SEMIANNUAL REPORTFiscal Period Ended August 31, 2021

Financial Highlights
for the Fiscal Period Ended August 31, 2021

Net Income(JPY millions)

Distributions Per Unit
(JPY)

Operating Revenues(JPY millions)

6,764

4,953

2,381

170,404

Loan-to-Value Ratio

Average Debt Cost

Credit Rating

Average Occupancy

32.3%

0.40%

JCR AA-

99.8%

Forecasted Feb. 2022

Logicross Nagoya Kasadera(Positive) As of Nov. 17, 2021

As of Oct. 15, 2021

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Portfolio Size
(JPY millions)

Message from the Management

Dear Fellow Unitholders,
We are pleased to represent our 10th Fiscal Period Semiannual Report of Mitsubishi Estate Logistics REIT Investment Corporation (MEL).
We would like to take this opportunity to express our heartfelt appreciation to all of our unitholders for supporting MEL.
During the fiscal period ended August 31, 2021, despite the global uncertainties caused by COVID-19 pandemic, we continued to maximize ourunitholder value through disciplined acquisitions. In March 2021, we completed our fourth follow-on offering and successfully raised 16.7 billion
yen of capital including overallotment. With the proceeds and debt financing, we acquired three sponsor-developed properties (LogicrossNarashino, Logicross Osaka (remaining 40% co-beneficiary interest) and Logicross Nagoya Kasadera (remaining 40% co-beneficiary interest)) andtwo properties (MJ Industrial Park Kobe (Land) and MJ Industrial Park Chiba-Kita (Land)) that were sourced by us the Asset Management
Company, totaling 28.2 billion yen. As a result, our portfolio size has grown to 170.4 billion yen.
With these steady growth, MEL’s operating revenues was 4,953 million yen, net income was 2,381 million yen and distributions per unit,
including the surplus cash distributions (SCD), was 6,764 yen, which exceeded our original forecast of 6,685 yen.
In addition, as the diversification of our portfolio has been improved, our credit rating outlook was changed from "stable" to "positive" on
November 17, 2021.
We maintained an extremely high average occupancy of more than 99 percent and our rents continued to grow. Despite the current COVID-19
pandemic, our rent growth was high 13.9% on a weighted average nominal basis, and have achieved rent growth for seven consecutive periods.
Also, we have achieved HYBRID internal growth other than rent revisions through distinctive initiatives such as receipt of Green Lease fee in returnfor electric cost reduction by installing LED lightning, increasing parking space and installation of solar panels on the rooftop. Capturing thismomentum, we intend to strive to accomplish this HYBRID internal growth.
We further strengthened our balance sheet backed by high credibility of our sponsor, Mitsubishi Estate.
In April 2021, we have issued our first bond as a Green bond at a favorable condition with a term of 15 years where it is difficult to borrow frombanks. Our remaining debt duration is 5.6 years and all in debt cost is 40 basis point. As of the end of the reporting fiscal period, our loan-tovalue (“LTV”) ratio was 32.7 percent, and as a reflection of the prepayment of consumption tax loan for the properties acquired in the reporting
fiscal period, our LTV ratio is forecasted to be 32.3 percent at the end of the fiscal period ending February 28, 2022 which gives us enough room
to further grow.
As for the ESG, we have participated in the 2021 GRESB Real Estate and have been awarded the highest rating of “5-Stars” for the second
consecutive year. MEL strives to invest in environmentally friendly logistics facilities, and will continue to focus on maximizing the energy efficiencyof our properties, as well as contribution to local communities.
Looking forward, we will endeavor to maximize our unitholder value by growing both externally and internally through HYBRID model and follow
our management policy, “Three Pillars.”
We sincerely appreciate your continued support of MEL and the Mitsubishi Estate Group and look forward to reporting our further progress in themonths and years ahead.
Ken Takanashi

Executive Director Mitsubishi Estate Logistics REIT Investment Corporation
Director, General Manager of Logistics REIT Department of Mitsubishi Jisho Investment Advisors, Inc.

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Our Strength“HYBRID” Model utilizing Pipeline and Know-how by Both Sponsor and Asset Management Company

Development / Facilities Management

Investment / Asset Management

SponsorOverview

Asset Management Company

Dedicated to city development in the Marunouchi area
(Tokyo) for over 120 years

Established in 2001, when the scheme of realestate securitization was emerging in Japan

Contributing to the society through a variety ofbusiness activities as one of the largest comprehensive
real estate developers

Track record including structuring and managementof various types of real estate funds, such as thelargest private REIT in Japan

Overview

Promoting the logistic facility business as a
growth area

Proven track records in a variety of asset types ininvestment and asset management

Constant supply of pipeline properties through developmentof advanced logistics facilities

SupportFlexible and diverse acquisition strategies, using awide range of schemes, such as bridge funds
including value-up, PDP and CRE

Utilization of Sponsor's know-how and corporate customer
relations in the leasing activities

SupportPromotion of capital recycling business in domestic asset
business and consistent expansion of AUM and DX promotion
in non-asset business

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Internal growth leveraging unique know-how inaddition to rent revision, such as installation of LED
lighting and solar panels

Management Policy based on “Three Pillars” (Amended in Oct. 2021)

Measures executedand achieved

Measures continued from the pastand to be taken in the future

Maximization of Unitholder Value in Mid-to-Long Term
Alignment

Discipline

HybridAlign interest with unitholders

Achieve disciplined growth

Enhance MEL’s unique strategy
Hybrid Model

NEW Launch of discussion on the
ESG
TCFD recommendations
and KPI setting
NEW
ESG

Promotion of efforts
for Low-Carbon

External growth utilizing LTV

ESG

ESG
ESG

Hybrid internal growth(Utilizing management capability of MJIA
and leasing capacity of Sponsor)

Flexible property acquisition strategy utilizing bridge funds

More in-depth ESG commitment
and diversification of financing methods through green financing

Support from Sponsor
and continued same-boat investment（Supply of properties from both Sponsor and MJIA)

Property acquisition with attention
to portfolio yield and implied cap rate

Further inclusion in major indicesand improvement in liquidity
ESG

Hybrid external growthFlexible financing carefully watching
the market conditions

Expanding pipelines through utilizing
MJIA’s various sourcing methods,
such as CRE proposals and PDP
NEW Track record in PM consignmentand built-up knowledge throughutilization of technology at Sponsor GroupAcquisition of 5 Stars rating for the second consecutive year (Oct. 2021 and Nov. 2020)
Introduction of cumulative investment for employees of Sponsor and MJIA (Mar. 2021)
Continued growth through execution of public offerings based on “Three Pillars” (Feb. 2021, Aug. 2020 and Sep. 2019)
Inclusion in the FTSE EPRA Nareit Global Real Estate Index Series (Jun. 2020)

ESG

Introduction of the asset management fee structure fully linked to unit price performance, first among J-REITs (May 2019)

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HYBRID External Growth■ Capability to develop logistics facilities
independently based on extensive land
information■ Capability to co-develop facilities backed by
MEC’s ability and credibility for development

Logicross

MJ Logipark

Brand of logistics facilities that MEC
develops throughout Japan

Properties which MEL acquired or intends toacquire from 3rd parties

Sponsor-developed properties with expected
preferential negotiation right

MJIA-sourced and operated properties withexpected preferential negotiation right

Mitsubishi Estate
Occupancy
100%■ Capability to assess properties backed by experience incontinuously acquiring properties from 2001
■ Flexible and diversified property acquisition strategy byleveraging the capability to manage real estate funds

Bridge Fund / 3rd Party Bridge

Occupancy
100%

Occupancy
100%

Occupancy
100%

Occupancy
100%

PDP
Occupancy
100%

Logicross Yokohama Kohoku

Logicross Hasuda

Logista·Logicross Ibaraki Saito (B)LOGIPORT Kawasaki Bay

Logicross Atsugi II

MJ Logipark Takatsuki 1*(16,000 m2)
Completed in 2019

(79,000 m2)
Completed in 2021

(31,000 m2)
Completed in 2021

(296,000 m2)
Completed in 2019(35,000 m2)
Completed in 2019

(19,000 m2)
Completed in 2021

Pre-leased
100%

Occupancy
100%

PDP
Pre-leased
100%

Logista·Logicross Ibaraki Saito (A)Logicross Kasukabe

Logicross Funabashi

MJ Logipark Kakogawa 1*(115,000 m2)
Completed in 2021

(39,000 m2)
Completed in 2021

(23,000 m2)
To be completed in 2021

(33,000 m2)
To be completed in 2022
Newly Added Pipeline

PDP (Partnership Development Program)● Development bridge scheme in which MJIA takes theinitiative● MJIA leads the project in a manner that compensates theneeds of partner companies such as developers,
construction companies and real estate brokers each other● MEL can preferentially consider acquisition after thebuilding is completed and leased up

PDP

PDP

PDP

Occupancy
100%

Pre-leased
100%

Pre-leased
100%

Logicross Zama Komatsubara

Logicross Zama*

Sagamihara Chuo Fuchinobe Project*

MJ Logipark Inzai 1*

MJ Logipark Aisai 1*

MJ Logipark Daito 1*(44,000 m2)
To be completed in 2022

(183,000 m2)
To be completed in 2023

(173,000 m2)
To be completed in 2023

(22,000 m2)
Completed in 2021

(10,000 m2)
To be completed in 2022

(11,000 m2)
To be completed in 2022

16 properties 1,136,000 ㎡* Tentative nameNote: As of Oct. 15, 2021

Other multiple projects
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Our Portfolio (As of Aug. 31, 2021)

Logicross Fukuoka Hisayama

Logicross Atsugi

Logicross Kobe Sanda

Acquisition price JPY 5,770 million

Acquisition price JPY 8,440 million

Acquisition price JPY 3,900 million

Occupancy rate

Occupancy rate

100.0%

Occupancy rate

100.0%

BELS

★★★★★

BELS

★★★★

CASBEES Rank for Real Estate

CASBEEA Rank for Real Estate

100.0%DBJ Green Building ★★★★

Logicross Osaka

Logicross Nagoya Kasadera

Logicross Narashino

Acquisition price JPY 9,743 million

Acquisition price JPY 14,424 million

Acquisition price JPY 11,851 million

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

BELS

★★★★★

BELS

★★★★★

BELS

★★★★★

CASBEES Rank for Real Estate

CASBEES Rank for Real Estate

CASBEES Rank for Real Estate

LOGIPORT Sagamihara

LOGIPORT Hashimoto

LOGIPORT Osaka Taisho(49% co-beneficiary interest ratio)(45% co-beneficiary interest ratio)(37.5% co-beneficiary interest ratio)

Acquisition price JPY 21,364 million

Acquisition price JPY 18,200 million

Acquisition price JPY 10,484 million

Occupancy rate

99.7%

Occupancy rate

100.0%

Occupancy rate

96.0%

BELS

★★★★

BELS

★★

BELS

★★★★★ (ZEB Ready)

CASBEES Rank for Real Estate

CASBEES Rank for Real Estate

CASBEES Rank for Real Estate

S E M I A N N U A L

MJ Logipark Funabashi 1

MJ Logipark Atsugi 1

MJ Logipark Kazo 1

MJ Logipark Osaka 1

Acquisition price JPY 5,400 million

Acquisition price JPY 6,653 million

Acquisition price JPY 1,272 million

Acquisition price JPY 6,090 million

Occupancy rate 100.0%

Occupancy rate 100.0%

Occupancy rate 100.0%

Occupancy rate 100.0%

BELS

★★★★★

MJ Logipark Fukuoka 1

MJ Logipark Tsuchiura 1

MJ Logipark Nishinomiya 1

Acquisition price JPY 6,130 million

Acquisition price JPY 3,133 million

Acquisition price JPY 2,483 million

Occupancy rate

Occupancy rate

Occupancy rate

100.0%

100.0%

100.0%

MJ Logipark Kasugai 1

MJ Logipark Kazo 2

MJ Logipark Sendai 1

Acquisition price JPY 13,670 million

Acquisition price JPY 1,637 million

Acquisition price JPY 7,388 million

Occupancy rate

100.0%

Occupancy rate

Occupancy rate

CASBEEA Rank for New Construction Aichi

100.0%

100.0%

MJ Industrial Park Sakai (Land)

MJ Industrial Park Kobe (Land)

MJ Industrial Park Chiba-Kita (Land)

Acquisition price JPY 5,600 million

Acquisition price JPY 4,970 million

Acquisition price JPY 1,800 million

Occupancy rate

Occupancy rate

Occupancy rate

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100.0%

100.0%

100.0%

Our Portfolio and Acquisition Pipelines

Current Assets

Tokyo Metropolitan Area

Head Office / Branches of Mitsubishi Estate

Pipeline Assets
SapporoGunma

Nagoya Metropolitan Area
Gifu
Meishin
Expressway

Joban Expressway

Chuo Expressway

Nagoya BranchKan-etsu Expressway

Isewangan Expressway

Aichi

SendaiShin-Tomei
Expressway

Nagoya Port

MJ Logipark Tsuchiura 1
Ibaraki

MJ Logipark Kazo 1

Logicross Nagoya KasaderaMie

MJ Logipark Kazo 2

MJ Logipark Sendai 1

MJ Logipark Kasugai 1

MJ Logipark Aisai 1*

TochigiTohoku Expressway

Logicross Hasuda
SaitamaTokyo

Logicross Kasukabe
Ken-o Expressway

Tomei
Expressway

Chubu
International
AirportNagoyaLogicross Fukuoka Hisayama

Fukuoka

Tokyo-Gaikan
Expressway

Yokohama

Osaka

Hiroshima

MJ Logipark Inzai 1*

MJ Logipark Fukuoka 1

Tokyo

Osaka Metropolitan Area

Logicross Funabashi
Shin-Meishin Expressway

Chugoku Expressway

Logicross Kobe Sanda

Sanyo Expressway

Chuo Expressway

Logista/Logicross Ibaraki Saito (A, B)

Head Office

MJ Logipark Funabashi 1

Tokyo Port

Logicross Narashino

LOGIPORT Sagamihara

MJ Logipark Nishinomiya 1

LOGIPORT Hashimoto

Tomei
Expressway

MJ Logipark Takatsuki 1*
Sagamihara Chuo Fuchinobe Project*

Osaka International Airport
Daini Keihan Expressway

Meishin Expressway

Hyogo

Metropolitan Expressway
Bayshore Route

MJ Industrial Park Chiba-Kita (Land)

Tokyo Ryutsu CenterTokyo International Airport(Haneda Airport)

Logicross Yokohama Kohoku

Logicross Atsugi II

LOGIPORT Kawasaki Bay

MJ Industrial Park Kobe (Land)

Logicross Osaka

Kobe Port

Osaka Branch

MJ Logipark Kakogawa 1*
Osaka Port
Kobe Airport

Kawasaki Port
Yokohama Port

MJ Logipark Daito 1*
Osaka

Yokohama Branch
Kanagawa

Kinki Expressway

Logicross Atsugi

LOGIPORT Osaka Taisho
MJ Logipark Osaka 1

MJ Logipark Atsugi 1
MJ Industrial Park Sakai (Land)

Hanshin Expressway

Logicross Zama*
Nara

Logicross Zama Komatsubara

Kansai International Airport* Tentative nameNote: As of Oct. 15, 2021

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NaritaInternational
AirportChiba

HYBRID Internal Growth (As of Aug. 31, 2021)

Rent Revision■ Upward rent revision
FP 2018/8(4th FP)57%

FP 2019/2(5th FP)■ Rent unchanged

43%■ Undecided(Based on leased area of the warehouse portion)

11,000 m 2

4%

FP 2019/8(6th FP)40%

FP 2020/2(7th FP)

62,000 m 2

96%
60%

40,000 m 2

12% 19,000 m 2

88%

FP 2020/8(8th FP)93%

FP 2021/2(9th FP)(Note)

88%

7% 21,000 m 2
6% 6% 24,000 m 2

FP 2021/8(10th FP)

5% 33,000 m 2

95%

FP 2022/2(11th FP)
(Forecasted)(Note)

86%
0

20,000Note: As of Sep. 30, 2021. Lease contracts that are not yet contracted are assumed
to be unchanged for the calculation

59,000 m 2

14%

Average Rent Growth

Average Rent Growthof Increased Portion

+1.8%

+3.0%

+0.2%

+3.4%

+3.1%

+6.8%

+2.2%

+2.5%

+9.5%

+10.4%

+8.5%

+9.7%

+13.9%+14.9%

+4.5%

+5.4%

Average Occupancy

99.8

%

Fixed-term Lease

100.0

%

Weighted Average
Lease Expiry

7.0

years

60,000 (m 2)40,00086% contracted

Tenant Data
Tenant Diversification (Based on leased area)

Type of Cargo (Based on leased area)
Cargo for EC■ IHI Infrastructure Systems

10.9%
4.9%
4.9%
53.6%

4.0%
3.9%
3.7%
3.7%
3.5%
3.4%
3.4%

■ Nihon Realest■ Sankyu■ ORIX Auto
■ Kimura Unity■ MITAKA SOKO
■ Fukuoka Logistics System

23.6 %
B to C

83.5 %■ AXions■ Others

Cargo with
Strong Demand

82.0

Daily Necessities

1.1%

58.1

2.7%
5.7%
8.5%

%

29.6%

■ Household Goods

5.5%■ Food and Beverage■ Pharmaceuticals
and Medical Devices■ PC/Communications,Home Appliance, etc

18.5%■ Sun City Building■ Honda Logicom

Delivery Destination (Based on leased area)

5.0%■ Casual Clothing

23.6%■ Raw/Component Materials■ Furniture and Home Goods■ Electronic Devices andComponents for Business Use%■ Others
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3PL

67.0 %

12.9%
5.0%
5.6%

■ 3PL
■ Wholesale

9.5%
67.0%

■ Retail■ Manufacture■ Others

Financial Strategy (As of Oct. 15, 2021)

Financial Highlights

Lenders

Long-term Debt Ratio

98.5

Fixed Interest
Rate Ratio

98.5

%

Average Debt Cost

Average Remaining
Debt Duration

5.6%

Credit Rating(as of Nov. 17, 2021)

0.40%

JCR:

■ MUFG Bank, Ltd.
25.6%
■ Mizuho Bank, Ltd.
16.6%
■ Sumitomo Mitsui
15.6%
Banking Corporation■ The Bank of Fukuoka, Ltd. 7.3%
7.2%
■ The Norinchukin Bank
4.9%
■ Shinkin Central Bank
4.6%
■ The Shinkumi
Federation Bank
3.0%
■ Shinsei Bank, Limited■ The Yamaguchi Bank, Ltd. 2.5%

Total Debt Balance
JPY

years

59,274
millions■ Development Bank of Japan
2.5%■ The 77 Bank, Ltd.
2.4%
■ The Chiba Bank, Ltd.
1.3%
■ Sumitomo Mitsui
0.8%
Trust Bank, Limited■ The Yamanashi Chuo Bank, Ltd. 0.8%
■ The Nishi-Nippon City Bank, Ltd. 0.8%
■ The Bank of Toyama, Ltd.
0.5%
■ Investment Corporation Bonds 3.4%
Green Finance

Loan-to-Value Ratio(Forecasted 2022/2)

AA- 32.3%(Positive)

Debt Maturity Schedule(JPY millions)■ Short-term borrowings■ Long-term borrowings■ Investment Corporation Bonds
Green Finance

10,0008,000

Debt Capacity (up to 40%)

Debt Capacity (up to 50%)

Approx.

Approx.

23.0

JPY

JPY

billion

6,000

63.0

4,000

2,000

billion0Upper Limit of Green Finance

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Other ESG FinanceFunds(mn yen)Procurement
Date

Repayment /Redemption Date

Allocation
StatusGreen Loan

1,350

Mar. 9, 2021

Mar. 9, 2025

Allocated

Green Loan

720

Sep.14, 2021

Sep. 14, 2028

Allocated

Green Bonds

2,000

Apr. 14, 2021

Apr. 14, 2036

Allocated

Total Green Finance

4,070

–

–

–

Upper Limit of Green Finance (Note)

38,964–––

MEL received the highest rank of "S" in "MUFG ESG
Rating Certificate for J-REIT supported by JCR" andborrowed "MUFG ESG Loan for J-REIT" from MUFG Bankfor the first caseFirst case in J-REIT financed by SMBC with “Funding topromote SDGs”

Note: The Upper Limit of Green Finance = Total Acquisition Price of Green Eligible Assets ×Total Asset. LTV is calculated based on Aug. 31, 2021

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2031

2032

2033

2034

2035

2036

(year)

ESG Initiatives

GRESB Assessment

Mitsubishi Estate Group’s Initiatives for ESG

For 2021 GRESB Real Estate Assessment, MEL was awarded the prestigious"5 Stars" for the second consecutive year based on a comparative
assessment by overall score, and "Green Star" for third consecutive year.

Mitsubishi Estate Group 2030 Goals for ESG(Long-term Business Plan)

In addition, in the "GRESB Public Disclosure" (5-level rating) that measuresthe level of ESG information disclosure, MEL's effort to disclose ESG
information was highly evaluated and awarded the highest rank "A Level"
for the second consecutive year.

1. Environment
Sustainable urban development thatproactively addresses climate change
and environmental issues

2. Diversity & Inclusion
Urban development that responds
to lifestyle and human resources
trends and facilitates active
participation for all

3. Innovation
Innovative urban development that
continuously renews society

Signing of PRI
Asset Management Company became asignatory of PRI, the Principles for Reasonable
Investment in March 2020.

4. Resilience
Dynamic, flexible urban
development that builds disasterresilient communities and prioritizes
safety and security

PRI encourages the incorporation ofEnvironment, Social and Governance issues
into investment decision-making processes,with the aim to help companies enhancelong-term investment performance and better
fulfill their fiduciary duty.

Participate in United Nations Global Compact (UNGC)
UNGC is a voluntary, global initiative supporting a global
framework for sustainable growth through the demonstration ofcreative, responsible leadership by the respective corporations
and organizations as principled members of society.

Preparing for supporting the recommendation by the"Task Force on Climate-related Financial Disclosures (TCFD)"

Mitsubishi Estate became a signatory of the UNGC and Mitsubishi
Estate Group was registered as participants in April 2018. Alongwith this, the Asset Management Company has participated inthis initiative as a member of Mitsubishi Estate Group.

In order to express our support therecommendation by the TCFD, preparing to
expand information disclosure such as MEL's
climate change policy and KPIs.

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ESG Initiatives

Environment

Sustainable Building Certifications
Ratio of Green Properties in Portfolio (GFA basis)

Certification System

Property Name

No. of Properties

Evaluation
Building-Housing Energy-Efficiency
Labeling System (BELS)

9

79.1

Logicross
Fukuoka Hisayama

LogicrossAtsugi

Logicross
Kobe Sanda

Logicross
Osaka

Logicross
Nagoya Kasadera

Logicross
Narashino

★★★★★

★★★★

★★★★★

★★★★★

★★★★★

S Rank for Real Estate

A Rank for Real Estate

S Rank for Real Estate

S Rank for Real Estate

S Rank for Real Estate

LOGIPORT
Sagamihara

LOGIPORT
Hashimoto

LOGIPORT
Osaka Taisho

MJ Logipark
Kasugai 1

MJ Logipark
Kazo 1★★★★

★★

★★★★★ / ZEB Ready

S Rank for Real Estate

S Rank for Real Estate

S Rank for Real Estate

BELS
CASBEEDBJ Green Building
Certification

Comprehensive Assessment System
for Built Environment Efficiency (CASBEE)

9

Property Name
Evaluation
BELS

DBJ Green Building Certification

1

CASBEE

%

★★★★

★★★★★
A Rank for New
Construction Aichi

DBJ Green Building
Certification

ExamplesEnergy Saving Initiatives

Insulated sandwich panels
for exterior walls

Installation of
motion-detection sensors

Reuse of OA floor panels of
office buildings in Marunouchi

Renovation with LED installed based on
green lease contract

Installation solar panels

Seismic isolators

Installation of
emergency power generators

Measures against infectious diseases(use of hand sanitizers)

Use of Renewable Energy /BCP Initiatives

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ESG Initiatives

SocialProactive Participation in CSR Activities

Participation in flower bed
maintenance activities of community
near Logicross Atsugi

Register for Disaster Cooperation
Building (LOGIPORT Sagamihara,
LOGIPORT Hashimoto)Lawn-mowing at greenery areas(MJ Logipark Atsugi 1)

Secure reserves in case of
emergency(Food, beverage & portable toilet)

Free salt candy service fortenants in properties as aheatstroke measure (for allproperties held as of Aug. 2021)

Tenant Satisfaction Survey
Conducted a tenant satisfaction survey in collaboration with a third party agency to improve facility
management. The survey included hardware / software aspects and tenants' opinions on the facilities.
During the 10th FP, the survey results were utilized in improvement in day-to-day service throughinstallation of thermos cameras and AEDs, and measures to ease bird damages.

Collaboration with Local Educational Institute andImprovement in Tenant Satisfaction
Conducted a survey to employees and reflected result on the renovation of employee lounge. Also, a wall
design contest involving local universities and vocational schools was held, and the design of the winner isused for the lounge's wall design of MJ Logipark Fukuoka 1

Offering Comfortable Working Environment

BeforeAfter

Donation of 1,900 unused surgical masks stored
to the Chiyoda Ward Health Center

Examples in the Asset Management Company
Introduction of flexible working hour
Installation of community spaces within office area
Invitation of personnel from group companies and outside professionals
Specialized training for skill improvement
Employee satisfaction survey

Donation of unused calendars to elementary
schools in developing countries through support
organizations as a substitute for notebooks
Donation of disaster prevention supplies that are
no longer needed to volunteer firefighters andrescue teams in developing countries throughsupport organizations

These initiatives are intended to maximize asset management performance by improving productivity, skills
and motivation of employees
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ESG Initiatives

Governance
Asset Management Fee Structure

Measures to Address Conflict of Interests in Asset Management

MEL introduced an asset management fee structure reflecting the performance of investment unit
price for the purpose of aligning interest with unitholders.

Any asset acquisition from or sale to stakeholders of MEL is determined through a transparent
decision-making process at MJIA

Total assets as of the end of previous period × 0.2% (upper limit)

Asset Management Fee Ⅱ(Real estate profit-linked)

Adjusted NOI x 5.0% (upper limit)

Drafting by Logistics REIT Management Department

Adjusted net income before tax × net income before tax per unit
× 0.001% (upper limit)

Examination by Compliance Department

1st in J-REIT

Investment unit price“Fee linked to investment unit price”
Performance against TSE REIT Index ((a) - (b)) × market
capitalization (for fiscal period of each term)
× 0.1% (upper limit)(a): Fluctuations in MEL’s investment unit price (incl. dividends)(b): Fluctuations in the TSE REIT Index (incl. dividends)

Deliberation by Executive Committee

MJIA

Asset Management Fee Ⅲ(Unitholder interest-linked)※Need to be attended by a third party appraiser

TSE REIT Index (incl. dividends)+DPU

Deliberation by Compliance & Risk Management Committee

If MEL’s growth rateis greater

If MEL’s growth rate
is lower※Need to be attended by an external expert (legal counsel)

Increase Fee
Reference date(Previous period)+DPU

Reference date(Present period)

Fee

+DPU
Reference date(Previous period)

Decrease Fee

Reference date(Present period)

Same-boat investment by Mitsubishi Estate as of Oct. 15, 2021

(Present period)

MEL

If MEL’s growth rate
is lower

4.1%

Cumulative Investment for Employees
Introduced a program for employees of the Sponsor and the Asset Management Company to invest
in MEL to align interest with unitholders
S E M I A N N U A L

Decrease Fee

Deliberation by Board of Directors if necessary
Reference
date to Company’s Regulations
Pursuant

Reference date(Previous period)

th rateer(If voted down)

Asset Management Fee Ⅰ(AUM-linked)

Approval by MEL’s Board of Directors

Note: An example of the decision-making flow in cases that fall under the category of transactions with stakeholders, etc. requiring approval of the board of directors of the investment corporation
pursuant to Article 201-2 of the Act on Investment Trusts and Investment Corporations

Employee Hotlines (Whistleblower Protection)
We have established a consultation desk for legal violations, violations of internal rules, harassment, andother matters that are widely contrary to ethical and social standards, and all persons engaged in ourbusiness, including retirees and temporary employees, can report and consult with us. We strictly observe
privacy in whistleblowing and consulting, confirm and investigate the facts, and take appropriate action.
The Mitsubishi Estate Group Help Line and the Mitsubishi Estate Group Whistleblower System may also
be used as necessary. This system complies with the Whistleblower Protection Act.
R E P O RT

13

Unitholder Information (As of Aug. 31, 2021)

Breakdown by Units

Major Unitholders
2.7%■ Domestic individuals and others :31,713 units■ Financial institutions: 237,879 units■ Domestic entities: 27,120 units■ Foreign entities: 83,725 units■ Securities Companies: 10,698 units

8.1%
21.4%

6.9%

391,135
Units

60.8%

■ Financial institutions:

163 unitholders■ Domestic entities:

243 unitholders■ Foreign entities:

184 unitholders■ Securities companies:

22 unitholders

Share ofInvestment Units (%)

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

62,007

15.85

Custody Bank of Japan, Ltd. (Trust Account)

53,479

13.67

The Nomura Trust and Banking Company, Ltd. (Trust Account)

16,637

4.25

Mitsubishi Estate Co., Ltd.

15,950

4.08

Custody Bank of Japan, Ltd. (Securities Investment Trust Account)

14,775

3.78

The Shinkumi Federation Bank

6,520

1.67

The Chugoku Bank, Limited

6,194

1.58

SSBTC CLIENT OMNIBUS ACCOUNT

6,003

1.53

THE BANK OF NEW YORK 133970

5,962

1.52

STATE STREET BANK WEST CLIENT -TREATY 505234

5,895

1.51

193,422

49.45

Total

Breakdown by Unitholders■ Domestic individuals and others : 8,602 unitholders

Number ofInvestment Units

2.0%
2.6%
1.8%

0.2%

Continuous Same-Boat Investment in MEL by the Sponsor

Investment in MEL

9,214

by MEC

Unitholders(As of Oct. 15, 2021)

93.4%

S E M I A N N U A L

R E P O RT

14

15,950(4.1%)

units

Financial Section
BALANCE SHEET, continued

BALANCE SHEET
Thousands of yen

Thousands of yen

As of

As of

February 28, 2021

February 28, 2021

August 31, 2021

Cash and deposits (Notes 4, 6)
Cash and deposits in trust (Notes 4, 6)¥

Operating accounts receivable
Prepaid expenses

3,787,095
5,685,115¥

28,57921,3504,669,730
6,973,856
43,411
21,978Consumption taxes receivable

1,209,689

594,077

Total current assets

10,731,829

12,303,054

Buildings in trust (Note 12)
Less: accumulated depreciation

60,814,082(3,727,731)

69,323,806(4,572,054)

Buildings in trust, net

57,086,350

64,751,752

Fixed assets:
Property and equipment (Notes 5, 7)

Structures in trust (Note 12)
Less: accumulated depreciation

2,132,358(103,076)

2,413,488(126,726)

2,029,281

2,286,761

197,114(12,939)

202,323(24,328)

Machinery and equipment in trust, net

184,175

177,994

Tools, furniture and fixtures in trust

16,694

28,674(2,652)(4,392)

14,042

24,281

Structures in trust, net
Machinery and equipment in trust
Less: accumulated depreciation

Less: accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property and equipment
Intangible assets (Note 5)
Software81,361,574

101,608,148

140,675,424

168,848,938

2,985

2,035

Other intangible assets

641

591

Total intangible assets

3,626

2,626

Investments and other assets
Deferred tax assets (Note 13)15

11Long-term prepaid expenses
Security deposit

42,71410,00041,711
10,000Total investments and other assets

52,73051,722

140,731,780

168,903,287

Organization expenses

4,032

-

Total deferred assets

4,032

-

Total fixed assets
Deferred assets:

Total assets

August 31, 2021

LIABILITIESASSETS
Current assets:¥

151,467,642¥

181,206,341

Current liabilities:
Operating accounts payable¥

Short-term loans payable (Notes 6,11)
Long-term loans payable due within one year

257,699¥306,660

2,000,000
2,211,000

1,400,000
2,211,000

Accounts payable
Distributions payable

21,350
6,862

11,1594,808

Accrued expenses
Income taxes payable

488,817916

566,362826

Advances received
Deposits received

715,55696

877,391
63,771-96

5,702,299

5,442,075

OthersTotal current liabilities
Non-current liabilities
Investment corporation bonds (Note 6,11)-

2,000,000

Long-term loans payable (Notes 6, 11)
Tenant leasehold and security deposits in trust (Note 6)

43,363,000
2,816,129

53,663,000
3,691,040

Total non-current liabilities

46,179,129

59,354,040

51,881,429

64,796,116

Total liabilities
NET ASSETS
Unitholders’ equity
Unitholders’ capital
Units authorized:
10,000,000 units as of August 31, 2021 and February 28, 2021
Units issued and outstanding:
391,135 units as of August 31, 2021 and
348,237 units as of February 28, 2021
Unitholders’ capital, gross

98,444,036

115,191,501

Deduction from unitholders’ capital(931,072)(1,162,998)

Unitholders’ capital, net

97,512,964

114,028,503

SurplusRetained earnings

2,073,248

2,381,722

Total surplus

2,073,248

2,381,722

Total unitholders’ equity

99,586,213

116,410,225

Total net assets (Note 10)

99,586,213

116,410,225

Total liabilities and net assets¥

151,467,642¥

181,206,341

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements.

15

SEMIANNUAL REPORTSEMIANNUAL REPORT

16

Financial Section
STATEMENT OF INCOME AND RETAINED EARNINGSSTATEMENT OF CHANGES IN NET ASSETS
Thousands of yen
For the period ended
February 28, 2021
August 31, 2021

Operating revenues:
Operating rental revenues (Note 8)
Other rental revenues (Note 8)
Total operating revenues
Operating expenses:
Expenses related to property rental business (Note 8)
Asset management fee
Asset custody fee
Administrative service fee
Directors’ compensation
Commission paid
Other operating expenses
Total operating expenses
Operating income
Non-operating income:Interest income
Interest on refund
Refund of property taxes
Reversal of cash distribution payable
Total non-operating income
Non-operating expenses:
Interest expenses
Interest expenses on Investment corporation bonds
Borrowing related expenses
Amortization of organization expenses
Investment unit issuance expenses
Investment corporation bond issuance expenses
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes-current (Note 13)
Income taxes-deferred (Note 13)
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings¥¥

4,002,266
201,145
4,203,412¥

For the period ended August 31, 2021

Unitholders’ capital
Deduction
fromUnitholders’
Unitholders’capital, net
capital, gross unitholders’capital

4,720,745
232,341
4,953,086

1,497,479
352,247
1,390
19,1562,400
94,81531,182
1,998,671
2,204,740

1,801,259
398,037
1,558
21,662
2,400
101,640
70,591
2,397,151
2,555,935

44
726
770

55
829
604
2,284
3,773

87,433
3,290
6,047
34,682
131,455
2,074,055
2,074,055
923
(3)
919
2,073,136
112
2,073,248

112,251
5,343
3,959
4,032
35,343
16,411
177,341
2,382,367
2,382,367
834
4
839
2,381,528
193
2,381,722¥

Thousands of yen
Unitholders’ equity
Surplus

Balance as of March
1, 2021 (Note 10)

UnappropriatedTotal surplus
retained earnings

Total
unitholders’equityTotal
net assets¥98,444,036¥ (931,072)¥97,512,964¥2,073,248 ¥2,073,248¥99,586,213¥99,586,213

16,747,464-

16,747,464--

16,747,464

16,747,464-(231,925)(231,925)--(231,925)(231,925)

Surplus cash
distributions

-

-

-

(2,073,054) (2,073,054)(2,073,054)(2,073,054)

Net income

Change during theperiodIssuance of new
investment units
Distributions inexcess ofretained earnings

-

-

-

2,381,528

2,381,528

2,381,528

2,381,528

Total change during
the period

16,747,464(231,925)

16,515,539

308,473

308,473

16,824,012

16,824,012

Balance as of August
31, 2021 (Note 10)¥115,191,501¥2,381,722 ¥2,381,722¥116,410,225¥116,410,225

UnappropriatedTotal surplus
retained earnings

Total
unitholders’equityTotal
net assets¥(1,162,998) ¥114,028,503

For the period ended February 28, 2021

Thousands of yen
Unitholders’ equity
Surplus

Unitholders’ capital
Deduction
fromUnitholders’
Unitholders’capital, net
capital, gross unitholders’capitalBalance as of
September 1, 2020

¥80,744,051¥(750,029)¥79,994,021¥1,654,877 ¥1,654,877¥81,648,898¥81,648,898

17,699,985-

17,699,985--

17,699,985

17,699,985-(181,042)(181,042)--(181,042)(181,042)---(1,654,764) (1,654,764)(1,654,764)(1,654,764)

-

-

-

2,073,136

2,073,136

2,073,136

2,073,136

17,699,985(181,042)

17,518,943

418,371

418,371

17,937,314

17,937,314¥98,444,036¥(931,072)¥97,512,964¥2,073,248 ¥2,073,248¥99,586,213¥99,586,213(Note 10)
Change during theperiodIssuance of new
investment units
Distributions inexcess of

Yen

Net income per unit (Note 14)

For the period ended
February 28, 2021
August 31, 2021
¥
5,958
¥

The accompanying notes are an integral part of these financial statements.

retained earnings
6,108

Surplus cash
distributions
Net income
Total change during
the period
Balance as ofFebruary 28, 2021
(Note 10)

The accompanying notes are an integral part of these financial statements.

17

SEMIANNUAL REPORTSEMIANNUAL REPORT

18

Financial Section
STATEMENT OF CASH FLOWSNOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION
Thousands of yen
For the period ended
February 28, 2021
August 31, 2021

Cash flows from operating activities:
Income before income taxes
Depreciation
Investment unit issuance expenses
Investment corporation bond issuance expenses
Interest income
Interest expenses
Interest expenses on investment corporation bonds
Reversal of cash distribution payable
Decrease (Increase) in operating accounts receivable
Decrease (Increase) in consumption taxes receivable
Decrease (Increase) in prepaid expenses
Decrease (Increase) in long-term prepaid expenses
Increase (Decrease) in operating accounts payable
Increase (Decrease) in accounts payable
Increase (Decrease) in accrued expenses
Increase (Decrease) in consumption taxes payable
Increase (Decrease) in advances received
OthersSubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of property and equipment in trust
Proceeds from tenant leasehold and security deposits intrust
Repayments from tenant leasehold and security deposits
in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Proceeds from issuance of investment corporation bonds
Proceeds from issuance of new investment units
Payment of distributions of retained earnings
Payment of distributions in excess of retained earnings
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period(Note4)¥

2,074,055
774,496
34,682(44)
87,433(1,120)(1,209,689)(6,542)(9,636)
85,211
13,02865,951(204,777)
187,511
21,9901,912,552
44(84,432)(843)
1,827,319¥(28,900,804)(29,046,707)

676,278895,083(20,172)(55,560)¥

The accompanying notes are an integral part of these financial statements.

2,382,367
882,10335,343
16,411(55)
112,251
5,343(2,284)(14,832)
615,612(628)
1,003
41,049(10,191)
67,176
161,834
67,8024,360,307
55(107,225)(924)
4,252,212(28,280,087)(28,171,796)

2,800,000(1,750,000)
11,150,000
17,665,302(1,654,114)(180,847)
28,030,340
1,577,572
7,894,638

3,500,000(4,100,000)
10,300,000
1,983,588
16,712,121(2,072,871)(231,878)
26,090,959
2,171,375
9,472,211

9,472,211¥

11,643,587

a)Organization
Mitsubishi Estate Logistics REIT Investment Corporation (hereinafter “MEL”) was established on July 14, 2016 under the “Acton Investment Trust and Investment Corporation” (hereinafter the “Investment Trust Law”), and acquired 1 property worth
5,400 million yen on September 29, 2016, and was listed on the REIT Securities Market of the Tokyo Stock Exchange on
September 14, 2017, with Mitsubishi Estate Co., Ltd. (hereinafter “MEC”), one of the largest comprehensive developers in Japan,
acting as a sponsor. MEL focuses on investing in logistics facilities primarily in the Tokyo Metropolitan Area. MEL is externallymanaged by a licensed asset management company, Mitsubishi Jisho Investment Advisors, Inc. (hereinafter the “Asset Manager”
or “MJIA”). On September 13, 2017, MEL issued 198,000 new units through a public offering and raised approximately 49,678
million yen. Those units are listed on the J-REIT section of the Tokyo Stock Exchange. MEL acquired seven properties (aggregateacquisition price: 65,479 million yen) on September 14, 2017 following its listing and acquired two properties (aggregateacquisition price: 12,340 million yen) on September 3, 2018. Furthermore, MEL acquired one additional property on September
2, 2019, and additional four properties on October 9, 2019, total of five properties worth aggregate acquisition price of 30,568
million yen. In addition, MEL acquired five properties on September 1, 2020, worth aggregate acquisition price of 28,407 million
yen. MEL acquired additional five properties worth aggregate acquisition price of 28,209 million yen during the reporting fiscal
period. As of August 31, 2021, MEL held in the form of beneficiary right in trust in 22 properties (aggregate acquisition price:
170,404 million yen), and the occupancy rate remained high at 99.8% as of the end of the reporting fiscal period.

b)Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust
Law, the Japanese Financial Instruments and Exchange Act and their related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (hereinafter the “Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements from International Financial Reporting Standards. The accompanying financial
statements have been reformatted and translated into English from the financial statements of MEL prepared in accordance withJapanese GAAP, and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial
Instruments and Exchange Act. In preparing these financial statements, certain reclassifications and modifications have been
made to the financial statements issued domestically in order to present them in a format which is more familiar to readers
outside Japan. As permitted by the regulations under the Financial Instruments and Exchange Act of Japan, amounts of less than
one thousand yen have been omitted. As a result, the totals shown in the accompanying financial statements do not necessarily
agree with the sums of the individual amounts. MEL’s fiscal period is a six-month period that ends at the end of February andAugust of each year. MEL does not prepare consolidated financial statements as it has no subsidiaries.

2.
a)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and cash in trust, floating deposits, deposits in trust and short-term

investments that are very liquid and realizable with a maturity of three months or less when purchased and that are subject toinsignificant risks of changes in value.
b)

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment, including property and equipment in trust,is calculated by the straight-line method over the estimated useful lives as follows:c)

Buildings
Structures

2-63 years
10-58 years

Machinery and equipment
Tools, furniture and fixtures

8-12 years
3-15 years

Intangible Assets

Intangible assets are stated at cost. Amortization of intangible assets, including intangible assets in trust, is calculated by thestraight-line method over the estimated useful lives.
d)Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.

e)

19

SEMIANNUAL REPORT

Organization Expenses
All organization expenses are amortized over five years using straight-line method.

SEMIANNUAL REPORT

20

Financial Sectionf)g)Investment Unit Issuance Expenses
The full amount of investment unit issuance expenses is recorded as expense when incurred.
Investment corporation bond Issuance Expenses

The full amount of Investment corporation bond issuance expenses is recorded as expense when incurred.
h)Beneficiary Rights in Trust
As to beneficiary rights in trust, all accounts of assets and liabilities for assets in trust as well as the related income generated

and expenses incurred are recorded in the relevant balance sheet and statement of income and retained earnings accounts.
Important line items included in accounting for financial assets and liabilities in the MEL’s balance sheet are cash and deposits in(1) Overview
The IASB and the FASB have established detailed guidance regarding fair value measurement (IFRS 13 “Fair Value Measurement”(IASB) and Topic 820 “Fair Value Measurement” (FASB)). The ASBJ repeatedly considered the guidance regarding fair value of financial
instruments and disclosure in order to improve the comparability with such international accounting standards, and issued “AccountingStandard for Fair Value Measurement” and “Implementation Guidance on Accounting Standard for Fair Value Measurement.”
As the basic policy of the ASBJ for the development of accounting standard for fair value measurement, the ASBJ basically adopted
all provisions of IFRS 13 by using the unified measurement method, from the point of view of improving the comparability of financial
statements among domestic and foreign companies. In addition, considering the actual practices that have been executed in Japan,
other treatments for individual items are established within the scope not to impair comparability between the financial statements.
(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending February 28, 2022.

trust, buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, land in trust
and tenant leasehold and security deposits in trust.

(3) Impact of applying the accounting standardsi)

The impact of applying the “Accounting Standard for Fair Value Measurement” and its guidance on the financial statements is currently
under evaluation.

Taxes on Property and Equipment

With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessed and determined, theamount corresponding to the relevant fiscal period is accounted for as rental expenses.
Of the amounts paid for the acquisitions of real estate properties or beneficiary right in trust of real estate, the amountequivalent to property taxes is capitalized as part of the acquisition cost of the relevant property instead of being charged as an
expense.
j)

CASH AND CASH EQUIVALENTS
Relationship between cash and cash equivalents in statement of cash flows and accounts and amounts in the accompanying
balance sheet are as follows:

Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.

3.

4.

ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

・“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29 issued on March 31,
2020)

February 28, 2021
Cash and deposits¥

Cash and deposits in trust
Cash and cash equivalents

Thousands of yen
As of3,787,095

August 31, 2021¥

5,685,115¥

9,472,211

4,669,730
6,973,856¥

11,643,587

・“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on March 26, 2021)
・“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 31,
2020)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in the United States havejointly developed comprehensive accounting standards for revenue recognition and issued “Revenue from Contracts with Customers”(IFRS 15 (IASB) and Topic 606 (FASB)) in May 2014. Given the situation where IFRS 15 will be applied from fiscal years beginning on orafter January 1, 2018 and that Topic 606 will be applied from fiscal years beginning after December 15, 2017, the ASBJ has developed
comprehensive accounting standards for revenue recognition and issued them together with the implementation guidance. The basic
policy of the ASBJ when it developed the accounting standards for revenue recognition was to specify the accounting standards,
incorporating the basic principles of IFRS 15 as a starting point, from the perspective of comparability between financial statements,
which is one of the benefits of maintaining compatibility with IFRS 15. The basic policy also stipulates that if there is an item to which
consideration should be given, such as practices that have been conducted thus far in Japan, alternative treatments will be added tothe extent to which comparability is not impaired.
(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending February 28, 2022.
(3) Impact of applying the accounting standards
The impact of applying “Accounting Standard for Revenue Recognition” and its guidance on the financial statements is currently
under evaluation.

・“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019)
・”Accounting Standard for Financial Instruments” (ASBJ Statement No.10 issued on July 4, 2019)
・“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on June 17, 2021)
・“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 31,
2020)

21

SEMIANNUAL REPORTSEMIANNUAL REPORT

22

Financial Section
5.

PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS
Property and equipment and intangible assets as of August 31, 2021 are as follows:(3) Supplemental Explanation Regarding the Estimated Fair Values of Financial Instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market
price available, fair value is based on a price that is reasonably estimated. Since various assumptions and factors are reflectedThousands of yen

Type of assets

Balance as ofMarch 1, 2021

Buildings in¥ 60,814,082
trust
Structures in
2,132,358
trust
Machinery andProperty andequipment in
197,114equipment
trust
Tools, furnitureand fixtures in
16,694trust
Land in trust
81,361,574
Total property and equipment ¥144,521,823
Software¥9,500
Intangible
Other intangible
assets1,000
assetsTotal intangible assets¥
10,500Depreciation
Decrease Balance as of
Net balance as
Depreciation
during the August 31, Accumulatedof August 31, Remarks
for theperiod2021
2021
depreciation
periodIncreaseduring theperiod¥8,509,724 ¥-¥ 69,323,806¥4,572,054¥ 844,322 ¥

281,130-

2,413,488

126,726

23,6502,286,761

-

5,208

-

202,323

24,328

11,389177,994-

11,979-28,674

4,392

1,740

24,281(Note)

20,246,574¥29,054,617 ¥
¥
- ¥
¥

- ¥

-

101,608,148¥173,576,441¥
9,500¥4,727,502
¥
7,465

-

1,000

408

-

¥

10,500¥7,873

64,751,752 (Note)

101,608,148 (Note)¥ 881,103 ¥ 168,848,938
¥
950 ¥
2,035
50
¥

1,000

591
¥

2,626

(Note) The amount of increase during the period is primarily attributable to the acquisition of 3 properties and the additional acquisition of
2 property.
6.

FINANCIAL INSTRUMENTSa)

Overview(1) Policy for Financial Instruments
MEL procures funds for the acquisition of assets and repayment of debt mainly through bank loans or the issuance of new
investment units.
In borrowing funds, MEL takes consideration in interest rate trend, debt cost, floating or fixed interest rate, borrowing
period and repayment date.
In the case of borrowing, the lender shall be limited to qualified institutional investors as stipulated in Article 2, Paragraph
3, Item of the Financial Instruments and Exchange Act of Japan (limited to institutional investors prescribed in Article 67-15 of
the Taxation Special Measures Law), with in principle no collateral / no guarantee. However, MEL may provide assets as
collateral in consideration of financing environment and economic conditions. In addition, in order to flexibly procure thenecessary funds related to MEL's operation such as property acquisition and repayment debt financing, MEL may enter into
the overdraft agreements, commitment line agreements or conclude the reserved agreements.
MEL generally invests surplus funds in bank deposits, considering the safety and liquidity of the investment and also
reflecting the market environment and cash positions of MEL itself. MEL enters into derivative transactions solely for the
purposes of reducing risks of rising interest rates related to financings and other types of risks. MEL does not use derivativetransactions for speculative purposes. Not applicable for the reporting period.
(2) Type of Financial Instruments, related Risks and Risk Management System
Bank loans are mainly made to procure funds for acquisition of properties, repayment of bank loans. Although MEL is
exposed to liquidity risks upon repayment, by diversifying the maturities and lending institutions, securing liquidity of cash inhand and managing such liquidity risks by preparing and monitoring cash flows projection, such risks are maintained undercontrol. In addition, some loans bear floating interest rates and are exposed to potential risks of rising interest rates. MEL
attempts to mitigate such risks on its operations by maintaining a conservative loan to value ratio and increasing the ratio of
long-term fixed interest rate loans.
The security deposits which MEL has received from the tenants are exposed to liquidity risk due to cancelation of leaseagreement before the maturity date. In the case of trust beneficiary interest in real estate, MEL secures safety byin estimating the fair value, different assumptions and factors could result in a different value.
b)

Estimated Fair Value of Financial Instruments
The book value, fair value and differences between the values as of August 31, 2021 and February 28, 2021 are as follows:

Financial instruments for which the fair value is extremely difficult to estimate are excluded from the following table (see Note 2
below).
Thousands of yen
As of August 31, 2021
Book value(1) Cash and deposits¥(2) Cash and deposits in trust
Total assets(3) Short -term loans payable

4,669,730

23

SEMIANNUAL REPORT¥

Difference

4,669,730

6,973,856¥-

6,973,856-¥

11,643,587¥

11,643,587

¥

-

¥

1,400,000¥

1,400,000¥--(4) Long-term loans payable due within one year

2,211,000

2,211,276

276-(5) Investment corporation bonds

2,000,000

2,035,749

35,749(6) Long-term loans payable

53,663,000

54,043,474

380,474

Total liabilities¥

59,274,000¥

59,690,500¥

416,500

Thousands of yen
As of February 28, 2021
Book value(1) Cash and deposits¥(2) Cash and deposits in trust
Total assets(3) Short -term loans payable¥

9,472,211¥¥

2,000,000

3,787,095¥

2,211,000(6) Long-term loans payable

47,574,000¥-

9,472,211¥

2,000,000¥-

2,212,967

43,363,000¥

Difference

5,685,115¥(4) Long-term loans payable due within one year
Total liabilities

3,787,095

Fair value

5,685,115

1,967

43,473,011¥

110,01147,685,978¥111,978(Note 1) Methods to estimate fair values of financial instruments(1) Cash and deposits and (2) Cash and deposits in trust (3) Short-term loans payable
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of thefair value, and therefore, the book value is used as the fair value.
(4) Long-term loans payable due within one year and (5) Investment corporation bonds (6) Long-term loans payable
The fair value of long-term loans payable is determined based on the present value of contractual cash flows
which would be applicable to new loans payable under the same terms. In terms of floating interest rate loans
payable, since it reflects the market interest rate in a short period of time, the fair value is approximately equal tothe book value. Thus, the book value is used.
(Note 2) Financial instruments for which the fair value is extremely difficult to estimate
As tenant leasehold and security deposits in trust has no available quoted market price, and it is impracticable toreasonably estimate their future cash flows, their fair value is not disclosed.
Thousands of yen

accumulating a portion in the trust account, and in the case of real estate, leasehold rights of real estate, and superficies, MEL
secures safety by accumulating a portion in bank savings account or bank time deposit account. Moreover, MEL ensuressafety by accurately tracking the timing of the tenant move-ins and outs and anticipating the fund demand utilizing historical
data.

Fair value

As ofFebruary 28, 2021
Tenant leasehold and security deposits in trust¥

2,816,129

August 31, 2021¥

3,691,040

SEMIANNUAL REPORT

24

Financial Section
7.

(Note 3) Redemption schedule for monetary claims after August 31, 2021
Thousands of yen

Cash and deposits
Cash and deposits in trust
Total

As of August 31, 2021
Due after
Due after four Due after fiveDue within Due after one Due after two
three to fourto two years to three years
to five years
years
one yearyears¥ 4,669,730 ¥
- ¥
- ¥
- ¥
- ¥
6,973,856¥11,643,587 ¥
- ¥
- ¥
- ¥
- ¥
-

MEL owns logistics facilities for leasing for the purpose of earning rental income. The book value, changes during the reporting
fiscal period and fair value of the properties are as follows:
Thousands of yen
For the period ended
February 28, 2021
August 31, 2021
Book value (Note 1)
Balance at the beginning of the period¥

112,466,230

Balance at the end of the period¥

Fair value at the end of the period (Note 3)¥

Changes during the period (Note 2)

Redemption schedule for monetary claims after February 28, 2021
Thousands of yen

Cash and deposits
Cash and deposits in trust
Total

INVESTMENT AND RENTAL PROPERTIESAs of February 28, 2021
Due after
Due after four Due after fiveDue within Due after one Due after two
three to fourto two years to three years
to five years
years
one yearyears¥ 3,787,095 ¥
- ¥
- ¥
- ¥
- ¥
5,685,115¥ 9,472,211 ¥
- ¥
- ¥
- ¥
- ¥
-

¥

140,675,424

140,675,424¥

168,848,938

155,900,000¥

189,300,000

28,209,193

28,173,514(Note 1) Book value is calculated by deducting accumulated depreciation from acquisition cost.
(Note 2) The increase for the fiscal period ended February 28, 2021 was primarily a result of the acquiring new properties for a
total of 28,865,490 thousand yen. The decrease was primarily a result of the recognition of depreciation, which amounted
to 773,496 thousand yen. The increase for the fiscal period ended August 31, 2021 was primarily a result of acquiring newproperties for a total of 28,886,168 thousand yen. The decrease was primarily a result of the recognition of depreciation,
which amounted to 881,103 thousand yen.
(Note 3) The fair value at the end of the period is determined based on appraised value provided by independent real estateappraisers.

(Note 4) Repayment schedule for debt after August 31, 2021

Income and loss in connection with investment and rental properties are disclosed in “8. PROPERTY-RELATED REVENUES AND
EXPENSES.”

Thousands of yen

Short-term loans payable
Long-term loans payable
due within one year
Investment corporationbonds
Long-term loans payable
Total

As of August 31, 2021
Due after
Due after four Due after fiveDue within Due after one Due after two
three to fourto two years to three years
to five years
years
one yearyears¥ 1,400,000 ¥
- ¥
- ¥
- ¥
- ¥
2,211,000

-

-

-

-

-

-

-

-

-

-

2,000,000

3,310,000¥ 3,611,000 ¥ 3,310,000

6,540,000
5,900,000
4,970,000 32,943,000¥ 6,540,000 ¥ 5,900,000 ¥ 4,970,000 ¥34,943,000

Repayment schedule for debt after February 28, 2021
Thousands of yen

Short-term loans payable
Long-term loans payable
due within one year
Long-term loans payable
Total

As of February 28, 2021
Due after
Due after four Due after fiveDue within Due after one Due after two
three to four
one yearto two years to three years
to five years
years
years
¥ 2,000,000 ¥
- ¥
- ¥
- ¥
- ¥
2,211,000-

3,310,000¥ 4,211,000 ¥ 3,310,000

-

-

-

-

6,540,000
4,550,000
4,970,000 23,993,000¥ 6,540,000 ¥ 4,550,000 ¥ 4,970,000 ¥23,993,000

8.

PROPERTY-RELATED REVENUES AND EXPENSES
The following table summarizes the revenues and expenses generated from property leasing activities for the fiscal periods

ended August 31, 2021 and February 28, 2021.
Thousands of yen
For the period ended
February 28, 2021
August 31, 2021
A. Property-related revenues
Operating rental revenues
Rental revenues
Common area charges
Total
Other rental revenues
Received utilities cost
Others
Total
Total property-related revenues
B. Property-related expenses
Rental expenses
Facility management fee
Property and other taxes
Insurance
Repair and maintenanceUtilities cost
Depreciation
Custodian fee¥

3,825,893
176,373
4,002,266¥

124,108
77,037201,145
4,203,412¥¥

185,972
313,276
6,412
75,570115,299
773,4963,140¥

208,222407,913
7,306
142,071
131,715881,103
3,676¥¥

1,497,479
2,705,932¥¥

1,801,259
3,151,826¥¥¥¥

OthersTotal rental expenses
C. Operating income from property leasing (A-B)

25

SEMIANNUAL REPORT¥¥¥

24,312

4,533,464
187,280
4,720,745
144,882
87,458232,341
4,953,086

19,251SEMIANNUAL REPORT

26

Financial Section
9.

LEASES

The future minimum rental revenues from tenants subsequent to each fiscal period end under the non-cancelable operatingleases of properties are as follows:
Thousands of yen
As of

Due within one year
Due after one year

February 28, 2021¥
8,139,356
39,466,864¥

August 31, 2021
8,732,265
58,945,497

Total

¥

¥

67,677,762

47,606,221

10. NET ASSETSa) Stated Capital
MEL issues only non-par value units in accordance with the Investment Trust Law. The entire amount of the issue price of newunits is designated as stated capital. The Investment Corporation is required to maintain net assets of at least 50 million yen as
required by the Investment Trust Law.
b)Distributions
Yen
For the period ended
February 28, 2021
I. Unappropriated retained earnings¥ 2,381,722,226

231,925,842

264,016,125

2,304,980,703(6,619)2,645,637,140(6,764)

2,073,054,861

2,381,621,015(5,953)(6,089)231,925,842

264,016,125

(666)

(675)

III. Distributions(Distributions per unit)

Repayment date

September 2, 2023
September 14, 2023

0.2400%0.2500%0.3913%September 1, 2024
September 14, 2024
October 9, 2024

0.2000%0.4288%0.1800%March 9, 2025
September 1, 2025

Pursuant to the “Policy on the Distribution of Funds” as defined in Article 35, Paragraph 1 of the Articles of Incorporation, theamount of distributions shall be the amount which does not exceed the amount of profits but exceeds 90% of the distributable

October 9, 2026

0.2100%0.2000%0.2663%0.2000%0.4675%0.3950%0.2160%0.2413%0.3125%0.5075%0.4538%0.2600%profit as defined in Article 67-15 of the Special Taxation Measures Act. Based on the policy, MEL declared distribution amounts of
2,381,621,015yen and 2,073,054,861 yen for the fiscal periods ended August 31, 2021 and February 28, 2021, respectively. These

March 9, 2027
September 14, 2027

0.3663%0.5500%

October 9, 2027
March 9, 2028

0.2400%0.4313%

March 19, 2028
September 1, 2028

0.3963%0.4238%September 14, 2028

0.5750%

October 10, 2028
March 9, 2029

0.4200%0.5013%

Of which, distributions of retained earnings(Of which, distributions in retained earnings
per unit)
Of which, distributions in excess of retained
earnings(Of which, distributions in excess of retained
earnings per unit)
IV. Retained earnings carried forward¥

193,995¥

101,211amounts were equivalent to the maximum integral multiples of number of investment units issued and outstanding as of the endof each fiscal period. Based on the distribution policy as defined in Article 35, Paragraph 2 of the Articles of Incorporation, MEL
shall make Surplus Cash Distributions (SCD), defined as distributions in excess of retained earnings, as a return of unitholders’capital, each fiscal period on a continuous basis.
Accordingly, for the fiscal period ended August 31, 2021, MEL declared SCD of 264,016,125 yen, as a return of unitholders’capital, which was the amount equivalent to approximately 30.0% of depreciation expense. For the fiscal period ended February
28, 2021, MEL declared SCD of 231,925,842 yen, as a return of unitholders’ capital, which was the amount equivalent toapproximately 30.0% of depreciation expense.

27

Weighted-averageinterest rate
September 1, 2021(Note 1)
0.1508%September 1, 2021
0.1723%October 9, 2021(Note 2)
0.1674%
Short-term loans payable
March 9, 2022(Note 3)
0.1473%
March 9, 2022(Note 4)0.1673%
March 9, 2022
0.1524%
Total short-term loans payable
Long-term loans payable
September 14, 2021
0.3263%due within one year
Total Long-term loans payable due within one year
Long-term loans payable
September 14, 2022
0.3575%Classification

August 31, 2021

¥ 2,073,248,856

II. Distributions in excess of retained earnings
Deduction from unitholders’ capital

11. INTEREST-BEARING DEBTa) Short term loans and Long-term loans payable
Short-term and long-term loans payable consisted of bank borrowings under loan agreements. The following tablesummarizes the short-term and long-term loans payable as of August 31, 2021 and February 28, 2021.

SEMIANNUAL REPORT

September 14, 2025
October 9, 2025
September 1, 2026
September 14, 2026

Thousands of yen
As ofFebruary 28, 2021
¥

¥
¥
¥
¥

1,300,000
500,000
200,000
2,000,000
720,000
1,491,000
2,211,000
430,000
2,050,000
830,000
3,000,000
1,760,000
1,330,000
450,000
1,150,000
900,000
1,250,000
1,250,000
1,500,000
800,000
300,000
620,000
800,000
200,000
750,000
500,000
710,000
500,000
2,400,000
400,000
1,340,000
1,340,000
880,000
880,000
1,250,000
900,000
500,000
830,000
807,000
1,256,000
750,000-

August 31, 2021
¥

¥
¥
¥
¥

500,000
900,000
1,400,000
720,000
1,491,000
2,211,000
430,000
2,050,000
830,000
3,000,000
1,760,000
1,330,000
450,000
1,150,000
900,000
1,250,000
1,250,000
1,350,000
1,500,000
800,000
300,000
620,000
800,000
200,000
750,000
500,000
710,000
500,000
2,400,000
400,000
900,000
1,340,000
1,340,000
880,000
880,000
1,250,000
900,000
800,000
800,000
900,000
500,000
830,000
807,000
1,256,000
750,000
500,000
500,000
500,000

SEMIANNUAL REPORT

28

Financial Section
March 19, 2029
September 1, 2029
September 30, 2029
March 9, 2030
August 30, 2030

0.4663%0.4182%0.4900%0.5549%0.4683%0.5000%March 7, 2031
March 9, 2033

0.6176%0.6500%Total long-term loans payable

1,750,000
4,000,000
2,000,000
500,000
500,000
43,363,000
47,574,000

¥
¥

Total

Reconciliations of major items that caused differences between the statutory tax rate and effective tax rate with respect to pre-1,000,000
1,750,000
4,000,000
1,050,000
2,000,000
500,000
500,000
1,000,000
1,000,000
53,663,000
57,274,000¥¥

tax income reflected in the accompanying statements of income for the fiscal periods ended August 31, 2021 and February 28,
2021 are as follows:

Statutory tax rate
Adjustments:
Deductible cash distributions
Other
Actual effective income tax rate

The stated interest rate is the weighted average interest rate during each fiscal period. The redemption schedules for longterm loans payable subsequent to February 28, 2021 and August 31, 2021 are disclosed in “6. FINANCIAL INSTRUMENTS”.
(Note 1) The short-term loan of 1,300 million yen was repaid in advance on July 1, 2021.
(Note 2) The short-term loan of 200 million yen was repaid in advance on April 15, 2021.
(Note 3) The short-term loan of 800 million yen was borrowed on March 9, 2021 and repaid in advance on April 9, 2021.
(Note 4) The short-term loan of 1,800 million yen was borrowed on March 9, 2021 and repaid in advance on April 15, 2021.

b)

Short-term investment corporation bonds and Long-term investment corporation bonds
The following table summarizes the Short-term investment corporation bonds and Long-term investment corporation bonds

Series 1

April 14, 2036
Total Long-term investment corporation bonds

0.7000%

¥

-

¥

-

¥

-

¥

2,000,000¥-¥

2,000,000

12. REDUCTION ENTRY

tax deductible distribution as defined in the Special Taxation Measures Act.

14. PER UNIT INFORMATION
The following table summarizes per unit information for the fiscal periods ended August 31, 2021 and February 28, 2021.

Weighted average number of units outstanding

¥

5,958
347,929¥6,108
389,872

Net assets per unit¥
285,972¥
297,621(Note) Basic net income per unit is based on the weighted average number of units issued and outstanding during theperiod. Diluted earnings per unit and related information are not disclosed as no dilutive units were outstanding.

There were no transactions and account balances for the fiscal periods ended August 31, 2021 and February 28, 2021.

Thousands of yen
As of
Buildings in trust
Structures in trust

Net income per unit
Basic net income per unit

Yen
For the period ended
February 28, 2021
August 31, 2021

15. TRANSACTION WITH RELATED PARTIESa) Transactions and Account Balances with the Parent Company and Major Unitholders

The amount of reduction entry of property and equipment as of August 31, 2021 and February 28, 2021 are as follows:

February 28, 2021¥
31,220¥7,008(31.45%)
0.03%
0.04%

MEL has a policy of making cash distributions of earnings in excess of 90% of distributable income as defined in the Special

Thousands of yen
As ofFebruary 28, 2021
August 31, 2021

Interest rate

(31.44%)
0.03%
0.04%

Taxation Measures Act for the fiscal period to qualify for conditions, as set forth in the Special Taxation Measures Act, to achieve a
deduction of cash distributions for income tax purposes. Based on this policy, MEL treated the cash distributions of earnings as a

as of August 31, 2021 and February 28, 2021

Maturity
Classification
Total Short-term investment corporation bonds

For the period ended
February 28, 2021
August 31, 2021
31.46%
31.46%

August 31, 2021¥¥

31,2207,008b)Transactions and Account Balances with Affiliates
There were no transactions and account balances for the fiscal periods ended August 31, 2021 and February 28, 2021.

c)

Transactions and Account Balances with Companies under Common Control
There were no transactions and account balances for the fiscal periods ended August 31, 2021 and February 28, 2021.

d)

13. INCOME TAXESMEL is subject to Japanese corporate income taxes on its taxable income. The tax effects of temporary differences that give rise
to a significant portion of the deferred tax assets and liabilities as of August 31, 2021 and February 28, 2021 are as follows:
Thousands of yen
As ofEnterprise tax payable
Total deferred tax assets
Net deferred tax assets

29

SEMIANNUAL REPORT

February 28, 2021
¥
¥

15
15
15

August 31, 2021
¥
¥

11
11
11

Transactions and Account Balances with Board of Directors and Individual Unitholders
There were no transactions and account balances for the fiscal periods ended August 31, 2021 and February 28, 2021.

16. SEGMENT AND RELATED INFORMATION(For the fiscal periods ended August 31, 2021 and February 28, 2021)
a) Segment Information
Disclosure is omitted because the real estate leasing business is MEL’s sole business and it has no reportable segment subject
to disclosure.

SEMIANNUAL REPORT

30

Financial Sectionb)

Related Information(1) Information by Geographic Region(i) Operating Revenues
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenues
on the statement of income and retained earnings.
(ii) Property and Equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounts for over 90% of theamount of property and equipment on the balance sheet.
(2) Information by Each Major Customer
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenues
on the statement of income and retained earnings.

17. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable.

31

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32

Financial Section

33

SEMIANNUAL REPORTSEMIANNUAL REPORT34