SEMIANNUAL REPORTFiscal Period Ended February 28, 2021

Financial Highlights
for the Fiscal Period Ended February 28, 2021

Distributions Per Unit
(JPY)

Operating Revenues(JPY millions)

6,619

4,203

Net Income(JPY millions)Credit Rating

2,073

JCR AA-

Portfolio Size
(JPY millions)Average Occupancy

170,404

As of Mar. 19, 2021

99.8%

Includes 5 properties acquired in 10th FP

Loan-to-Value Ratio

Average Debt Cost

32.4%

0.40%

Forecasted Feb. 2022

Logicross Narashino(Stable)As of Apr. 15, 2021

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Message from the Management

Dear Fellow Unitholders,
We are pleased to represent our Ninth Fiscal Period Semiannual Report of Mitsubishi Estate Logistics REIT Investment Corporation (MEL).
We would like to take this opportunity to express our heartfelt appreciation to all of our unitholders for supporting MEL.
During the fiscal period ended February 28, 2021, despite the global uncertainties caused by COVID-19 pandemic, we continued to maximize our unitholder
value through disciplined acquisitions. In September 2020, we completed our third follow-on offering and successfully raised 18.3 billion yen of capital
including overallotment. With the proceeds and debt financing, we acquired three sponsor-developed properties (Logicross Osaka (initial 60% co-beneficiaryinterest), Logicross Nagoya Kasadera (initial 60% co-beneficiary interest) and LOGIPORT Osaka Taisho) (remaining 17.5% co-beneficiary interest) and two
properties (MJ Logipark Kazo 2 and MJ Logipark Sendai 1) that were sourced by us the Asset Manager, totaling 28.4 billion yen. As a result, our portfolio
size has grown to 142.1 billion yen.
With these steady growth, MEL’s operating revenues was 4,203 million yen, net income was 2,073 million yen and distributions per unit, including thesurplus cash distributions (SCD), was 6,619 yen, which strongly exceeded our original forecast of 5,968 yen.
We maintained an extremely high average occupancy of more than 99 percent and our rents continued to grow. Despite the current COVID-19 pandemic,
our rent growth was high 8.5% on a weighted average nominal basis, and have achieved rent growth for six consecutive periods. Also, we have achieved
HYBRID internal growth other than rent revisions through distinctive initiatives such as receipt of Green Lease fee based on Green Lease contract, increasing
parking space and installation of solar panels on the rooftop. Capturing this momentum, we intend to strive to accomplish this HYBRID internal growth.
In terms of HYBRID external growth, we completed our fourth follow-on offering continued by the previous offering in August last year. With the proceeds
and debt financing, we acquired three sponsor-developed properties (Logicross Narashino, Logicross Osaka (remaining 40% co-beneficiary interest) andLogicross Nagoya Kasadera (remaining 40% co-beneficiary interest) ) and two properties (MJ Industrial Park Kobe (Land) and MJ Industrial Park Chiba-Kita(Land) ) that were sourced by us the Asset Manager, totaling 28.2 billion yen. These acquisitions embody our HYBRID external growth. As a result, ourportfolio size has grown to 170.4 billion yen. Accordingly, combing our previous offering, we realized accretion of 16.2 percent distributions per unit (DPU)
growth on a stabilized basis and 10.7 percent growth for net asset value (NAV) per unit annually.
We further strengthened our balance sheet backed by our high credibility of our sponsor, Mitsubishi Estate.
In April 2021, we have issued our first bond as a Green bond at a favorable condition with a term of 15 years where it is difficult to borrow from banks. Our
remaining debt duration is 5.6 years and all in debt cost is 40 basis point. As of the end of the reporting fiscal period, our loan-to-value (“LTV”) ratio was
31.4 percent, and as a reflection of the offerings and acquisitions, our LTV ratio is forecasted to be 32.4 percent at the end of the fiscal period ending
February 28, 2022 which gives us enough room to further grow.
As for the ESG, we have participated in the 2020 GRESB Real Estate and have been awarded the highest “5-star” rating and the prestigious “Green Star”
rating. MEL was also recognized as the “Global Listed Industrial Sector Leader,” ranked No. 1 globally, demonstrating its outstanding performance in ESG.
MEL strives to invest in environmentally friendly logistics facilities, and will continue to focus on maximizing the energy efficiency of our properties, as well as
contribution actions to the local communities.
Looking forward, we will endeavor to maximize our unitholder value by growing both externally and internally through HYBRID model and follow ourmanagement policy, “Three Pillars.”
Joined Mitsubishi Estate Co. Ltd. in 1997

We sincerely appreciate your continued support of MEL and the Mitsubishi Estate Group and look forward to reporting our further progress in the months
and years ahead.

Has extensive experience in Investment Managementbusiness in Mitsubishi Estate Group, including;2015 – 2012: Core/ core+ fund management businessin New York-based Rockefeller Group, Boston-based
TA Realty, and Mitsubishi Estate New York2012 – 2007: Private fund business in Mitsubishi Jisho
Investment Advisors, the Asset Management Company

Ken Takanashi

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

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Our Strength“HYBRID” Style and Focus on Sponsor’s Pipeline

Development / Facilities Management

Investment / Asset Management

SponsorOverview

Asset Management Company

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

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

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

Its track record includes structuring and managing
various types of real estate funds, such as thelarger private REIT in Japan

Overview

Promoting the logistics facility business as a
growth area

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

Constant supply of pipeline properties from sponsor throughdevelopment / operation of advanced logistics facilities

SupportUnique property sourcing capacity with discerning
judgment

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

SupportFormulation of capital market-oriented long-term management
plan to promote recycling business in domestic asset businessand to expand AUM consistently in non-asset businesses

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Flexible and diverse acquisition strategy, using a wide
range of schemes, including bridge funds
Competitive real estate fund management capability
backed by a diverse deal track record3Progress of Management Policy based on “Three Pillars”

Execution of Growth Strategy based on “Three Pillars” (Since April 2019)

Alignment

Align interests
with unitholders

Assetmanagement
fee fully linked
to unit priceperformance

Inclusionin theFTSE EPRA
Nareit Global
Real Estate
Index Series

Discipline
External growthutilizing LTV

Achievedisciplined growthHybridEnhance MEL’s uniquestrategy Hybrid Model

Measures for the Future

Support from
Sponsor andcontinued
same-boat
investment

Acquisition ofhighest ratingfrom GRESBReal Estateand greeningof the portfolio

Introducing
cumulative
investment
for employeesof Sponsor
and Asset
Management
Company

Aim for further inclusion
in major indices and improveliquidity by steadily increasing
market capitalization

External growthwith attention
to portfolio
yield
and implied
cap rate

Flexiblefinancingcarefully
watching
the market
conditions

Issuance ofGreen Bond
to diversify
financingmethods

Maximize unitholder value
through disciplined acquisitions
and utilizing low LTV

Flexible
propertyacquisition
strategyutilizingbridge funds
Enhancedcollaboration
withTokyo Ryutsu
Center(TRC)

Internal growthutilizing
management
capability of
AssetManagement
Company
and leasing
capacity of
the Sponsor

Expandingpipelines fromboth theSponsorand Asset
Management
Company

Note: Executed measures after Apr. 2020 are highlighted in red.

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Introducing
new pipeline
method of"PDP" by AssetManagement
Company

Continue “Hybrid”
external and internal growth
Secure pipelines continuously
from the Sponsor
Secure pipelines through utilizing
Asset Management Company’svarious sourcing methods,
such as CRE proposals

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

Logicross

MJ Logipark

Brand of logistics facilities that MEC
develops throughout Japan

Properties which MEL acquired or intends toacquire from 3rd parties■ Capability to assess properties backed by experience incontinuously acquiring properties from 2001
■ Flexible and diversified property acquisition strategy byleveraging the capability to manage real estate funds

Sponsor-developed properties with expected
preferential negotiation right

MJIA-sourced and operated properties withexpected preferential negotiation right

Mitsubishi Estate

Bridge Fund / 3rd Party Bridge

Occupancy
100%

Pre-leased
100%

Occupancy
100%

Occupancy
100%

Logicross Yokohama Kohoku

Logicross Hasuda

Logista·Logicross Ibaraki Saito (B)LOGIPORT Kawasaki Bay

Logicross Atsugi II(16,000 m2)
Completed in 2019

(79,000 m2)
Completed in 2021

(31,000 m2)
To be completed in 2021

(296,000 m2)
Completed in 2019(35,000 m2)
Completed in 2019Pre-leased
100%

Pre-leased
100%

PDP

Newly Added Pipeline

Occupancy
100%

PDP
Pre-leased
100%

Logista·Logicross Ibaraki Saito (A)Logicross Kasukabe

Logicross Funabashi

MJ Logipark Takatsuki 1 (tentative name)

MJ Logipark Kakogawa 1 (tentative name)(115,000 m2)
To be completed in 2021

(39,000 m2)
To be completed in 2021

(23,000 m2)
To be completed in 2021

(19,000 m2)
Completed in 2021

(33,000 m2)
To be completed in 2022

Newly Added Pipeline

New Pipeline Method by the Asset Management Company

PDP (Partnership Development Program) refers to a unique development

initiative by the Asset Management Company to incorporate properties developedby partners outside MEC group into the pipeline
Logicross Zama Komatsubara

Logicross Zama (tentative name)

Sagamihara Chuo Fuchinobe Project (tentative name)(44,000 m2)
To be completed in 2022

(183,000 m2)
To be completed in 2023

(173,000 m2)
To be completed in 2023

13 properties 1,091,000 ㎡
Note: As of Apr. 15, 2021

Other multiple projects
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Our Portfolio (as of Mar. 19, 2021)

Logicross Fukuoka Hisayama

Logicross Atsugi

Logicross Kobe Sanda

Acquisition price

JPY 5,770 million

Acquisition price

JPY 8,440 million

Acquisition price

JPY 3,900 million

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

BELS

★★★★★

BELS

★★★★

CASBEES Rank for Real Estate

CASBEEA Rank for Real Estate

DBJ Green Building ★★★★

Logicross Osaka

Logicross Nagoya Kasadera

Logicross Narashino

Acquisition price

JPY 9,743 million

Acquisition price

JPY 14,424 million

Acquisition price

JPY 11,851 million

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

BELS

★★★★★

BELS

★★★★★

CASBEES Rank for Real Estate

CASBEES Rank for Real Estate

LOGIPORT Sagamihara

LOGIPORT Hashimoto

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

Acquisition price

JPY 21,364 million

Acquisition price

JPY 18,200 million

Acquisition price

JPY 10,484 million

Occupancy rate

99.7%

Occupancy rate

99.9%

Occupancy rate

96.0%

BELS

★★★★

BELS

★★

BELS

★★★★★ (ZEB Ready)

CASBEES Rank for Real Estate

CASBEES Rank for Real Estate

CASBEES Rank for Real Estate

S E M I A N N U A L

MJ Logipark Funabashi 1

MJ Logipark Atsugi 1

MJ Logipark Kazo 1

MJ Logipark Osaka 1

Acquisition price JPY 5,400 million

Acquisition price JPY 6,653 million

Acquisition price JPY 1,272 million

Acquisition price JPY 6,090 million

Occupancy rate 100.0%

Occupancy rate 100.0%

Occupancy rate 100.0%

Occupancy rate 100.0%

BELS

★★★★★

MJ Logipark Fukuoka 1

MJ Logipark Tsuchiura 1

MJ Logipark Nishinomiya 1

Acquisition priceJPY 6,130 million

Acquisition price

JPY 3,133 million

Acquisition price

JPY 2,483 million

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

MJ Logipark Kasugai 1

MJ Logipark Kazo 2

MJ Logipark Sendai 1

Acquisition price

JPY 13,670 million

Acquisition price

JPY 1,637 million

Acquisition price

JPY 7,388 million

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%CASBEEA Rank for New Construction Aichi

MJ Industrial Park Sakai (Land)

MJ Industrial Park Kobe (Land)

MJ Industrial Park Chiba-Kita (Land)

Acquisition price

JPY 5,600 million

Acquisition price

JPY 4,970 million

Acquisition price

JPY 1,800 million

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%R E P O RT

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Our Portfolio and Acquisition Pipelines

Tokyo Metropolitan Area

Property Acquired in the 10th FP

Pipeline Assets

Properties Held as of 9th FP

Head Office / Branches of Mitsubishi Estate
SapporoGunma

Nagoya Metropolitan Area
Gifu
Meishin
Expressway

Joban Expressway

Chuo Expressway

Nagoya BranchKan-etsu Expressway

Aichi

SendaiShin-Tomei
Expressway

Nagoya Port

MJ Logipark Tsuchiura 1
Ibaraki

MJ Logipark Kazo 1

Logicross Nagoya Kasadera(Note 2)
Isewangan Expressway

MJ Logipark Kazo 2

MJ Logipark Sendai 1

MJ Logipark Kasugai 1

Mie

TochigiTohoku Expressway

Logicross Hasuda
SaitamaTokyo

Logicross Kasukabe
Ken-o Expressway

Tomei
Expressway

Chubu
International
AirportNagoyaLogicross Fukuoka Hisayama

Fukuoka

Tokyo-Gaikan
Expressway

Yokohama

Osaka

Hiroshima

MJ Logipark Fukuoka 1

Tokyo

Osaka Metropolitan Area

Logicross Funabashi
Shin-Meishin Expressway

Chugoku Expressway

Logicross Kobe Sanda

Sanyo Expressway

Chuo Expressway

Logista·Logicross Ibaraki Saito (A, B)

Head Office

MJ Logipark Funabashi 1

Tokyo Port

Logicross Narashino

LOGIPORT Sagamihara

MJ Logipark Nishinomiya 1

LOGIPORT Hashimoto

Tomei
Expressway

MJ Logipark Takatsuki 1*
Sagamihara Chuo Fuchinobe Project*

Osaka International Airport
Daini Keihan Expressway

Meishin Expressway

Hyogo

Metropolitan Expressway
Bayshore Route

MJ Industrial Park Chiba-Kita (Land)

Tokyo Ryutsu CenterTokyo International Airport(Haneda Airport)

Logicross Yokohama Kohoku

Logicross Atsugi II

LOGIPORT Kawasaki Bay

MJ Industrial Park Kobe (Land)

Kawasaki Port
Yokohama Port

Logicross Osaka(Note2)

Kobe Port

Osaka Branch

MJ Logipark Kakogawa 1*
Osaka Port
Kobe Airport

Osaka

Yokohama Branch
Kanagawa

Kinki Expressway

Logicross Atsugi

LOGIPORT Osaka Taisho
MJ Logipark Osaka 1

MJ Logipark Atsugi 1
MJ Industrial Park Sakai (Land)

Hanshin Expressway

Logicross Zama*
Nara

Logicross Zama Komatsubara

Kansai International Airport* Tentative nameNote 1: As of Apr. 15, 2021
Note 2: For Logicross Osaka and Logicross Nagoya Kasadera, 60% co-beneficiary interest were acquired on Sept. 1, 2020, and the remaining 40% co-beneficiary interest were acquired on Mar. 9, 2021, respectively

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NaritaInternational
AirportChiba

HYBRID Internal Growth Strategy

Rent Revision■ Upward rent revision■ Rent unchanged

FP 2018/8(4th FP)

43%

57%

FP 2019/2(5th FP)■ Undecided

96%

40%

FP 2020/2(7th FP)

+1.8%

+3.0%

2

40,000 m 2

12% 19,000 m 2
7% 21,000 m 2

93%

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

62,000 m

60%

88%

FP 2020/8(8th FP)

Average Rent Growthof Increased Portion

11,000 m 2

4%

FP 2019/8(6th FP)

Average Rent Growth88%

FP 2021/8(10th FP)
(Forecasted)(Note)

6% 6% 24,000 m 292%
05% 3% 33,000 m 2

15,000

Average Occupancy

+0.2%

+3.4%

99.8

+3.1%

+6.8%

Fixed-term Lease Rate

+2.2%

+2.5%

+9.5%

+10.4%

100.0

%

%

+8.5%

+9.7%

Weighted Average
Lease Expiry+13.4%+15.0%

years

7.4

65,000 (m 2)40,00097% contracted

Tenant Data
Tenant Diversification (Based on leased area)

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

10.9%
4.9%
4.9%
54.0%

4.0%
3.9%
3.7%
3.5%
3.4%
3.4%
3.3%

■ Nihon Realest■ Sankyu■ ORIX Auto
■ Kimura Unity■ MITAKA SOKO
■ Sun City Building

23.0 %
B to C

83.0 %■ Fukuoka Logistic System■ Others

Cargo with
Strong Demand

81.2

Daily Necessities

1.5%

57.5

3.0%
5.8%
8.5%

%

29.4%

■ Household Goods■ Food and Beverage

5.4%■ Pharmaceuticals
and Medical Devices■ PC/Communications,Home Appliance etc

18.2%■ Honda Logicom■ Mitsubishi Estate

Delivery Destination (Based on leased area)■ Casual Clothing

23.2%
4.9%

■ Raw/Component Materials■ Furniture and Home Goods■ Electronic devices andComponents for Business use%■ Others

Note: As of Apr.5, 2021. Lease contracts that are not yet contracted are assumed to be unchanged for the calculation

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3PL66.7 %

13.0%
5.2%
5.6%

■ 3PL
■ Wholesale

9.5%
66.7%

■ Retail■ Manufacture■ Others

Financial Strategy (as of Apr. 15, 2021)

Financial Highlights

Lenders

Long-term Debt Ratio

95.5

%

Fixed Interest
Rate Ratio

95.5

Average Remaining
Debt Duration

%

5.6

1.3%

0.8%

0.8%
0.8%

Green Finance

0.5%

3.3%

■ MUFG Bank, Ltd.
■ Mizuho Bank, Ltd.
■ Sumitomo Mitsui
Banking Corporation■ The Bank of Fukuoka, Ltd.
■ The Norinchukin Bank
■ The Shinkumi
Federation Bank
■ Shinkin Central Bank
■ Shinsei Bank, Limited

2.5%
2.5%
25.1%
2.9%
4.5% Total Debt Balance

2.3%

4.8%

years

JPY

60,574
millions

7.0%

18.4%

7.1%

Average Debt Cost

0.40%

Credit Rating

JCR:

15.3%

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

AA- 32.4%(Stable)■ The Yamaguchi Bank, Ltd.
■ Development Bank of Japan■ The 77 Bank, Ltd.
New ■ The Chiba Bank, Ltd.
■ Sumitomo Mitsui
Trust Bank, Limited■ The Yamanashi Chuo Bank, Ltd.
New ■ The Nishi-Nippon City Bank, Ltd.
■ The Bank of Toyama, Ltd.
■ Investment Corporation Bonds

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

10,0008,000

Debt Capacity (up to 40%)

Debt Capacity (up to 50%)

Approx.

Approx.

22.0

JPY

billion

JPY

6,000

63.0

4,000

2,000

billion0

Green Loan
MEL borrowed 1,350 mnyen through the SDGs Green Loan
financed by Sumitomo Mitsui Banking Corporation on Mar. 9,
2021, based on the above third-party evaluation institution’s“Green Finance Framework”
First case in J-REIT financed by MUFG Bank with “ESG Loan
for J REIT” and SMBC with “Funding to promote SDG’s”

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

(year)

Upper Limit of Green FinanceFunds(mn yen)Procurement
Date

Repayment /Redemption Date

Allocation
StatusGreen Loans

1,350

Mar. 9, 2021

Mar. 9, 2025

Allocated

Green Bonds

2,000

Apr. 14, 2021

Apr. 14, 2036

Allocated

Total Green Finance

3,350

–

–

–

Upperlimit of Green Finance (Note)

33,682–––

Note: The Upper Limit of Green Finance = Total Acquisition Price of Green Eligible Assets ×Total Asset. LTV is calculated based on Feb. 28, 2021

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ESG Initiatives

GRESB Assessment

Participate in United Nations Global Compact (UNGC)

For 2020 GRESB Real Estate Assessment, MEL as awarded the prestigious"5 Stars" for the first time based on a relative evaluation by overall score,and "Green Star" for 2 consecutive years. Furthermore, MEL ranked 1stamong 22 companies in industrial-listed sector in global, and was selected
as "Global Listed Industrial Sector Leader". In addition, in the "GRESB
Public Disclosure" (5-level rating) that measures the level of ESG
information disclosure, MEL's effort to disclose ESG information was highly
evaluated, and for the first time, was awarded the highest rank "A Level".

UNGC is a voluntary, global initiative supporting a global
framework for sustainable growth through the demonstration ofcreative, responsible leadership by the respective corporations
and organizations as principled members of society.
Mitsubishi Estate became a signatory of the UNGC and Mitsubishi
Estate Group was registered as participants in April 2018. Alongwith this, the Asset Management Company has participated inthis initiative as a member of Mitsubishi Estate Group.

Mitsubishi Estate Group’s Initiatives for ESG
Mitsubishi Estate Group’s Sustainable Development Goals 2030
(Long-term Business Plan)

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

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

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

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

3. Innovation
Innovative urban development that
continuously renews society

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

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ESG Initiatives

Environment

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

Certification System

No. of Properties

Building-Housing Energy-Efficiency
Labeling System (BELS)

8Comprehensive Assessment System for Built
Environment Efficiency (CASBEE) for Real Estate

DBJ Green Building
Certification

8

1

75.3

Property Name%

Evaluation

Property Name

Evaluation

Logicross
Fukuoka Hisayama

DBJ Green Building Certification: ★★★★ (2018/3/30)

LOGIPORT Sagamihara

BELS: ★★★★ (2020/12/22)
CASBEE S Rank for Real Estate (2019/8/21)

Logicross Atsugi

BELS: ★★★★★ (2019/2/20)
CASBEE S Rank for Real Estate (2019/3/29)

LOGIPORT Hashimoto

BELS: ★★ (2018/2/15)
CASBEE S Rank for Real Estate (2019/8/21)

Logicross Kobe Sanda

BELS: ★★★★ (2019/2/20)
CASBEE A Rank for RealEstate (2019/3/29)

LOGIPORT
Osaka Taisho

BELS: ★★★★★/ZEB Ready (2020/12/22)
CASBEE S Rank for Real Estate (2020/7/10)

Logicross Osaka

BELS: ★★★★★ (2021/1/27)
CASBEE S Rank for Real Estate (2021/2/26)

MJ Logipark Kasugai 1

CASBEE A Rank for New Construction Aichi (2015/9/1)

Logicross
Nagoya Kasadera

BELS: ★★★★★ (2021/1/27)
CASBEE S Rank for Real Estate (2021/2/26)

MJ Logipark Kazo 1

BELS: ★★★★★ (2019/2/20)

ExamplesEnergy Saving Initiatives

Insulated sandwich panels
for exterior walls

Installation of
motion-detection sensors

Reuse of OA floor panels of
office buildings in Marunouchi

Renovation with LED installed based on
green lease contract

Insulated solar panels

Seismic isolators

Installation ofprivate power generators

Measures against infectious diseases(use of hand sanitizers)

Use of Renewable Energy /BCP Initiatives

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ESG Initiatives

SocialProactive Participation in CSR Activities

Participation in flower bed
maintenance activities of community
near Logicross Atsugi

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

Secure reserves in case of
emergency(Food, beverage & portable
toilet)As a heatstroke measure, freesalt candy Service for tenants inproperties (for all properties
held as of Aug. 2020)

Offering Comfortable Working Environment
Donated 1,900 unused surge masks stored to the
Chiyoda Ward Health Center

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

Donated unused calendars as a substitute fornotebooks to elementary schools in developing
countries through a supporting organization

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

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

BeforeS E M I A N N U A L

R E P O RT

After

12

ESG Initiatives

Governance
Cumulative Investment for Employees
Introduced a program for employees of the Sponsor and the Asset Management Company to invest in MEL to align interest with unitholders

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

Asset Management Fee Ⅰ (AUM-linked)

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

Asset Management Fee Ⅱ (Real estate profit-linked)

Adjusted NOI x 5.0% (upper limit)
Adjusted net income before tax × net income before tax per unit × 0.001% (upper limit)

1st in J-REIT
Asset Management Fee Ⅲ (Unitholder interest-linked)“Fee linked to investment unit price”
Performance against TSE REIT Index ((a) - (b)) × market capitalization (for fiscal period of each term) × 0.1% (upper limit)(a): Fluctuations in MEL’s investment unit price (incl. dividends)(b): Fluctuations in the TSE REIT Index (incl. dividends)

Investment unit price

TSE REIT Index (incl. dividends)+DPU

If MEL’s growth rateis greater

If TSE REIT Index
growth rate is greater

Increase Fee
Reference date(Previous period)

Reference date(Present period)

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

+DPU
Reference date(Previous period)

Decrease Fee

Reference date(Present period)

4.1%

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

S E M I A N N U A L

R E P O RT

13

Unitholder Information (As of Feb. 28, 2021)

Breakdown by Units

Major Unitholders
4.3%■ Domestic individuals and others :33,372 units■ Financial institutions: 203,105 units■ Domestic entities: 25,997 units■ Foreign entities: 70,650 units■ Securities Companies: 15,113 units

9.6%
20.3%

7.5%

348,237
Units

58.3%

■ Financial institutions:

160 unitholders■ Domestic entities:

266 unitholders■ Foreign entities:

185 unitholders■ Securities companies:

18 unitholders

Share ofInvestment Units (%)

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

53,105

15.24

Custody Bank of Japan, Ltd. (Trust Account)

46,55913.36

Mitsubishi Estate Co., Ltd.

14,200

4.07

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

13,755

3.94

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

10,859

3.11

SMBC Nikko Securities Inc.

9,270

2.66

The Chugoku Bank, Limited

6,194

1.77

The Shinkumi Federation Bank

5,748

1.65

Mitsubishi UFJ Trust and Banking Corporation

5,413

1.55

STATE STREET BANK WEST CLIENT–TREATY 505234

4,632

1.33

169,735

48.74

Total

Breakdown by Unitholders■ Domestic individuals and others : 8,956 unitholders

Number ofInvestment Units

1.9%
2.8%
1.7%

0.2%

Continuous Same-Boat Investment in MEL by the Sponsor

Investment in MEL

9,585

by MEC

Unitholders(As of Apr. 15, 2021)

93.4%

S E M I A N N U A L

R E P O RT

14

15,950(4.1%)

units

Financial Section
BALANCE SHEET, continued

BALANCE SHEET
Thousands of yen

Thousands of yen

As of

As of

August 31, 2020
ASSETS
Current assets:
Cash and deposits (Notes 4, 6)
Cash and deposits in trust (Notes 4, 6)
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other current assets¥

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

August 31, 2020

February 28, 2021

3,504,701
4,389,936
27,45914,807‐
15,845¥

3,787,095
5,685,115
28,57921,3501,209,689‐

7,952,750

10,731,829

48,174,980(2,987,424)

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

45,187,555

57,086,350

1,760,155(81,973)

2,132,358(103,076)

1,678,181

2,029,281

41,356(1,989)197,114(12,939)

39,367

184,175

11,091(1,515)

16,694(2,652)

9,576

14,042Land in trust

65,551,550

81,361,574

Total property and equipment

112,466,230

140,675,424

LIABILITIESCurrent liabilities:
Operating accounts payable
Short‐term loans payable (Notes 6,11)
Long‐term loans payable due within one year
Accounts payable
Distributions payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received¥

Total current liabilities
Non‐current liabilities
Long‐term loans payable (Notes 6, 11)
Tenant leasehold and security deposits in trust (Note 6)
Total non‐current liabilities
Total liabilities

February 28, 2021

90,602950,000
‐
8,322
6,017
419,864837
204,777
528,045‐¥257,6992,000,000
2,211,000
21,3506,862
488,817916‐
715,55696

2,208,467

5,702,299

34,424,000
2,195,412

43,363,000
2,816,129

36,619,412

46,179,129

38,827,879

51,881,429

80,744,051(750,029)

98,444,036(931,072)

NET ASSETS
Unitholders’ equity
Unitholders’ capital
Units authorized:
10,000,000 units as of February 28, 2021 and August 31, 2020
Units issued and outstanding:
348,237 units as of February 28, 2021 and
305,815 units as of August 31, 2020
Unitholders’ capital, gross
Deduction from unitholders’ capital

Intangible assets (Note 5)
Software
Other intangible assets

3,935
691

2,985
641

79,994,021

97,512,964

Total intangible assets

4,626

3,626

SurplusRetained earnings

1,654,877

2,073,248

11
33,07810,00015
42,71410,000Total surplus

1,654,877

2,073,248

Total unitholders’ equity

81,648,898

99,586,213

Total net assets (Note 10)

81,648,898

99,586,213

Total liabilities and net assets

Investments and other assets
Deferred tax assets (Note 13)
Long‐term prepaid expenses
Security deposit
Total investments and other assets
Total fixed assets

43,09052,730112,513,946

140,731,780

10,079

4,032

Deferred assets:
Organization expenses
Total deferred assets
Total assets

10,079¥120,476,777

Unitholders’ capital, net¥

120,476,777¥

151,467,642

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

4,032
¥

151,467,642

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

15

SEMIANNUAL REPORTSEMIANNUAL REPORT

16

Financial Section
STATEMENT OF INCOME AND RETAINED EARNINGSSTATEMENT OF CHANGES IN NET ASSETS
Thousands of yen
For the period ended
August 31, 2020
February 28, 2021

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

3,179,904
162,864
3,342,769¥

For the period ended February 28, 2021

Unitholders’ capital
Deduction ofUnitholders’
Unitholders’unitholders’capital, grosscapital, net
capital

4,002,266
201,145
4,203,412

1,187,243
307,446
1,150
16,7842,400
66,88030,886
1,612,790
1,729,9781,497,479
352,247
1,390
19,1562,400
94,81531,182
1,998,671
2,204,740

36
2,174
‐
2,211

44
‐
726
770

68,880
1,723
6,047
‐
76,651
1,655,538
1,655,538
842
5
848
1,654,690
187
1,654,877

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

Thousands of yen
Unitholders’ equity
Surplus

Balance as of
September 1, 2020
(Note 10)

UnappropriatedTotal surplus
retained earnings

Total
unitholders’equityTotal
net assets¥80,744,051¥(750,029)¥79,994,021¥1,654,877 ¥1,654,877¥81,648,898¥81,648,898

Issuance of new
investment units

17,699,985‐

17,699,985‐‐

17,699,985

17,699,985

Distributions inexcess ofretained earnings‐(181,042)(181,042)‐‐(181,042)(181,042)

Surplus cash
distributions

‐

‐

‐

(1,654,764) (1,654,764)(1,654,764)(1,654,764)

Net income

‐

‐

‐

2,073,136

2,073,136

2,073,136

2,073,136

Total change during
the period

17,699,985(181,042)

17,518,943

418,371

418,371

17,937,314

17,937,314

Balance as ofFebruary 28, 2021
(Note 10)

¥98,444,036¥(931,072)¥97,512,964¥2,073,248 ¥2,073,248¥99,586,213¥99,586,213

UnappropriatedTotal surplus
retained earnings

Total
unitholders’equityTotal
net assets

Change during theperiodFor the period ended August 31, 2020

Thousands of yen
Unitholders’ equity
Surplus

Unitholders’ capital
Deduction ofUnitholders’
Unitholders’unitholders’capital, grosscapital, net
capitalBalance as of March
1, 2020 (Note 10)¥ 80,744,051¥ (576,021)¥ 80,168,030¥ 1,632,627 ¥ 1,632,627¥ 81,800,657¥ 81,800,657

Distributions inexcess ofretained earnings‐(174,008)(174,008)‐‐(174,008)(174,008)

Surplus cash
distributions

‐

‐

‐

(1,632,440) (1,632,440)(1,632,440)(1,632,440)

Net income

‐

‐

‐

1,654,690

1,654,690

1,654,690

1,654,690

Total change during
the period‐(174,008)(174,008)

22,24922,249(151,759)(151,759)

Balance as of August
31, 2020 (Note 10)¥ 80,744,051¥ (750,029)¥ 79,994,021¥ 1,654,877 ¥ 1,654,877¥ 81,648,898¥ 81,648,898

Change during theperiodYen

Net income per unit (Note 14)

For the period ended
August 31, 2020
February 28, 2021
¥
5,410
¥
5,958

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

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

17

SEMIANNUAL REPORTSEMIANNUAL REPORT

18

Financial Section
STATEMENT OF CASH FLOWS

Thousands of yen
For the period ended
August 31, 2020
February 28, 2021
Cash flows from operating activities:
Income before income taxes
Depreciation
Amortization of investment unit issuanceInterest income
Interest expenses
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
Payments due to disaster
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of property and equipment in trust
Proceeds from tenant leasehold and security deposits intrust
Repayments from tenant leasehold and security deposits
in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Proceeds from short‐term loans payable
Repayments of short‐term loans payable
Proceeds from long‐term loans payable
Proceeds from issuance of new investment units
Payment of distributions of retained earnings
Payment of distributions in excess of retained earnings
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period(Note4)¥¥

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

1,655,538
605,448‐(36)
68,880(6,010)1,005,408
1,159
5,617
11,159(1,432)64,162
204,777(30,446)(8,803)
3,575,421
36(68,232)(9,635)(949)
3,496,640¥

2,074,055
774,496
34,682(44)
87,433(1,120)(1,209,689)(6,542)(9,636)
85,211
13,02865,951(204,777)
187,511
21,9901,912,552
44(84,432)‐(843)
1,827,319(47,866)(28,900,804)

78,145676,278(12,650)(55,560)

17,628(28,280,087)‐(1,100,000)‐‐(1,632,883)(173,942)(2,906,826)
607,443
7,287,195

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

7,894,638¥

9,472,211

NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATIONa) Organization
Mitsubishi Estate Logistics REIT Investment Corporation (hereinafter “MEL”) was established on July 14, 2016 under the “Acton Investment Trust and Investment Corporation” (hereinafter the “Investment Trust Law”), and acquired 1 property worth
5,400 million yen on September 29, 2016, and was listed on the REIT Securities Market of the Tokyo Stock Exchange on
September 14, 2017, with Mitsubishi Estate Co., Ltd. (hereinafter “MEC”), one of the largest comprehensive developers in Japan,
acting as a sponsor. MEL focuses on investing in logistics facilities primarily in the Tokyo Metropolitan Area. MEL is externallymanaged by a licensed asset management company, Mitsubishi Jisho Investment Advisors, Inc. (hereinafter the “Asset Manager”
or “MJIA”). On September 13, 2017, MEL issued 198,000 new units through a public offering and raised approximately 49,678
million yen. Those units are listed on the J‐REIT section of the Tokyo Stock Exchange. MEL acquired 7 properties (aggregateacquisition price: 65,479 million yen) on September 14, 2017 following its listing and acquired 2 properties (aggregate acquisition
price: 12,340 million yen) on September 3, 2018. Furthermore, MEL acquired one additional property on September 2, 2019,
and additional four properties on October 9, 2019, total of five properties worth aggregate acquisition price of 30,568 million
yen. In addition, MEL acquired five properties worth aggregate acquisition price of 28,407 million yen during the reporting fiscal
period. As of February 28, 2021, MEL held in the form of beneficiary right in trust in 19 properties (aggregate acquisition price:
142,194 million yen), and the occupancy rate remained high at 99.7% as of the end of the reporting fiscal period.
b)Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust
Law, the Japanese Financial Instruments and Exchange Act and their related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (hereinafter the “Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements from International Financial Reporting Standards. The accompanying financial
statements have been reformatted and translated into English from the financial statements of MEL prepared in accordance withJapanese GAAP, and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial
Instruments and Exchange Act. In preparing these financial statements, certain reclassifications and modifications have been
made to the financial statements issued domestically in order to present them in a format which is more familiar to readers
outside Japan. As permitted by the regulations under the Financial Instruments and Exchange Act of Japan, amounts of less than
one thousand yen have been omitted. As a result, the totals shown in the accompanying financial statements do not necessarily
agree with the sums of the individual amounts. MEL’s fiscal period is a six‐month period that ends at the end of February andAugust of each year. MEL does not prepare consolidated financial statements as it has no subsidiaries.

2.
a)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and cash in trust, floating deposits, deposits in trust and short‐term
investments that are very liquid and realizable with a maturity of three months or less when purchased and that are subject toinsignificant risks of changes in value.

b)

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment, including property and equipment in trust,is calculated by the straight‐line method over the estimated useful lives as follows:
Buildings
2‐63 years
Structures
10‐58 years
Machinery and equipment
8‐12 years
Tools, furniture and fixtures
4‐15 yearsc)Intangible Assets
Intangible assets are stated at cost. Amortization of intangible assets, including intangible assets in trust, is calculated by thestraight‐line method over the estimated useful lives.

d)Long‐term Prepaid Expenses
Long‐term prepaid expenses are amortized by the straight‐line method.

e)

19

SEMIANNUAL REPORT

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

SEMIANNUAL REPORT

20

Financial Sectionf)

Investment Unit Issuance Expenses
The full amount of investment unit issuance expenses is recorded as expense when incurred.

g)

Beneficiary Rights in Trust
As to beneficiary rights in trust, all accounts of assets and liabilities for assets in trust as well as the related income generated
and expenses incurred are recorded in the relevant balance sheet and statement of income and retained earnings accounts.
Important line items included in accounting for financial assets and liabilities in the MEL’s balance sheet are cash and deposits intrust, buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, land in trust
and tenant leasehold and security deposits in trust.

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

i)3.

Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

・“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29 issued on March 31,
2020)
・“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on March 31, 2020)
・“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 31,
2020)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in the United States havejointly developed comprehensive accounting standards for revenue recognition and issued “Revenue from Contracts with Customers”(IFRS 15 (IASB) and Topic 606 (FASB)) in May 2014. Given the situation where IFRS 15 will be applied from fiscal years beginning on orafter January 1, 2018 and that Topic 606 will be applied from fiscal years beginning after December 15, 2017, the ASBJ has developed
comprehensive accounting standards for revenue recognition and issued them together with the implementation guidance. The basic
policy of the ASBJ when it developed the accounting standards for revenue recognition was to specify the accounting standards,
incorporating the basic principles of IFRS 15 as a starting point, from the perspective of comparability between financial statements,
which is one of the benefits of maintaining compatibility with IFRS 15. The basic policy also stipulates that if there is an item to which
consideration should be given, such as practices that have been conducted thus far in Japan, alternative treatments will be added tothe extent to which comparability is not impaired.
(2) Scheduled date of application

Standard for Fair Value Measurement” and “Implementation Guidance on Accounting Standard for Fair Value Measurement.”
As the basic policy of the ASBJ for the development of accounting standard for fair value measurement, the ASBJ basically adopted
all provisions of IFRS 13 by using the unified measurement method, from the point of view of improving the comparability of financial
statements among domestic and foreign companies. In addition, considering the actual practices that have been executed in Japan,
other treatments for individual items are established within the scope not to impair comparability between the financial statements.
(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending February 28, 2022.
(3) Impact of applying the accounting standards
The impact of applying the “Accounting Standard for Fair Value Measurement” and its guidance on the financial statements iscurrently under evaluation.

・“Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31 issued on March 31, 2020)(1) Overview
Paragraph 125 of International Accounting Standard 1 (IAS 1), “Presentation of Financial Statements,” (issued by the IASB in 2003)
requires disclosure of information about the “assumptions the entity makes about the future, and other major sources of estimation
uncertainty.” In this regard, there has been a request that the major sources of estimation uncertainty should be disclosed in the notes
to financial statements under Japanese GAAP to provide useful information to users of financial statements. In response to this request,
the ASBJ developed and issued “Accounting Standard for Disclosure of Accounting Estimates.”
The Accounting Standards Committee's basic policy for the development of this standard is not to expand individual notes, but toindicate the principles (disclosure purposes). Specific disclosures are to be determined by corporates based on the purpose of
disclosure, and are to be developed based on the rules set forth in IAS No. 1, Item 125.
(2) Scheduled date of application
The accounting standard will be applied from the end of the fiscal period ending August 31, 2021.
・“Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections” (ASBJ Statement No. 24 issued
on March 31, 2020)(1) Overview
The ASBJ’s Standards Advisory Council recommended that the ASBJ consider enhancing disclosures for notes relating to “accounting
policies and methods adopted in the cases where the relevant accounting standards were not clear.” In response to such
recommendations, the ASBJ issued the revised “Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error
Corrections.”
To improve the note information concerning “The accounting policies and methods which have been adopted in the cases where
the relevant accounting standards are not available”, the provision of Financial Accounting Principles (note 1‐2) will be followed toensure consistency with actual practices when the relevant accounting standards exist.
(2) Scheduled date of application
The accounting standard will be applied from the end of the fiscal period ending August 31, 2021.

The accounting standards will be applied from the beginning of the fiscal period ending February 28, 2022.
(3) Impact of applying the accounting standards
The impact of applying “Accounting Standard for Revenue Recognition” and its guidance on the financial statements is currently
under evaluation.

4.

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:・“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019)
・”Accounting Standard for Financial Instruments” (ASBJ Statement No.10 issued on July 4, 2019)

August 31, 2020

・“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on July 4, 2019)

Cash and deposits

・“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 31,
2020)

Cash and deposits in trust
Cash and cash equivalents¥

Thousands of yen
As of3,504,701

February 28, 2021¥

4,389,936¥

7,894,638

3,787,095
5,685,115¥

9,472,211(1) Overview
The IASB and the FASB have established detailed guidance regarding fair value measurement (IFRS 13 “Fair Value Measurement”(IASB) and Topic 820 “Fair Value Measurement” (FASB)). The ASBJ repeatedly considered the guidance regarding fair value of financial
instruments and disclosure in order to improve the comparability with such international accounting standards, and issued “Accounting
21

SEMIANNUAL REPORTSEMIANNUAL REPORT

22

Financial Section
5.

PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS
Property and equipment and intangible assets as of February 28, 2021 are as follows:(3) Supplemental Explanation Regarding the Estimated Fair Values of Financial Instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market
price available, fair value is based on a price that is reasonably estimated. Since various assumptions and factors are reflectedin estimating the fair value, different assumptions and factors could result in a different value.

Thousands of yen

Type of assets

Balance as of
September 1,
2020

Buildings in¥ 48,174,980
trust
Structures in
1,760,155
trust
Machinery andProperty andequipment in
41,356equipment
trust
Tools, furnitureand fixtures in
11,091
trust
Land in trust
65,551,550
Total property and equipment ¥115,539,133
Software¥9,500
Intangible
Other intangible
1,000
assetsassetsTotal intangible assets¥
10,500Depreciation
Decrease Balance as of
Net balance as
Depreciation
during the February 28, Accumulatedof February Remarks
for theperiod2021
28, 2021
depreciation
periodIncreaseduring theperiod¥12,639,102 ¥‐¥ 60,814,082¥3,727,731¥ 740,306 ¥

57,086,350‐

372,203‐2,132,358

103,076

21,102

2,029,281‐

155,757‐

197,114

12,93910,949184,175

‐

5,603

‐

16,694

2,652

1,137

14,042‐

15,810,023¥28,982,690 ¥
¥
‐ ¥
‐
¥

‐ ¥

‐
‐
‐

81,361,574¥144,521,823
¥
9,500

‐
¥3,846,399
¥
6,515

‐

1,000

358

‐

¥

10,500¥6,873‐
81,361,574¥ 773,496 ¥ 140,675,424
¥
950 ¥
2,985
50
¥

1,000

641
¥

3,626

(Note) The amount of increase during the period is primarily attributable to the acquisition of 4 properties and the additional acquisition of
1 property.
6.
a)

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

23

SEMIANNUAL REPORT

‐
‐
‐

b)

Estimated Fair Value of Financial Instruments
The book value, fair value and differences between the values as of February 28, 2021 and August 31, 2020 are as follows:
Financial instruments for which the fair value is extremely difficult to estimate are excluded from the following table (see Note 2
below).
Thousands of yen
As of February 28, 2021
Book value(1) Cash and deposits¥(2) Cash and deposits in trust
Total assets(3) Short ‐term loans payable

Fair value

3,787,095¥

Difference

3,787,095

5,685,115¥‐

5,685,115‐¥

9,472,211¥

9,472,211¥‐¥

2,000,000¥

2,000,000¥‐‐(4) Long‐term loans payable due within one year

2,211,000

2,212,967

1,967

‐

(5) Long‐term loans payable

43,363,000

43,473,011

110,011¥

Total liabilities

47,574,000¥

47,685,978¥111,978

Thousands of yen
As of August 31, 2020
Book value(1) Cash and deposits¥(2) Cash and deposits in trust
Total assets(3) Short ‐term loans payable¥

Difference

3,504,701

4,389,936¥‐

4,389,936‐¥

7,894,638¥

7,894,638¥‐¥

950,000¥

950,000¥‐(4) Long‐term loans payable due within one year
(5) Long‐term loans payable
Total liabilities

Fair value

3,504,701

¥

‐

‐

‐

34,424,000

34,648,574

224,574

35,374,000¥

35,598,574¥

224,574(Note 1) Methods to estimate fair values of financial instruments(1) Cash and deposits and (2) Cash and deposits in trust (3) Short‐term loans payable
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of thefair value, and therefore, the book value is used as the fair value.
(4) Long‐term loans payable due within one year and (5) Long‐term loans payable
The fair value of long‐term loans payable is determined based on the present value of contractual cash flows
which would be applicable to new loans payable under the same terms. In terms of floating interest rate loans
payable, since it reflects the market interest rate in a short period of time, the fair value is approximately equal tothe book value. Thus, the book value is used.
(Note 2) Financial instruments for which the fair value is extremely difficult to estimate
As tenant leasehold and security deposits in trust has no available quoted market price, and it is impracticable toreasonably estimate their future cash flows, their fair value is not disclosed.
Thousands of yen
As ofAugust 31, 2020
Tenant leasehold and security deposits in trust¥

2,195,412

February 28, 2021¥

2,816,129

SEMIANNUAL REPORT

24

Financial Section
7.

(Note 3) Redemption schedule for monetary claims after February 28, 2021
Thousands of yen

Cash and deposits
Cash and deposits in trust
Total

As of February 28, 2021
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
¥ 3,787,095 ¥
‐ ¥
‐ ¥
‐ ¥
‐ ¥
‐
5,685,115‐‐‐‐‐¥ 9,472,211 ¥
‐ ¥
‐ ¥
‐ ¥
‐ ¥
‐

INVESTMENT AND RENTAL PROPERTIESMEL owns logistics facilities for leasing for the purpose of earning rental income. The book value, changes during the reporting
fiscal period and fair value of the properties are as follows:
Thousands of yen
For the period ended
August 31, 2020
February 28, 2021
Book value (Note 1)
Balance at the beginning of the period¥

113,023,624

Balance at the end of the period¥

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

Changes during the period (Note 2)
Redemption schedule for monetary claims after August 31, 2020
Thousands of yen

Cash and deposits
Cash and deposits in trust
Total

As of August 31, 2020
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
¥ 3,504,701 ¥
‐ ¥
‐ ¥
‐ ¥
‐ ¥
‐
4,389,936‐‐‐‐‐¥ 7,894,638 ¥
‐ ¥
‐ ¥
‐ ¥
‐ ¥
‐

(Note 4) Repayment schedule for debt after February 28, 2021
Thousands of yen

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

As of February 28, 2021
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
¥ 2,000,000 ¥
‐ ¥
‐ ¥
‐ ¥
‐ ¥
‐
2,211,000‐‐
3,310,000¥ 4,211,000 ¥ 3,310,000

‐

‐

‐

Repayment schedule for debt after August 31, 2020
Thousands of yen

Short‐term loans payable
Long‐term loans payable
Total

As of August 31, 2020
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
¥ 950,000 ¥
‐ ¥
‐ ¥
‐ ¥
‐ ¥
‐
‐
2,211,000
3,310,000
6,540,000
3,400,000 18,963,000¥ 950,000 ¥ 2,211,000 ¥ 3,310,000 ¥ 6,540,000 ¥ 3,400,000 ¥18,963,000

SEMIANNUAL REPORT

112,466,230¥

140,675,424

123,615,000¥

155,900,000

28,209,193(Note 1) Book value is calculated by deducting accumulated depreciation from acquisition cost.
(Note 2) The increase for the fiscal period ended August 31, 2020 was primarily a result of the recognition of CAPEX whichamounted 47,053 thousand yen. The decrease was primarily a result of the recognition of depreciation, which amounted
to 604,448 thousand yen. The increase for the fiscal period ended February 28, 2021 was primarily a result of acquiring
new properties for a total of 28,865,490 thousand yen. The decrease was primarily a result of the recognition ofdepreciation, which amounted to 773,496 thousand yen.
(Note 3) The fair value at the end of the period is determined based on appraised value provided by independent real estateappraisers.
Income and loss in connection with investment and rental properties are disclosed in “8. PROPERTY‐RELATED REVENUES AND
EXPENSES.”
8.

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, 2021 and August 31, 2020.
Thousands of yen
For the period ended
August 31, 2020
February 28, 2021
A. Property‐related revenues
Operating rental revenues
Rental revenues
Common area charges
Total
Other rental revenues
Received utilities cost
Others
Total
Total property‐related revenues
B. Property‐related expenses
Rental expenses
Facility management fee
Property and other taxes
Insurance
Repair and maintenanceUtilities cost
Depreciation
Custodian fee
OthersTotal rental expenses
C. Operating income from property leasing (A‐B)

25

112,466,230(557,394)‐

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

3,035,383
144,521
3,179,904¥

111,023
51,841
162,864
3,342,769¥¥

104,652
313,996
4,957
41,40699,083
604,448
2,427
16,272¥

185,972
313,276
6,412
75,570115,299
773,496
3,140
24,312¥¥

1,187,243
2,155,525¥¥

1,497,479
2,705,932

¥
¥
¥
¥

¥

¥
¥

3,825,893
176,373
4,002,266
124,108
77,037201,145
4,203,412

SEMIANNUAL REPORT

26

Financial Section
9.

LEASES

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

Due within one year
Due after one year

August 31, 2020¥
5,853,529
34,518,339

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

Total

¥

¥

40,371,869

47,606,221

10. NET ASSETSa) Stated Capital
MEL issues only non‐par value units in accordance with the Investment Trust Law. The entire amount of the issue price of newunits is designated as stated capital. The Investment Corporation is required to maintain net assets of at least 50 million yen as
required by the Investment Trust Law.

11. SHORT‐TERM AND LONG‐TERM LOANS PAYABLE
Short‐term and long‐term loans payable consisted of bank borrowings under loan agreements. The following tablesummarizes the short‐term and long‐term loans payable as of February 28, 2021 and August 31, 2020.

Classification

Repayment date
October 9, 2020

Short‐term loans payable

September 1, 2021

October 9, 2021
Total short‐term loans payable
Long‐term loans payable September 14, 2021
due within one year
Total Long‐term loans payable due within one year
Long‐term loans payable September 14, 2022

Weighted‐averageinterest rate
0.1424%0.1424%0.1440%0.1640%0.1619%February 28, 2021

¥

¥

¥
¥

0.3575%¥¥0.2400%0.2500%0.3913%September 1, 2024
September 14, 2024
October 9, 2024

0.2000%0.4288%0.1800%

September 1, 2025

October 9, 2026

0.2000%0.2663%0.2000%0.4675%0.3950%0.2160%0.2413%0.3125%0.5075%0.4538%0.2600%Pursuant to the “Policy on the Distribution of Funds” as defined in Article 35, Paragraph 1 of the Articles of Incorporation, theamount of distributions shall be the amount which does not exceed the amount of profits but exceeds 90% of the distributableprofit as defined in Article 67‐15 of the Special Taxation Measures Act. Based on the policy, MEL declared distribution amounts of

September 14, 2027

0.5500%2,073,054,861 yen and 1,654,764,965 yen for the fiscal periods ended February 28, 2021 and August 31, 2020, respectively.
These amounts were equivalent to the maximum integral multiples of number of investment units issued and outstanding as ofthe end of each fiscal period. Based on the distribution policy as defined in Article 35, Paragraph 2 of the Articles ofIncorporation, MEL shall make Surplus Cash Distributions (SCD), defined as distributions in excess of retained earnings, as a returnof unitholders’ capital, each fiscal period on a continuous basis.
Accordingly, for the fiscal period ended February 28, 2021, MEL declared SCD of 231,925,842 yen, as a return of unitholders’capital, which was the amount equivalent to approximately 30.0% of depreciation expense. For the fiscal period ended August 31,
2020, MEL declared SCD of 181,042,480 yen, as a return of unitholders’ capital, which was the amount equivalent toapproximately 30.0% of depreciation expense.

October 9, 2027
September 1, 2028

0.2400%0.4238%September 14, 2028

0.5750%

October 10, 2028
September 1, 2029
September 30, 2029
August 30, 2030

0.4200%0.4182%0.4900%0.4683%0.5000%Distributions

August 31, 2020

0.3263%September 2, 2023
September 14, 2023b)

Thousands of yen
As of

Yen
For the period ended
August 31, 2020

February 28, 2021

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)¥ 1,654,877,226¥ 2,073,248,856

181,042,480
1,835,807,445(6,003)
1,654,764,965

231,925,842
2,304,980,703(6,619)2,073,054,861(5,411)(5,953)

181,042,480

231,925,842

(592)

(666)

IV. Retained earnings carried forward¥

112,261¥

193,995

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

Total long‐term loans payable
Total

¥
¥

200,000
750,000‐‐‐
950,000
720,000
1,491,000
2,211,000
430,000
2,050,000
830,000
3,000,000
1,760,000
1,330,000
450,000‐
900,000
1,250,000
1,250,000‐‐‐
620,000
800,000
200,000‐‐
710,000
500,000
2,400,000
400,000
1,340,000
1,340,000
880,000
880,000
1,250,000‐‐
830,000
807,000
1,256,000
750,000‐
4,000,000‐‐‐
32,213,000
35,374,000

¥
¥
¥
¥

¥
¥

‐
‐
1,300,000
500,000
200,000
2,000,000
720,000
1,491,000
2,211,000
430,000
2,050,000
830,000
3,000,000
1,760,000
1,330,000
450,000
1,150,000
900,000
1,250,000
1,250,000
1,500,000
800,000
300,000
620,000
800,000
200,000
750,000
500,000
710,000
500,000
2,400,000
400,000
1,340,000
1,340,000
880,000
880,000
1,250,000
900,000
500,000
830,000
807,000
1,256,000
750,000
1,750,000
4,000,000
2,000,000
500,000
500,000
43,363,000
47,574,000

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, 2021 and August 31, 2020 are disclosed in “6. FINANCIAL INSTRUMENTS”.
27

SEMIANNUAL REPORTSEMIANNUAL REPORT

28

Financial Section
15. TRANSACTION WITH RELATED PARTIES

12. REDUCTION ENTRY
The amount of reduction entry of property and equipment as of February 28, 2021 and August 31, 2020 are as follows:
Thousands of yen
As of
Buildings in trust
Structures in trust

August 31, 2020¥¥

31,2207,008

February 28, 2021¥
31,220¥7,008

13. INCOME TAXESMEL is subject to Japanese corporate income taxes on its taxable income. The tax effects of temporary differences that give rise
to a significant portion of the deferred tax assets and liabilities as of February 28, 2021 and August 31, 2020 are as follows:
Thousands of yen
As ofEnterprise tax payable
Total deferred tax assets
Net deferred tax assets

August 31, 2020
¥

11
11
11

¥

February 28, 2021
¥

15
15
15

¥

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, 2021 and August 31,
2020 are as follows:

August 31, 2020
Statutory tax rate
Adjustments:
Deductible cash distributions
Other
Actual effective income tax rate

For the period ended
February 28, 2021
31.46%
31.46%(31.45%)
0.04%
0.05%

(31.44%)
0.03%
0.04%

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

14. PER UNIT INFORMATION
The following table summarizes per unit information for the fiscal periods ended February 28, 2021 and August 31, 2020.

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

Yen
For the period ended
August 31, 2020
February 28, 2021¥

5,410
305,815¥

5,958
347,929

Net assets per unit¥
266,987¥
285,972(Note) Basic net income per unit is based on the weighted average number of units issued and outstanding during theperiod. Diluted earnings per unit and related information are not disclosed as no dilutive units were outstanding.

29

SEMIANNUAL REPORTa)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, 2021 and August 31, 2020.

b)Transactions and Account Balances with Affiliates
There were no transactions and account balances for the fiscal periods ended February 28, 2021 and August 31, 2020.

c)

Transactions and Account Balances with Companies under Common Control
There were no transactions and account balances for the fiscal periods ended February 28, 2021 and August 31, 2020.

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, 2021 and August 31, 2020.

16. SEGMENT AND RELATED INFORMATION(For the fiscal periods ended February 28, 2021 and August 31, 2020)a) Segment Information
Disclosure is omitted because the real estate leasing business is MEL’s sole business and it has no reportable segment subject
to disclosure.
b)

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

17. SIGNIFICANT SUBSEQUENT EVENTSa) Issuance of New Investment Units
MEL issued new investment units based on the resolution made by the board of directors on February 18, 2021 and March
1, 2021 and the payment was completed on March 5, 2021 and April 6, 2021 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 and outstanding : 41,000 units
Issue price: 403,650 yen per unit
Total amount issued: 16,549,650,000 yen
Issue amount: 390,402 yen per unit
Net proceeds: 16,006,482,000 yen
Payment date
: Mar. 5, 2021
<Issuance of New Investments Units through the Third‐Party Allotment>
Number of units issued and outstanding : 1,898 units
Issue amount: 390,402 yen per unit
Net proceeds: 740,982,996 yen
Payment date
: Apr. 6, 2021
Allotee: SMBC Nikko Securities Inc.

SEMIANNUAL REPORT

30

Financial Section
b)

.

31

Issuance of Investment Corporation Bonds
MEL decided to issue Green Bonds on April 8, 2021 (payment date: April 14, 2021) based on an amendment of shelfregistration statement announced in the press release “MEL Files Amendment to Shelf Registration Statement for Issuance ofGreen Bonds” dated January 18, 2021 and per the blanket resolution approved at the board of directors’ meeting held on April
7, 2021.
Name

Mitsubishi Estate Logistics REIT Investment Corporation 1st Series Unsecured Bonds (Ranking paripassu among Specified investment corporation bonds) (Green Bonds)
Total Issue Amount
2,000 million yen
Interest Rate
0.700% per annum
Redemption Date
Apr. 14, 2036
Credit Rating
AA‐ (JCR)
Collateral and guarantee Neither collateral nor guarantee is provided for Green Bonds, and no asset has been particularly
secured for the Green Bonds.
Use of Proceeds
The proceeds were allocated to the prepayment of a portion of the short‐term loans (total amount
2,000 million yen)

SEMIANNUAL REPORTSEMIANNUAL REPORT32