SEMIANNUAL REPORTFiscal Period Ended August 31, 2022

Overview

Hybrid Model

Distributions Per Unit

Distributions Per Unit

Distributions Per Unit

(FP Ended Aug. 2022 Actual)(FP Ending Feb. 2023 Forecast)(FP Ending Aug. 2023 Forecast)

7,353

yen

7,628

yen

7,832

CONTENTS
To Our Unitholders………………………… 2
Q & A………………………………………… 3
Operating Highlights… …………………… 6yen

HYBRID External Growth… ……………… 8
HYBRID Internal Growth… ……………… 10

Operating Revenues

Net Income(FP Ended Aug. 2022 Actual)(FP Ended Aug. 2022 Actual)

6,276

2,979

mn yenLoan-to-Value Ratio

Average Debt Cost

(Forecasted Aug. 2023)(As of Dec. 14, 2022)

38.2

mn yen%0.49%

ESG Initiatives… …………………………… 11
Development / Facilities Management

Investment / Asset Management

SponsorAsset Management Company

Portfolio……………………………………… 16
Unitholder Information… ………………… 17
Financial Section… ………………………… 18
Other Information… ……………………… 48

Credit Rating (JCR)

No. of Properties(As of Dec. 1, 2022)

AA(Stable)32

properties

Asset Size
(As of Dec. 1, 2022)

261.6

bn yenAverage Occupancy(As of Aug. 31, 2022)

100.0

%

Basic Policy
MEL mainly invests in logistics facilities for the ultimate purpose of maximizing unitholder value
through management utilizing the comprehensive strengths of the MEC Group and also in order tocontribute to the realization of an affluent society through development of logistics functions that
support the lives of people.
Growth Strategy

1. Building a Long-term Stable Portfolio in order to Maximize Unitholder Value
2. HYBRID External Growth Utilizing the Strength of Both MEC
and The Asset Management Company (MJIA)

3. HYBRID Internal Growth Supporting Stable Growth of MEL
4. Long-term Stable Financial Management with Emphasis on Soundness
5. Development of a Solid Governance Structure Focusing on
Improving Unitholder Value

LOGIPORT Kawasaki Bay

Mitsubishi Estate Logistics REIT Investment Corporation1

To Our Unitholders

Q&A
We would like to express heartfelt appreciation to all our unitholders
for continued support of MEL.

Q 1 Please tell us about the public offering announced in October 2022.

We are pleased to present our Semiannual Report for 12th fiscal
period ended August 31, 2022 successfully and would like toexpress our sincere gratitude for supports of our stakeholders.

was the second global offering this year (sixth after listing). Asset size expanded
A 1 Thisto 261.6 billion yen for 32 properties.

During the fiscal period ended August 31, 2022, we successfullyacquired 2 properties (total acquisition price: 45.8 billion yen)through global offering at the beginning of this period, bringing theasset size has expanded to 24 properties, 216.2 billion yen at theend of this fiscal period.
In October, we conducted our second global offering this year andacquired 8 properties (total acquisition price: 45.4 billion yen). As aresult, the asset size has expanded to 32 properties, 261.6 billion
yen and achieved strong DPU growth.
In terms of internal growth, the occupancy rate at the end of thisfiscal period was 100.0%, maintaining high occupancy rate, andalso achieved rent growth for the tenth consecutive period under
the strong market conditions driven by accelerating growth of EC
market and steady operation of MEL.

Hybrid external growth combining properties developed by the Sponsor and properties sourced by
the Asset Management Company (MJIA)
In this offering, we were able to improve the portfolio quality while generally maintaining the average NOI (Net
Operating Income) yield level by leveraging hybrid external growth model, combining properties developed by theSponsor and properties sourced by MJIA with relatively high yields based on an ingenious and unique strategy. All
properties are fully occupied, and the average building age of these properties is 2.7 years, which is expected togenerate stable cash flow.
Sponsor-developed (Jointly)

Sponsor-developed (Independently)

As a result, DPU is 7,353 yen (up 179 yen from the previous fiscal
period and up 46 yen from the forecast), achieved DPU growth foreighth consecutive period.

Ken Takanashi

Executive Director of Mitsubishi Estate Logistics REIT
Investment Corporation
Executive Officer, General Manager of Logistics REITManagement Department, Mitsubishi Jisho Investment
Advisors, Inc.
2

MEL announced its management policy based on the “Three Pillars”
in April 2019, as a management plan designed to maximize
unitholder value in the medium-to-long term. The management
policy is intended to gather the entire MEC Group to work together
in order to improve unitholder value of MEL, focusing on thefollowing three pillars: Alignment (align interest with unitholders),
Discipline (disciplined growth) and Hybrid (enhance MEL’s uniquestrategy, the hybrid model). We will continue to endeavor
maximizing our unitholder value by growing through dialogues with
our unitholders following our management policy, “Three Pillars”.
We sincerely appreciate your continued support to MEL and MEC
Group and look forward to reporting our further progress in themonths and years ahead.

LOGiSTA·Logicross Ibaraki Saito (A)(45% co-ownership interest)

LOGiSTA·Logicross Ibaraki Saito (B)(45% co-ownership interest)

Logicross Yokohama Kohoku

MJ Logipark Takatsuki 1

MJ Logipark Inzai 1

MJIA-sourced (PDP)MJ Logipark Funabashi 2

Mitsubishi Estate Logistics REIT Investment Corporation

3

Q&A
Achieved DPU growth of 6.0% (vs Pre-offering), 13.3% (YoY) on a stabilized basis

The impact of inflation on our Utility Costs

Through the 6th follow-on offering, MEL acquired 8 properties for 45.4 billion yen, including 3 modern and state-ofthe-art properties developed by the Sponsor and 5 properties sourced by MJIA. Through continuous external growth,
the asset size expanded by 91.2 billion yen per year, and the stabilized DPU is expected to grow by 6.0% from pre6th follow-on offering, and 13.3% on a year-on-year basis, together with the 5th follow-on offering in March thisyear. LTV (Loan-to-Value ratio) after the 6th follow-on offering is expected to be 38.2%, which will remain at a low
level. We will continue to aim to increase unitholder value through disciplined property acquisitions by leveraging our
LTV capacity and abundant pipeline properties (please refer to page 8).
Effect of 6th follow-on offering

Asset Size

Tax-stabilized DPU(bn yen)300+91.2 bn yen

261.6 bn yen

216.2 bn yen
200

170.4 bn yen

7,000

6th
follow-on
offering

5th
follow-on
offering

100+45.4 bn yen+13.3 %

(yen)
8,000

7,832 yen

7,392 yen

Utility Costs

For single-tenant facilities, all utilities cost for the facility areborne by the tenant, and therefore, MEL has not experienced
any impact. On the other hand, even for multi-tenant facilities,
the impact is expected to be limited as MEL only incur utility
costs generated from the common areas, so the costs forwhich MEL is responsible are limited to 4.6% of the floor area.
Although the current utilities Profit/Loss has worsened due tosoaring energy prices, the percentage of such Profit/Loss in NOI
is small, and therefore, the impact on MEL is limited. Goingforward, we will seek to improve profitability by reviewing theunit price and billing method for tenants, revising the electricity
supply and demand contract, reducing the amount of electricity
used, and introducing self-consumption of solar power.

Mainly electricity costs are borne by tenants● Limited impact, including cost increases incommon areas●

Image of Cost Burden for Multi-tenant facilities
Commonarea

Exclusive area

Burden on tenants

6,910 yen

Burden on owner

Tenants+6.0 %+7.0 %

MEL

6,000+45.8 bn yen
00

FP 2022/2

FP 2022/8

Post-6th
follow-on offering

Pre-5thfollow-on offering

Pre-6thfollow-on offering

Post-6th
follow-on offering

Q 2 Concern about inflation is occurred globally, how will this affect MEL?
believe the impact will be limited due to our portfolio with inflation resistance andA 2 Welong-term stability

Classification of Utility Cost Burden by Property Type (Based on total floor area)
Common area

Exclusive area

Tenants bearing cost including common area

Tenants bearing cost on whole building

Multi-tenant (excluding whole-building leases) 61.1%
4.6%

52.8%

Burden on MEL

BTS / Single-tenant 38.9%
3.6%

Tenant Indirect burden
Paid in advance by MEL

Chilled and Frozen

35.9%

3.1%

Tenant direct burden
Tenant pays utilities cost directly

Limitedburden on MEL

Utility expenses is charged
directly to the tenants

Impact on rental revenues
Multi-tenant facilities leased to multiple tenants mainly have relatively short-term contracts with remaining lease termof less than five years, so MEL intends to increase rent at the time of re-signing or replacement. On the other hand,single-tenant facilities and land are mainly under relatively long-term contracts, contributing to the long-term stable
cash flow. In the future, MEL will also aim to reduce the impact of inflation by negotiating for the introduction ofincorporating clauses in the lease agreements with such tenants which allow for rent revision during contract periods.
In this way, by emphasizing a balance between short-term and long-term contracts, MEL has been able to achieve
rent growth for tenth consecutive periods on the background of strong demand in the current leasing market for
logistics facilities (please refer to page 10).
4

Remaining Lease Term by Property Type (Based on Leased Area)(m2)
450,000

Multi (excluding whole-building leases): Avg. 3.0 years
BTS/Land/Single: Avg. 11.2 years(Ratio to the totalleased area)
38%

300,000

25%

150,000

13%

0

0%

less than
3yrs

3yrs or more 5yrs or more 7yrs or more
- less than- less than- less than
5yrs
7yrs
10yrs

more than
10yrs

Multi-tenant (excluding whole-building leases)
Remaining term ofless than 5 years
80.9%

Rent increase according to
the rent gap
with the market level

BTS/Land/Single
Remaining term of
5 years or more
70.7%

Long-term operation withstability and efforts toaddress inflation

Mitsubishi Estate Logistics REIT Investment Corporation

5

Operating Highlights
Balance Sheet (summary)(Millions of yen)Item

Of which, cash and deposits(including cash and deposits in trust)
Fixed assets

POINT

1

Property and Equipment

Increased by 45.3 billion yen from theprevious fiscal period, mainly due to theacquisition of 2 properties during fiscal
period ended Aug. 31, 2022.

Of which, property and equipment
Total assets

2Interest-bearing Debt

Interest-bearing debt at the end of the
fiscal period ended Aug. 31, 2022 was
82,074 million yen and LTV was 36.0%,
due to the execution of borrowings tofund the acquisition of the assets
acquired during the period.

POINT

3

Unitholders’ Capital, Net

Increased by 22.8 billion yen from theprevious fiscal period, due to the public
offering for funding the acquisition ofassets acquired during the fiscal period
ended Aug. 31, 2022.

6

Item

FP Ended Aug.
2022

Operating revenues

6,276

14,661

Operating expenses

2,946

12,788Operating income

3,329

Ordinary income

2,980

Net income

2,979

213,511
213,459

(yen)

8,330

Of which, Short-term loans payable

2,700

Of which, long-term loans payable due
within one year

3,310

Non-current liabilities

80,220Of which, investment corporation bonds

2,000

Of which, long-term loans payable

74,064

Total liabilities

88,550Unitholders' capital, net

136,643

Surplus2,980

Total net assets

139,623

Total liabilities and net assets

228,173

Distributions per unit (including SCD)

7,353

Distributions per unit (excluding SCD)

6,623

Surplus cash distributions (SCD) per unit

730

Operating Revenues

Increased by 1,247 million yen from theprevious fiscal period due to thecontribution of rental revenues fromthe 2 properties acquired during the
fiscal period ended Aug. 31, 2022 andrent growth from existed properties.

5

228,173

Liabilities and net assets

4

POINT

Distributions

Current liabilities
POINT(Millions of yen)

FP Ended Aug.
2022

AssetsCurrent assets

POINT

Statement of Income (summary)Operating Expenses

Increased by 558 million yen from theprevious fiscal period due to an increasein depreciation and facility management
fee for 2 properties acquired during the
fiscal period ended Aug. 31, 2022
property taxes for assets acquired in
2021 that began to be expensed in the
period, and an increase in expenses forexisting properties due to utilities costs
and other factors.
POINT

6

Net Income

Increased by 439 million yen from theprevious fiscal period due to theincrease in operating revenue as
described in POINT 4, although nonoperating expenses increased due to anincrease in interest expenses andinvestment unit issuance expenses.

Mitsubishi Estate Logistics REIT Investment Corporation

7

HYBRID External Growth
Properties (to be) Acquired on Oct. 25, 2022
and Dec. 1, 2022.

■ Capability to develop logistics facilities independently based on
extensive land information■ Capability to co-develop facilities backed by MEC’s ability andcredibility for development

Sponsor-developed properties with expected
preferential negotiation right

Logicross

MJ Logipark

Brand of logistics facilities that MEC
develops throughout Japan

Properties which MEL acquired orintends to acquire from 3rd parties

Mitsubishi Estate
Occupancy
100%

Occupancy
100%

Logicross Yokohama Kohoku

Logicross Hasuda(16,000 m2) Completed in 2019

(79,000 m2) Completed in 2021

Occupancy
100%■ Capability to assess properties backed by experience in continuously
acquiring properties from 2001
■ Flexible and diversified property acquisition strategy by leveraging
the capability to manage real estate funds

MJIA-sourced and operated properties with expected
preferential negotiation rightBridge Fund / 3rd Party Bridge
Occupancy
100%

Occupancy
100%

LOGiSTA·Logicross Ibaraki Saito (A)(45% co-ownership interest)

LOGiSTA·Logicross Ibaraki Saito (B)(45% co-ownership interest)(108,000 m2) Completed in 2021

(31,000 m2) Completed in 2021

Occupancy
100%

CRE

PDP

PDP

PDP

Occupancy
100%

Occupancy
100%

Occupancy
100%

Occupancy
100%

MJ Logipark Higashi Osaka1

MJ Logipark Takatsuki 1

MJ Logipark Inzai 1

MJ Logipark Aisai 1*(10,000 m2) Completed in 1991

(20,000 m2) Completed in 2021

(20,000 m2) Completed in 2021

(10,000 m2) Completed in 2022

Pre-leased
100%

Commercial Area

Tsuzumigataki Sta.

CRE

PDP

PDP

Occupancy
100%

Location

Residential
Area

Occupancy
100%

Occupancy
100%

Occupancy
100%

r
Rive
Ina
ctric
e Ele ay
NosRailwn Line
oke
My

PDP

Residential
Area

Ikeda-Kibe Daini IC

Logicross Kasukabe

Logicross Funabashi

Logicross Zama Komatsubara

Logicross Osaka Katano

MJ Logipark Funabashi 2(39,000 m2) Completed in 2021

(23,000 m2) Completed in 2021

(44,000 m2) Completed in 2022

(20,000 m2) To be completed in 2022

(19,000 m2) Completed in 2022

NEW

Ikeda-Kibe Daiichi IC

MJ Industrial Park
Kawanishi (Land)(9,000 m2)

MJ Logipark Kakogawa 1*

MJ Logipark Daito 1*(33,000 m2) Completed in 2022

(11,000 m2) Completed in 2022

NEW

PDP (Partnership Development Program)● Development bridge scheme in which MJIA takes the initiative● MJIA leads the project in a manner that compensates the needs of partner companies such as developers, construction

companies and real estate brokers each other

Logicross Zama

Logicross Sagamihara

Logicross Misato*(178,000 m2) To be completed in 2023

(170,000 m2) To be completed in 2023

(53,000 m2) To be completed in 2025

Osaka Suminoe Shibatani Cold
Storage Project*(42,000 m2) To be completed in 2025

12 properties* Tentative nameNote: As of Oct. 14, 2022

8

● MEL can preferentially consider acquisition after the building is completed and leased up

Other multiple

708,000m

2

projects
Mitsubishi Estate Logistics REIT Investment Corporation

9

HYBRID Internal Growth▶

ESG Initiatives

Portfolio Summary▶

(As of Aug. 31, 2022)▶

Average occupancy since IPO

Fixed-term lease

Weighted average leaseremaining expiry

99% or more

100%

6.0 years

Update of website dedicated to ESG and publication of the second Sustainability Report
We updated the website dedicated to ESG and published the second Sustainability Report to explain to all
stakeholders our approach to ESG and related initiatives
Dedicated ESG website

Sustainability Report

Rent Revision Track Record(m2)

Rent unchanged

90,000

Upward rent revision

+0.2%

+6.5%

Blue letters：Average Rent Growth

+5.3%

+5.0%

60,000+3.1%
30,000

+2.2%

+1.8%
0

Aug. 31,2018(4th FP)+13.9%+9.5%+8.7%
Initiatives

Feb. 28,2019(5th FP)

Aug. 31,2019(6th FP)

Feb. 29,2020(7th FP)

Aug. 31,2020(8th FP)

Feb. 28,2021(9th FP)

Aug. 31,2021(10th FP)

Feb. 28,2022(11th FP)

Aug. 31,2022(12th FP)

Feb. 28,2023(13th FP)

Proactive Participation in CSR Activities
Participation in flower bed
maintenance activities ofcommunity near Logicross Atsugi

Initiatives for Climate Change

Register for Disaster Cooperation Building(LOGIPORT Hashimoto, LOGIPORT Osaka Taisho,
LOGIPORT Sagamihara, Logicross Nagoya Kasadera)

Energy Saving Initiatives

Financial Strategy▶

F inancial Highlights(As of Dec. 14, 2022)

10

LOGIPORT Hashimoto

Long-term Debt Ratio

Fixed Interest Rate Ratio

Average Remaining
Debt Duration

93.1%

91.3%

5.4 years

Average Debt Cost

Credit Rating (JCR)

Forecasted LTV(FP 2023/8)

0.49%

AA (Stable)

38.2%

Cleanup activities aroundour office

LOGIPORT Osaka Taisho

Renovation of cafeteria(LOGIPORT Sagamihara)

Installing insulated sandwich panels

Deploying motion sensors

Use of Renewable Energy
Installation of solar panels

LOGIPORT Kawasaki Bay

Introducing RE100(MJ Logipark Sendai 1)

Mitsubishi Estate Logistics REIT Investment Corporation

11

ESG Initiatives
Asset Management Fee Structure

Promotion of Green Portfolio

Introduced an asset management fee structure reflecting the performance of investment unit price for the purpose ofaligning interest with unitholders
Asset management fee Ⅰ(AUM-linked)

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

Asset management fee Ⅱ(Real estate profit-linked)

Adjusted NOI × 5.0% (upper limit)(Total Floor Area basis)

Adjusted net income before tax × net income before tax per unit × 0.001%(upper limit)
First among J-REITs
Asset management fee Ⅲ(unitholder interest-linked)

Investment unit price of MEL“Fee linked to Investment Unit Price”
Performance against TSE REIT Index ((a) - (b)) × market cap (for fiscal periodof 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)

TSE REIT Index (incl. dividends)

Ratio of Green Properties in
Portfolio

If MEL’s growth rate is
greater

84.7%
Logicross Fukuoka Hisayama

If MEL’s growth rate issmaller

Reference date (Previous period)

Reference date (Present period)

Continued Investment by the Sponsor(As of Aug. 31, 2022)

Approx.

4.1%

Cumulative Investment for Employees
Introduced cumulative investment for officers and employees of the Sponsor and MJIA with the aim of continuous increase inunitholder’s value and provision of benefits to officers and employees
12

Evaluate comprehensively environmental
performance of buildings, incl. reduction ofenvironmental burden and consideration
for scenery

14
properties

16
properties

Logicross Atsugi★★★★★

S Rank for real estate

Logicross Kobe Sanda★★★★

A Rank for real estate

Logicross Osaka★★★★★

S Rank for real estate

Logicross Nagoya Kasadera★★★★★

S Rank for real estate

Logicross Narashino★★★★★

S Rank for real estate

Logicross Yokohama Kohoku
LOGIPORT Sagamihara

LOGIPORT Osaka Taisho
LOGIPORT Kawasaki Bay

Capital Contribution Ratio

Evaluate and indicate energy conservation
performance of new and existing buildings

S Rank for real estate

LOGIPORT Hashimoto

Decrease fee

Comprehensive Assessment System for
Built Environment Efficiency (CASBEE)—

Logicross Atsugi II

Increase fee

Building-Housing Energy-Efficiency
Labeling System (BELS)LOGiSTA·Logicross Ibaraki Saito (A)LOGiSTA·Logicross Ibaraki Saito (B)MJ Logipark Kasugai 1
MJ Logipark Kazo 1
MJ Logipark Fukuoka 1★★★★★

(ZEB Ready)

S Rank for real estate—

B- Rank for Yokohama★★★★

S Rank for real estate★★

S Rank for real estate★★★★★

(ZEB Ready)
★★★★★

(ZEB)

★★★★★
★★★★★

(ZEB Ready)

S Rank for real estate
A Rank for new construction
A Rank for Osaka Mirai
A Rank for Osaka Mirai—

S Rank for real estate

★★★★★

—

★★★★★

(ZEB Ready)

S Rank for real estate
Mitsubishi Estate Logistics REIT Investment Corporation

13

ESG Initiatives
Progress toward Goal Achievements by FY2030

KPIs / Targets

CO2 emission intensity (Note 1)

30% reduction
Energy consumption
intensity (Note 1)

15% reduction
Water consumption
intensity (Note 1)

Not increase

KPI’s track record
10.0%
0.0%
-10.0%-20.0%-30.0%-40.0%

20.0%
10.0%
0.0%
-10.0%-20.0%-30.0%

20.0%
10.0%
0.0%
-10.0%-20.0%-30.0%

6.5%

FY 2017(Base year)

FY 2018-15.3%FY 2019

Initiatives to reduce environmental burden (Examples)
Achievementtarget-21.3%FY 2020-34.7%-30.0%FY 2021

FY 2030(Target year)-6.8%

FY 2018

Renewal of air-conditioning equipment

Promotion of appropriate temperature setting in air conditioner

9.5%

FY 2017(Base year)

FY 2019-9.7%

FY 2020

Achievementtarget-23.3%FY 2021-15.0%

Installation of solar panels

FY 2030(Target year)

Purchase of non-fossil fuel0.0%

Installation of water-saving toilets and sound-imitating devices

11.9%-18.9%-9.8%
FY 2017(Base year)

FY 2018

Installation of LED lighting and motion sensor

FY 2019

FY 2020-27.6%FY 2021

AchievementtargetWater saving with tenants

FY 2030(Target year)

Installation of smart watering systems
73.3%

80.0%

Waste recycling (Note 2)

70%

70.0%
60.0%
50.0%

66.6%

63.4%

62.3%

54.9%
FY 2017(Base year)

70.0%
AchievementtargetFY 2018

FY 2019

FY 2020

FY 2021

FY 2030(Target year)

Promotion of Recycling

Implementation of trash sorting procedures(Note 1) Achievement target: by FY2030, compared with FY2017(Note 2) Achievement target: by FY2030

14

Mitsubishi Estate Logistics REIT Investment Corporation

15

Portfolio▶

Portfolio Summary
No. of Properties▶

Total Acquisition Price

32 properties▶

Total Appraisal Value

Average Property Age

261.6 bn yen 296.7 bn yen

Appraisal NOI Yield

6.7 years

4.7%

Diversification Summary
Area Diversification(Based on acquisition price)
IHI Infrastructure Systems 7.9%
Nippon Express Company 4.4%
Not Disclosed
4.2%
MITSUI-SOKO LOGISTICS
4.1%
Nihon Realest
3.5%
Sankyu3.5%
LONCO JAPAN
3.1%
ORIX Auto
2.9%
Kimura Unity
2.8%
MITAKA SOKO
2.7%
Others60.7%

Main Portfolio

Change in Investment Unit Price(yen)

35,00030,000Sponsor-developed Properties /MJIA-sourced Properties(Based on acquisition price)

25,000400,000
20,000350,000

7.4%

15,000

10.7%

32.4%

300,000

54.5%
27.4%

67.6%

10,000250,000

5,000

200,000■ Tokyo Metropolitan Area
■ Osaka Metropolitan Area
■ Nagoya Metropolitan Area
■ Others0

Sept. 14,2017

■ Sponsor-developed Properties■ MJIA-sourced Properties▶

Feb. 28,
2018

Aug. 31,2018

Feb. 28,2019

Aug. 30,
2019

Acquisition price 11,851 million yen
Occupancy rate 100.0%
BELS ★★★★★
CASBEE S Rank for Real Estate

Breakdown by Units

Domestic entities
255 unitholders(2.6%)
Financial institutions
177 unitholders(1.8%)

Securities companies
14,831 units(3.3%)

Foreign entities
197 unitholders (2.0%)
Securities companies
20 unitholders(0.2%)LOGIPORT Kawasaki Bay(45% co-ownership interest)
Acquisition price 36,000 million yen
Occupancy rate 99.9%
BELS ★★★★★ (ZEB)CASBEE A Rank for New Construction▶

Feb. 26,
2021

Aug. 31,2021

Feb. 28,
2022

Aug. 31,2022

Foreign entities
99,010 units(22.0%)

Domestic individuals
and others
8,822 unitholders(93.1%)IR Calendar

Domestic individuals
and others
33,491 units(7.4%)(As of Aug. 31, 2022)

449,935

Domestic entities
27,916 units(6.2%)

12th fiscal period

Investment
in MEL by MEC

18,350 units (4.1%)

unitsFinancial institutions
274,687 units(61.0%)

13th fiscal period

Fiscal period ended August 31, 2022
Fiscal period ending February 28, 2023
(March 1, 2022 to August 31, 2022)(September 1, 2022 to February 28, 2023)
Announcement of results: October 14, 2022
Announcement of results: middle of April 2023 (to be announced)
Commencement of dividends payments: November 21, 2022
Commencement of dividends payments: late May 2023 (to be announced)
Announcement of
results for the period
ending February
Closing of the period ending February
Commencement of dividends payments for the period ending February

MJIA-Sourced Properties

Feb.
Aug.

16

Aug. 31,
2020

Breakdown by Unitholders

9,471
Logicross Narashino

Feb. 28,2020U nitholders Composition (As of Aug. 31, 2022)

unitholders

Acquisition price 9,838 million yen
Occupancy rate 100.0%
BELS ★★★★★ (ZEB Ready)
CASBEE S Rank for Real Estate

66,500(As of Aug. 31, 2022)

500,000

Sponsor-Developed Properties

Logicross Atsugi Ⅱ(unit)

478,500 yen

Trading Volume (Right)

Investment Unit Price (Left)

550,000

450,000

Tenant Diversification(Based on leased area)▶

Unitholder Information(As of Aug. 31, 2022. However, Properties (to be) Acquired during 13th FP are included)

MJ Logipark Osaka 1

MJ Logipark Funabashi 2

MJ Logipark Atsugi 1

Acquisition price 6,090 million yen
Occupancy rate 100.0%

Acquisition price 4,880 million yen
Occupancy rate 100.0%

Acquisition price 6,653 million yen
Occupancy rate 100.0%

Mar.

Apr.

Sept.

Oct.

Closing of the period ending August

May
Nov.
Announcement of
results for the period
ending August

Jun.

Jul.

Dec.

Jan.

Commencement of dividends payments for the period ending August
Mitsubishi Estate Logistics REIT Investment Corporation

17

Financial Section
BALANCE SHEETASSETS
Current assets:
Cash and deposits (Notes 3, 5)
Cash and deposits in trust (Notes 3, 5)
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other current assets
Total current assets
Fixed assets:
Property and equipment (Notes 4, 6)
Buildings in trust (Note 12)
Less: accumulated depreciation
Buildings in trust, net
Structures in trust (Note 12)
Less: accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Less: accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Less: accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property and equipment
Intangible assets (Note 4)
Software
Other intangible assets
Total intangible assets
Investments and other assets
Deferred tax assets (Note 13)
Long-term prepaid expenses
Security deposit
Total investments and other assets
Total fixed assets
Total assets
The accompanying notes are an integral part of these financial statements.

BALANCE SHEET, continued
Thousands of yen
As ofFebruary 28, 2022
August 31, 2022¥¥

5,380,624
6,836,890
38,45722,284
1,890
12,280,146¥

4,241,958
8,546,883
70,995
24,771
1,777,083
14,661,691

69,433,894(5,420,209)
64,013,685
2,415,040(150,817)
2,264,223
202,323(35,872)
166,450
33,200(7,116)26,083
101,608,148
168,078,592

88,264,585(6,468,958)
81,795,626
3,253,880(182,807)
3,071,073
210,718(47,632)
163,085
50,345(10,610)
39,735
128,389,735
213,459,256

1,085
541
1,626

135
491
626

14
33,33910,00043,354
168,123,573
180,403,720

11
42,022
10,00052,033
213,511,916
228,173,608¥

LIABILITIESCurrent liabilities:
Operating accounts payable
Short-term loans payable (Notes 5,11)
Long-term loans payable due within one year
Accounts payable
Distributions payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
OthersTotal current liabilities
Non-current liabilities
Investment corporation bonds (Note 5,11)
Long-term loans payable (Notes 5, 11)
Tenant leasehold and security deposits in trust (Note 5)
Total non-current liabilities
Total liabilities
NET ASSETS
Unitholders’ equity
Unitholders’ capital
Units authorized:
10,000,000 units as of February 28, 2022 and August 31,
2022
Units issued and outstanding:449,935 units as of August 31, 2022, 391,135 units as ofFebruary 28, 2022
Unitholders’ capital, gross
Deduction from unitholders’ capital
Unitholders’ capital, net
SurplusRetained earnings
Total surplus
Total unitholders’ equity
Total net assets (Note 10)
Total liabilities and net assets

Thousands of yen
As ofFebruary 28, 2022
August 31, 2022¥¥

189,127
3,310,000
12,754
4,632
647,119904
281,822876,14383
5,322,587¥

313,4822,700,000
3,310,000
12,075
5,065
745,555835
1,107,517
125,235
10,3378,330,104

2,000,000
53,064,000
3,712,060
58,776,060
64,098,648

2,000,000
74,064,000
4,156,439
80,220,439
88,550,544

115,191,501(1,427,014)
113,764,487

138,335,652(1,692,595)
136,643,057

2,540,583
2,540,583
116,305,071
116,305,071
180,403,720

2,980,006
2,980,006
139,623,063
139,623,063
228,173,608¥

The accompanying notes are an integral part of these financial statements.
18

Mitsubishi Estate Logistics REIT Investment Corporation

19

Financial Section
STATEMENT OF INCOME AND RETAINED EARNINGS

Operating revenues:
Operating rental revenues (Note 7)
Other rental revenues (Note 7)
Total operating revenues
Operating expenses:
Expenses related to property rental business (Note 7)
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
Compensation income for damage or loss
Reversal of cash distribution payable
Total non-operating income
Non-operating expenses:
Interest expenses
Interest expenses on Investment corporation bonds
Borrowing related expenses
Investment unit issuance expenses
Loss on reduction of tangible fixed assets
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

20

Thousands of yen
For the fiscal period ended
February 28, 2022
August 31, 2022¥¥

4,798,577
230,320
5,028,898¥

Yen

5,934,447
342,352
6,276,799

1,744,322
475,962
1,570
17,686
2,400
102,961
43,502
2,388,405
2,640,493

2,221,313
527,144
1,690
18,8602,400
136,11239,366
2,946,887
3,329,911

57
36,387
737
37,182

58
529
587

111,309
6,916
2,899
15,157
136,283
2,541,392
2,541,392
913
(3)
909
2,540,482
101
2,540,583

175,254
7,038
4,328
163,186
349,8072,980,692
2,980,692
844
3
847
2,979,844
162
2,980,006¥

Net income per unit (Note 14)

For the fiscal period ended
February 28, 2022
August 31, 2022
¥
6,495
¥

6,623

The accompanying notes are an integral part of these financial statements

Mitsubishi Estate Logistics REIT Investment Corporation

21

Financial Section
STATEMENT OF CHANGES IN NET ASSETSFor the fiscal period ended February 28, 2022

For the fiscal period ended August 31, 2022
Thousands of yen
Unitholders’ equity
Surplus

Unitholders’ capital
Deduction
Unitholders’fromUnitholders’capital, gross unitholders’capital, net
capitalUnappropriatedTotal surplus
retained earnings

Total
unitholders’equityTotal
net assets

Balance as of
September 1, 2021
(Note 10)

¥115,191,501 ¥ (1,162,998) ¥114,028,503¥2,381,722 ¥2,381,722¥116,410,225¥116,410,225

Change during the
fiscal period
Distributions in-(264,016)(264,016)

Surplus cash
distributions--

Net income-

Total change during
the fiscal period-

excess ofretained earnings

Balance as ofFebruary 28, 2022
(Note 10)22-

(264,016)(264,016)-(2,381,621) (2,381,621)(2,381,621)(2,381,621)--

2,540,482

2,540,482

2,540,482

2,540,482(264,016)(264,016)

158,861

158,861(105,154)(105,154)¥115,191,501 ¥ (1,427,014) ¥113,764,487-¥2,540,583 ¥2,540,583¥116,305,071

Thousands of yen
Unitholders' equity
Surplus¥116,305,071

Balance as of March
1, 2022(Note 10)
Change during the
fiscal period
Issuance of new
investment units
Distributions inexcess of retained
earnings
Surplus cash
distributions
Net income
Total change during
the fiscal period
Balance as of August
31, 2022(Note 10)Unitholders' capital
Deduction
fromUnitholders’
Unitholders’capital, net
capital, gross unitholders’ capital¥115,191,501

Unappropriatedretainedearnings¥(1,427,014) ¥113,764,487

Total unitholders' Total net assets
equityTotal
surplus¥2,540,583 ¥2,540,583¥116,305,071¥116,305,071

23,144,150-

23,144,150--

23,144,150

23,144,150-(265,580)(265,580)--(265,580)(265,580)---(2,540,421)(2,540,421)(2,540,421)(2,540,421)

-

-

-

2,979,844

2,979,844

2,979,844

2,979,844

23,144,150(265,580)

22,878,569

439,422439,422

23,317,992

23,317,992¥(1,692,595) ¥136,643,057¥2,980,006¥2,980,006¥139,623,063¥139,623,063¥138,335,652

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

Mitsubishi Estate Logistics REIT Investment Corporation

23

Financial Section
NOTES TO FINANCIAL STATEMENTS

STATEMENT OF CASH FLOWSCash flows from operating activities:
Income before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Interest expenses on investment corporation bonds
Reversal of cash distribution payable
Compensation income for damage or loss
Loss on reduction of tangible fixed assets
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 in trust
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
Repayments of long-term loans payable
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 fiscal period
Cash and cash equivalents at the end of the fiscal period(Note 3)Thousands of yen
For the fiscal period ended
February 28, 2022
August 31, 2022¥¥

2,541,392
887,512(57)
111,309
6,916(737(36,387)
15,157
4,954
594,077(306)
8,371(58,169)
1,595
83,773281,822(1,248)(44,444)
4,395,532
57(121,243)(835)
4,273,511¥

2,980,692
1,096,994
163,186(58)
175,2547,038(529)(32,537)(1,777,083)(2,487)(8,682)
37,838(679)
84,203(281,822)
231,374
137,379
2,810,080
58(168,059)(913)
2,641,165(175,529)
35,200(14,179)(154,509)(46,390,140)
475,849(31,470)(45,945,761)(1,400,000)
2,711,000(2,211,000)(2,381,210)(263,864)(3,545,074)
573,927
11,643,587

3,800,000(1,100,000)
21,000,000
22,980,964(2,539,745)(265,296)
43,875,923
571,327
12,217,514

12,217,514¥

12,788,842

1.
a)

ORGANIZATION AND BASIS OF PRESENTATION
Organization
Mitsubishi Estate Logistics REIT Investment Corporation (hereinafter “MEL”) was established on July 14, 2016 under the “Act on 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 externally managed by a licensed asset management company, Mitsubishi Jisho Investment
Advisors, Inc. (hereinafter the “Asset Manager” or “MJIA”). As of August 31, 2022, MEL held in the form of trust beneficiary interest in 24
properties (aggregate acquisition price: 216,242 million yen), and an occupancy rate remained 100% at a high level as of the end of thereporting 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, theJapanese Financial Instruments and Exchange Act and their related accounting regulations, and in conformity with accounting principles
generally accepted in Japan (hereinafter the “Japanese GAAP”), which are different in certain respects as to application 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 with Japanese 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, amountsof 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 and August of eachyear. 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 arevery liquid and realizable with a maturity of three months or less when purchased and that are subject to insignificant 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 calculatedby 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
Amortization of intangible assets, including intangible assets in trust, is calculated by the straight-line method over the estimated useful lives.

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

24

Mitsubishi Estate Logistics REIT Investment Corporation

25

Financial Sectiond)Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.

e)

f)

3.

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:

Investment Unit Issuance Expenses
Investment unit issuance expenses are recorded as expenses when incurred.
Revenue Recognition

Details of the main performance obligations related to revenues arising from contracts with customers of MEL and the normal timing at whichsuch performance obligations are satisfied (the normal timing for recognizing revenue) are as follows.
(1) Sale of Real Estate
Revenue from sales of real estate is recognized once a buyer, who is a customer, acquires control of a relevant real estate by fulfilling an

February 28, 2022
Cash and deposits¥

Cash and deposits in trust
Cash and cash equivalents

Thousands of yen
As of5,380,624

August 31, 2022¥

6,836,890¥

12,217,514

4,241,958
8,546,883¥

12,788,842

obligation of delivery stipulated in a contract for sales of real estate.
(2) Utilities Charge
Revenue from utilities charge is recognized by supplying electricity, water, etc. to lessee who is a customer based on a lease contract for realestate, etc. and an agreement incidental thereto.
With respect to revenue from utilities charge, in case MEL is determined as an agent, revenue is recognized at net amount by deducting anamount to be paid to another party from an amount received as electricity and gas charges supplied from the same other party.

g)Trust Beneficiary Interests of Real Estate
As to trust beneficiary Interests of real estate, all accounts of assets and liabilities for assets in trust as well as the related income generated
and expenses incurred from assets in trust, 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 intrust, buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, land in trust and tenantleasehold and security deposits in trust.

h)Taxes on Property and Equipment

With respect to property taxes and other taxes including city planning taxes and depreciable asset tax, of a tax amount assessed anddetermined, the amount corresponding to the relevant fiscal period is accounted for as rental expenses.
Of the amounts paid for the acquisitions of real estate properties or trust beneficiary interests of real estate, an amount equivalent to property
taxes is capitalized as part of the acquisition costs of the relevant property instead of being charged as an expense.

26

Mitsubishi Estate Logistics REIT Investment Corporation

27

Financial Section
4.

PROPERTY
4.
PROPERTY
AND EQUIPMENTAND EQUIPMENT
AND INTANGIBLE
AND INTANGIBLEASSETS ASSETS
PropertyProperty
and equipment
and equipment
and intangible
and intangible
assets asassetsof Augustas of31,
August202231,are2022
as follows:
are as follows:investment units, comprehensively taking into account the financial environment, MEL’s capital structure and the impact on existing
unitholders.
MEL also may invest surplus funds in bank deposits etc. for the purpose of efficiency of fund operations. MEL enters into derivativetransactions solely for the purposes of reducing risks of rising interest rates related to financings and other types of risks. There was no

Thousands
Thousandsof yen of yen
Depreciation
Depreciation
IncreaseIncrease
DecreaseDecrease
Balance Balance
as of as of
Net balance
Net asbalance as
Balance Balance
as of as ofDepreciation
Depreciation
Type of assets
Type of assets
during theduring theAugustof Augustof31,
Remarks
AugustAccumulated
31, Accumulated
August31, Remarks
during theduringthe 31,March 1,March2022 1, 2022
for the fiscal
for the fiscal
fiscal period
fiscal period2022 2022
2022 2022
fiscal period
fiscal period
depreciation
depreciation
period period
BuildingsBuildingsinin¥ 69,433,894¥ 69,433,894¥ 18,830,691¥ 18,830,691¥¥- ¥ 88,264,585- ¥ 88,264,585¥ 6,468,958¥ 6,468,958¥ 1,048,749¥ 1,048,749¥ 81,795,626¥ 81,795,626(Note) (Note)trust trust
Structures
Structuresinin
2,415,040
2,415,040838,839 838,839
3,253,880
3,253,880182,807 182,807
31,990 31,9903,071,073
3,071,073(Note) (Note)trust trust
Machinery
Machinery
andand
PropertyProperty
andandequipment
equipment
inin 202,323 202,323 8,395 8,395
210,718
210,718 47,632 47,632
11,760 11,760 163,085 163,085
equipment
equipment
trust trust
Tools, furniture
Tools, furnitureand fixturesand infixtures in 33,200 33,200 17,145 17,145- 50,345 50,345 10,610 10,6103,493 3,493 39,735 39,735
trust trust
Land in trust
Land in trust
101,608,148
101,608,148
26,781,587
26,781,587- 128,389,735- 128,389,735
128,389,735
128,389,735(Note) (Note)
Total property
Total property
and equipment
and equipment¥173,692,607¥173,692,607¥ 46,476,658¥ 46,476,658¥¥- ¥220,169,265- ¥220,169,265¥6,710,009¥6,710,009¥1,095,994¥1,095,994¥213,459,256¥213,459,256
SoftwareSoftware ¥
9,500
¥
9,500
¥
¥ - ¥ - ¥- ¥ - 9,500
¥
9,500
¥
9,365
¥
¥9,365 950
¥
¥950
¥ 135
135
Intangible
Intangible
Other intangible
Other intangible
assets assets
1,000 1,000- 1,000 1,000 508
508 5050
491-491
assets assets
Total intangible
assets assets ¥10,500¥¥ - ¥ - ¥- ¥ - 10,500¥
10,500
¥
9,873
¥
9,873
¥
1,000
¥
1,000
¥
¥ 626
626
Total intangible¥
10,500-derivative transactions during the reporting period.
(2) Type of financial instruments, related risks and risk management system
Bank loans and investment corporation bonds are mainly made to procure funds for acquisition of properties, repayment of interest
bearing debt. Although MEL is exposed to liquidity risks upon repayment, by diversifying the maturities and lending institutions, securingliquidity of cash in hand and managing such liquidity risks by preparing and monitoring cash flows projection, such risks are maintained
under control. In addition, some loans bear floating interest rates and are exposed to potential risks of rising interest rates. MEL attempts tomitigate such risks on its operations by maintaining a conservative loan to value ratio and increasing the ratio of long-term fixed interest rateloans.
The security deposits which MEL has received from the tenants are exposed to liquidity risk due to cancelation of lease agreement before
the maturity date. In the case of trust beneficiary interest in real estate, MEL secures safety by 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 ensures safety by accurately tracking the timing of the tenant move-ins and outs andanticipating the fund demand utilizing historical data.
(3) Supplemental explanation regarding the estimated fair values of financial instruments
The fair value of financial instruments is calculated based on certain assumptions. Accordingly, the fair value of financial instruments may
differ if different assumptions are used.

(Note)
The amountof increaseduringfiscalisperiod
is primarily
attributable
to the acquisitionof 2 properties.
(Note) The
amountof increaseduring the
fiscalthe
periodprimarily
attributable
to the acquisitionof 2 properties.
5.
a)

FINANCIAL
5. FINANCIAL
INSTRUMENTS
INSTRUMENTS
Overviewa) Overview(1) Policy(1) forPolicy
financialfor financial
instruments
instruments
MEL procures
MEL procures
funds forfunds
the acquisition
for the acquisitionof assetsofand
assetsrepayment
and repayment
of debt mainlyof debtthroughmainly throughbank loans,bankissuanceloans, issuanceof investment
of investment
corporation
corporation
bonds orbonds
the issuanceor the issuanceof new investmentof new investment
units. units.
In borrowing
In borrowing
funds orfunds
issuance
or issuanceof investment
of investment
corporation
corporation
bonds, MEL
bonds,
takes
MEL
consideration
takes consideration
in interestin rateinterest
trend,
ratedebt
trend,
cost,
debt
floating
cost, orfloating or
fixed interest
fixed rate,interest
borrowingrate, borrowing
or issuanceor issuance
period andperiodrepayment
and repayment
or redemption
or redemption
date. date.
In the caseIn theof borrowing,case of borrowing,
the lendertheshalllenderbe limited
shall beto
limitedqualified
to qualified
institutional
institutional
investorsinvestors
as stipulated
as stipulated
in Articlein2,Article
Paragraph2, Paragraph
3, Item of3,theItem of the
FinancialFinancial
Instruments
Instruments
and Exchange
and Exchange
Act of JapanAct of(limited
Japan to(limited
institutional
to institutional
investorsinvestorsprescribedprescribedin Articlein67-15
Articleof67-15
the Taxationof the Taxation
Special Special
Measures
MeasuresLaw), withLaw),
in principlewith in principle
no collateral
no collateral/ no guarantee.
/ no guarantee.
However,However,
MEL mayMEL
providemay assets
provideasassets
collateral
as collateralin considerationin considerationof financing
of financing
environment
environment
and economicand economic
conditions.
conditions.
In addition,
In addition,in order into orderflexibly
toprocureflexibly the
procurenecessary
the necessary
funds related
fundstorelated
MEL'stooperation
MEL's operationsuch as such as
propertyproperty
acquisitionacquisition
and repayment
and repayment
debt financing,debt financing,
MEL mayMEL
enter
may
into
enter
the into
overdraftthe overdraft
agreements,
agreements,
commitmentcommitmentline agreements
line agreements
ororconcludeconclude
the reserved
the reserved
agreements.
agreements.
In addition,
In addition,
aiming foraiminglong-term
for long-termand stable
andgrowth,stable MEL
growth,willMEL
issuewill
additional
issue additional
investment
investment
units whileunits
payingwhileduepayingregardduetoregard
the dilution
to the ofdilution of28b)

Estimated fair value of financial instruments
The book value, fair value and differences between the values as of February 28, 2022 are as follows: Financial instruments for “Cash anddeposits”,” Cash and deposits in trust” and “Short-term loans payable” are excluded from the following table due to the short maturities andthe book value of these instruments which is deemed a reasonable approximation of the fair value. “Tenant leasehold and security deposits
in trust” is also excluded from the following table since it is immaterial.
Thousands of yen
Book value

Difference¥(2)

Investment corporation bonds

2,000,000

1,973,800(3)Long-term loans payable

53,064,000

53,888,893(Note1) Methods to determine fair values of financial instruments¥

3,310,000¥

Long-term loans payable due within one year

Total liabilities¥

Fair value (Note 1)(1)

58,374,000¥

3,316,298

59,178,991

6,298(26,200)
824,893¥804,991(1) Long-term loans payable due within one year and (3) 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

Mitsubishi Estate Logistics REIT Investment Corporation

29

Financial Section
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 fairvalue is approximately equal to the book value. Thus, the book value is used

(2) Investment corporation bonds
The fair value is determined based on the reference values published by the Japan Securities Dealers Association.

(2) Investment corporation bonds(Note 2) Repayment schedule for debt after August 31, 2022

The fair value is determined based on the reference values published by the Japan Securities Dealers Association.

Thousands of yen
As of August 31, 2022

(Note2) Repayment schedule for debt after February 28, 2022

Due within one Due after one to Due after two to Due after three Due after fouryear
two years
three years
to four years
to five years

Thousands of yen
As of February 28, 2022
Due within one Due after one to Due after two to Due after three Due after fouryear
two years
three years
to four years
to five years
Long-term loans payable due
within one year
Investment corporationbonds
Long-term loans payableTotal¥ 3,310,000

¥

-

-

¥

-

-

¥

-

-

¥

Long-term loans payable due

Due after five
years

-

¥

-

within one year
Investment corporation
bonds

-

Long-term loans payable
Total

2,000,000-

6,540,000

4,550,000

6,320,000

5,010,000

30,644,000¥ 3,310,000¥ 6,540,000¥ 4,550,000¥ 6,320,000¥ 5,010,000¥32,644,000¥ 3,310,000
-

¥

-

¥

-

¥

-

¥

-

Due after fiveyears¥

2,000,000-

6,540,000

5,900,000

5,970,000

7,910,000

47,744,000¥ 3,310,000¥ 6,540,000¥ 5,900,000¥ 5,970,000¥ 7,910,000¥49,744,000

The book value, fair value, and differences between the values as of August 31, 2022 are as follows: Financial instruments for “Cash anddeposits”,” Cash and deposits in trust”, and “Short-term loans payable” are excluded from the following table due to the short maturities andthe book value of these instruments which is deemed a reasonable approximation of the fair value. “Tenant leasehold and security deposits intrust” is also excluded from the following table since it is immaterial.
Thousands of yen
Book value(1)Long-term loans payable due within one year(2)

Investment corporation bonds(3)Long-term loans payable
Total liabilities(Note 1) Methods to determine fair values of financial instruments¥

3,310,000

Fair value (Note 1)

Difference¥¥

2,000,000

1,950,000

79,374,000¥

80,287,357

1,351(50,000)

75,026,006

74,064,000¥

3,311,351

962,006¥

913,357(1) Long-term loans payable due within one year and (3) 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 fairvalue is approximately equal to the book value. Thus, the book value is used.

30

Mitsubishi Estate Logistics REIT Investment Corporation

31

Financial Section
6.

INVESTMENT AND RENTAL PROPERTIES7.

MEL owns logistics facilities for leasing for the purpose of earning rental income. The book value, changes during the reporting period, and fairvalue of the properties are as follows:
Thousands of yen
For the fiscal period ended
February 28, 2022
August 31, 2022
Book value (Note 1)
Balance at the beginning of the fiscal period¥

Changes during the fiscal period (Note 2)

168,848,938¥(770,346)

168,078,592
45,380,664

Balance at the end of the fiscal period¥

168,078,592¥

213,459,256

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

191,520,000¥

246,147,500(Note 1) Book value is measured at deducting accumulated depreciation from acquisition cost.
(Note 2) The increase for the fiscal period ended February 28, 2022 was primarily a result of the recognition of CAPEX which amounted 131,323
thousand yen. The decrease was primarily a result of the recognition of depreciation, which amounted to 886,512 thousand yen. The
increase for the fiscal period ended August 31, 2022 was primarily a result of acquiring Real estate beneficiary interests for a total of
46,294,212 thousand yen. The decrease was primarily a result of the recognition of depreciation, which amounted to 1,095,994
thousand yen.
(Note 3) The fair value at the end of each fiscal period is determined based on appraised value provided by independent real estate appraisers.
Income and loss in connection with investment and rental properties are disclosed in “7. PROPERTY-RELATED REVENUES AND EXPENSES.”PROPERTY-RELATED REVENUES AND EXPENSES

The following table summarizes the revenues and expenses generated from property leasing activities for the fiscal periods ended February
28, 2022 and August 31, 2022.
Thousands of yen
For the fiscal period ended
February 28, 2022
August 31, 2022
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
OthersTotal rental expenses
C. Operating income from property leasing (A-B)

32¥

4,606,378
192,198
4,798,577¥

151,770
78,550230,320
5,028,898¥¥

212,078
407,631
7,202
62,387
144,931886,5123,710
19,867¥

275,605
475,490
10,631
105,563
231,154
1,095,994
4,047
22,826¥¥

1,744,322
3,284,575¥¥

2,221,313
4,055,485

¥
¥
¥
¥

¥

¥
¥

5,682,416
252,030
5,934,447
220,513
121,839
342,352
6,276,799

Mitsubishi Estate Logistics REIT Investment Corporation

33

Financial Section
8.

a)(1) Balance of contract assets and contract liabilities, etc.

REVENUE RECOGNITION
Breakdown information on revenue from contracts with customers
The previous period (the fiscal period from September 1, 2021 to February 28, 2022)
Thousands of yen
Revenue from contracts withcustomers
Revenue from utilities charge¥

Net sales to external customers

151,770

Others¥151,770

Total¥

151,770

4,877,127¥

5,028,898(Note1) Rental business revenue, etc. subject to ASBJ Statement No. 13, "Accounting Standard for Lease Transactions," and transfers of real estate,etc. subject to ASBJ Statement No. 15, "Practical Guidance on Accounting Practical Guidelines for Real Estate Securitization Utilizing Special
Purpose Companies," are not included in the above amounts because they are exempt from the revenue recognition accounting standard.
Revenues from contracts with major customers consist of revenues from utilities.
(Note2) Received utilities cost is the amount recorded as revenues based on the supply of electricity, water, etc. to lessees who are customers, basedon the lease agreements for real estate, etc. and associated agreements.
The reporting fiscal period (the fiscal period from March 1, 2022 to August 31, 2022)
Thousands of yen
Revenue from contracts withcustomers
Revenue from utilities charge¥

Others

Net sales to external customers

220,513

¥

Total

¥

220,513Claims generated from contracts with customers(balance at beginning of the fiscal period)

Thousands of yen
For the fiscal period from For the fiscal period from
September 1, 2021 toMarch 1, 2022 toFebruary 28, 2022
August 31, 2022¥

Claims generated from contracts with customers(balance at end of the fiscal period)

32,553¥29,511

29,511

59,153Contract assets (balance at beginning of the fiscal period)--

Contract assets (balance at end of the fiscal period)--

Contract liabilities (balance at beginning of the fiscal period)-

Contract liabilities (balance at end of the fiscal period)

¥

-

¥

-

(2) Transaction price allocated to the remaining performance obligations
Not applicable.
Received utilities cost is recognized at the amount that MEL has the right to claim in accordance with Paragraph 19 of the “AccountingStandard Guidance for Revenue Recognition”, as MEL is entitled to receive from the customers the amount of consideration that directly
corresponds to the value to the tenants who are the customers for the portion of performance completed by the end of the period.
Accordingly, MEL has applied the provisions of paragraph 80-22(2) of the "Accounting Standard for Revenue Recognition" and has notincluded them in the notes to the transaction price allocated to its remaining performance obligations.

220,513
6,056,286¥

6,276,799(Note1) Rental business revenue, etc. subject to ASBJ Statement No. 13, "Accounting Standard for Lease Transactions," and transfers of real estate,etc. subject to ASBJ Statement No. 15, "Practical Guidance on Accounting Practical Guidelines for Real Estate Securitization Utilizing Special
Purpose Companies," are not included in the above amounts because they are exempt from the revenue recognition accounting standard.
Revenues from contracts with major customers consist of revenues from utilities.
(Note2) Received utilities cost is the amount recorded as revenues based on the supply of electricity, water, etc. to lessees who are customers, basedon the lease agreements for real estate, etc. and associated agreements.

34b)

Basic information for understanding revenue from contracts with customers
As stated in “2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES”.

c)

Information on relationship between fulfillment of performance obligations based on contracts with customers and cash flow generated
from said contracts, and on amount and fiscal period of revenues expected to be recognized in the following fiscal period or thereafter
from contracts with customers existing at the end of the current fiscal period.

Mitsubishi Estate Logistics REIT Investment Corporation

35

Financial Section
9.

LEASES

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

Due within one year
Due after one year

February 28, 2022¥
8,951,097
55,564,422

¥

Total

¥

¥

64,515,520

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 new units isdesignated as stated capital. The Investment Corporation is required to maintain net assets of at least 50,000 thousand yen as required by theInvestment Trust Law.

August 31, 2022
10,998,039
61,448,292b)Distributions
Yen
For the fiscal period ended

72,446,331

February 28, 2022
I. Unappropriated retained earnings
II. Distributions in excess of retained earnings
Deduction from unitholders’ capital
III. Distributions(Distributions per unit)
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

August 31, 2022

¥ 2,540,583,889¥¥ 2,980,006,749

265,580,665

328,452,550

2,806,002,490(7,174)

3,308,372,055(7,353)

2,540,421,825

2,979,919,505(6,495)(6,623)

265,580,665

328,452,550

(679)

(730)

162,064¥

87,244

Pursuant to the “Policy on the Distribution of Funds” as defined in Article 35, Paragraph 1 of the Articles of Incorporation, the amount of
distributions shall be the amount which does not exceed the amount of profits but exceeds 90% of the distributable profit as defined in Article
67-15 of the Special Taxation Measures Act. Based on the policy, MEL declared distribution amounts of 2,540,421,825 yen and 2,979,919,505
yen for the fiscal periods ended February 28, 2022 and August 31, 2022, respectively. These amounts were equivalent to the maximum integral
multiples of number of investment units issued and outstanding as of the end of each fiscal period. Based on the distribution policy as definedin Article 35, Paragraph 2 of the Articles of Incorporation, MEL shall make Surplus Cash Distributions (SCD), defined as distributions in excess ofretained earnings, as a return of unitholders’ capital, each fiscal period on a continuous basis.
Accordingly, for the fiscal period ended February 28, 2022, MEL declared SCD of 265,580,665 yen, as a return of unitholders’ capital, which
was the amount equivalent to approximately 30.0% of depreciation expense. For the fiscal period ended August 31, 2022, MEL declared SCD of
328,452,550 yen, as a return of unitholders’ capital, which was the amount equivalent to approximately 30.0% of depreciation expense.

36

Mitsubishi Estate Logistics REIT Investment Corporation

37

Financial Section
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 table summarizes the shortterm loans payable and long-term loans payable as of February 28, 2022 and August 31, 2022.

Classification

Repayment date

Short-term loans payable

March 1, 2023 (Note 1)

Weighted-averageinterest rate
0.1523%

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

September 14, 2022

0.3575%September 14, 2022

0.2400%Total Long-term loans payable due within one year
Long-term loans payable

September 2, 2023
September 14, 2023

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

October 9, 2026

0.2100%0.2000%0.2663%0.2000%0.4675%0.3950%0.2160%0.2413%0.2200%0.3125%0.2500%0.5075%0.4538%0.2600%March 1, 2027
March 9, 2027
September 14, 2027

0.2500%0.3663%0.5500%

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

38

Thousands of yen
As ofFebruary 28, 2022

August 31, 2022

¥

-

¥

2,700,000-

¥

-

¥

2,700,000-¥

430,000
2,050,000
830,000¥

430,000
2,050,000
830,000¥

3,310,000¥

3,310,000¥

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
500,000
710,000
500,000
2,400,000
400,000
900,000
1,340,000
1,340,000
880,000¥

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
1,000,000
500,000
500,000
710,000
500,000
2,400,000
400,000
2,000,000
900,000
1,340,000
1,340,000
880,000

Classification

Repayment date

Weighted-averageinterest rate

October 9, 2027
March 1, 2028
March 9, 2028

0.2400%0.4575%0.4313%

March 19, 2028
September 1, 2028

0.3963%0.4238%September 14, 2028

0.5750%

October 10, 2028
March 1, 2029

0.3738%0.4200%0.5263%

March 1, 2029

0.5263%

March 9, 2029

0.5013%

March 19, 2029
September 1, 2029
September 14, 2029
September 30, 2029
March 1, 2030
March 9, 2030
August 30, 2030

0.4663%0.4182%0.4400%0.4900%0.5662%0.5549%0.4683%0.5000%March 1, 2031

0.6340%March 7, 2031
March 1, 2032

0.6176%0.7025%

Thousands of yen
As ofFebruary 28, 2022
880,000
1,250,000
900,000
800,000
800,000
900,000
500,000
830,000
807,000
1,256,000
720,000
750,000
500,000
500,000
500,000
1,000,000
1,750,000
1,491,000
4,000,000
1,050,000
2,000,000
500,000
500,000
1,000,000-

August 31, 2022
880,000
1,250,000
500,000
900,000
800,000
800,000
900,000
500,000
830,000
807,000
1,256,000
720,000
750,000
500,000
500,000
1,000,000
1,000,000
500,000
500,000
1,000,000
500,000
500,000
500,000
1,000,000
1,750,000
1,491,000
4,000,000
1,000,000
1,050,000
2,000,000
500,000
500,000
1,000,000
500,000
1,000,000
2,000,000
1,000,000
1,000,000
1,000,000

Mitsubishi Estate Logistics REIT Investment Corporation

39

Financial Section

Classification

Repayment date

March 9, 2033

Weighted-averageinterest rate

February 28, 2022

Total

August 31, 2022

1,000,000

0.5000%0.7125%0.6500%Total long-term loans payable

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

Thousands of yen
As ofportion of the deferred tax assets and liabilities as of February 28, 2022 and August 31, 2022 are as follows:

1,000,000
1,000,000
1,000,000
2,000,000
1,000,000¥

53,064,000¥

74,064,000¥

56,374,000¥

80,074,000

Thousands of yen
As ofEnterprise tax payable
Total deferred tax assets
Net deferred tax assets

The stated interest rate is the weighted average interest rate during each fiscal period. The redemption schedules for long-term loans
payable subsequent to February 28, 2022 and August 31, 2022 are disclosed in “5. FINANCIAL INSTRUMENTS”.
(Note 1) The short-term loans payable of 1,100,000 thousand yen was repaid on April 1, 2022, in a short-term loan payable of 3,800,000
thousand yen which MEL borrowed on March 1, 2022.
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 as of February
28, 2022 and August 31, 2022

Maturity
Classification
Total Short-term investment corporation bonds
Series 1

April 14, 2036
Total Long-term investment corporation bonds

Interest rate
0.7000%Thousands of yen
As ofFebruary 28, 2022
August 31, 2022
¥

-

¥

-

¥

2,000,000¥

2,000,000¥

2,000,000¥

2,000,000

12. REDUCTION ENTRY

August 31, 2022¥¥¥

August 31, 2022
¥

11
11
11

¥

Reconciliations of major items that caused differences between the statutory tax rate and effective tax rate with respect to pre-tax income
reflected in the accompanying statements of income for the fiscal periods ended February 28, 2022 and August 31, 2022 are as follows:

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

For the fiscal period ended
February 28, 2022
August 31, 2022
31.46%
31.46%(31.45%)
0.02%
0.04%

(31.45%)
0.02%
0.03%

MEL has a policy of making cash distributions of earnings in excess of 90% of distributable income as defined in the Special 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 tax deductible distribution as defined in theSpecial Taxation Measures Act.

The following table summarizes per unit information for the fiscal periods ended February 28, 2022 and August 31, 2022.

Thousands of yen
As ofFebruary 28, 2022¥
31,220¥22,16614
14
14

14. PER UNIT INFORMATION

The amount of reduction entry of property and equipment as of February 28, 2022 and August 31, 2022 are as follows:

Buildings in trust
Structures in trust

February 28, 2022¥

31,22022,166

Net income per unit
Basic net income per unit
Weighted average number of units outstanding

Yen
For the fiscal period ended
February 28, 2022
August 31, 2022¥

6,495
391,135¥

6,627
449,600

Net assets per unit¥
297,352¥
310,318(Note) Basic net income per unit is based on the weighted average number of units issued and outstanding during the fiscal period.
Diluted earnings per unit and related information are not disclosed as no dilutive units were outstanding.

40

Mitsubishi Estate Logistics REIT Investment Corporation

41

Financial Section
15. TRANSACTION WITH RELATED PARTIESa) Transactions and account balances with the parent company and major unitholders
There were no transactions and account balances for the fiscal periods ended February 28, 2022 and August 31, 2022.
b)Transactions and account balances with affiliates
There were no transactions and account balances for the fiscal periods ended February 28, 2022 and August 31, 2022.

c)

Transactions and account balances with companies under common control
There were no transactions and account balances for the fiscal periods ended February 28, 2022 and August 31, 2022.

d)

Transactions and account balances with board of directors and individual unitholders
There were no transactions and account balances for the fiscal periods ended February 28, 2022 and August 31, 2022.

16. SEGMENT AND RELATED INFORMATION(For the fiscal periods ended February 28, 2022 and August 31, 2022)a) Segment informationb)

17. SIGNIFICANT SUBSEQUENT EVENTSIssuance of New Investment Units
MEL issued new investment units based on the resolution made by the board of directors on October 14, 2022 and October 19, 2022
and the payment was completed on October 25, 2022 and November 22, 2022 for the issuance of new investment units through public
offering and third-party allotment, respectively.
<Issuance of New Investment Units through Public Offering>Number of units issued: 51,000 units
Issue price: 394,875 yen per unit
Total amount issued: 20,138,625,000 yen
Issue amount: 381,996 yen per unit
Net proceeds: 19,481,796,000 yen
Payment date
: October 25, 2022
<Issuance of New Investments Units through the Third-Party Allotment>
Number of units issued: 2,550 units
Issue amount: 381,996 yen per unit
Net proceeds: 974,089,800 yen
Payment date
: November 22, 2022
Allotee: Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

Disclosure is omitted because the real estate leasing business is MEL’s sole business and it has no reportable segment subject to disclosure.
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 thestatement 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 the amount 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 thestatement of income and retained earnings.

42

Mitsubishi Estate Logistics REIT Investment Corporation

43

Financial Section
Independent Auditor’s Report

The Board of Directors
Mitsubishi Estate Logistics REIT Investment Corporation

In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles
generally accepted in Japan, matters related to going concern.
The Supervisory Director is responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements

OpinionWe have audited the accompanying financial statements of Mitsubishi Estate Logistics REIT
Investment Corporation (the Company), which comprise the balance sheet as at August 31,
2022, and the statements of income, and retained earnings, changes in net assets, and cash flows
for the six-month period then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at August 31, 2022, and its financial performance and its
cash flows for the six-month period then ended in accordance with accounting principles
generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Other Information
The other information comprises the information included in the Semi-Annual Report that
contains audited financial statements but does not include the financial statements and our
auditor’s report thereon. Management is responsible for preparation and disclosure of the otherinformation. The Supervisory Director is responsible for overseeing the Company’s reporting
process of the other information.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Supervisory Director for the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
・ Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation in accordance with accounting
principles generally accepted in Japan.
We communicate with the Executive Director regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide the Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.

Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
44

Mitsubishi Estate Logistics REIT Investment Corporation

45

Financial Section
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Ernst & Young ShinNihon LLC
Tokyo, Japan
November 29, 2022

/s/ Koichi Yanai
Koichi Yanai
Designated Engagement Partner
Certified Public Accountant/s/ Teruyo Okubo
Teruyo Okubo
Designated Engagement Partner
Certified Public Accountant

46

Mitsubishi Estate Logistics REIT Investment Corporation

47

Other Information
Remuneration Policy for the Asset Management Company’s Directors, Corporate Auditors and Employeesi) Remuneration for Asset Management Company’s Directors

Remuneration for Asset Management Company’s Directors and Corporate Auditors
April 1, 2021 to March 31, 2022

 Remuneration decision process. Remuneration for directors is determined by the representative director upon
consultation with the Board of Directors within the total remuneration limit for directors approved at the General
Meeting of Shareholders.

Directors

 Remuneration amount. Remuneration of each director is determined by the representative director based on the
remuneration table, which assigns responsibilities and position to each director. The responsibilities and position ofeach director are determined by the representative director through comprehensive assessment that includes eachindividual’s abilities and experience.

ii) Remuneration for Asset Management Company’s Corporate Auditors
 Remuneration decision process. Remuneration for corporate auditors is determined at the General Meeting of
Shareholders.
 Remuneration amount. Remuneration of each corporate auditor is determined through comprehensive assessment that
includes each individual’s abilities and experience.
 Bonus. No bonus will be paid to corporate auditors.

iii) Remuneration for Asset Management Company’s Employees

Remuneration

Number of
person(s)remunerated

Remuneration

Number of
person(s)remunerated

Remuneration

6¥68,050,000

1¥1,200,000

7¥69,250,000

Notes: 1. Remuneration for directors is as per the Companies Act of Japan, Article 361, Paragraph 1, Item 1.
2. Mitsubishi Jisho Investment Advisors, Inc. had four directors (one director served as a part-time role) and two corporate auditors (part-time) as of February 28,
2022.

Remuneration for Asset Management Company’s Employees
April 1, 2021 to March 31, 2022

 Remuneration system based on skill development. The Asset Management Company’s salary system is based on thelevel of each employee’s professional skills. In order to motivate employees to improve their performance and develop
their professional skills, the Asset Management Company has (i) a performance-based bonus system that rewards theemployee based on the performance of the Asset Management Company as well as the employee’s performance taking
into account the employee’s contribution to the performance of the Asset Management Company and the employee’s
work ethic, and (ii) a performance evaluation and promotion system that evaluates once a year whether to increase theemployee’s remuneration and/or to promotion the employee, in each case based on the employee’s performance andwork ethic.

 Evaluation of employees based on ESG criteria. All employees are evaluated once a year on their ESG awareness,
including compliance and risk management awareness, and the results of this evaluation are taken into consideration
when determining salary increases.

 Retirement allowance program. The Asset Management Company offers a defined contribution pension plan as well
as a retirement plan, with an aim to create a comfortable workplace where employees will want to work for a long
period time.

 Executive officer’s remuneration. Remuneration for executive officers is determined by the representative director inaccordance with the policy for executive officers.

48

Total

Number of
person(s)remunerated
Remuneration basedon resolutions of theGeneral Meeting of
Shareholders

 Bonus. Depending corporate performance, bonuses may be paid to directors upon resolution of the Board of Directors.

Corporate auditors

All employees (Note 1)
Remuneration
Number of employees

Remuneration based oncompensation rules
Note:

98

Total

Fixed

Variable (Note 2)¥905,119,333¥605,005,176¥300,114,157

1. Total number of employees of the Asset Management Company who received remuneration during the fiscal year, excluding 15 employees dispatched fromseveral companies, to which the Asset Management Company paid ¥160,179,998 in total for their services for the fiscal year.
2. Variable remuneration refers to bonuses paid to employees, as described in “iii) Remuneration for Asset Management Company’s Employees” above.

There are potential conflicts of interest between MEL and the Asset Management Company with respect to remuneration for the AssetManagement Company’s directors, corporate auditors and employees. We believe that the above remuneration policy mitigates suchpotential conflicts. In addition, the Asset Management Company has adopted an internal set of rules that apply to all related-party
transactions, such as transactions between MEL and the Asset Management Company. These rules require strict compliance by the AssetManagement Company with laws and regulations regarding related-party transactions. They also contain specific procedures to befollowed in the event of a transaction that involves a related party, in order to implement arm’s length terms.

Mitsubishi Estate Logistics REIT Investment Corporation

49

Other Information
Information Required under Article 22(2)(d) of the EU Alternative Investment Fund Managers
Directive (AIFMD)

Risk Factors
An investment in MEL’s units involves significant risks. The principal risks with respect to investment in MEL are as follows.

 Material Changes in Information Listed in Article 23 of AIFMD during the Financial Period Covered by the Report(Fiscal period ended August 31 2022 (March 1, 2022 to August 31, 2022))

The principal risks with respect to investment in MEL are as follows:

None.






















50

Any adverse conditions in the Japanese economy and the rest of the world could adversely affect MEL’s business and resultsof operations;
MEL’s strategy of mainly investing in logistics facilities may entail risks uncommon to other J-REITs that invest in a
broader range of real estate or real estate-related assets;
Scaling back of monetary policies by the United States, Japan and other major countries may result in increased market
interest rates in Japan and reduced cash distributions;
MEL may not close any or all of MEL’s anticipated acquisitions or dispositions of properties in connection with acquisitions
or dispositions MEL plans to make;
Increases in prevailing market interest rates could increase MEL’s interest expense and may result in a decline in the market
price of MEL’s units;
MEL faces significant and increasing competition in attracting tenants and it may be difficult to retain existing tenants orfind replacement tenants without reducing rents or incurring additional costs;
MEL may not be able to acquire properties to execute MEL’s growth and investment strategy in a manner that is accretive toearnings;
MEL’s reliance on Mitsubishi Estate Co., Ltd. and the Mitsubishi Estate Group companies could have a material adverse
effect on its business;
MEL expects to rely on certain properties for a significant portion of its rental revenues;
The past experience of the Mitsubishi Estate Group in the Japanese real estate market is not an indicator or guarantee of
MEL’s future results;
The Asset Management Company manages multiple REITs and property funds and there are potential conflicts of interest
between MEL and other property funds managed by the Asset Management Company;
There are potential conflicts of interest between MEL and certain Mitsubishi Estate Group companies, including the AssetManagement Company;
Any inability to obtain financing for future acquisitions or refinance MEL’s existing debt could adversely affect the growthof MEL’s portfolio or financial condition;
MEL may suffer large losses if any of its properties incurs damage from a natural or man-made disaster, acts of violence orwar, or ancillary economic restrictions;
Most of the properties in MEL’s portfolio are concentrated in the Tokyo metropolitan area and the Osaka metropolitan area;
Security breaches and other disruptions could compromise MEL’s information and expose us to liability, which could cause
its business and reputation to suffer;
MEL’s portfolio contains certain properties located on reclaimed land, which is subject to unique risks, including landliquefaction;
Most of the logistics facilities in MEL’s current portfolio and anticipated portfolio cater to a single tenant or a small numberof tenants and are typically designed for a specific use, which may make it difficult to find substitute tenants;
Illiquidity in the real estate market may limit MEL’s ability to grow or adjust MEL’s portfolio;
MEL’s policy to make distributions to its unitholders in excess of its retained earnings is subject to uncertainties;

Mitsubishi Estate Logistics REIT Investment Corporation

51

Other Information









A high loan-to-value ratio, or LTV, may increase MEL’s exposure to changes in interest rates and have a material adverse
effect on its results of operations;
A downgrading of MEL’s credit rating may affect its ability to refinance or newly issue investment corporation bonds;
MEL relies on expert appraisals and engineering, environmental and seismic reports, which are subject to significant
uncertainties;
MEL’s performance depends on the efforts of key personnel of the Asset Management Company;
MEL’s failure to satisfy a complex series of requirements pursuant to Japanese tax regulations would disqualify it fromcertain taxation benefits and significantly reduce its distributions to its unitholders;
MEL’s properties for which third parties hold leasehold interests in the land and own the buildings thereupon may subject it
to various risks;Some of the properties MEL owns or that it may acquire in the future may be held in the form of a property or trust
beneficiary co-ownership interest, and its rights relating to such properties may be affected by the intentions of other owners;
and
MEL is subject to increasing scrutiny from certain investors and regulations with respect to environmental, social andgovernance matters, which may adversely affect its ability to market its units and increase its compliance costs.

In addition, MEL is subject to the following risks:






















52

risks related to liquidity and other limitations on MEL’s activities under debt financing agreements;
risks related to unforeseen loss, damage or injury suffered by a third party at MEL’s properties;risks related to investment in Japanese anonymous association (tokumei kumiai);
risks related to interests in some properties through preferred shares of Japanese special companies (tokutei mokuteki
kaisha);risks related to entering into forward commitment contracts to acquire properties;risks related to any future borrowings or issuances of investment corporation bonds;
risks related to impairment loses in connection with MEL’s properties;risks related to decreases in tenant leasehold deposits and/or security deposits;risks related to MEL’s lack of control over operating costs;
risks related to loss of rental revenues in certain events;
risks related to certain lease agreements at multi-tenant properties;risks related to MEL’s cost of complying with regulations applicable to the properties MEL owns or intends to acquire;risks related to any property defect or non-conformity;risks related to reliance on industry and market data;risks related to violation of earthquake resistance standards or other building codes;
risks related to the environmental assessments of MEL’s properties made prior to MEL’s ownership;
risks related to climate change;risks related to no legal, regulatory or market definition of, or standardizes criteria for, what constitutes a “green,”“sustainable” or other equivalently labeled asset or framework;
risks related to unitholders’ limited control over changes in MEL’s investment policies;
risks related to MEL’s dependence on the performance of service providers;risks related to investment in properties with rooftop solar panels;





















risks related to the Asset Management Company’s limited experience in investing in and operating industrial properties andland with leasehold interests for existing industrial facilities;risks related to properties outside of Japan;
risks related to tight supervision by the regulatory authorities against J-REITs and their asset managers;
risks related to disagreement by the Japanese tax authorities with the interpretations MEL used to determine MEL’s taxable
income for prior periods;
risks related to not being able to benefit from reductions in certain real estate taxes enjoyed by qualified J-REITs;
risks related to changes in Japanese tax laws;
risks related to the treatment as a “passive foreign investment company” for U.S. federal income tax purposes;
risks related to the unitholders’ being subject to U.S. Foreign Account Tax Compliance Act withholding;risks related to the possibility of being declared invalid or limited of MEL’s ownership rights in some of its properties;risks related to loss of MEL’s rights in a property it owns or intends to acquire;risks related to holding properties through trust beneficiary interests;
risks related to important differences regarding the rights of unitholders in a J-REIT compared to those of shareholders in a
corporation;risks related to AIFMD, UK AIFMD and ERISA;
risks related to future sales of units by MEL’s major unitholders;risks related to daily price range limitations imposed by Tokyo Stock Exchange;risks related to the Bank of Japan’s policy to buy J-REIT units;risks related to appraisal NAV of MEL’s units;risks related to geopolitical instability caused by the Russian invasion of Ukraine; andrisks related to sharp rise in oil, electricity, water and other commodity prices.

Mitsubishi Estate Logistics REIT Investment Corporation

53

Other Information
Periodic disclosure for financial products referred to in Article 8, paragraphs 1, 2 and 2a, of Regulation (EU)2019/2088
and Article 6, first paragraph, of Regulation (EU) 2020/852
Product name: Mitsubishi Estate Logistics REIT Investment Corporation
Legal entity identifier: 353800YYSGZU31ICQK38
Mitsubishi Estate Logistics REIT Investment Corporation (“MEL”) promotes environmental and social characteristics, but does
not have as its objective a sustainable investment within the meaning of Article 9(1) of Regulation (EU) 2019/2088. MEL has noemployees in accordance with the prohibition on having employees under the Act on Investment Trusts and Investment
Corporations of Japan and relies on. Mitsubishi Jisho Investment Advisors, Inc. (the “Asset Management Company”), to manageand operate the properties in MEL’s portfolio. The Asset Management Company and MEL are hereinafter referred to collectively
as “we,” “us” or “our” unless noted otherwise. In addition, any “fiscal year” or “FY” hereinafter refers to the fiscal year
beginning on April 1 of such year and ending on March 31 of the following year.
Environmental and/or social characteristics

To what extent were the environmental and/or social characteristics promoted by MEL met?
Headed by our sponsor, Mitsubishi Estate Co., Ltd. (together with its consolidated subsidiaries and affiliates, the“Mitsubishi Estate Group”), the Mitsubishi Estate Group, to which we belong, implements initiatives on the four key themes ofEnvironment, Diversity & Inclusion, Innovation and Resilience. Pursuant to the Mitsubishi Estate Group’s long-term management
vision, Mitsubishi Estate Group Sustainable Development Goals 2030, the Mitsubishi Estate Group is working to contribute toachieving a sustainable society by addressing environmental, social and governance, or ESG, issues while providing significant
and growing value to a wider range of stakeholders.
We follow the Mitsubishi Estate Group’s ESG management principles, and we proactively implement ESG initiatives.
Following its establishment of an ESG policy in February 2019, the Asset Management Company, in collaboration with the
Mitsubishi Estate Group, has implemented the following ESG initiatives. Our ESG policy includes our basic policy on how we
can contribute to the environment, improve our work environment, ensure effective compliance and governance, achievetransparent ESG disclosure and collaborate with each stakeholder on ESG matters.
Environmental initiatives – climate change response. We implement energy-saving measures and take steps toreduce greenhouse gas emissions in our portfolio. Towards these ends, we have installed LED lighting and rooftop
solar panels in our properties. We also track energy consumption, solar power generation and CO2 emission levels
in our portfolio. Furthermore, we display posters that raise awareness on energy-saving measures in common areasof our properties.

Environmental initiatives – water and waste management. We seek to reduce water consumption by installingdevices and appliances such as water meters, water-efficient toilets and smart irrigation systems. We also track water
consumption and the recycling rate in our properties. Moreover, we strive to reduce waste in cooperation with tenants
by promoting 3R (reduce, reuse and recycle) waste programs.



Environmental initiatives - certification of our properties. To track the environmental performance of our properties,
we rely on certifications issued by third-party organizations, such as the Development Bank of Japan’s (“DBJ”)
Green Building certification, the Comprehensive Assessment System for Built Environment Efficiency(“CASBEE”) certification, the Building Energy-efficiency Labeling System (“BELS”) certification, and otherequivalent certifications.

Social initiatives – tenants. We endeavor to improve tenant health, safety and comfort by undertaking renovation
work in response to varying needs, and by expanding tenant support services to help serve such needs. We haveestablished restaurants and convenience stores on our premises and installed amenities such as shower rooms andmultipurpose restrooms. Our properties are also equipped with disaster-relief vending machines, secure reservescontaining food and beverage in case of emergency, and automated external defibrillators (”AED”).



Social initiatives - local communities. We build and maintain good relations with local residents, governments andother community members by providing and ensuring a pleasant and safe environment. We support local
communities in the event of disasters by providing our properties as municipality-designated disaster evacuationsites. We also participate in community service activities such as community clean-up events with local residents.

Did this financial product have a sustainable investment objective?
☐ Yes

☒ No

☐ It made sustainable investments with ☐ It promoted Environmental/Social (E/S)
an environmental objective: ___%
characteristics andwhile it did not have as its objective a sustainable
investment, it had a proportion of ____% of sustainable☐ in economic activities thatqualify
investments
as environmentallysustainable
under the EU Taxonomy☐ with an environmental objective in economic
activities that qualify as environmentally sustainable☐ in economic activities that do notunder the EU Taxonomy
qualify as environmentally
sustainable under the EU☐ with an environmental objective in economic
Taxonomy
activities that do not qualify as environmentally
sustainable under the EU Taxonomy☐ with a social objective☐ It made sustainable investments with ☒ It promoted E/S characteristics, but did notmake any
a social objective: ____%
sustainable investments

54

Mitsubishi Estate Logistics REIT Investment Corporation

55

Other Information●Social initiatives – employee satisfaction. We are committed to respecting the fundamental rights and diversity of
our employees, and we endeavor to establish an environment that supports a healthy work-life balance. To help
achieve these goals, we have introduced flexible working hours, a defined contribution pension plan and various
leave programs that are tailored to varying needs and circumstances.



Social initiatives – human resources development. The Asset Management Company develops human resources withextensive expertise and know-how by offering various training programs, on topics such as compliance, humanrights, risk management and sustainability. We also encourage employees to pursue professional qualifications thatassist them in honing their skills as real estate asset management professionals, and we subsidize the costs required
to obtain and maintain such qualifications.



Environmental initiatives – waste management. We aim to achieve a recycling rate of 70% or higher by FY2030.
The recycling rate was 63.4%, in FY2020 and 62.3%, in FY2021, respectively. In addition to tracking ourrecycling rate, we also track the amount of waste discharged by weight. In the fiscal period ended August 31,
2022, as a part of our ongoing waste management initiative, we implemented our thorough waste recycling
management at each property of our portfolio.

Environmental initiatives - certification of our properties. We have set a target of achieving a portfolio of which
100% constitutes “Green Buildings” by FY2030. We consider a property to be a Green Building if it receives a
CASBEE certification, a BELS certification or a DBJ Green Building certification. As of February 28, 2022,
79.1% of our properties were Green Buildings based on gross floor area. As of August 31, 2022, 87.6% of ourproperties were Green Buildings based on gross floor area. In the fiscal period ended August 31, 2022, as a partof our ongoing environmental initiatives, we continued improving environmental performance of our properties
and obtaining environmental certificates at our properties by enhancing energy efficiency and utilizing
renewable energy.

Social initiatives – tenants. We conduct surveys on a regular basis to measure satisfaction amongst our tenants.
These surveys are conducted either in person or in the form of a questionnaire. These surveys help formulate
future measures that will help improve tenant health, safety and comfort, and inform our decision-making on a
day-to-day basis. For example, as a result of these surveys, we have introduced thermal cameras and AEDs in
Logicross Nagoya Kasadera, as well as measures to prevent damage to property caused by birds in MJ Logipark
Sendai 1. In addition, we consider and integrate our tenant’s needs and feedbacks in renovations of our properties.
We conducted a separate survey among the tenants in MJ Logipark Fukuoka 1 before renovating the lounge.
Based on the results of this survey, we installed amenities such as large TVs, microwave ovens and free Wi-Fi
in the lounge area, and we also redesigned the layout of the lounge area to facilitate individual use. While we
conduct tenant satisfaction surveys on a regular basis, we did not conduct such surveys during the fiscal periods
ended August 31, 2022 and February 28, 2022. However, we have continuously improved our properties in orderto enhance our tenants’ satisfaction. In the fiscal period ended February 28, 2022, we implemented the following
measures;

How did the sustainability indicators perform?
We use the following indicators to measure the attainment of the E/S characteristics we promote:

Environmental initiatives – reduction of CO2 emissions. We aim to reduce CO2 emissions by 30% by FY2030
from a base year of FY2017. We classify our annual CO2 emissions into three categories: scope 1, scope 2 andscope 3. In addition to tracking our CO2 emissions, we also track CO2 emission intensity, the latter of which
decreased by 7.1% from FY2019 to FY2020 and by 17.0% from FY2020 to FY2021. In the fiscal period ended
August 31, 2022, as a part of our ongoing implementation of environmental initiatives, we installed LED lighting
and solar power generation equipment for self-consumption to properties in our portfolio as needed, discussed
how to better utilize renewable energy and reviewed our electricity purchase agreements. Furthermore, we
switched to RE100, meaning 100% of electricity used is generated from renewable energy, at MJ Logipark
Sendai 1 in February 2022 and procured a certain amount electricity (2,900,320kWh) used in FY2021 at
Logicross Nagoya Kasadera by purchasing Non-Fossil Value Certificate, which certifies that the electricity
purchased is generated by non-fossil fuel energy sources and carries environmental value.

Environmental initiatives – reduction of energy consumption. We aim to reduce energy consumption by 15% by
FY2030 from a base year of FY2017. We classify our annual energy consumption into two categories: gas andfuel consumption, and electricity consumption. In addition to tracking our energy consumption levels, we also
track our renewable energy production, as well as our energy consumption intensity, the latter of which
decreased by 3.2% from FY2019 to FY2020, and by 15.0% from FY2020 to FY2021. In the fiscal period ended
August 31, 2022, as a part of our ongoing implementation of environmental initiatives, we installed LED lighting
to properties in our portfolio as needed, discussed how to better utilize renewable energy and reviewed ourelectricity purchase agreements.



56

Property Name
Logicross Fukuoka Hisayama
Logicross Nagoya Kasadera

MeasureInstalling bird nets
Implementing advertising digital signage and AI
camera, which monitors utilization status ofsmoking room in five smoking rooms

Environmental initiatives – water management. We have set a target not increasing our water consumption level
until FY2030 from a base year FY2017. In addition to tracking our water supply usage, we also track our water
consumption intensity, the latter of which decreased by 10.1% from FY2019 to FY2020 and by 10.8% fromFY2020 to FY2021. In the fiscal period ended August 31, 2022, we engaged in reducing our water consumption
by introducing automated water meter reader, water-saving toilets and smart irrigation equipment.

Mitsubishi Estate Logistics REIT Investment Corporation

57

Other Information
Property Name
LOGIPORT Sagamihara
LOGIPORT Hashimoto
MJ Logipark Kazo 1
MJ Logipark Osaka 1
MJ Logipark Fukuoka 1
MJ Logipark Nishinomiya 1
MJ Logipark Sendai 1

Measure(i) implementing measures against bird damage, (ii)switching to LED in three tenant-exclusive areas,(iii) redesigning north and south break rooms, and(iv) installing of shatter-resistant panels in northand south break rooms
Switching to LED in eight tenant-exclusive areas
Introducing LED street lights
Conducting road line paving work
Switching to LED in one tenant-exclusive area
Switching to LED in the entire tenant-exclusive
area and common area
Renovating the break room

employees informed and up-to-date on the Asset Management Company’s code of conduct guidelines, the“interpretation about code of conducts to implementing MJIA values,” which contributes to forming common
enterprise value among our employees. We held a training on this code of conduct guidelines in August 2022.
Moreover, we have set an annual target of 90% of paid leave to be taken by our employees. In addition to
tracking the rate of employees taking paid leave, we also track our employee turnover rate and our rate of
employees returning to work after taking childcare leave, the latter of which stand at 7.2% for FY2021 and 100%
as of April 1, 2022, respectively.

●

See above.
●

In the fiscal period ended August 31, 2022, we implemented the following measures;
Property Name
All logistics facilities
MJ Logipark Kasugai 1

MeasureDistributing salt candy for tenants in properties as apreventive measure for heatstroke
Switching to LED in the common area

…and compared to previous periods?

What were the objectives of the sustainable investments that the financial product partially made and how did thesustainable investment contribute to suchobjectives?
Not applicable.

●

How did the sustainable investments that the financial product partially made notcause significant harm to any
environmental or social sustainable investment objective?
Not applicable.





58

Social initiatives - local communities. We assess our performance in this area by looking at the frequency withwhich we implement community service programs and activities such as community clean-up events around ourproperties with local residents and around our office with local workers, and the designation by municipalitiesof our properties as disaster evacuation sites such as disaster cooperation building and tsunami evacuationbuilding. In the fiscal period ended February 28, 2022, we conducted clean-up projects around the neighborhoodof the Asset Management Company’s office and redesigned break rooms of LOGIPORT Sagamihara.
Social initiatives – employee satisfaction. We conduct a survey to measure employee satisfaction on an annual
basis and strive to increase our ratio of female managers, which stands at 13.6% as of April 1, 2022. From July
2022 to August 2022, we hired a third party survey agency and conducted an employee satisfaction survey onan anonymous basis, of which results showed 89% of our employees were satisfied or moderately satisfied withoverall working conditions at the Asset Management Company. As a part of our ongoing initiatives to improve
employee satisfaction and communications with us, we encourage one-on-one check-ins between employees
and their managers and conduct monthly survey on employee conditions, which we call condition pulse survey,
and annual interview with the human resources department. As a measure to combat and eliminate workplaceharassment, we provide annual training on harassment prevention to promote better understanding of workplaceharassment and reporting policies among our management and employees, and to help create workplaceenvironment where everyone can feel safe and comfortable while performing their job. In FY2022, we held ourannual training on harassment prevention in August 2022. Furthermore, we continuously work to keep our

How did this financial product consider principal adverse impacts on sustainability factors?
We consider principal adverse impacts of our investment decisions on sustainability factors. To this end, we collect on
an ongoing basis select information on our existing portfolio regarding the principal adverse impact indicators, including exposure
to fossil fuels through investment assets, exposure to energy-inefficient investment assets and energy consumption intensity. We
aim to manage the risk connected to principal adverse impacts from our investment decisions in several ways, including generalscreening criteria and due diligence.


Exposure to fossil fuels through assets. We do not invest in real estate assets involved in the extraction, storage,transport or manufacture of fossil fuels.

Exposure to energy-inefficient investment assets. We consider properties other than those that we consider to be
Green Buildings to be energy-inefficient. As of August 31, 2022, 12.4% of our properties were not Green Buildings
based on gross floor area, as compared to 20.9% as of February 28, 2022. We implement as appropriate measures toreduce their environmental impact following acquisition, including by obtaining environmental certifications suchas DBJ, BELS or CASBEE. We are steadily working toward acquiring such certifications so that 100% of ourlogistics properties will be Green Buildings.

Mitsubishi Estate Logistics REIT Investment Corporation

59

Other Information
Energy consumption intensity. Energy consumption intensity of the properties in our portfolio was 46.78 kWh/m2 in
FY2019, 45.30 kWh/m2 in FY2020 and 38.49 kWh/m2 in FY2021.

We believe that investment decisions that negatively affect climate or other environment-related resources, or havenegative implications for society, can have a significant impact on and present risks to unitholder value. To this end, we consider
the principal adverse impacts of our investment decisions on the above sustainability factors to be a key factor in making acomprehensive investment decision and in the management process throughout the lifecycle of the properties in our portfolio.

Sector

Logistics facilities
OthersReal estate
Real estate% Assets(based on acquisition price)
94.3%
5.7%

Country

We aim to build a stable and long-lasting portfolio through selective investments in highly competitive logistics facilities
that meet tenant needs. It is our policy for logistics facilities to make up at least 80% of our portfolio, and for other types ofproperties related to or compatible with logistics facilities to make up no more than 20% of our portfolio based on acquisition
price. It is also our policy for properties located in the Tokyo metropolitan area (which consists of Tokyo, Kanagawa, Saitama,
Chiba and Ibaraki prefectures) to make up at least 50% of our portfolio, and for properties located elsewhere in Japan to make up
no more than 50% of our portfolio based on acquisition price.

Not applicable.
●

Japan
Japan

What was the proportion of sustainability-related investments?

Did the financial product invest in fossil gas and/or nuclear energy related activities complying with the EU
Taxonomy?
Not applicable. MEL does not invest in real estate assets involved in fossil gas and/or nuclear energy-related activities.

● What was the share of investments made in transitional and enabling activities?

As of February 28, 2022, 79.1% of the properties in the portfolio were Green Buildings, and 20.9% were nonqualified
assets based on gross floor area. As of August 31, 2022, 87.6% of the properties in the portfolio were Green Buildings, and 12.4%
were nonqualified assets based on gross floor area. In the fiscal period ended August 31, 2022, 2022, we continued improving
environmental performance of our properties and obtaining environmental certificates at our properties by enhancing energy
efficiency and utilizing renewable energy. Our target is to achieve a portfolio of which 100% (excluding properties where weown only the underlying land) constitutes Green Buildings by FY2030, and we plan to further increase the number of such assets
by continuing to acquire Green Building certifications for the buildings in our properties.
●

In which economic sectors were the investments made?

To what extent were the sustainable investments with an environmental objective aligned with the EU Taxonomy?

What were the top investments of this financial product?
Largest investments●

Not applicable.
●

How did the percentage of investments that were aligned with the EU Taxonomy compare with previous reference
periods?
Not applicable.

What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy?

What was the asset allocation?

Not applicable.
87.6% is #1 Aligned with E/Scharacteristics#1B Other E/S characteristics

What was the share of socially sustainable investments?
Not applicable.

Investments of MEL
12.4% qualifies as #2 Other

What investments were included under “other,” what was their purpose and were there any minimum environmental orsocial safeguards?
As of February 28, 2022, 20.9% of our properties were not Green Buildings based on gross floor area. As of August 31,
2022, 12.4% of our properties were not Green Buildings based on gross floor area. The Asset Management Company’s investment
decision-making process involves assessment of material ESG-related risks and opportunities to ensure that our sustainable60

Mitsubishi Estate Logistics REIT Investment Corporation

61

Other Information
investment strategy is implemented. ESG-related risks that are assessed include risks pertaining to earthquakes, flooding, soil
contamination and hazardous substances. With each acquisition opportunity, the Asset Management Company and we review
ESG-related due diligence findings and take into account the acquisition of environmental certifications or future potential toobtain them and energy efficiency assessment.
As we invest by comprehensively taking into account various factors including E/S, we may acquire properties that are
not Green Buildings in exceptional cases. However, with respect to logistics properties, we have confirmed through due diligencethat such properties are still ESG-conscious because we regularly acquire properties from the Mitsubishi Estate Group, whichemphasizes ESG considerations in its investment strategy. When we acquire a logistics property that is not a Green Building, we
implement appropriate measures to reduce the environmental impact following acquisition.

●

How does the reference benchmark differ from a broad market index?
Not applicable.

●

How did this financial product perform with regard to the sustainability indicatorsto determine the alignment of thereference benchmark with the environmental or social characteristics promoted?
Not applicable.

●

How did this financial product perform compared with the reference benchmark?
Not applicable.

●
What actions have been taken to meet the environmental and/or social characteristics during the reference period?

How did this financial product perform compared with the broad market index?
Not applicable.

As described in greater detail above, we implement various environmental initiatives at our properties including thefollowing:Reduction of CO2 emissions;
Reduction of energy consumption;
Water and waste management; andCertification of our properties.

As described in greater detail above and our website, we implement various social initiatives at our properties including
the following:







Tenant satisfaction;
Contribution to local communities;
Employee satisfaction;
Human resource development;
Diversity and inclusion; andHuman rights.

How did this financial product perform compared to the reference benchmark?
Not applicable. No specific index has been designated as reference benchmark to determine whether MEL is alignedwith the environmental and/or social characteristics that it promotes

62

Mitsubishi Estate Logistics REIT Investment Corporation

63