

526,608

Gain on negative goodwill―

16,562,405

Other

―

980

Total extraordinary income―

16,563,386

240,987

17,089,994

5,232

605

Income taxes – deferred

(330)

384

Total income taxes

4,901

989

236,086

17,089,005

24

16

236,110

17,089,021

Total non-operating expenses
Ordinary income
Extraordinary income

Income before income taxes
Income taxes – current

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)8

(3) Statements of Unitholders’ Equity(Thousand yen)
Fiscal Period
ending April 2012
(From November 1, 2011
to April 30, 2012)

Fiscal Period
ending October 2011
(From May 1, 2011
to October 31, 2011)
Unitholders’ equity
Unitholders’ capital
Balance as restated

14,928,800

14,928,800――

14,928,800

14,928,800――

Increase by merger―

20,566,420

Total changes of items during the period―

20,566,420―

20,566,420

224,215

236,110

Changes of items during the period
Total changes of items during the period
Balance at end of the period
SurplusCapital surplus
Balance as restated
Changes of items during the period

Balance at end of the period
Unappropriated retained earnings (undisposed loss)
Balance as restated
Changes of items during the period
Dividends from surplus(224,191)(236,094)

Net income

236,086

17,089,005

Total changes of items during the period
Balance at end of the period

11,894

16,852,911

236,110

17,089,021

224,215

236,110―

20,566,420

Total surplus
Balance as restated
Changes of items during the period
Increase by merger
Dividends from surplus(224,191)(236,094)

Net income

236,086

17,089,005

Total changes of items during the period
Balance at end of the period

11,89437,419,331

236,11037,655,442

15,153,015

15,164,910―

20,566,420

Total unitholders’ equity
Balance as restated
Changes of items during the period
Increase by merger
Dividends from surplus
Net income
Total changes of items during the period
Balance at end of the period(224,191)(236,094)

236,086

17,089,005

11,89437,419,331

15,164,910

52,584,242

15,153,015

15,164,910―

20,566,420

Total net assets
Balance as restated
Changes of items during the period
Increase by merger
Dividends from surplus(224,191)(236,094)

Net income

236,086

17,089,005

Total changes of items during the period
Balance at end of the period

911,89437,419,331

15,164,910

52,584,242

(4) Cash Flow Statement(Thousand yen)
Fiscal Period
ending April 2012
(From November 1, 2011
to April 30, 2012)

Fiscal Period
ending October 2011
(From May 1, 2011
to October 31, 2011)
Cash flows from operating activities
Income before income taxes

240,987

Depreciation and amortization

105,332

514,206―(16,562,405)

Gain on negative goodwill

17,089,994

Interest income

(182)

(933)

Interest expenses

145,774

760,523

172

88,166

Decrease (increase) in operating accounts receivable
Decrease (increase) in prepaid expenses

8,431

57,834

Amortization of long-term advance charges

15,801

186,520―(88,671)

Decrease (increase) in deposit paid
Increase (decrease) in accrued consumption taxes

1,489

69,977

Increase (decrease) in operating accounts payable(289)(65,860)

Increase (decrease) in accounts payable – others

4,417(60,704)

Increase (decrease) in advances received(5,610)(26,659)―

2,798,690

Decrease by sale of property, plant, and equipment
Decrease by sale of property, plant, and equipment in trust―

365,029

Amortization of security deposit(50,309)(2,182)

Reversal of provision for disaster-related loss

(3,664)―

Other, net(3,673)(16,151)

Subtotal

458,676

5,107,372

Interest income received
Interest expenses paid

182

933

(145,972)(768,174)

Income taxes paid

(1,005)(5,918)Net cash provided by (used in) operating activities

311,881

4,334,213

Cash flows from investment activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust―(54,865)(399)(119,175)

Proceeds from tenant leasehold and security deposits―

26,683

Repayments of tenant leasehold and security deposits―(60,770)

12,749219,649(8,439)(482,199)

Proceeds from tenant leasehold and security deposits intrust
Repayments of tenant leasehold and security deposits in
trust
Purchase of investment securities
Net cash provided by (used in) investment activities―(20,000)

3,910(490,677)

Cash flows from financing activities
Decrease in short-term loans payable―(300,000)

Decrease in long-term loans payable(49,000)(1,850,615)―(275,486)

Dividends paid

(224,021)(803,655)(3,229,756)

Decrease in long-term loans payable in trust
Net cash provided by (used in) financing activities(273,021)

Net increase (decrease) in cash and cash equivalents

42,770613,779

Cash and cash equivalents at beginning of the period

1,858,760

1,901,531

Increase in cash and cash equivalents by merger―

7,113,250

Cash and cash equivalents at end of the period

1,901,531

9,628,561

10