Table of Contents
1. Executive Summary・・・・・・・・・・・・・・・・・・

2

2. External Growth Strategies ・・・・・・・・・・・・・・・ 10
3. Internal Growth Strategies・・・・・・・・・・・・・・・・17
4. Financial Strategies ・・・・・・・・・・・・・・・・・・ 27
5. Overview of Financial Results for 19th Fiscal Period・・・・ 30
6. APPENDIX・・・・・・・・・・・・・・・・・・・・・・ 38
This material includes forward-looking statements based on present assumptions and future outlook.
Actual results may differ from the forward-looking statement values due to various factors.
This material is not intended as a solicitation to acquire investment securities of Hankyu REIT nor is it intended as asolicitation to sign contracts relating to transactions of other financial instruments. When undertaking any investment,
please do so based on your own judgment and responsibility as an investor.
Before purchasing investment securities of Hankyu REIT, please consult with a securities company that is a “Type I
Financial Instruments Business Operator.”
This material is an English translation of the original, which was issued in the Japanese language.
There are sections that display property names in abbreviated form.

Hankyu REIT implemented a five-for-one split of its investment units with November 30, 2014 as the record dateand December 1, 2014 as the effective date.

11. Executive Summary2

1-1. Continued Growth30.9 bn

16 properties
JPY 116.1 bn
Acquired
assets15 properties
JPY 121.3 bn
TransferredassetsAsset size (total acquisition price)

Continued growthby conducting capital increase through public offering (PO) for 2nd consecutive year
Continued growth
Return to growth path
Improvement of healththroughthroughthrough
PO for 2nd consecutive year
resuming external growth
asset replacement
23 properties
JPY 139.3 bn

19 properties
JPY 127.8 bn

39.3 bn
39.3 bn

41.1 bn13.0 bn13.0 bn13.0 bn13.0 bn

20.7 bn

kotocross Hankyu
Kawaramachi（Urban retail facilities）

LIFE Shimoyamate Store (site)（Community-based retailfacilities）

23.4 bn

17.3 bn

50.9 bn63.3 bn

54.6 bn

44.6 bn

MANDAI Gojo Nishikoji Store (site)（Community-based retail facilities）

26.3 bn

End of 15th FP(End of Nov. 2012)

End of 16th FP(End of May 2013)

Community-based
retail facilities

End of 18th FP(End of May 2014)

Urban
retail facilities

DAILY QANAT Izumiya Horikawa Marutamachi
Store (site) (Community-based retail facilities)

Hotel-use
portion

Office-use zones /Zones for other uses

End of 19th FP(End of Nov. 2014)3

1-2. Profitability and Financial Status●Improvement of profitability of portfolio
End of 17th FP(End of Nov. 2013)

End of 18th FP(End of May 2014)

End of 19th FP(End of Nov. 2014)(Note)

4.8%

4.7%

4.8%

Average NOI yield
after depreciation

3.3%

3.2%

3.4%

-JPY 3.6 bn-JPY 0.9 bn

JPY 1.6 bn

Average NOI yield(Note)

Unrealized income/loss(Note)●Improvement of stability of financial foundation
End of 17th FP(End of Nov. 2013)

End of 18th FP(End of May 2014)

End of 19th FP(End of Nov. 2014)(Note)

48.6%

47.3%

45.4%

Interest-bearing
debt ratio (Note)

43.2%

43.4%

42.9%

Averagedebt financing costs

1.34%

1.23%

1.08%

2.2 years

2.7 years

3.6 years

LTV(Including investment corporation
bonds)

Average remaining periodof long-term borrowings
and investment
corporation bonds(Note) Details of the calculation method for “Average NOI yield,” “Average NOI yield after depreciation,” “Unrealized income/loss” and “LTV” are presented
on page 57.

41-3. Results of 19th Fiscal Period
IssuesResults of 19th Fiscal Period

・ How to acquire properties thatwill enable planning of target
External
distributions amidst the heated
Growthcompetition for property
acquisition

Internal
Growth・ Maintenance and improvementof competitiveness ofproperties held・ Leasing of Sphere Tower
Tennoz・Implementation of LTV control
Financial
Strategies(Issues Explained in Financial Results Briefing
Materials for the 18th Fiscal Period)

・Extension of borrowing periods,
diversification of debt repayment
dates, and diversification of fundprocurement methods

Net assets per unit

612,343 yen*

Net assets per unit afterreflecting unrealized income/loss

626,567 yen*・ Acquired a total of 4 properties (urban retail facility and community-based
retail facilities (sites)), and thereby realized portfolio stability and profitability
improvement. MANDAI Gojo Nishikoji Store was completed in November 25,
2014 and rent is now collected in whole (only 30% was collected during
construction)
・ Regarding investment in hotels, investment ratio and investment targets wereconsidered, resulting in increasing the investment ratio from 10% to 20%(January 2015)
・ The portfolio occupancy rate as of the end of the 19th fiscal period wasmaintained at a high level of 98.7%
・ Promoted value-enhancement work at Sphere Tower Tennoz (renovatedentrance, elevator hall, etc. and improved flow of people, sign boards, etc.)
・ For Namba-Hanshin Building, tenants were brought in with rent levels higher
than the average of existing tenants, realizing further increase of theoccupancy rate (94.9% as of the end of the 19th fiscal period)

・ Maintained distributions as well as implemented LTV control by conducting
capital increase through public offering and new debt financing
・ Promoted further stabilization by reducing debt financing costs, extending
borrowing periods and diversifying debt repayment dates
・ Implemented a five-for-one split of investment units on December 1, 2014 torespond to NISA, expand the investor base and increase the liquidity ofinvestment units

Results for 19th fiscal period(ended November 2014)
Distribution per unit

12,685 yen* Hankyu REIT implemented a five-for-one split of its investment units with November 30, 2014 as the record date and December 1, 2014 as the effective date, and investment units started transacting at the split
price from November 26, 2014.
“ Distribution per unit,” “Net assets per unit” and “Net assets per unit after reflecting unrealized income/loss” in the 19th fiscal period’s results are actual values calculated with the number of investment units before
the split.

51-4. Goals for the 20th and Subsequent Fiscal Periods
・ Aim for expansion and growth of portfolio by acquiring quality properties flexibly throughExternal
Growthutilization of real estate networks and warehousing functions of the sponsor group
・ Amidst heated competition for property acquisitions, expand options such as byconsidering acquisition of properties utilizing the development capabilities coming fromthe sponsor group, which holds comprehensive real estate company functions, in an aim
to acquire properties at appropriate prices

Internal
Growth・ Aim to maintain/improve rent through measures based on the competitiveness of each
property while establishing favorable relationship with tenants through reinforcement ofoperational management
・ For Sphere Tower Tennoz, continue to work toward early improvement of occupancy
rate by continuing to promote leasing based on the features of locations and buildings
while strengthening appeals through value-enhancement work

Financial
Strategies

・ Realize equity financing that enables both distributions to be maintained/improved andLTV to be improved
・ Aim for steady refinancing, extension of borrowing periods, diversification of debt
repayment dates, reduction of debt financing costs and diversification of fundprocurement methods through cooperation with financial institutions

Forecast for 20th fiscal period (ending May 2015)
Distribution per unit

2,530 yen

■Aim to secure distributions of JPY 2,400 on an ongoing basis(JPY 12,000 prior to five-for-one split) and further build up
6

1-5.Future Investment Policy Regarding Hotel-Use
The future investment policy for hotels is as follows

Increase the maximum ratio of investment in hotel-use to 20% (previously 10%)l Investment Target
The main targets shall be business hotels and city hotels.
・With a focus on operators and location, facilities that can incorporate urban tourism demand in addition to business customers shallbe targeted.
・Stability of income will be emphasized even among these properties (specifically, hotels that are mainly for accommodation). Resort
hotels, which have large fluctuations of income, will not be targeted.
l Target Areas
The target areas will center on the Tokyo metropolitan area, Chukyo area, Kansai region as well as Hiroshima, Fukuoka, etc.
Regarding government-ordinance-designated cities nationwide and other comparable major cities, investment will be madeconsidering the status of business demand and urban tourism demand and other factors.

Reason for increasing the maximum ratio of investment in hotels
l Building up a stable management track record
Since the addition of hotel-use portions to retail-use zones in 2008, there are now 4
properties (Note 1) held which have hotel-use portions.
RevPAR (Note 2), a revenue indicator for the hotel business, is strong at all 4
properties.

l Increase in accommodation demand in Japan
Business demand is going strong.
Demand for accommodation for the purpose of urban tourism is increasing.

RevPAR
ADR

140%

Occupancy
rate

Status of Hotels in Hankyu REIT’s Portfolio
Occupancy rate(right axis)

120%

100%

100%

80%

RevPAR (left axis)60%

ADR (left axis)l Increase of Foreign Tourists Visiting Japan (Inbound Tourists)
After having exceeded 10 million for the first time in 2013, the number of foreign 80%
tourists visiting Japan is expected to have been around 13 million in 2014.
8th FP

40%
10th FP 12th FP 14th FP 16th FP

19th FP[Graph] Occupancy rate: Average of the 4 properties (Note 1)(Note 1) Kitano Hankyu Building (Hotel New Hankyu Annex ) (long-term fixed-type master lease contract), Hotel(right axis)
Gracery Tamachi (long-term fixed contract), LAXA Osaka (Hotel Hanshin) (fixed-type master lease
RevPAR/ADR (Note 2): Relative value based on (100%) thecontract) and Richmond Hotel Hamamatsu (fixed-type master lease contract)
average of the 4 properties in the 8th(Note 2) RevPAR: Revenue per available room, calculated by dividing room income by the total number of rooms;
fiscal period (ended May 2009) (left
ADR: Average daily rate, calculated by dividing room income by the number of room sales.
axis)

7

1-6. Value-Enhancement Work at Sphere Tower Tennoz
Promote leasing based on area/building features while continuing to work towards early improvementof occupancy rate by strengthening appeals through value-enhancement work
● Atrium

before
after

after

beforeChanged wall surface to greenery and stone material, and changed pillars and stairs to wood. In addition,
maintained luxurious feel, made space overflowing with warmth and richness utilizing natural materials. A new
entry into the entrance was newly established, improving convenience as well.

● Elevator Hall

● Signboards

beforebeforeafter

Carpets and lighting were renewed to create a modern space.

after
Signboards inside the building were improved along with the valueenhancement work.
A simple and elegant design was applied to harmonize with the space.

8

1-7. Trends of Debt Financing Costs and Diversification of Repayment Dates
Promoted further stabilization by reducing debt financing costs, extending borrowing periods anddiversifying debt repayment dates

Trends of Debt Financing Costs
and Average Remaining Years
1.50%

Changes in Long-Term Debt Ratio
and Fixed Debt Ratio

4.0 years
1.43%

1.40%

3.5 years

1.36%

88.6%

90.0%

1.30%

91.9%

89.5%
85.1%

85.0%

1.23%

80.3%

1.20%

2.5 years

2.1
years

1.00%

As of end of
14th period

80.0%

2.2 years

75.0%

1.08% 2.0 years

75.9%

2.0 years

As of end of
15th period

73.8%

78.6%

2.4
years

As of end of
16th period

73.3%

70.0%

As of end of
17th period

As of end of
18th period

100.0%

3.0 years

2.7
years

1.10%

100.0%

93.0%

95.0%

1.34%

1.33%

98.2%

100.0%

3.6 years

As of end of
19th period

69.8%

1.5 years

65.0%

As of end of
14th period

Ave. debt financing cost(including investment corporation bonds)

As of end of
15th period

As of end of
16th period

Long-term debt ratio

As of end of
17th period

As of end of
18th period

As of end of
19th period

As ofJan. 23, 2015
(Forecast)

Fixed debt ratio

Ave. remaining years on long-term loans payable and investment corporation bonds

Diversification of Repayment Dates
14.0

①

12.0

②

（JPY bn）

10.0②

Plan to refinance JPY 2 bn (3 years) in longterm loans maturing January 23, 2015 with longterm loans (7 years)

Investment corporation bonds
JPY 6.0 bn

6.0
9.2
5.0
6.0

7.0

6.0

2.0
0.0

Made early repayment for JPY 5 bn in short-termloans (1 year) maturing on June 23, 2015 andrefinanced with long-term loans (8 years)

2.0

8.0

4.0

①

1.2

1.0

2.0

1.0

7.0
5.5

5.0

5.0

4.0
2.0

20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th
period period period period period period period period period period period period period period period period period'15/05 '15/11 '16/05 '16/11 '17/05 '17/11 '18/05 '18/11 '19/05 '19/11 '20/05 '20/11 '21/05 '21/11 '22/05 '22/11 '23/05

92. External Growth Strategies102-1. Acquisition Strategy and Investment Targets
Investment Targets

Investment Target Areas

Target real estate with retail-use and office-use zones

Target real estate across Japan

Especially focus investment on retail-use zones

Investment target areas are the Tokyo metropolitan area,
government-ordinance-designated cities nationwide andother comparable major cities

Retail-use
facilities

Retail-use
zones
50% ormore

Office-use
facilities

Mixed-use(complex)facilities

Office-use
zones
Retail-use
zones

Office-use
zones

Zones forother uses

Zones forother uses

Of these, investment is focused on the Kansai region
Utilize information sourcing capabilities
and network of the Hankyu Hanshin
Holdings Group that has deeply rooted
connections in the community

Retail-use
zones
Zones forother uses

Kansairegion50% ormore* In principle, the maximum investment ratio for hotel-use portion (part of retailuse zones) is 20% of all assets under management(Increased to 20% as of January 22, 2015)
Other
Urban
1.1%
retail facilities
16.8%

Kansai region: Osaka, Kyoto, Hyogo, Nara,
Shiga and Wakayama

Portfolio Status

Office27.2%

Total acquisition price: JPY
139.30 bn
Total number of properties：
23 properties

Hotel
9.4%

Community-based
retail facilities
45.5%

Other region
3.1%

Retailuse
zone
71.7%
Other Kansai
region8.0%

Umeda area
17.5%

Tokyo
24.6%
Areas along
Hankyu andHanshin lines
46.8%

Kansairegion72.3%

11

2-2. Securing Opportunities to Acquire Properties
Trends of Information Leads(leads)
1,000
900
800
700
600
500
400
300
200
100
0

Information leads checked

1stperiod2nd
period3rd
period4th
period5th
period6th
period7th
period8th
period9th
period10th
period11th
period12th
periodInformation leads considered

13th
period14th
period15th
period16th
period17th
period18th
period19th
periodDiverse Property Acquisition Methods
Acquisition method
Sponsor group’s property

Property developed bysponsor group

HEP Five
Kitano Hankyu Building
Dew Hankyu Yamada
Nitori Ibaraki-Kita Store(site)
LaLaport KOSHIEN (site)
LAXA Osaka
Namba-Hanshin Building
HANKYU NISHINOMIYAGARDENS

Shiodome East Side
Building
Hotel Gracery Tamachi

On-balance bridge

MANDAI Toyonaka
Honan Store (site)
DAILY QANAT
Izumiya Horikawa
Marutamachi Store (site)
MANDAI
Gojo Nishikoji Store (site)

SPC bridge

Hankyu Corporation
Head Office Building
Ueroku F Building
Richmond Hotel
Hamamatsu
AEON MALL
SAKAIKITAHANADA(site)

Direct acquisition fromoutsideTakatsuki-Josai
Shopping Center
Kohnan Hiroshima
Nakano-Higashi Store(site)
Sphere Tower Tennoz
Kita-Aoyama 3 cho-me
Building

LIFE Shimoyamate Store(site)

kotocross
Hankyu Kawaramachi

Acquired assets in the 19th fiscal period122-3. Information Leads and Leads Considered (19th Fiscal Period)* Outer circle: Information leads

Area
Urban vicinity

City center

Use

OfficeInner circle: Leads actually considered

8

54

7

8

3

17

1

3

2

Mixed
(Complex)

4

Retail

1

10

38

3

Hotel

1

4

1

2

Other

1

14

46

18

(Note)

20

2

73

3

27

25

36

4

2

8

44

Suburban

6

4

0

0

0

0

1

2

27

9

4

3

10

2

6

0

0

5

55

1

0

0

3

9

(Note) Properties anticipating property development of the sponsor group such as at old buildings and former sites of factories, etc.
Kansai region (Osaka, Kyoto, Hyogo,
Nara, Shiga, Wakayama)

Tokyo metropolitan area
(Tokyo, Kanagawa,
Saitama, Chiba)

Other areas

Leads considered were primarily community-based retail facilities
in the Kansai region, Tokyo metropolitan area andregional major cities, such as Nagoya, Fukuoka and Hiroshima

Community-based
retail facilities132-4. Concrete Property Acquisition Policy for Future
Urban retail facilities and community-based retail facilities
set as investment targets of focus among retail facilities
Area
Urban vicinity

OfficeCity center
Namba-Hanshin Building
Ueroku F Building
Hankyu Corporation Head Office Building

Sphere Tower Tennoz
Shiodome East Side Building

SuburbanCommunity-based
retail facilities

Urban
retail facilities
RSC (regional shopping centers)

Urban SC

RetailLarge
specialty
shops

HEP Five

NSC (neighbourhood shopping centers)

Kitano Hankyu Building

Dew Hankyu Yamada
Takatsuki-Josai Shopping Center
MANDAI Toyonaka Honan Store
Kohnan Hiroshima Nakano-Higashi Store

Kita-Aoyama 3 cho-me
Building

MANDAI Gojo Nishikoji StoreGMS (general merchandise stores) / SM (supermarkets)

kotocross
HankyuKawaramachi

DAILY QANAT Izumiya
Horikawa Marutamachi Store

LIFE
Shimoyamate StoreSpecialty shops

Nitori Ibaraki-Kita Store
Street-level shops

Hotel*

Use

Department
storesLaLaport KOSHIENHANKYU NISHINOMIYA GARDENSAEON MALL SAKAIKITAHANADALAXA Osaka
Richmond Hotel Hamamatsu
Hotel Gracery Tamachi
Primary
investment target zone

Outlet centers* Business hotels and city hotels are main targets of investment
Investment targets of focus
among retail facilities

Acquired assets
in 19th fiscal period142-5. Retail Facilities ①
Investment in community-based retail facilities and urban retail facilities
Community-based retail facilities

Urban retail facilities

Provides products and services
to serve needs of daily life

Provides extraordinary urban
entertainment space

Core area (Note 1)
Excellent trade areas such as
areas along Hankyu and Hanshin lines

Core area (Note 1)
Umeda area
HEP Five Kitano Hankyu Building

MANDAI Gojo
Nishikoji Store (site)

LIFE
Shimoyamate
Store(site)
HANKYU NISHINOMIYA GARDENS,
Dew Hankyu Yamada, etc.
DAILY QANAT
Izumiya Horikawa
Marutamachi Store(site)

Urban vicinity areas in the Kansai region

kotocross
HankyuKawaramachi

Maximize opportunities
to acquire
quality properties
by setting areas otherthan core areas asinvestment areas, too
Utilize the know-how
of the sponsor groupin not only the
Umeda area andareas along Hankyu
and Hanshin lines,
but also areas
centering onrail stations ofmajor cities
nationwide

Rail terminals and other bustling areasin the Kansai region

Other urban vicinity areas(Note)“Core area” refers to an area that is currently a focus of investment considerations at Hankyu REIT.

Kita-Aoyama
3 cho-me
Building

Other bustling areas152-5. Retail Facilities ②
Points to Investment Decisions and Management of Retail Facilities
Community-based retail facilities
Excellent trade areas with strong consumer demand

Excellent trade areas such as areas along
Hankyu and Hanshin lines where the population
is increasing and where strong consumer demandcan be expected in the medium to long term

Utilizing real estate know-how
and experience nurtured by thesponsor group over the years

1＋

Tenant compositions, products and services
that match the features of the trade area

・ Tenant compositions that match the population
dynamics, family composition, household income
and other features and needs of the trade area
・ Provision of daily necessities, fresh foods and otherproducts and services necessary for daily life
Adapt to change of needsof the trade area

Implementation of reviews of products, services
and tenant compositions as well as renewals andsuch in order to adapt to any change of needs ofthe trade area

Oriented toward stable income

With trade areas believed to be excellent in themedium to long term as a base, secure ongoingincome and stability through the operational
management of the sponsor group

Analysis oftrade area andflow of people

2

Provision of
products andservicesthat match thetrade area andflow of people＋
3

Operational
managementof thesponsor group

Aim for stable income andimprovement of profitability
in the medium to long termby making decisions on
investment in retail facilities
based on the analysis above

Urban retail facilities
Competitive bustling areas

Competitive bustling areas concentrated aroundcore stations, etc. where a certain number ofincoming and outgoing passengers can be expected
Tenant compositions, products and services
that match the target customer base・ Plan the concept and direction for retail facilities
overall and tenant compositions throughaccurate targeting based on the flow of people
・ Provide products and services that match thetarget customer base
Adapt to shift in preferencesof the target customer base・ Promptly catch any shift in preferences of thetarget customer base and reflect in tenantcompositions, products and services
・ While retaining freshness by conducting sales
promotions as appropriate, conduct renewals andother revitalization if there is any obsolescence
Seek upside rent

While consistently confirming the concept anddirection for retail facilities overall, seek
maximization of income through adequate
business category and tenant compositions(Note) This is not intended as a guarantee that all assets held by Hankyu REIT classified as community-based retail facilities or urban retail facilities feature the qualities above. Notably, there are assets among
these that employ a fixed-type master lease method and, in the case of such assets, Hankyu REIT cannot receive upside rent. Community-based retail facilities or Urban retail facilities from which Hankyu
REIT may be able to receive upside rent are limited to those that employ a pass-through-type master lease or direct lease method, those that employ a fixed-type master lease method but have introduced
a certain level of variable rent, etc.

16

3. Internal Growth Strategies173-1. Operational Management
Achieving a WIN-WIN-WIN-WIN relationship in operations

Consumers

Investors
Boosting stakeholder satisfaction
Maintaining and improving rent income
Improving attractiveness to consumers
and sojourn time
Invitation of competitive “in vogue” tenants

Tenants

Hankyu REIT18

3-2. Occupancy Rate for Individual Properties (Occupancy by End-Tenants)
Total portfolio occupancy rate of 98.7% (end of 19th fiscal period )The graph excludes the 15 properties (Takatsuki-Josai, Nitori Ibaraki, Kohnan Hiroshima, Tamachi, LaLaport KOSHIEN, LAXA Osaka,
Hamamatsu, NISHINOMIYA GARDENS, Hankyu Corporation Head Office, SAKAIKITAHANADA, MANDAI Toyonaka Honan, Izumiya
Horikawa Marutamachi, kotocross, LIFE Shimoyamate and MANDAI Gojo Nishikoji) leased to single tenants (occupancy rates of 100%).
(％)

100

Total portfolio

90

HEP

80

Kitano Hankyu

70

Hankyu Yamada

60

Ueroku F Bldg.
Tennoz50

Shiodome

40

Namba-Hanshin

30
2014/06

2014/07

2014/08

2014/09

2014/10

2014/11Kita-Aoyama(Note) Figures express the value at the end of each month.

Stable occupancy rates maintained since 1st fiscal period
（％）

100
95

99.5 100.0 99.3 98.5 99.3 98.8
99.4 98.5 99.0 99.5 98.6 98.6 98.7
98.1 98.5 98.7 98.4 98.7 99.0

90
85
80

1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th 11th 12th 13th 14th 15th 16th 17th 18th 19th
period period period period period period period period period period period period period period period period period period period'05/11 '06/05 '06/11 '07/05 '07/11 '08/05 '08/11 '09/05 '09/11 '10/05 '10/11 '11/05 '11/11 '12/05 '12/11 '13/05 '13/11 '14/05 '14/11(Note) Figures indicate the values at the end of each fiscal period.

19

3-3.Topics on Properties Held
＜MANDAI Gojo Nishikoji Store＞＜Dew Hankyu Yamada＞

Building completed, operation launched in December

Maintained good sales

The building was completed on November 25, 2014 and rent is
now collected in whole (operation began on December 3).

Replacements of some shops was implemented and promoted
vitalization of facilities and realized increase in earnings throughincreased rents.
Sales of Toys“R”Us/Babies“R”Us, where sales-based overagerent system has been introduced, continues to be strong withsteady sales increase of popular TV animation toys, etc.

As a community-based retail facility, tenants are comprised of asupermarket, clothing shop, drug store, 100 yen shop and othershops closely connected to living.

Exterior of MANDAI Gojo Nishikoji Store

Exterior of MANDAI Gojo Nishikoji Store＜Namba-Hanshin Building＞
Increase of rent and occupancy rate
Realized improvement of occupancy rate in the 18th fiscal
period (73.1% to 92.8% during the period).
In the 19th fiscal period as well, tenants were attracted withrents exceeding the average level of existing tenants andfurther increase in occupancy rate was realized (94.9% at endof the 19th fiscal period).

Dew Hankyu Yamada Photo of shop

＜Hotel Gracery Tamachi＞
Response to rent reduction action filed by lessee
A rent reduction action was filed by Fujita Kanko Inc., a lessee,on October 2014.
The claim is considered to lack reasonable grounds in light ofsuch factors as the current hotel market conditions and rent
trends in the Tokyo metropolitan area, and Hankyu REIT plans toassert its opinion to that effect in upcoming court proceedings.

20

3-4. Rent Systems and Present Conditions of 23 Portfolio Properties ① (End of 19th Fiscal Period)<Properties mainly using the fixed-rent system>
Property name
HANKYU NISHINOMIYAGARDENS
RSC (Note 1)

Main rent system
Long-term, fixed

Present conditions
Rent income is stable based on a fixed-type master lease method (Note 2) with Hankyu
Corporation.
Due in part to the renewal implemented in March 2014, sales even after the consumption tax hike
was a strong showing throughout the period, increasing over 100% year-on-year. Tenants are
performing well, as evident by sales increasing for five consecutive years since opening in 2008 toreach JPY 75.1 billion in fiscal 2013, and such.

Dew Hankyu Yamada
NSC (Note 1)

Long-term, fixed(partly overage)

The occupancy rate is stable at 100%.
A long-established bakery shop opened in November 2014 as did a western-style restaurant,
which originated in Kyoto, in December. Sales of Toys“R”Us and Babies“R”Us, where sales-based
overage rent system has been introduced, continues to be strong with steady sales increase of
popular TV animation toys and baby goods.

Kitano Hankyu Building
Specialty shop building(urban SC)

Fixed(partly overage)

The occupancy rate at the end of the period was 98.7%, maintaining the same level from the endof the previous period (18th fiscal period).
Leasing activities for vacant spaces are being advanced for tenants that will have synergistic
effects with existing tenants and for tenants that will serve to revitalize the facility. Efforts continue
to be underway to improve attractiveness to customers such as by holding events in conjunction
with local events, etc.

Event at HANKYU NISHINOMIYA GARDENS

Event at Dew Hankyu Yamada(Note 1) RSC: Regional Shopping Center; NSC: Neighborhood Shopping Center(Note 2) Fixed-type master lease method: Hankyu REIT receives rent income from the master lessee (sublessor). The amount received is fixed irrespective of the rent received bysublessor from end-tenants.

21

3-4. Rent Systems and Present Conditions of 23 Portfolio Properties ② (End of 19th Fiscal Period)<Properties mainly using the fixed-rent system>
Property nameMain rent system

Present conditions

Takatsuki-Josai Shopping
Center
NSC (Note 1)

Long-term, fixed

Hankyu Corporation Head
Office Building
OfficeLong-term, fixed

Rent income is stable based on a fixed-type master lease method (Note 2) with Kohnan Shoji
Co., Ltd.
As a community-based retail property, it is comprised of shops that fulfill the needs of nearby
residents, such as a home center, supermarket, electronics store and sporting goods shop.
Rent income is stable based on a fixed-type master lease method (Note 2) with Hankyu
Corporation. The main base of Hankyu Hanshin Holdings Group, and Hankyu Corporation uses
it as its head office building.

Nitori Ibaraki-Kita Store (site)
Specialty shop

Long-term, fixed

Rent income is stable based on a contract for fixed-term land lease for business purposes withNitori Holdings Co., Ltd. Development of residential land is underway nearby and the trade area
population is increasing.

kotocross Hankyu
Kawaramachi
Specialty shop building(urban SC)

Long-term, fixed

Acquired in the 19th fiscal period. Rent income is stable based on a fixed-type master leasemethod (Note 2) with Hankyu Corporation.
Comprised of merchandise shops, restaurants and service shops as a property that features thecharacteristics of a landmark, facing the Shijo-Kawaramachi crossing.

DAILY QANAT Izumiya
Horikawa Marutamachi Store(site)SM (Note 1)

Long-term, fixed

Acquired in the 19th fiscal period. Rent income is stable based on a contract for fixed-term landlease for business purposes with Izumiya Co., Ltd.
Opened in December 2013. It is becoming more well-known and sales are steadily increasing
such as with the morning fair started in July 2014 contributing to gathering customers.

Long-term, fixed

Acquired in the 19th fiscal period. Rent income is stable based on a contract for fixed-term landlease for business purposes with Mandai Co., Ltd.
The building was completed on November 25, 2014 and from next day the rent is now being
collected in whole.
As a community-based retail facility, tenants are comprised of a supermarket, clothing shop, drug
store, 100 yen shop and other shops closely connected to living.

Long-term, fixed

Acquired in the 19th fiscal period. Rent income is stable based on a contract for fixed-term landlease for business purposes with Life Corporation.
Opened in January 2014. Sales have been on an upward trend since around the summer as it
has become more well-known and the personal delivery service started at the end of May 2014 ispopular.

MANDAI Gojo Nishikoji Store(site)NSC (Note 1)
LIFE Shimoyamate Store(site)SM (Note 1)(Note 1) NSC: Neighborhood Shopping Center; SM: Supermarket(Note 2) Fixed-type master lease method: Hankyu REIT receives rent income from the master lessee (sublessor). The amount received is fixed irrespective of the rent received bysublessor from end-tenants.

22

3-4. Rent Systems and Present Conditions of 23 Portfolio Properties ③ (End of 19th Fiscal Period)<Properties mainly using the sales-based overage-rent system>
Property nameMain rent system

Present conditions

HEP Five
Specialty shop building(urban SC)

Overage(fixed + variable)

Continuing to look for shops targeting women in their teens and 20s, the core targets.
Although the customer unit price decreased, the number of cash-register-sale customers has
been maintained at more than 100% in year-on-year comparison throughout the period. The
cash point card that can be used at Hankyu Hanshin Group facilities, the “Hankyu Hanshin
Odekake Card” will be newly issued in April 2015 in an aim to concentrate customers, increase
sales and attract more people. Measures to increase visitors and cash-register-sale customers
will be continued to be promoted.

<Properties using the fixed-rent system>
Property nameMain rent system

Present conditions

Kita-Aoyama 3 cho-me
Building
Urban retail facilities +Office

Fixed

The occupancy rate is 100% as of the end of the period. Occupied by THREE AOYAMA, theflagship store of THREE, a natural cosmetics brand operated by an affiliate of Pola Orbis
Holdings Inc. Attracted new designer item showroom and office to the second floor from October
2014, further vitalizing facilities.

Shiodome East Side Building
OfficeFixed

The occupancy rate continued to be 100%.
Will continue to promote tenant relations while reducing costs through preventive building
maintenance efforts by drawing on the strengths of having a resident PM company.

Sphere Tower Tennoz
OfficeFixed

Promote leasing based on area/building features while continuing to work towards early
improvement of occupancy rate by strengthening appeals through value-enhancement work.
(made new booklets, held viewings, etc.)

Namba-Hanshin Building
OfficeFixed

Ueroku F Building
OfficeFixed

Brought in a tenant with in-person visits, which had been targeted, at a rent level exceeding the
average for existing tenants, utilizing the close proximity to terminal station.
Period-end occupancy rate was 94.9%, up 2.1 points from the end of the previous period(92.8%).
Period-end occupancy rate was 93.8%, down 3.3 points from the end of the previous period(97.1%).
For vacant spaces, relations with existing tenants are being strengthened alongside new leasing,and needs for expansion of floor area within the same property are being sought out.

23

3-4. Rent Systems and Present Conditions of 23 Portfolio Properties ④ (End of 19th Fiscal Period)<Properties using mainly the fixed-rent system>
Property name
LaLaport KOSHIEN (site)
RSC (Note 1)

Main rent system
Long-term, fixed

LAXA Osaka
Hotel

Long-term, fixed

Hotel Gracery Tamachi
HotelLong-term, fixed

Kohnan Hiroshima
Nakano-Higashi Store (site)
NSC (Note 1)

Long-term, fixedRichmond Hotel Hamamatsu
HotelLong-term, fixed

AEON MALL
SAKAIKITAHANADA (site)
RSC (Note 1)

Long-term, fixed

MANDAI Toyonaka Honan
Store (site)
NSC (Note 1)

Long-term, fixed

Present conditions
Rent income is stable based on a contract for fixed-term land lease for business purposes with
Mitsui Fudosan Co., Ltd.
American casual brand’s first shop in the Kansai region opened in December 2014.
Rent income is stable based on a fixed-type master lease method (Note 2) with Hanshin
Electric Railway Co., Ltd. The room occupancy rate of Hotel Hanshin, which is under asublease contract, remains at a high level, and the guest room unit price is also increasing.
Based on a contract for long-term and fixed lease with Fujita Kanko Inc. The room occupancy
rate remains at a high level, the guest room unit price is also increasing and profitability isimproving.
A rent reduction action was filed by Fujita Kanko Inc., a lessee, on October 2014. The claim isconsidered to lack reasonable grounds in light of such factors as the current hotel market
conditions and rent trends in the Tokyo metropolitan area, and Hankyu REIT plans to assert its
opinion to that effect in upcoming court proceedings.
Based on a contract for fixed-term land lease for business purposes with Kohnan Shoji Co.,
Ltd. Although this retail facility offers high transportation convenience with a home center and agrocery store as tenants, the tenant’s management balance sheet is in a tough situation and thus
joint efforts will continue to be underway for balance improvement, such as reduction of costs
and effective utilization (subleasing) of parking space.
Rent income is stable based on a fixed-type master lease method (Note 2) with RNT HOTELS
Co., Ltd. (consolidated subsidiary of ROYAL HOLDINGS Co., Ltd.).
With sufficient facilities, such as parking space and meeting rooms, and providing a wide rangeof accommodation plans, the occupancy rate remains at a high level for the area. RevPAR also
continues to increase and be strong. Being 13 years since opening, renovation of airconditioning system and such are scheduled to be implemented, at the expense of tenants.
Rent income is stable based on a contract for fixed-term land lease for the shopping center landwith land leasehold right, which occupies most of the site.
Boasts favorable market potential and formed as a mall of specialty shops that houses about 160
shops with AEON and Hankyu Department Store as the core tenants.
Rent income is stable based on a contract for fixed-term land lease for business purposes with
MANDAI Co., Ltd.
Sales have been strong since the property’s opening in October 2013.
As a community-based store, it houses shops closely related to daily life such as a grocery store,
drugstore and dry cleaner.

(Note 1) RSC: Regional Shopping Center; NSC: Neighborhood Shopping Center(Note 2) Fixed-type master lease method: Hankyu REIT receives rent income from the master lessee (sublessor). The amount received is fixed irrespective of the rent received bysublessor from end-tenants.

24

3-5. Appraisal Value
Appraisal value increases by 1.2%
Transition to unrealized loss position (JPY 1,690 mn)
Cap rate decreases for 22 properties out of 23 properties（JPY mn）

24,000

6.0%

20,0005.0%

16,000

4.0%

12,000

3.0%

8,000

2.0%

4,000

1.0%

0

1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
period period period period period period period period period period period period period period period period period period period'05/11 '06/05 '06/11 '07/05 '07/11 '08/05 '08/11 '09/05 '09/11 '10/05 '10/11 '11/05 '11/11 '12/05 '12/11 '13/05 '13/11 '14/05 '14/11
HEP (Note 1)

Kitano Hankyu

Hankyu Yamada

Ueroku F Bldg.

Takatsuki-Josai

Nitori Ibaraki

Kohnan Hiroshima

NU

Tennoz

Shiodome

Tamachi

LAXA Osaka

LaLaport KOSHIEN

Namba-Hanshin

Hamamatsu

Nishinomiya G

Head
Office Building
Marutamachi

KITAHANADA

Honan Store

Kita-Aoyama

kotocrossShimoyamate

Nishikoji

0.0%

Weighted average CAP rate (Note 2)(Note 1) Concerning HEP Five, because 31% quasi co-ownership of the trust beneficiary interest was transferred in the 16th fiscal period (April 9, 2013) anddiffers from the equity ratio ownership of 14% . For comparison, values calculated with the equity ratio of 14% are shown from the 1st to 15th fiscal
periods.
(Note 2) Cap rates are the weighted average based on appraisal values.

25

3-6. List of Appraisal Values(Unit：JPY mn)① End of previous period(18th fiscal period-end)
Acquisition priceHEP Five ( 14% of the quasi co-ownership of the trust
beneficiary interests)

6,468② End of current period(19th fiscal period-end)

Appraisal value

Cap rate(Note 1)

Appraisal value

Cap rate(Note 1)

7,770

4.2%

7,882

4.1%

Change(②-①)

Change(②-①)/①③Value recordedon the balance
sheet at end ofcurrent period

112

1.4%

5,729

2,152

Unrealized
income/loss②-③

Value to book
ratio
②/③

137.6%

Kitano Hankyu Building

7,740

6,600

5.2%

6,570

5.1%

-30

-0.5%

7,766

-1,196

84.6%

Dew Hankyu Yamada

6,930

7,610

5.1%

7,810

5.0%

200

2.6%

5,788

2,021

134.9%

Takatsuki-Josai Shopping Center

8,600

7,609

5.6%

7,745

5.5%

136

1.8%

7,433

311

104.2%

Ueroku F Building

2,980

2,590

5.8%

2,630

5.7%

40

1.5%

2,736

-106

96.1%

Nitori Ibaraki-Kita Store (Site)

1,318

1,530

5.9%

1,560

5.5%

30

2.0%

1,340

219

116.4%

Kohnan Hiroshima Nakano-Higashi Store (Site)

2,175

1,860

6.3%

1,880

6.1%

20

1.1%

2,280

-400

82.4%

Sphere Tower Tennoz (33% of the quasi co-ownershipof the trust beneficiary interests)

9,405

6,732

4.7%

6,732

4.7%

0

0.0%

8,671

-1,93977.6%

Shiodome East Side Bldg.

19,025

12,900

4.6%

13,200

4.5%

300

2.3%

17,835-4,63574.0%

Hotel Gracery Tamachi

4,160

4,010

5.2%

4,010

5.0%

0

0.0%

3,851

158

104.1%LAXA Osaka

5,122

5,220

5.5%

5,120

5.3%

-100

-1.9%

4,478

641

114.3%

LaLaport KOSHIEN (site)

7,350

6,850

4.9%

6,950

4.8%

100

1.5%

7,748

-798

89.7%

Namba-Hanshin Building

4,310

2,730

5.3%

2,410

5.2%

-320

-11.7%

3,943-1,533

61.1%

Richmond Hotel Hamamatsu

2,100

1,988

6.2%

2,021

6.1%

33

1.7%

1,591

429

126.9%

HANKYU NISHINOMIYAGARDENS (28% of the quasi co-ownership of the trust
beneficiary interests)

18,30021,7284.9%

22,120

4.8%

392

1.8%

18,104

4,015

122.2%

Hankyu Corporation Head Office Building

10,20010,700

4.7%

10,900

4.6%

200

1.9%

9,989

910

109.1%AEON MALL SAKAIKITAHANADA (site)

8,100

8,650

4.9%

8,840

4.8%

190

2.2%

8,189

650

107.9%

MANDAI Toyonaka Honan store (site)

1,870

2,130

5.0%

2,150

4.9%

20

0.9%

1,889

260

113.8%

Kita-Aoyama 3 cho-me Buiding

1,680

1,700

4.1%

1,760

4.0%

60

3.5%

1,747

12

100.7%DAILY QANAT Izumiya Horikawa Marutamachi Store(site) (Note 2)

3,100

3,230

4.9%

3,250

4.8%

20

0.6%

3,127

122

103.9%

kotocross Hankyu Kawaramachi (Note 2)

2,770

2,960

5.0%

3,010

4.9%

50

1.7%

2,787

222

108.0%

LIFE Shimoyamate Store (site) (Note 2)

1,421

1,430

5.0%

1,490

4.8%

60

4.2%

1,434

55

103.9%

MANDAI GOJO Nishikoji Store (site) (Note 2)

4,182

4,220

5.0%

4,340

4.9%

120

2.8%

4,213

126

103.0%

139,307

132,747

5.0%

134,380

4.9%

1,633

1.2%

132,680

1,699

101.3%

Total

Regarding LAXA Osaka and Namba-Hanshin Building, repair and renewal costs increased as in appraisals due to the reacquisition of Engineering reports.
(Note 1) Cap rates are cap rates and discount rates based on the direct capitalization method used for appraisal value calculations (Nitori Ibaraki-Kita Store (site), Kohnan
Hiroshima Nakano-Higashi Store (site) , LaLaport KOSHIEN (site) , AEON MALL SAKAIKITAHANADA (site) and LIFE Shimoyamate Store (site) are allocated a discountrate using the DCF method.) and the total is the weighted average cap rate based on appraisal values.
(Note 2) Newly acquired during the 19th fiscal period (June 2014). The indicated appraisal value and CAP rate for the end of the previous fiscal period (end of the 18th period) arethose as of the property’s acquisition.

26

4. Financial Strategies27

5-1. Basic Financial Policy / Debt Outstanding
Debt Outstanding by Lender (JPY mn)

Basic Financial Policy● Maintain sound financial position● Maintain favorable trading relationship with financial institutions● Realize lower fund procurement costs(effective use of security deposits/guarantees)● Reduce financing risks (diversification of debt repayment dates)● Reduce interest rate risks (focus on long-term, fixed-rate loans)

As of November 30, 2014
6,000,
1.6%

6,000,
9.7%

3,200
5.2%

11,700
18.9%

6,000
9.7%
11,000
17.8%

As of end of
18th period

As of end of
19th period

JPY 56.9 bn

JPY 61.9bn

Avg. funding cost（interest-bearing debt＋utilized
amount of security deposits andguarantees)

1.19%

1.06%

Avg. debt financing cost (including
investment corporation bonds)

1.23%

1.08%

2.7 years

3.6 years

100.0%

91.9%

Fixed debt ratio

80.3%

73.8%

LTV (Note)

47.3%

45.4%

Interest-bearing debt ratio

43.4%

42.9%

JPY 6 bn

JPY 6 bn

Registration for Issuance of Investment Corporation Bonds

Investor rating(R&I)

A+（stable）

A+（stable）

Planned value of issuance (upper limit):

Investor rating(JCR)

AA（stable）

AA（stable）

Planned issuance period: Dec. 19, 2013 to Dec. 18, 2015

Interest-bearing debt

Avg. remaining years
on long-term loans payable andinvestment corporation bonds
Long-term debt ratio

Investment corporation bonds(Note) Details of the calculation method for, “LTV” are presented on P57.

6,400
10.3%
6,400
10.3%

10,20016.5%

Mitsubishi UFJ Trust and Banking Corporation
Development Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
The Senshu Ikeda Bank, Ltd.
Mizuho Trust and Banking Co., Ltd
Investment corporate bonds

Total JPY 61.9 bn

JPY 100,000 mn

28

4-2. Asset Scale and LTV (Loan to Value)
Capital increaseby 3rd public
offering

Total acquisition priceTotal appraisal value at the end of period
LTV at end of period (based on management guidelines)

Capital increaseby 2nd public
offering

Interest-bearing debt ratio at the end of period

Capital increaseby 1st public
offering(JPY bn)
270
240

46.1

45.6

210

57.9

180
150

30.0 30.7

28.8

55.2

55.6

55.9

56.0

55.9

55.8

40.8

40.3

60

53.5
48.6

46.0
49.4

31.0

（％）
56.1

46.9

46.2

45.4

45.5

45.2

45.5

45.5

47.3 45.4

46.7
43.2

43.4 42.9

39.1

50
40
30

120
21.3

90
60

20

18.0 18.2 18.9

10

30
0

No. ofproperties

0
1st
period'05/11

2nd
3rd
4th
5th
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
period period period period period period period period period period period period period period period period period period'06/05 '06/11 '07/05 '07/11 '08/05 '08/11 '09/05 '09/11 '10/05 '10/11 '11/05 '11/11 '12/5 '12/11 '13/05 '13/11 '14/05 '14/11

5

6

7

8

9

11 11 16 15 15 15 15 15 15 15 16 19 19 23

LTV decreased 1.9 points due to increase of
appraisal value, the 3rd public offering, etc.

29

5. Overview of Financial
Results for 19th Fiscal Period305-1. Financial Highlights（Unit:JPY mn）

Item

Operation period (days)

Forecast for 19th Fiscal Period ①(as of Jul. 16, 2014)183

Results for 19th Fiscal Period ②(Jun. 1, 2014 to Nov. 30, 2014)

183

Change②-①―

Operating revenues

4,764

4,786

21

Operating income

1,905

1,928

22

Ordinary income

1,483

1,517

33

Net income

1,481

1,515

33

Number of outstanding
investment units at end of
fiscal period (units)

119,500

119,500―

Distribution per unit (JPY) *12,40012,685285

20,541

20,822281(Main factors for increase/decrease)①Increase of sales-based overage rent
+JPY 8 mn
LAXA Osaka+JPY 8 mn① (HEP, Hankyu Yamada, etc.)② ② Decrease of borrowing cost

FFO per unit (JPY) *+JPY 11 mn* Hankyu REIT implemented a five-for-one split of its investment units with November 30, 2014 as the record date and December 1,
2014 as the effective date. The indicated figures are actual figures before the split.

31

5-2. Distribution Forecast for 20th Fiscal Period
Forecast for the 20th fiscal
periodDistribution per unit forecast

JPY 2,530[Main factors for increase/decrease from 19th FP]
・Contribution to lease operation income of assets acquired in the 19th FP ＋81 (Nishikoji Rent increase from building completion)
・Increase in maintenance and repair fees
-77 (Takatsuki-Josai SC –21, Namba Hanshin Building –15, etc.)
・Increase in asset management remunerations -22（Unit: JPY mn）

Item

Results for 19th Fiscal Period ① Forecast for 20th Fiscal Period ②(Jun. 1, 2014 to Nov. 30, 2014)(Dec. 1, 2014 to May 31, 2015)

Results for 18th Fiscal Period ③(Dec. 1, 2013 to May 31, 2014)

Change②-①

Change②-③Operation period(days)

183

182

-1

182

―

Operating revenues

4,786

4,842

56

4,460

381

Operating income

1,928

1,921

-7

1,750

171

Ordinary income

1,517

1,513

-4

1,312

200

Net income

1,515

1,511

-4

1,311

200

119,500

597,500

478,000

105,200

492,300

2,530

-7

4,166

1

Number of outstanding
investment units at end of
period (units)

Distribution per unit (JPY) *FFO per unit (JPY) *2,537(12,685)
4,164(20,822)

2,492(12,462)
4,293(21,467)

37-127[Main preconditions]•There will be no transfer of portfolio properties from the presently held 23 properties•There will be no additional issuance of investment units to the present 597,500 units until the end of the period* Hankyu REIT implemented a five-for-one split of its investment units with November 30, 2014 as the record date and December 1, 2014 as the effective date. In order to comparewith the 20th fiscal period after the split, “Distribution per unit (JPY)” and “FFO per unit (JPY)” in the results for the 19th fiscal period ① and results for the 18th fiscal period ③arefigures where the actual values indicated in parentheses are divided by 5.

32

6-3. Income Statement / Cash Distribution Statement
Income statement
Item（Unit: JPY mn）

19th Fiscal Period(Operation period:182 days)(Operation period:183 days)

Dec. 1, 2013 to May. 31, 2014

Jun. 1, 2014 to Nov. 30, 2014

Amount
1. Operating revenues
Lease operating revenues
Distribution revenue of silent partnership

2. Operating expenses
Lease operating costs
Asset management remuneration
Officer remuneration
Asset consignment remuneration
Adminstrative agency remuneration
Auditor remuneration
Other operating expenses
Operating income
3. Non-operating revenues
Interest earned
Other non-operating revenues
4. Non-operating expenses
Interest expenses
Loan related expense
Interest due on investment corporation bonds
Amortization of investment corporation bondissuance costs

4,460
4,460
―
2,710
2,305
299
3
17
33
7
45
1,750
1
0
1
439
318
38
38

Pretax net income for current period

3
36
4
1,312
1,312

Corporate, local and enterprise tax

1Adjustment for corporate tax, etc.

0
1,311
0
1,311

Investment unit issue costs
Other expenses
Ordinary income

Net income for current period
Retained earnings carried forwardfrom the previous period
Unappropriated income for current period

Percentage

100.0

60.8

39.2
0.0

9.8

29.4

Amount

4,786
4,786
―
2,857
2,433
309
3
17
33
8
51
1,928
2
0
1
413
308
44
37
3
7
11
1,517
1,517

Cash distribution statement(Unit: JPY thousand)18th Fiscal Period

ChangePercentage

100.0

325

Item
income for① Unappropriatedcurrent period
Distributions

59.7

146

(Distribution per unit (JPY)) *② Retained earnings carried forward

18th Fiscal Period 19th Fiscal Period

ChangeAmountAmountAmount1,311,082

1,515,948

204,866

1,311,002(12,462)79

1,515,857(12,685)90

204,855(223)
11(Main factors for increase/decrease)

40.3
0.0

178
0

8.6

-25

① Increase in operating revenue
Increase in operating revenues due to contribution fromproperties acquired in the 19th FP+JPY 263 mn
Increase in utilities expense income+JPY 40 mn
Increase in operating revenues of Namba Hanshin Building+JPY 8 mn② Increase of operating expenses

31.7

204

31.7

204

Expensed tax and public dues of properties acquired in the
16th and 17th FP for full period+JPY 106 mn
Decrease in maintenance and repair fees
- JPY 75 mn
Increase in utilities expenses+JPY 63 mn

1
29.4

0
1,515
0
1,515

Lease operating revenues / expenses
Breakdown: See pages 35 and 36* Hankyu REIT implemented a five-for-one split of its investment units with November 30, 2014 as the record date and December 1, 2014 as the effective date. The indicated figures are actual figures
before the split.

33

5-4. Balance Sheet（Unit: JPY mn）（Unit: JPY mn）

Item

18th Fiscal Period

19th Fiscal Period(as of May. 31, 2014)(as of Nov. 30, 2014)

AmountAmountRatio (%)

ChangeItem

Ratio (%) Amount18th Fiscal Period

19th Fiscal Period(as of May. 31, 2014)(as of Nov. 30, 2014)

AmountAmountRatio (%)

ChangeRatio (%) Amount

Liabilities

AssetsI Current assets total

8,884

6.8

11,2337.8

2,348

I Current liabilities total

25,11819.2

19,039Currency and demand deposit

1,856

2,581

Operating accounts payable

369

511

Currency and demand depositin trust

6,731

8,403

Short term loans payable

―

5,000

4

6

Long term loans payable(return within 1 year)

116

112

23,70012,400Operational income receivable
Deposit paid
Prepaid expense
Deferred income tax assets

II Fixed assets total

174

128

0
122,1830
93.2

133,04192.2

10,858

Buildings

2,182

2,117

Structures

254

241

Tools, furniture and fixtures
Land
Buildings in trust

0

12

13

Accrued expenses

157

144

1

1

Interest-bearing
liabilities
JPY 61,900 mn

Income taxes payable

Advance received
Current deposit received

0

9,485

9,485

(return within 1 year)

30,55630,808

II Total noncurrent liabiliteies

1,385

68

77,467

88,11526

6Intangible fixed assets total

1,039

JPY 1,480 mn
was allocated forpropertyacquisitions

6,188
49.9

71,113

49.3

I Unitholders capital

64,31649.1

71,65949.7

II Total surplus

1,311

1.0

1,515

1.1

Unappropriated income for current
period82
0.8

11,735

Total security
deposits
JPY 7,807 mn

5,656

10,764 Net assets

957

86
1,043

36.1

65,456

Liabilities total

2. Intangible fixed assets

Others52,073

5,707

76

957

30.8

1,430

Tools, furniture and fixtures in trust

91.2

40,338

Security deposits in trustLong term loans payable

Land leasehold

233

Security deposits

194

131,647

202

38,500

609

211

92.2

0

27,200620

120,8824

6,000

Machinery and equipment in trust

Tangible fixed assets total

31
703

6,000

Structures in trust

Trust construction account55
615

Security deposits

Investment corporation bonds

Land in trust-6,079Accrued dividend

Accrued consumption tax

1. Tangible fixed assets

13.2

0.7

-4 Net assets total

1,311

1,515

65,62750.1

73,175

50.7

7,547

131,083100.0

144,288100.0

13,204

3. Investments, other assets
Long-fiscal period prepaid expenses
Guarantee money deposit
Investment, other assets total

IIITotal deferred assets
Investment corporation bondissuance costs

Assets total

246

345

10

10

256

0.2

355

0.2

98

15

0.0

12

0.0

-3

15
131,08312
100.0

144,288100.0

13,204 Liabilities and net assets total

34

5-5. Income and Expenditure by Property ①（Unit： JPY mn）
HEP Five

Item(14% of the quasi
Kitano Hankyu
co-ownership of theBldg.
trust beneficiaryinterests)

Dew Hankyu
YamadaKohnanNitori IbarakiTakatsuki-Josai
Hiroshima
Hotel Gracery
Kita Store (site)
SC
Nakano-Higashi
Tamachi(Note)Store (site)

Number of operating daysof 19th fiscal period

183

183

183

183

Lease operating revenues
total

305

578

387

Income from lease

244

380

Utilities expense income

15

Other incomes183

NISHINOMIYAGARDENSAEON MALL
Richmond Hotel(28% of the
SAKAI
Hamamatsu
quasi coKITAHANADA(Note)
ownership of the(site) (Note)trust beneficiaryinterests)

LaLaport
KOSHIEN(site)

183

183

183

183

284

68

121

257

618

261

283

68

116

257

617

136

58

―

―

―

―

―

44

61

68

0

0

4

0

0

183

MandaiToyonaka
Honan Store(site) (Note)

183

183

192

433

234

137

6

54

106

211

Property/Facility
management fees

43

113

76

10

0

1

1

0

Utilities expense

28

185

61

0

―

―

―

―

3

0

1

22

―

―

0

6

26

1

0

―

―

―

―

―

Repair expense

7

4

2

0

―

0

0

0

Nonlife insurance
premium

0

1

0

1

―

0

0

2

Tax and public dues

23

50

26

26

6

14

102

58

6

1

4

0

―

0

1

0

51

75

61

75

―

36

0

141

Lease operating income

113

144

152

146

61

67

150

407

NOI
(Lease operating income +Depreciation)

164

220

214

222

60

61

103

151

65

548

211

53

4

143

―

0

―

―

―

0

―

―

―

―

Lease operating costs total

Rent paid
Advertising and promotion
expenses

Other expenses
Depreciation

Capital expenditure(Note) Rent Information is not disclosed as the consent of the tenant was not obtained.

35

5-5. Income and Expenditure by Property②（Unit： JPY mn）

Item

Number of operating daysof 19th fiscal period

IzumiyaHorikawa
MarutamachiStore(site) (Note)

180

kotocross
HankyuKawaramachi

LIFE
Shimoyamate
Store(site) (Note)

MANDAI Gojo
Nishikoji
Store (site)(Note)

180

180

160

HankyuCorporation
Head Office
Bldg.

Ueroku F Bldg.

Sphere Tower
Tennoz(33% of thequasi coownership of
the trust
beneficiary

183

183

183

183

183

183

Shiodome
East
Side Bldg.

LAXA Osaka

Kita-Aoyama
Total
Namba-Hanshin
3 cho-me Bldg.
Building(23 properties)(Note)

183―

Lease operating revenues
total

100

407

359

139

113

262

117

4,786

Income from lease

100

377

359

118

83

254

98

4,279

Utilities expense income

―

27

―

13

11

―

7

272

Other incomes

0

2

―

8

18

8

10

233

37

199

157

86

163

165

118

2,433

1

18

1

22

23

1

22

348

Utilities expense

―

33

―

12

47

―

18

388

Lease operating costs
total
Property/Facility
management fees

Rent paid

12

0

―

―

―

17

―

65

Advertising and promotion
expenses

―

―

―

―

0

―

0

28

Repair expense

―

0

―

1

2

2

2

27

Nonlife insurance premium

0

0

1

0

0

2

0

15

Tax and public dues

―

21

48

12

29

49

19

550

Other expenses

0

2

0

1

2

9

1

37

21

122

105

36

57

81

52

972

63

207

201

53

-50

97

-1

2,352

Depreciation
Lease operating income
NOI(Lease operating income +Depreciation)

91

85

36

31

330

307

89

7

179

51

37

3,325

Capital expenditure

―

0

―

―

1

―

1

7

8

0

―

169

(Main capital expenditure)
Kitano Hankyu Building Renewal work for anti-disaster facilities JPY 138 mn(Note) Rent Information is not disclosed as the consent of the tenant was not obtained.

36

5-6. Financial Indicators

Item

18th Fiscal Period

19th Fiscal Period

Remarks
18th fiscal period: Dec. 1, 2013 to May. 31, 2014
19th fiscal period: Jun. 1, 2014 to Nov. 30, 2014

182

183

1.0%

1.1%

Ordinary income / {(Total assets at beginning of period+ Total assets at end of period) /2 }

2.0%

2.2%

Calculated from duration of operation

2.0%

2.2%

Net income / {(Net assets at beginning of period + Net assets at end of
period) /2 }

4.0%

4.4%

Calculated from days of operation

50.1%

50.7%

Net assets / Total assets

47.3%

45.4%

(46.9%)(45.9%)

43.4%

42.9%

7.3times

8.2times

Net Operating Income (NOI)

JPY3,103 mn

JPY3,325 mn

Net lease operating income + Depreciation

Funds From Operation (FFO)

JPY2,258 mn

JPY2,488 mn

Net income for current fiscal period +Depreciation - Income/loss onsale of real estate

Operation period

Return On Assets (ROA)(per annum)
Return On Equity (ROE)(per annum)
Ratio of net assets at end of period

Loan To Value ratio at end of period (LTV)
Ratio of interest-bearing debts to total assets
at end of period
Debt Service Coverage Ratio (DSCR)(Amount of interest-bearing debt + Security deposits - Matched money to security deposits)/(Total assets(*) - Matched money to security deposits)*Appraisal-value basis (Ratios in brackets are based on book value)Interest-bearing debt / Total assets
Pre-interest and pre-depreciation net income for current fiscal period /Interest expenses

37

6. APPENDIX

38

6-1. Portfolio List (As of End of 19th Fiscal Period) ①
As of November 30, 2014
Classifi
Code(Note 1)
cationName

Total leasablearea (m2)(Note 3)

Occupancy Total number
PML
rate
of tenants(Note 4)(Note 3)(Note 3)

Kita Ward,
Osaka City

Nov. 1998

16.1

6,337.37

100.0%

1(2,958.94)(99.2%)(132)

Kitano Hankyu Bldg.

Kita Ward,
Osaka City

Jun. 1985

29.5

28,194.15

100.0%

2(18,477.35)(98.7%)

(24)

R3(K)

Dew Hankyu Yamada

Suita City,
Osaka Prefecture

Oct. 2003

11.2

13,027.28

100.0%

R4(K)

Takatsuki-Josai
Shopping Center

Takatsuki City,
Osaka Prefecture

Apr. 2003

11.7

31,451.81

R5(K)Nitori Ibaraki-Kita Store(site)

Ibaraki City,
Osaka Prefecture

―

―

R6

Kohnan Hiroshima NakanoHigashi Store (site)

Aki Ward,
Hiroshima City―

R8

Hotel Gracery Tamachi

Minato Ward,
Tokyo

R9(K)

LaLaport KOSHIEN(site)

R10

Richmond Hotel Hamamatsu

R11(K)

HANKYU NISHINOMIYAGARDERNSHEP Five

Retail-use Facilites

Location

Building
Completion dateage
(Note 2)R1(K)(14% of the quasi co-ownership of
the trust beneficiary interests)

R2(K)(28% of the quasi co-ownership of
the trust beneficiary interests)

Date of acquisition

Acqusition price Investme Appraisal value(JPY mn)(JPY mn )nt ratio

Cap rate(Note 5)

4.6%

Feb. 1, 2005

6,468

4.6%

7,882

4.1%

10.1%

Feb. 1, 2005

7,740

5.6%

6,570

5.1%

28

4.5%

Feb. 1, 2005

6,930

5.0%

7,810

5.0%

100.0%

1

6.1%

Nov. 15, 2005

8,600

6.2%

7,745

5.5%

6,541.31

100.0%

1―

Mar. 29, 2006

1,318

0.9%

1,560

5.5%

―

25,469.59
60.14

100.0%

1―

Oct. 2, 2006
Apr. 9, 2007

2,170
5

1.6%

1,880

6.1%

Sep. 2008

6.2

4,943.66

100.0%

1

10.3%

Dec. 25, 2008

4,160

3.0%

4,010

5.0%

Nishinomiya City,
Hyogo Prefecture――

126,052.16

100.0%

1

6.4%

Jan. 22, 2009

7,350

5.3%

6,950

4.8%

Naka Ward,
Hamamatsu City

Sep. 2002

12.2

6,995.33

100.0%

1

14.5%

Jan. 22, 2009

2,100

1.5%

2,021

6.1%

Nishinomiya City,
Hyogo Prefecture

Oct. 2008

6.2

65,372.41

100.0%

1

9.2%

Apr.16, 2013

18,30013.1%

22,120

4.8%

R12(K)AEON MALL
SAKAIKITAHANADA(site)

Kita Ward,
Sakai City――

64,104.27

100.0%

2―

June. 27, 2013

8,100

5.8%

8,840

4.8%

R13(K)

MANDAI Toyonaka Honanstore (site)

Toyonaka city
Osaka Prefecture――

8,159.41

100.0%

1―June. 27, 2013

1,870

1.3%

2,150

4.9%

DAILY QANAT Izumiya
R14(K) Horikawa Marutamachi Store(site)

Kamigyo ward,
Kyoto city――

3,776.15

100.0%

1―June 4, 2014

3,100

2.2%

3,250

4.8%

R15(K)

kotocross Hankyu
Kawaramachi

Shimogyo ward,
Kyoto city

Oct. 2007

7.2

4,400.13

100.0%

1

2.6%

June 4, 2014

2,770

2.0%

3,010

4.9%

R16(K)

LIFE Shimoyamate Store(site)

Chuo ward,
Kobe city――

2,397.83

100.0%

1―June 4, 2014

1,421

1.0%

1,490

4.8%

R17(K)

MANDAI Gojo
Nishikoji Store (site)

Ukyo-ku
Kyoto city――

9,182.80

100.0%

1―June 24, 2014

4,182

3.0%

4,340

4.9%

39

6-1. Portfolio List (As of End of 19th Fiscal Period) ②

Mixed-use (complex) facilities

Office-use
facilities

Classifi
Code(Note 1)
cationTotal leasablearea (m2)(Note 3)

Occupancy Total number
PML
rate
of tenants(Note 4)(Note 3)(Note 3)Name

Location

Completion date

Building
age(Note 2)

O1

Shiodome East Side Bldg.

Chuo Ward,
Tokyo

Aug. 2007

7.3

9,286.58

100.0%

6

4.6%

Feb. 29, 2008

19,025

13.7%

13,200

4.5%

O2(K)

Hankyu Corporation Head
Office Building

Kita Ward,
Osaka City

Sep. 1992

22.2

27,369.37

100.0%

1

3.7%

Apr.10 2013

10,2007.3%

10,900

4.6%

M1(K)

Ueroku F Bldg.

Chuo Ward,
Osaka City

Sep. 1993

21.2

4,611.82

93.8%

11

3.2%

Nov. 1, 2005

2,980

2.1%

2,630

5.7%

M2

(33% of the quasi co-ownership of
the trust beneficiary interests)

Shinagawa
Ward,
Tokyo

Apr. 1993(Note 6)21.7

8,807.71

39.0%

20

2.7%

Oct. 2, 2007

9,405

6.8%

6,732

4.7%

M3(K)

LAXA Osaka

Fukushima
Ward,
Osaka City

Feb. 1999

15.8

30,339.91

100.0%

1

3.7%

Jan. 22, 2009

5,122

3.7%

5,120

5.3%

M4(K)

Namba-Hanshin Building

Chuo Ward,
Osaka City

Mar. 1992

22.7

9,959.01

100.0%

1(6,456.88)（94.9%)

(19)

5.1%

Jan. 22, 2009

4,310

3.1%

2,410

5.2%

M5

Kita-Aoyama 3 cho-me
Building

Minato Ward,Tokyo

Sep. 2013

1.2

619.76100.0%

3

7.4%

Nov. 12, 2013

1,680

1.2%

1,760

4.0%

13.7

497,459.98(480,862.62)

98.9%(98.7%)

88
(259)

3.5%

139,307100.0%

134,380

4.9%

Sphere Tower Tennoz

Total (at the end of 19th Fiscal Period)

Date of acquisition

Acqusition price Investme Appraisal value(JPY mn )(JPY mn)
nt ratio

Cap rate(Note 5)(Note 1) The properties owned by Hankyu REIT are assigned codes classified by facility (type of use) and region.
The letters on the left represent the facility (type of use):“R” is for retail-use facility, “O” is for office-use facility and “M” is for mixed-use (complex) facility.
The numerals are the numbers assigned to each facility in the chronological order of the acquisition.
The letter “K” in parentheses to the right of the numerals indicates that the property is located in the Kansai region.
(Note 2) The portfolio total is the weighted average building age by acquisition price.
(Note 3) Figures in parenthesis indicate the total leasable area for end-tenants, the occupancy rate based on the said area, and the number of endtenants, respectively.
For HEP Five, 14% quasi co-ownership of the trust beneficiary interests is indicated as the leasable area.
For Sphere Tower Tennoz, 33% quasi co-ownership of the trust beneficiary interests is indicated as the leasable area.
For HANKYU NISHINOMIYA GARDENS, 28% quasi co-ownership of the trust beneficiary interests is indicated as the leasable area.
(Note 4) PML of LaLaport KOSHIEN (site) is calculated for the parking garage space administration building (394.88m2).
(Note 5) Cap rates and discount rates are based on the direct capitalization method used for appraisal value calculations (Nitori Ibaraki-Kita Store(site), Kohnan Hiroshima Nakano-Higashi Store (site), LaLaport KOSHIEN (site), AEON MALL SAKAIKITAHANADA (site) and LIFE
Shimoyamate Store (site) are allocated a discount rate using the DCF method.) and the portfolio total is the weighted average cap rate
based on appraisal values.
(Note 6) The completion date for the office and store portions is indicated.

40

6-2. Portfolio View (as of end of 19th Fiscal Period) ①
Urban retail facilities

Community-based retail facilities①

HEP Five

kotocross Hankyu
Kawaramachi

HANKYU NISHINOMIYA GARDENS

Kita-Aoyama 3 cho-me Building

Kitano Hankyu Building

AEON MALL SAKAI KITAHANADA (Site)41

6-2. Portfolio View (as of end of 19th Fiscal Period) ②
Community-based retail facilities②
DAILY QANAT Izumiya Horikawa Marutamachi Store (site)

Dew Hankyu Yamada

MANDAI Gojo Nishikoji Store (site)

LIFE Shimoyamate Store (site)42

6-2. Portfolio View (as of end of 19th Fiscal Period) ③
Community-based retail facilities③
LaLaport KOSHIEN (Site)

MANDAI Toyonaka Honan Store (Site)

Takatsuki-Josai SC

Nitori Ibaraki-Kita Store (Site)

Kohnan Hiroshima Nakano-Higashi Store (Site)43

6-2. Portfolio View (as of end of 19th Fiscal Period) ④
Hotel
LAXA Osaka

Richmond Hotel Hamamatsu

OfficeHotel Gracery Tamachi

Shiodome East Side Building

Hankyu Corporation Head Office
Building

Ueroku F Building

Namba-Hanshin Building

Sphere Tower Tennoz

44

6-3. Trends of Distribution per Unit
Distribution per unit forecast *

（JPY）

4,000

3,792

3,500
3,000
2,500
2,000

2,715 2,744
2,500 2,560

2,991

2,860

2,714

2,560

2,998

2,820

3,068

3,000

Distribution per unit *JPY 2,537(JPY 12,685)

3,473
2,862

3,300
2,820

2,483

2,538

2,537 2,464

2,600
2,420 2,400 2,460
2,322

2,400

2,445 2,361

2,597 2,492 2,537

2,540 2,460 2,480 2,530
2,400
2,300

1,500
1,000
500
0
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th
period period period period period period period period period period period period period period period period period period period period'05/11 '06/05 '06/11 '07/05 '07/11 '08/05 '08/11 '09/05 '09/11 '10/05 '10/11 '11/05 '11/11 '12/05 '12/11 '13/5 '13/11 '14/5 '14/11 '15/5

Irregular period (303 days)(Compare with 19th FP forecast: +JPY 57 per unit, net income + JPY 33 mn))
Increase in operating income +JPY 22 mn
Decrease in non-operating expenses +JPY 9 mn
(Interest expenses JPY 4 mn, etc.)* Hankyu REIT implemented a five-for-one split of its investment units with November 30, 2014 as the record date and December 1, 2014 as the effective date. Results for the
19th fiscal period are calculated by dividing the actual figures in parentheses by 5, and the graph shows figures that retrospectively reflect the implementation of the split.

45

6-4. Income Ratio by Rent Category and Sales-Based Overage Rent System Mechanism

Income Ratio by Rent Category and Variation Factors
19th FP
Income Ratio
1.1%
Overagerent
tenants

7.2%

Income Ratio by Rent Category and Variation Factors＜Variable-rent portion＞
Rent income varies inaccordance with the sales ofpart of shops in HEP Five,Dew Hankyu Yamada, Kitano
Hankyu Building and others.
<Varies in accordance with thefixed-rent portion>
Rent income varies inaccordance with occupancy
rates and rent levels of HEP
Five, Kitano Hankyu Building
and others.

Rent income
Variablerent
portionFixedrent
portionFixedrent
tenants

91.6%

Rent income varies inaccordance with theoccupancy rates and rent
levels of remaining properties

Point from where sales-based
variable rent is generated

Tenant sales

Total rent income(excluding warehouse income)46

6-5. Acquisition of Site Properties
Policy for Handling of Site Properties
Hankyu REIT sees retailers to be headed toward increasing neighborhood shopping center, supermarket
and other stores to city center and urban vicinity locations in the future amidst progress in the return of the
population to highly-convenient regions, aging of the population, increase in one-person households, etc.,
and there will thus be an increase in site properties of such stores.
In addition, sites are becoming recognized as one of the common investment assets as contracts for fixedterm land lease for business purposes, which have no renewal of contract period, becomes widespread.
Hankyu REIT intends to continue considering acquisition, taking into consideration the balance withbuilding-attached properties.

Key Advantages of Site Properties① No depreciation means a high level of contribution to distributions② In general, tenant departure and risks at the time of departure are low compared to building-attachedproperties in the case of neighborhood shopping centers, supermarkets, etc.
・ Tenant owns the building: This means asset retirement and removal costs burden would be required of
the tenant upon their departure, making departure highly difficult for the tenant・ Site properties are returned as vacant land in principle: This means that, in addition to attracting
replacement tenants, it would also be possible to consider disposition as vacant land
(Retailers often demand buildings to be in their own specifications, making risks at the time of tenant
departure high in the case of building-attached properties)

Key Points to Keep in Mind and Hankyu REIT’s Countermeasures for Site Properties
Points to keep in mind

Hankyu REIT’s countermeasures

No depreciation means no internal reserve canbe made, and unrealized losses may possibly be
incurred when land prices drop because thecarrying amount does not decrease

For entire portfolio, acquire at the appropriate price, taking
into consideration the land/building ratio balance, as well as
conducting studies from various aspects that include stresssimulations of rent, etc. in the property acquisition stage

In general, substitutability and liquidity are low inthe event of tenant departure

In the property acquisition stage, examine the possibility of
attracting replacement tenants and the possibility ofdisposition of the property as vacant land47

6-6. Change in Population in Areas along Hankyu/Hanshin Lines
The population in the Kansai region is either remaining flat or is trending downwards due tothe aging population along with decreasing birthrate but areas along Hankyu/Hanshin lines
are relatively popular and the population in these areas have been increasing consistently
after bottoming out in 1996
105
104
103

Along Hankyu and Hanshin lines
Kansai region
Great Hanshin-Awaji Earthquake
Osaka
Hyogo
Kyoto

102
101
100
99
98

Population along Hankyu/Hanshinlines has been increasing
consistently since the earthquake

97
96* Change in population with 1991 as 100 are indicated.

95'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14(Source) Ministry of Internal Affairs and Communications’ “Population Summary of the Basic Resident Registers”(Note) The graph indicates the change in populations where the populations in 1991 are set at 100.

48

6-7. Population Dynamics of Kansai Region ①
・ Concentration of population will heighten due to return of population to city centerand urban vicinity
・ Retail facilities of Hankyu REIT are located in most populous municipal regions
Population of Kansai is 20.57 million
Osaka Prefecture: approx. 8.67 million
Of which, 62% reside in the top
7 municipal regions(population of 300,000 or more)
including Osaka City
Hyogo Prefecture: approx. 5.56 million
Of which, 68% reside in the top
7 municipal regions(population of 200,000 or more)
including Kobe City

<Populations as of March 31, 2014 of municipal regionswith populations of 100,000 or more>

Source: Japan Geographic Data Center “Population
Summary of the Basic Resident Registers” (2014)49

6-7. Population Dynamics of Kansai Region ②・ Population is clearly resurging in city center and urban vicinity
・ Populations of Umeda and municipal regions along Hankyu/Hanshin Lines are risingThough Kansai population fellslightly -0.4% (10-year period), thepopulation of city centers such as in
Osaka City is +2.2%
Areas along Hankyu/Hanshin lines
increased (+3.9%)
Reason for differentiation:
High transportation convenienceand high concentration of city
facilities
Positive factors to profitability andstability of Hankyu REIT

<10-year population rise/fall in municipal regions withpopulations of 100,000 or more and Hankyu/Hanshin lines >(Note) With change of the research period for the Basic Resident Registers,comparison is of the population as at the end of March 2004 in the 2004 version
and as at January 1, 2014 in the 2014 version.

Source: Japan Geographic Data Center “Population Summaryof the Basic Resident Registers” (2004, 2014)50

6-8. Overview of the Hankyu Umeda Area and the “Umeda 1-Chome 1-Banchi Project”

Perspective drawing of the completed “Umeda 1-Chome 1-Banchi Project”(Looking from Umeda Hankyu Building (Hankyu Umeda Main Store))
Location

Umeda 1Chome 1Banchi Project
Project area

1-1 Umeda, Kita-ku, Osakashi, and other

Lot area

Approx. 12,200m2

Floor area ratio

2,000%

Total floor area

Total floor area:
Approx. 100,000m2
11F to 38F

Office zone
Approx. 257,000m2

Total floor area:
Approx. 140,000m2

38 floors above ground andNumber of floors

11F
3 floors below

HeightConferencezone

Approx. 190ｍ
Department store, office,Main use(Note 1) Includes properties jointly owned with the Hankyu Hanshin Holdings Group.
(Note 2) Includes properties jointly owned with other companies.

B2F to 9F
Department
store zone

Total floor area:
Approx. 4,000m2

Other (parking
space, etc.)

Total floor area:

hall, etc.
Approx. 13,000m2
Overview of “construction plan”●1st phase work
Fall 2014: Start demolition of Shin-Hankyu Building
Spring 2015: Start demolition of east side of Daihanshiin Building
Spring 2018: Completion of 1st phase buildings(Shin-Hankyu Building, east section of Daihanshin Building)* Partial opening of new department store●2nd phase work
Spring 2018: Start demolition of west side of Daihanshin Building
Fall 2021: Completion of 2nd phase building(New department store section)* Full opening of new department store
Spring 2022: Full completion* Opening of office-use zone51

6-9. Main Investment Area of Hankyu REIT “Umeda”(Aerial photograph taken fromsoutheast side facing northwest)
shot in December 2013
LAXA OSAKAHERBISOSAKANU chayamachi

Hotel New
Hankyu Osaka

Kitano Hankyu Bldg.
GRAND FRONTOSAKA

Kita-Hankyu
Bldg.

HERBIS ENT

HANKYUTERMINAL Bldg.

Chayamachi
Applause

HankyuCorporation
Head Office Bldg.

Dai Hanshin Bldg.
(Hanshin Department Store)
Hankyu GrandBldg.
ＪＲ Osaka Sta.

Hankyu Umeda Sta.
Hankyu-Sanbangai

OS Bldg.

Umeda Center
Bldg.

HEP Navio

Shin Hankyu Bldg.

■Property owned by Hankyu REIT

Umeda Hankyu Bldg.
(Hankyu Department Store)

HEP Five

Higashi Hankyu
Bldg.

■Property owned and developed by Hankyu Hanshin Holdings Group

Present situation: Osaka/Umeda area
The average vacancy rate of the entire Umeda area is 7.73% (Note) and on an increasingly decreasing trend. Due to the increase of foreign tourists
visiting Japan (inbound tourists), sales at duty-free shops grew steadily and total sales have also continued to increase year-on-year.
At HEP Five, the number of cash-register-sale customers exceeded that of the previous year and the number of people riding the Farris wheel
increased 20% compared to the same period last year, a significant increase, due in part to the impact of the increase of inbound tourists.
(Note) Source: Miki Shoji Co., Ltd.’s “Office Data,” December 2014.

52

6-10. HANKYU NISHINOMIYA GARDENS and Properties in Vicinity
Hankyu Imazu
Line
ACTA
NISHINOMIYAWest Bldg.

ACTA
NISHINOMIYA
East Bldg.

Hankyu Kobe
Line

HANKYUNISHINOMIYAGARDENS

Nishinomiya
Kitaguchi Sta.

Hyogo
Performing Arts
Center
Konan
University(Aerial photograph taken from south side facing north)53

6-11. Dew Hankyu Yamada and Properties in Vicinity
Bampaku-kinenkoen

Osaka Monorail
Chugoku Expressway
Osaka Central
Circular Route
Osaka Monorail
Yamada Sta.

Hankyu Yamada Sta.

Hankyu Senri
Line

Tsukumodai
housing estate

Dew Hankyu
Yamada(Aerial photograph taken from south side facing north)54

6-12. DAILY QANAT Izumiya Horikawa Marutamachi Store (site) and Properties in Vicinity
Kyoto Imperial
PalaceHorikawa-dori St.
prefectural Office

DAILY QANAT
Izumiya Horikawa
Marutamachi Store(site)

SubwayKarasuma Line

Marutamachi
Sta.

Murutamachi-dori St.

Nijo Castle(Nijo-jo)SubwayTozai Line

Nijojo-mae Sta.

(Aerial photograph taken from south
side facing north)58
55

6-13. Location of 3 Properties Acquired in Kyoto City

Kinkakuji
TempleRitsumeikan
Univ.
Kitanotenmangu
ShrineMANDAI Gojo
Nishikoji Store(site)DAILY QANAT Izumiya
Horikawa Marutamachi
Store (site)

Doshisha Univ.

Prefectural
OfficeNijojo Castle
Kyoto Imperial
PalaceNishi-Honganji
TempleShimogamojinja Shrine

kotocross
HankyuKawaramachi

Heian-jingu
ShrineHigashiHonganji
TempleJR Kyoto Sta.

Toji Temple(Aerial photograph taken from south side facing north)58
56

6-14. Details of Value Calculation Methods
Concerning owned real estate or newly acquired assets as of each period: Average NOI yield = [Total real estate lease
operation income* - Real estate lease operation expenses* + Total depreciation*] ÷Total acquisition priceConcerning owned real estate or newly acquired assets as of each period: Average yield after depreciation = [Total realestate lease operation income* - Real estate lease operation expenses*] ÷Total acquisition priceUnrealized income/loss = Total appraisal value of owned real estate or newly acquired assets as of each period - Total
book value* Figures based on results. However, for the properties acquired during the19th fiscal period, the net operating income and operating expenses
for the first fiscal year (Note) in the discounted cash flow (DCF) method recorded in the appraisal report is used except for depreciation ofproperties, and figures based on Hanky REIT’s accounting policy are used for figures of depreciation of such properties. For public charges
and taxes, they are posted in expense from the first fiscal year and yields on an on-going basis are calculated.
(Note) As for MANDAI Gojo Nishikoji Store (site), net operating income and operating expenses based on rent from the day following thebuilding’s completion, which fall under the second year, are used. Therefore, the figure differs from that which uses rent up to thebuilding completion date (collection of 30%).

LTV＝

Amount of outstanding debts + Security deposits or guarantees - Matched money
Total amount of assets - Matched money• When corporate bonds have been issued, the amount of outstanding debts shall include the amount of outstanding
bonds.
• Matched money refers to cash or deposits reserved in the trust account to guarantee the deposit or security money
for the assets owned by Hankyu REIT as the object of the trust beneficiary interests.
• The total amount of assets refers to the amount in the assets section of the most recent balance sheet for eachperiod. However, with respect to tangible fixed assets, the difference between appraisal value and book value at theend of the fiscal period shall be added to or subtracted from the book value of the tangible fixed assets at the end of
the fiscal period.

57

6-15. Portfolio PML and Anti-Seismic Measures
As of November 30, 2014

●What is PML?
Classification

Code

R1(K)
R2(K)
R3(K)
R4(K)

Retail-use Facilites

R5(K)

4.6%
10.1%
4.5%
6.1%
―

Kohnan Hiroshima Nakano-Higashi Store (site)―

R8

Hotel Gracery Tamachi
LaLaport KOSHIEN(site) (Note)
Richmond Hotel Hamamatsu
HANKYU NISHINOMIYA GARDERNS(28% of the quasi co-ownership of the trust
beneficiary interests)
AEON MALL SAKAIKITAHANADA(site)
MANDAI Toyonaka Honan store(site)DAILY QANAT Izumiya
Horikawa Marutamachi Store(site)
kotocross Hankyu Kawaramachi
LIFE Shimoyamate Store(site)(tentative name) MANDAI Gojo
Nishikoji Store (site)

10.3%

O1

Shiodome East Side Bldg.

4.6%

O2(K)

Hankyu Corporation Head Office Building

3.7%

Ueroku F Bldg.
Sphere Tower Tennoz
M2(33% of the quasi co-ownership of the trust
beneficiary interests)
M3(K)LAXA Osaka
M4(K)Namba-Hanshin Building
M5
Kita-Aoyama 3 cho-me Building
Total (at the end of 19th Fiscal Period)

3.2%

R9(K)
R10
R11(K)

R13(K)
R14(K)
R15(K)
R16(K)
R17(K)
Officeusefacilities

HEP Five(14% of the quasi co-ownership of the trust
beneficiary interests)
Kitano Hankyu Bldg.
Dew Hankyu Yamada
Takatsuki-Josai
Shopping Center
Nitori Ibaraki-Kita Store(site)PML

R6

R12(K)

Mixed-use(complex) facilities

Name

M1(K)

6.4%
14.5%
9.2%
―
―

PML (Probable Maximum Loss) refers to the estimatedamount of the maximum loss from earthquake damage,and indicates the ratio of projected maximum physicalloss amount of a building from a probable earthquake ofmaximum magnitude (assumed to happen once every
475 years, or a 10% probability of occurring during any
50 year span) during its use (a 90% non-exceedance
probability) against the price to reacquire it.
●Portfolio PML
The total PML value for multiple buildings scattering inwide areas is always smaller than the weighted average
PML value of each building. This is called the portfolio
effect. Hankyu REIT calculates the portfolio PML bytaking into account the geographical diversity of buildings
over wide areas.
As shown in the table to the left, the portfolio PML ofHankyu REIT is 3.5%.

―
2.6%
―
―

●Policy on earthquake insurance coverage
Hankyu REIT will decide to cover earthquake insurancein accordance with the following standard set forth in its
management guidelines:“Hankyu REIT will investigate earthquake insurance
coverage when the PML of an individual property
exceeds 15%.”

2.7%
3.7%
5.1%
7.4%
3.5%

(Note) PML of LaLaport KOSHIEN (site) is calculated for the parking garage spaceadministration building (394.88m2).

58

6-16. Investment Unit Price
Relative Price (closing price basis)

Per Unit* Trading Trends(Relative value based on 100 of the closing price basis on January 6, 2014 / closing price basis)140.00(Oct. 26, 2005-Dec. 30, 2014)
High (closing price basis)

JPY 276,000(June 2007)

130.00Low (closing price basis)120.00JPY 65,000(December 2011)110.00January 6, 2014- December 30, 2014

100.00High (closing price basis)

JPY 153,200(December 30, 2014)

90.00

Low (closing price basis)

80.00
H26.1
出所：QUICKJPY 102,400(March 20, 2014)

H26.4

H26.7

阪急ﾘｰﾄ投資口価格
東証REIT指数
TSE REIT
Index
HankyuREＩT

H26.10日経平均株価NikkeiStock Average

Price on December 30, 2014 (closing price basis)

JPY 153,200

Unit Price (closing price basis)（Unit: JPY thousand）（Units）

280

7,000

240

6,000

200

5,000

160

4,000

120

'05/10/26

3,000

80

2,000

40

1,000

0
0
'05/5 '05/11 '06/5 '06/11 '07/5 '07/11 '08/5 '08/11 '09/5 '09/11 '10/5 '10/11 '11/5 '11/11 '12/5 '12/11 '13/5 '13/11 '14/5 '14/11 '15/5

Source: QUICK* Hankyu REIT implemented a five-for-one split of its investment units with November 30, 2014 as the record date and December 1, 2014 as the effective date, and investment units
started transacting at the split price from November 26, 2014. Investment unit prices in the graphs and table retrospectively reflect the implementation of the split.

59

6-17. Analysis of Unitholder Attributes at End of 19th Fiscal Period
Top 10 Unitholders

Unitholder Composition
Ownership by category

Number ofunitholders (persons)Ratio to ownership

Number ofinvestment units held
( units)

Ratio to numberof investment units

Financial institutions(excluding trust banks)

83

0.76%

21,67818.14%

Trust banks

10

0.09%

47,47239.73%

10,46396.11%

30,58525.59%

Other organizations

227

2.09%

11,4599.59%

Foreign organizations, etc.

103

0.95%

8,306

6.95%

10,886

100%

119,500

100%

Individuals, etc.

Total

Number ofunits held

Ownership

28,36923.74%

9,557

8.00%

5,449

4.56%

The Senshu Ikeda Bank, Ltd.

4,883

4.09%

Hankyu Corporation

4,200

3.51%

The Nomura Trust and Banking Co., Ltd.
(Investment accounts)

2,951

2.47%

THE CHUKYO BANK, Ltd.

1,581

1.32%

Bank of Kyoto , Ltd.

1,276

1.07%

Nippon Tosho Fukyu Co.,LTD.

1,241

1.04%

STATE STREET BANK AND TRUSTCOMPANY 505223

1,230

1.03%

Total investment

60,73750.83%

Number of outstanding units

119,500

100%

Unitholder name
Japan Trustee Services Bank, Ltd.
(Trust account)
The Master Trust Bank of Japan, Ltd.
(Trust account)
Trust & Custody Services Bank, Ltd.
(Securities investment trust account)

Ratio of Units by Unitholder Category

47.27%

43.48%

44.25%

36.46%

33.83%

37.17%

35.81%

38.22%

39.22%

34.34%

31.72%

25.95%

29.72%
13.39%

27.24%

33.60%

7.78%

13.38%

11.16%

7.80%

7.37%

8.11%

32.53%

32.70%

29.02%

23.71%

26.31%

26.32%

8.82%

9.63%

13.46%

13.44%

7.33%

8.62%

8.23%

12.98%

10.14%

8.62%

17.05%

18.44%

9.12%

9.78%

5.32%

4.55%

22.67%

23.77%

19.02%

23.91%

23.46%

28.52%

32.07%

23.20%

24.78%
12.69%

12.78%

13.63%

11.31%

11.33%

11.86%

11.22%

4.61%

9.01%

7.18%

8.72%

9.03%

4.83%

17.13%

18.63%

33.13%

34.26%

33.54%

29.15%

29.75%

30.26%

18.14%

39.73%

34.41%

21.38%

4.47%

18.47%

27.56%

28.39%

22.27%

9.29%

33.96%

25.30%

25.59%

11.79%

11.73%

10.73%

9.59%

7.46%

7.14%

6.84%

6.95%

As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of As of end of
1st period
2nd period 3rd period
4th period
5th period
6th period
7th period
8th period
9th period 10th period 11th period 12th period 13th period 14th period 15th period 16th period 17th period 18th period 19th period

Foreign organizations, etc.

Other organizations

Individuals, etc.

Trust banks

Financial institutions(excluding trust banks)60

6-18. Organization of Hankyu REIT Asset Management, Inc.
(As of November 30, 2014)
Corporate Data
General meeting ofshareholders

Trade nameHankyu REIT Asset Management, Inc.

Headquarters

19-19, Chayamachi, Kita-ku, Osaka
530-0013, Japan

EstablishedMarch 15, 2004

Paid-in capital

JPY 300 mn

Shareholder

Hankyu Corporation (100%)

Number of
officers andemployees

23

Auditors
Board of Directors

President &Representative Director

Internal Audit Department
Compliance Committee

Investment Management
Committee

Executive
officers

Compliance Department

President &Representative Director

Yoshiaki Shiraki

Director

Toshinori Shoji

Director

Yasuki Fukui

Director

Hideo Natsuaki

Director (part-time)

Toyoyuki Komori

Corporate Auditor (parttime)
Corporate Auditor (parttime)

Toru Ono
Ken Kitano

Financial instruments trading(investment management business)
Investment
Management
Department 1

Investment
Management
Department 2

Corporate
Planning
Department

Corporate
Administrationand Supervision
Department

Principal
businessesl Financial product trader:
Director-General of the Kinki Finance
Bureau Ministry of Finance (Kinsho) No. 44
l Real Estate Transaction License:
The Governor of Osaka Prefecture (3) No. 50641
l Approval of discretionary dealing trustee etc.:
No.23 by Minister of land, infrastructure,transportation and tourism

61

7-19. Compliance and Internal Audit Systems of Hankyu REIT Asset Management, Inc.
Systematically ensure multiple check functions.
Focus on promoting a compliance-conscious corporate
culture.

Compliance System
・ Achieve comprehensive compliance by establishinga Compliance Department and a Compliance
Officer.

Constituent member
Implementation(Note)

Directors, Corporate Auditors

Decision criteria
A majority of directors in attendance, andapproval of a majority of the attending directors
are required.

Board of Directors

President & Representative Director

Constituent member
Chairman: Compliance officer
Committee members: President & Representative
Director, full-time Directors and outside experts
Observers: Corporate Auditors (do not participate
in resolutions) and other persons recommended
by the Chairman and approved by the Committee

・ The Compliance Committee, including outside
experts, deliberates on Conflicts of Interests
Transaction with interested parties.
・ The Compliance Officer attends the Investment
Committee meeting and checks for complianceissues.
・ Appointed a person to be in charge of efforts toprevent improper requests and exclude anti-social
forcesInternal Audit System

Decision criteria

Compliance Committee

Approval of all of the attending committee
members is required under the condition where
3/4 or more of them have attended including
Compliance officer and two outside experts.

Constituent member
Investment Management Committee

Proposals by Departments

Chairman: President & Representative Director
Vice chairman: full-time director designated bychairmanCommittee members: full-time director (excluding
Compliance officer), respective department
managers (other than full-time director orCompliance officer)

・ Put PDCA cycle into operation by systematically
implementing the internal audit system every fiscal
year based on the annual internal audit plan.
・ Utilize external consulting entity to secure
independence of internal audit and obtain an
extremely effective internal audit.
・Construct the internal control system andstrengthen the check and balance function as aconsolidated subsidiary of Hankyu Hanshin Holdings,
Inc.

Decision criteria
Approval of all of the attending committee
members is required under the condition where
3/4 or more of them including the chairman andvice chairman have attended together with thecompliance officer.

(Note) Interested party transactions that meet a certain
criteria must gain approval of Hankyu REIT’s Boardof Directors’ Meeting.

62

6-20. Company Structure of Hankyu REIT
(As of November 30, 2014)(Note) In preparation for the event that the number of Executive and Supervisory Directors is less than that stipulated in laws and regulations,
Toshinori Shoji was elected as alternate Executive Director and Motofumi Suzuki was elected as alternate Supervisory Director at theGeneral Unitholders’ Meeting held on August 27, 2014.

63