July 12, 2019

Financial Report for the Fiscal Period Ended May 31, 2019
(December 1, 2018 – May 31, 2019)

Activia Properties Inc.
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange3279
https://www.activia-reit.co.jp/en/
Kazuyuki Murayama, Executive Director

Investment management company:
TLC REIT Management Inc.
Representative: Hiroyuki Tohmata, President & CEO
Contact:
Kazuyuki Murayama, General Manager of Strategy Department,
Activia Management Division
TEL: +81-3-6804-5671
Scheduled date to file Securities Report:
Scheduled date to start distribution payments:
Supplementary material on financial report:
Financial report presentation meeting:

August 29, 2019
August 13, 2019
Yes
Yes (for institutional investors and analysts)(Amounts truncated to the nearest million yen)1.

Summary of financial results for the fiscal period ended May 31, 2019
(December 1, 2018 – May 31, 2019)(1) Operating results(Percentages show changes from the corresponding amounts for the previous period.)
Operating revenue

Fiscal period ended
May 31, 2019
Fiscal period ended
November 30, 2018

Operating profit

Ordinary profit

ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

14,843

7.4

8,599

14.0

7,726

15.4

7,725

15.4

13,815

3.7

7,546

1.0

6,697

1.3

6,696

1.3

Basic earnings per unit

Return on unitholders’equity (ROE)%

Ordinary profit tototal assets

Ordinary profit tooperating revenue

Yen%%
Fiscal period ended
10,1183.2
1.6
52.1
May 31, 2019
Fiscal period ended
9,584
3.0
1.5
48.5
November 30, 2018
(Note) Basic earnings per unit is calculated by dividing profit by the day-weighted average number of investment units for theperiod (698,704 units and 763,508 units for the fiscal period ended November 30, 2018, and the fiscal period ended
May 31, 2019, respectively).

- 1 -(2) Cash distributions
Cash
distributions
per unit

Total
distributions(excluding excessof earnings)(excluding excessof earnings)

Cashdistributions
in excess ofearnings
per unit

Yen Millions of yen
Fiscal period ended
May 31, 2019
Fiscal period ended
November 30, 2018

Total
distributions
in excess ofearnings

Cashdistributions
per unit(including excessof earnings)

Yen Millions of yen

Total
distributions(including excessof earnings)

Yen Millions of yen

10,003

7,714

14

10

10,017

7,725

9,584

6,696

–

–

9,584

6,696

Payout ratio

Distribution
ratio tounitholders’equity%%Fiscal period ended
99.9
3.1
May 31, 2019
Fiscal period ended
100.0
3.0
November 30, 2018
(Note 1) The ¥14 in cash distributions in excess of earnings per unit for the fiscal period ended May 31, 2019 comprises ¥14 inallowance for temporary difference adjustments. There are no distributions on reduction of unitholders’ capital for tax
purposes.
(Note 2) Because new investment units were issued during the fiscal period ended May 31, 2019, the payout ratio for that
period is obtained by the following formula with figures rounded to the first decimal place: Payout ratio = total
distributions (excluding excess of earnings) / profit × 100(3) Financial position

As of May 31, 2019

Total assets

Net assets

Millions of yen
514,359

Millions of yen
256,085

445,464

223,842

As of November 30, 2018
(Reference) Unitholders’ equity
As of May 31, 2019:
As of November 30, 2018:

Unitholders’ equity tototal assets
%
49.8
50.2

Net assets per unit
Yen
332,050
320,368¥256,085 million¥223,842 million(4) Cash flows
Cash flows fromoperating activities
Millions of yen
Fiscal period ended
May 31, 2019
Fiscal period ended
November 30, 2018

Cash flows frominvesting activities
Millions of yen

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
periodMillions of yen

Millions of yen

10,426(69,832)

59,116

12,8008,708(1,471)(6,762)

13,090- 2 -2.

Forecasts of results for the fiscal period from June 1, 2019 to November 30, 2019 andthe fiscal period from December 1, 2019 to May 31, 2020
(Percentages show changes from the corresponding amounts for the previous period.)
Operatingrevenue

Fiscal period ending
November 30, 2019
Fiscal period ending
May 31, 2020

OperatingprofitOrdinary
profit(excluding excessof earnings)

Cashdistributions
in excess ofearnings
per unitCashdistributions
per unit

ProfitMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen

%

Yen

Yen

15,536

4.7

8,694

1.1

7,727

0.0

7,726

0.0

10,018–14,883

(4.2)

8,478

(2.5)

7,482

(3.2) 7,481

(3.2)

9,700

–

(Reference) Forecasted profit per unit (forecasted profit / total projected number of investment units issued at end of period)
for the fiscal period ending November 30, 2019:¥10,018
for the fiscal period ending May 31, 2020:¥9,700* Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of priorperiod financial statements
a.
b.
c.
d.

Changes in accounting policies due to revisions to accounting standards and other regulations: None
Changes in accounting policies due to other reasons: None
Changes in accounting estimates: None
Restatement of prior period financial statements: None

(2) Total number of units issueda.

b.

Total number of units issued at end of period (including treasury units)
As of May 31, 2019

771,224 units

As of November 30, 2018698,704 units

Number of treasury units at end of period
As of May 31, 2019

– units

As of November 30, 2018

– units(Note) Please refer to “Per Unit Information” on page 31 for the number of investment units used as the basis
for calculating basic earnings per unit.

* Financial reports are exempt from audit conducted by certified public accountants or an audit
corporation.
* Other special items
Forward-looking statements presented in this financial report including forecasts of results are based on
information currently available to us and on certain assumptions we deem to be reasonable. As such, actual
operating and other results may differ materially due to a number of factors. Furthermore, these forecasts arein no way a guarantee of any distribution amount. Please refer to “Assumptions for Forecasts of Investment
Performance for the 16th Fiscal Period from June 1, 2019 to November 30, 2019 and the 17th Fiscal Period
from December 1, 2019 to May 31, 2020” on pages 11 through 12 for information on assumptions for theforecasts.

This English version is a translation of the original Japanese document and is only for reference purposes. In
the case where any differences occur between the English version and the original Japanese version, theJapanese version will prevail.

- 3 -Index
1. Asset Management Status .............................................................................................................................. 5(1) Asset Management Status ...................................................................................................................... 5
2. Financial Statements .................................................................................................................................... 13(1) Balance Sheet ....................................................................................................................................... 13(2) Statement of Income ............................................................................................................................ 15(3) Statement of Unitholders’ Equity ........................................................................................................ 16(4) Statement of Cash Distributions .......................................................................................................... 17(5) Statement of Cash Flows ..................................................................................................................... 19(6) Notes on Assumption of Going Concern ............................................................................................. 20(7) Notes on Important Accounting Policies ............................................................................................. 20(8) Notes to Financial Statements .............................................................................................................. 22(9) Changes in Total Number of Investment Units Issued and Outstanding ............................................. 32
3. Reference Information ................................................................................................................................. 34(1) Composition of Invested Assets ........................................................................................................... 34(2) Investment Assets ................................................................................................................................ 35- 4 -1. Asset Management Status(1) Asset Management Statusi) Summary of Results for the Current Fiscal Period(A) Transition of Investment Corporation
Activia Properties Inc. (hereinafter referred to as the “Investment Corporation”) was established on
September 7, 2011, with unitholders’ capital of ¥200 million (400 units) and TLC Township Inc. (onApril 1, 2017, an absorption-type merger took place with current TLC REIT Management Inc.
(hereinafter referred to as the “Asset Manager”) as a surviving company and TLC Activia Investment
Management Inc. (its trade name was changed from TLC Township Inc. on April 1, 2012) as anabsorbed company) as the organizer under the Act on Investment Trusts and Investment Corporations(Act No. 198 of 1951, including subsequent revisions; hereinafter referred to as the “Investment TrustAct”), and completed its registration in the Kanto Local Finance Bureau on September 20, 2011
(Director-General of the Kanto Local Finance Bureau No. 73).
After that, the Investment Corporation was listed on the real estate investment trust securities marketof Tokyo Stock Exchange, Inc. (Securities code 3279) on June 13, 2012. On December 19, 2018, theInvestment Corporation carried out a publicly offered capital increase for the sixth consecutive year,
and on January 7, 2019, it carried out a third-party allotment.
“Activia” of “Activia Properties,” the name of the Investment Corporation, has been coined from thewords “activate” and “ia,” a suffix meaning “place.” By investing in and managing real estate
appropriate to its name, the Investment Corporation seeks to become an entity capable of broadlyenergizing society. The Investment Corporation will also select real estate capable of sustaining
customer demand as a location for both corporate activities and urban recreation in popular areas,
with the aim of maximizing the medium- and long-term value of unitholders, supported by its
proactive management (management to improve the circumstances by taking initiatives and acting forthe future).
In the fiscal period under review, which ended on May 31, 2019, the Investment Corporation took
steps to reshuffle its asset portfolio which involved using proceeds from a publicly offered capitalincrease to acquire three properties including Tokyu Plaza Ginza (land) (30% co-ownership interest),
which belongs in the focused investment properties category of “Urban Retail Properties,” andtransferring A-FLAG AKASAKA (50% co-ownership interest). Consequently, the Investment
Corporation held 45 properties (with the total acquisition price of ¥500,485 million) at the end of the
fiscal period under review.
(B) Investment Environment in the Fiscal Period under Review
In the fiscal period under review, the Japanese economy continued on a trend of gradual recovery on
the whole against an ongoing backdrop of robust employment and income environments, but signs of
weakness in exports and capital investment also emerged due to a slowing global economy.
With respect to the environment surrounding retail properties, personal consumption has been
mounting a modest recovery yet consumer sentiment has been weak according to the Monthly
Consumer Confidence Survey released by the Economic and Social Research Institute, Cabinet Office,
Government of Japan. Moreover, according to the Consumption Trend Survey for Foreigners Visiting
Japan released by the Japan Tourism Agency, the Ministry of Land, Infrastructure, Transport andTourism, the number of foreign overseas visitors to Japan continued on an upward trajectory during
the quarter spanning January to March 2019. As such, demand related to inbound tourism has
remained at high levels.
In the rental office market, a favorable environment of supply relative to demand has been persisting.
In that regard, according to data published by Miki Shoji Co., Ltd., the average vacancy rate of thefive central wards of Tokyo (Chiyoda-ku, Minato-ku, Chuo-ku, Shibuya-ku and Shinjuku-ku) has
been hovering just above the 1% range since November 2018, and rent levels have been encountering
their longest upward phase of gains ever with the average rent having been increasing for 65
consecutive months. The market environment has remained favorable also in major cities outside
Tokyo as vacancy rates hold to their lowest ever levels along with a persisting moderate upward trend
in rent levels.
The J-REIT market has been maintaining an upward trend supported by a situation where respective
investment corporations have been implementing initiatives with a focus on improving unitholder
value, which is in addition to a favorable external environment marked by a robust real estate market,- 5 -long-term interest rates remaining at low levels, etc. Financing activities through publicly offeredcapital increase and property acquisition have been continuously and actively conducted, and this has
led to an ongoing expansion in J-REIT asset sizes.
(C) Investment Performance
The Investment Corporation acquired beneficiary interests of real estate in trust by publicly offeredcapital increase in a total of three properties, namely Tokyu Plaza Ginza (Land) (30% co-ownershipinterest) (with the acquisition price of ¥37,500 million), Q plaza HARAJUKU (60% co-ownershipinterest) (with the acquisition price of ¥13,200 million) and EDGE Shinsaibashi (with the acquisition
price of ¥19,800 million) on January 10, 2019, as trust assets in accordance with the basic asset
management policy set forth in the Articles of Incorporation. On March 1, 2019, the Investment
Corporation also transferred beneficiary interests of real estate in trust of A-FLAG AKASAKA (50%
co-ownership interest) (with the transfer price of ¥1,875 million) as trust assets.
Consequently, total assets held by the Investment Corporation at the end of the fiscal period underreview were 45 properties (with the total acquisition price of ¥500,485 million) with the total leasablearea of 415,167 m2 (125,586 tsubo).
The trend of monthly average occupancy rate (Note) during the fiscal period under review is asfollows:
December31, 2018

January 31, February 28,
2019
2019

March 31,2019

April 30,2019

May 31,
2019

Urban Retail
Properties

100.0%

99.9%

99.5%

99.9%

100.0%

100.0%

Tokyo Office
Properties

100.0%

100.0%

100.0%

100.0%

99.9%

99.9%

Activia
Account
Properties

99.8%

98.8%

98.8%

98.4%

98.8%

99.0%

Total

99.9%

99.5%

99.3%

99.3%

99.5%

99.5%

(Note)

Figures for occupancy rates are rounded to the nearest tenth.

(D) Initiatives Regarding Sustainability
In order to build a portfolio consisting of “real estate capable of sustaining customer demand” withthe aim of maximizing medium- and long-term unitholder value, the Investment Corporation has beenpromoting various initiatives with its sights set on lowering environmental loads and contributing toour nearby surroundings and local communities, thereby extending beyond considerations such as
location, use, size and qualities. Based on such initiatives, the Investment Corporation’s asset
management company TLC REIT Management Inc. established the “Sustainability Policy” in April
2019, clearly stating our approach in contributing to sustainable development of society by addressing
social issues such as concerns for the environment and society, and reinforcement of corporate
governance. In July 2019, as material issues that the Investment Corporation needs to address, wereleased quantitative targets encompassing a wider range of performance benchmarks from anenvironmental standpoint, and also clearly stated practical management policy to such ends. This
involves daily effort to achieve our basic objective of cutting unit energy consumption, etc. by anannual average of 1% over the medium to long term. Initiatives carried out in the fiscal period underreview include upgrading to LED lighting at some private areas at Umeda Gate Tower, and somecommon areas of Kobe Kyu Kyoryuchi 25Bankan, A-FLAG KOTTO DORI, A-PLACE Shinbashi,
Shiodome Building and A-PLACE Bashamichi. At Umeda Gate Tower, the Investment Corporation
has entered into its first-ever green lease contract linked to energy consumption decreases underwhich tenants are to assume a portion of the costs of achieving lower energy consumption by having
upgraded to the aforementioned LED lighting.
Moreover, we continue to engage in annual initiatives geared to acquiring green building
certifications. During the fiscal period under review, we have acquired the CASBEE (Comprehensive
Assessment System for Built Environment Efficiency) for Real Estate certification for the sevenproperties Tokyu Plaza Omotesando Harajuku (S class), Tokyu Plaza Akasaka (S class), OSAKIWIZTOWER (S class), A-PLACE Yoyogi (S class), A-PLACE Ikebukuro (A class), A-PLACE
Gotanda (A class), and A-PLACE Kanayama (A class). We have also acquired the BELS
- 6 -certifications for the two properties Tokyu Plaza Omotesando Harajuku (five stars) and Commercial
Mall Hakata (five stars), and re-acquired the DBJ Green Building Certification for the one property
Shiodome Building (five stars). As such, a total of 25 of our properties have acquired green building
certification, which amounted to 57.8% of our holdings calculated on the basis of gross floor area (asof May 31, 2019).
Furthermore, at Tokyu Plaza Omotesando Harajuku, we continued the “Yasai-no-mori (garden ofvegetables) Project,” which entails the property growing vegetables in cooperation with NPOs,
sponsor companies, and neighboring nursery schools. We also cooperated in community activities tocoexist with nearby businesses, residents and cities as part of initiatives for local society, which
included our participation in clean-up campaigns and summer festivals in various areas where ourproperties are located.
The Investment Corporation will contribute to achieving a sustainable society by engaging in suchinitiatives geared to the environment and society.
(E) Overview of Financing
In the fiscal period under review, in order to cover a part of the acquisition costs for beneficiaryinterests of real estate in trust to the above three properties and related costs, the Investment
Corporation additionally issued investment units (67,320 units) through a public offering on
December 19, 2018, issued new investment units (5,200 units) by a third-party allotment on January 7,
2019, and borrowed funds of ¥35,000 million on January 10, 2019. The Investment Corporation has
refinanced borrowings amounting to a total of ¥23,700 million largely in order to cover repayment ofborrowings and investment corporation bonds that had come due. Moreover, the Investment
Corporation has been working to maintain a stable financial base through ongoing moves that haveincluded reducing interest costs and diversifying repayment dates on interest-bearing debt, which inpart involves making use of interest rate swaps in some such cases when arranging such borrowings
and refinancing. As of the end of the fiscal period under review, the balance of interest-bearing debt
was ¥234,350 million (borrowings of ¥220,350 million and investment corporation bonds of ¥14,000
million). The ratio of interest-bearing debt to total assets (LTV = Balance of interest-bearing debt /Total assets x 100) was 45.6% as of the end of the fiscal period under review. The long-term debt
ratio and the ratio of fixed-interest debt to total interest-bearing debt were 94.0% and 89.0%,
respectively.
The credit rating the Investment Corporation has obtained as of the end of the fiscal period underreview is as follows. This investment unit does not have a credit rating provided or made available forinspection by a credit rating agency or one scheduled to be provided or made available for inspection
by a credit rating agency at the Investment Corporation’s request.
Credit Rating Agency

Rating

Forecast

Japan Credit Rating Agency (JCR)

Long-term issuer rating: AA

Stable(F) Overview of Financial Results and Distributions in the Fiscal Period under Review
As a result of the above-mentioned investments, operating revenue, operating profit, and ordinary
profit were ¥14,843 million, ¥8,599 million, and ¥7,726 million, respectively, for the fiscal period
under review, and profit was ¥7,725 million.
In accordance with the distribution policy set forth by the Investment Corporation (Article 35 of the
Articles of Incorporation), the decision was made with respect to paying distributions of profits of¥7,714,553,672, which is the entire amount of the net profit defined in Article 136, Paragraph 1 of theInvestment Trust Act, with such amount excluding a fraction of less than ¥1 of distributions perinvestment unit, with the aim that as greatest as possible distributions of profits would be included intax deductible expenses under Article 67-15 of the Act on Special Measures Concerning Taxation(Act No. 26 of 1957, including subsequent revisions; hereinafter referred to as the “Special Taxation
Measures Act”). In addition, distributions in excess of earnings shall be made in an amount decided
by the Investment Corporation and equivalent to a deduction in net assets (refers to stipulations ofArticle 2, Paragraph 2, Item 30 (b) of the Regulations on Accountings of Investment Corporations),
taking into account effects of the deduction in net assets on distribution amounts. During the fiscal
period under review, the Investment Corporation has accordingly decided to distribute ¥10,797,136 as
distributions related to allowance for temporary difference adjustments, calculated to exclude a
fraction of less than ¥1 of distributions in excess of earnings per investment unit, with the amountequivalent to deferred losses on hedges of ¥11,474,393. Consequently, distributions per investment
unit resulted in ¥10,017.
- 7 -ii) Outlook for the Next Fiscal Period(A) Investment Environment for the Next Fiscal Period
In the Japanese economy going forward, we expect the trend of modest recovery to hold, driven inpart by robust employment and income environments, and also by increasing expenditures particularly
involving pubic-sector investment, and despite concerns of weak exports and production for the time
being amid global economic slowdown. Meanwhile, we will need to closely monitor risks of global
economic slowdown, particularly with respect to developments involving the Sino-American trade
war and monetary policy in Europe and the U.S., and the direction being taken regarding the U.K.’s
withdrawal from the European Union.
In the rental office market, robust conditions are likely to persist amid a scenario of tightening of
supply relative to demand coupled with strong demand particularly due to factors that include
continuing office environment improvements along with office expansion and relocation due toworkforce increases. With respect to the environment surrounding retail properties, although there areconcerns regarding effects of the consumption tax hike, we anticipate robust performance amid hopesthat the market will gain support from various economic measures, as well as an ongoing situation ofrobust employment and income environments along with a still increasing number of foreign overseas
visitors to Japan. The J-REIT market is likely to remain firm amid a scenario of consistent J-REIT
performance and relatively high dividend yields, in addition ongoing favorable conditions in theexternal environment, particularly with respect to a robust real estate market and long-term interest
rates remaining at low levels in Japan. Amid this environment, the Investment Corporation willcontinue to promote internal growth by leveraging the competitiveness of its assets undermanagement, while also working to achieve external growth through careful investment decisions,with the aim of improving unitholder value.
(B) Investment Policy and Developments to Be Addressed in the Next Fiscal Perioda. Basic Policy
The Investment Corporation’s basic policies are to invest in assets, with targeted investments in
Urban Retail and Tokyo Office properties; utilize the Tokyu Fudosan Holdings Group’s value chain
based on the comprehensive support system; and a governance structure that maximizes unitholder
value.
b. External Growth Strategy
The Investment Corporation will invest in Urban Retail and Tokyo Office properties as a main
target. It will make its investment decisions carefully, concentrating on selecting properties in
excellent locations, including surrounding areas, and thoroughly considering individual factors suchas use, size, specifications and other qualities of properties, and credibility and name recognition oftenants, in order to construct a competitive portfolio in the medium to long term.
To acquire these competitive assets on an ongoing basis, the Investment Corporation will work tomaintain and improve the quality of its portfolio by carefully selecting investment assets based on
the information it receives under its sponsor support agreement with Tokyu Land Corporation
regarding the Investment Corporation and its support agreement with five group companies in the
Tokyu Fudosan Holdings Group. It will also acquire properties through the exclusive know-how
and information-gathering network of the Asset Manager.
c. Internal Growth Strategy
The Investment Corporation will operate, manage, and refurbish its portfolio to maintain andimprove the competitiveness of its facilities through a comprehensive understanding of the featuresof its overall portfolio and its individual assets under management, based on the unique expertise of
its Asset Manager. The Investment Corporation will also seek to manage its portfolio in a stablemanner and strengthen its earnings by establishing appropriate operational and management
systems tailored to the specific characteristics of the assets it has invested in, and through regularand non-regular inspections by the property management company that has considerable experiencein the operation and management of real estate.
The Investment Corporation will also maintain and improve the value of its assets through its
expertise in internal growth through operating and managing properties. It will maximize thecompetitiveness of its assets through the ongoing assistance of Tokyu Land Corporation and othersupport companies, which, through their face-to-face business with consumers, have richinformation regarding consumer needs and developments in industries such as retail and services.
- 8 -With respect to the property management business for the assets under management, leasing support
has been provided from Tokyu Land Corporation, Tokyu Land SC Management Corporation or
Tokyu Community Corp.
d. Financial Strategy
Having the sound financial strategy in an effort to conservatively control LTV as well as makestable long-term borrowings and diversify maturities (diversifying repayment dates), the Investment
Corporation will endeavor to build stable financial base with solid bank formation. In addition, withthe aim of diversifying means of raising funds, the Investment Corporation will issue investment
corporation bonds while paying close attention to trends in financial markets. Concerning theissuance of new investment units, moreover, the Investment Corporation will prudently and flexibly
carry out such issuance while paying appropriate attention to various environmental factors with theaim of achieving long-term and stable growth.
(C) Significant Subsequent Events
Issuance of Investment Corporation Bonds
Based on a comprehensive resolution on the issuance of investment corporation bonds at the boardof directors meeting held on May 28, 2019, the Investment Corporation issued investment
corporation bonds on July 9, 2019 as described below.
Name

Total issue amountInterest rate
Collateral

Redemption method and date

Credit rating
Use of proceeds

The Investment Corporation 10th unsecured investment
corporation bonds (green bonds) (with pari passu conditions
among specified investment corporation bonds) (“the Investment
Corporation Bonds”)¥5.0 billion
0.220% per annum
Neither collateral nor guarantee is provided for the Investment
Corporation Bonds, and no asset has been particularly secured forthe Investment Corporation Bonds.
The total amount of the Investment Corporation Bonds will be
redeemed on July 9, 2024.
Redemption by purchase of the Investment Corporation Bonds by
the Investment Corporation will be available any time on andafter the following day of the payment date, unless otherwise
determined by the Japan Securities Depository Center,
Incorporated.
AA (Japan Credit Rating Agency)
The proceeds have been allocated for all, or a portion of, funds
for early repayment of existing borrowings.

- 9 -(D) Outlook of Investment Performance
For the fiscal period ending November 30, 2019 (16th fiscal period: June 1, 2019 to November 30,2019), investment performance is estimated as follows. For the assumptions used for the estimation of
investment performance, please refer to “Assumptions for Forecasts of Investment Performance forthe 16th Fiscal Period from June 1, 2019 to November 30, 2019 and the 17th Fiscal Period from
December 1, 2019 to May 31, 2020” on pages 11 through 12.
Operating revenue¥15,536 million

Operating profit¥8,694 million

Ordinary profit¥7,727 million

Profit¥7,726 million

Cash distributions per unit

¥10,018

Cash distributions in excess of earnings per unit¥–

If it is assumed that there are no changes in “Assumptions for Forecasts of Investment Performancefor the 16th Fiscal Period from June 1, 2019 to November 30, 2019 and the 17th Fiscal Period from
December 1, 2019 to May 31, 2020” on pages 11 through 12, the outlook of investment performancefor the fiscal period ending May 31, 2020 (17th fiscal period: December 1, 2019 to May 31, 2020) is
estimated as follows.
Operating revenue¥14,883 million

Operating profit¥8,478 million

Ordinary profit¥7,482 million

Profit¥7,481 million

Cash distributions per unit

¥9,700Cash distributions in excess of earnings per unit¥–

(Note) The above estimation is determined based on certain assumptions at the time of preparing
the financial statements. Due to changes in the circumstances surrounding the Investment
Corporation including acquisition or disposition of properties, the trend of real estatemarket, etc. in the future, actual operating revenue, operating profit, ordinary profit, profit
and cash distributions per unit may change. Furthermore, this estimation does notguarantee the amount of distributions.

- 10 -

Assumptions for Forecasts of Investment Performance for the 16th Fiscal Period from June 1, 2019 toNovember 30, 2019 and the 17th Fiscal Period from December 1, 2019 to May 31, 2020
Item
PeriodAssumptions
・ 16th fiscal period (June 1, 2019 to November 30, 2019) (183 days)
・ 17th fiscal period (December 1, 2019 to May 31, 2020) (183 days)

Investment
portfolio

・ Our forecasts of investment performance assume that there will be no materialchanges to the composition of our investment portfolio, including acquisition ofproperties or disposition of properties, associated with the 44 properties (the “Assets
Currently Held”) for which we hold the trust beneficiary interests as of today, before
the end of the 17th fiscal period (May 31, 2020).
Note that in the fiscal period ending November 30, 2019 (16th fiscal period), we
transferred A-FLAG AKASAKA (50% co-ownership interest) (the “Transferred
Asset”) on June 3, 2019.
・ Our forecasts, however, may change due to any changes to the composition of ourinvestment portfolio.

Operatingrevenue・ We have calculated our real estate leasing business revenues from the Assets
Currently Held taking into account the relevant lease agreements effective as oftoday, market trends, etc.
・ Operating revenue is based on our assumption that there will be no delinquencies or
non-payment of rents by tenants.
・ We expect to record gains on sales of the Transferred Asset amounting to ¥343
million in the fiscal period ending November 30, 2019 (16th fiscal period).

Operatingexpenses・ Expenses related to leasing business (other than depreciation), which are ourprincipal operating expenses, were calculated based on the historical information andupon considering variable factors.
・ In general, property tax and city planning tax of properties acquired are settled at thetime of acquisition between the former owner (seller) and the purchaser based on
their respective periods of ownership in relation to the relevant tax year. However,any of these taxes allocated to the purchaser are not expensed at the time ofacquisition because they are treated as a part of the acquisition cost for accounting
purposes. For property tax and city planning tax, ¥1,087 million and ¥1,083 million
for the Assets Currently Held and the Transferred Asset will be expensed in thefiscal period ending November 30, 2019 (16th fiscal period) and in the fiscal period
ending May 31, 2020 (17th fiscal period), respectively.
・ Repair and maintenance expenses of buildings are estimated at the amount required
for each of the fiscal periods based on the medium- and long-term repair andmaintenance plans formed by the Asset Manager. However, the actual repair andmaintenance expenses for the fiscal periods may significantly differ from theestimates since (i) an unforeseeable event may cause serious damage to a building
requiring emergent repair expenditure, (ii) in general, amounts vary according to thefiscal period, and (iii) certain types of repair and maintenance expenses are notrequired in every fiscal period.
・ We calculate depreciation expenses (including incidental expenses) by the straightline method, assuming ¥1,303 million and ¥1,323 million for the 16th fiscal period
ending November 30, 2019 and the 17th fiscal period ending May 31, 2020,
respectively.

- 11 -

Item

Assumptions

Non-operating
expenses・ We expect interest and other borrowing-related expenses of ¥966 million and ¥996
million for the 16th fiscal period ending November 30, 2019 and the 17th fiscal
period ending May 31, 2020, respectively.

・ As of today, we have a balance of ¥239,350 million in interest-bearing debt
(borrowings of ¥220,350 million and investment corporation bonds of ¥19,000
million). However, we assume that a balance of interest-bearing debt will be¥234,350 million (borrowings of ¥215,350 million and investment corporation bondsof ¥19,000 million) after the early repayment of a portion of the borrowings on July18, 2019. Thereafter, we assume that there will be no change to the balance ofinterest-bearing debt before the end of the 17th fiscal period (May 31, 2020).
Interest-bearing ・ We assume that there will be refinancing of interest-bearing debt coming due before
debt
the end of the 16th fiscal period (November 30, 2019) and the 17th fiscal period(May 31, 2020) (16th fiscal period: long-term borrowings of ¥3,000 million, 17th
fiscal period: short-term borrowings of ¥5,000 million, long-term borrowings of¥7,300 million and investment corporation bonds of ¥6,000 million).
・ We assume the LTV ratios as of November 30, 2019 and May 31, 2020 are both tobe approximately mid-45%.
・ The LTV ratio is obtained by the following formula:
LTV = Balance of interest-bearing debt / Total assets × 100

Units

・ The number is based on our assumption of total of 771,224 units issued as of today.
We assume that there will be no additional issuance of new investment units before
the end of the 17th fiscal period (May 31, 2020).
・ The cash distributions per unit for the 16th fiscal period ending November 30, 2019
and the 17th fiscal period ending May 31, 2020 have been calculated in accordancewith the total projected number of investment units issued as of the end of each of
the fiscal periods which are 771,224 units.

・ Cash distributions (cash distributions per unit) are calculated based on the cash
distribution policy stipulated in our Articles of Incorporation.
・ The cash distributions per unit may change due to various factors, including changes
Cash distributions
to the composition of our investment portfolio, changes in rental revenues
per unit
accompanying changes in tenants, and unexpected maintenance and repairs.
・ Deferred losses on hedges, which arise from interest rate swaps and are counted as adeduction in net assets, are calculated assuming no fluctuation.
・ As stated above, deferred losses on hedges, which are counted as a deduction in net
assets, are calculated assuming no fluctuation. Accordingly, we do not anticipate
distributions in excess of earnings (allowance for temporary difference adjustments)
Cash distributions
for the 16th fiscal period ending November 30, 2019 or the 17th fiscal period ending
in excess of
May 31, 2020.
earnings per unit
・ Among cash distributions in excess of earnings, we currently do not anticipate
distributions deemed as distributions on reduction of unitholders’ capital for tax
purposes.
・ We assume that there will be no amendments in legislation, taxation, accounting
standards, listing regulations or regulations of the Investment Trusts Association of
Other
Japan that affect the above forecasts.
・ We assume that there will be no material changes in general economic conditions orreal estate markets.

- 12 -

2. Financial Statements(1) Balance Sheet(Unit: Thousands of yen)
As of November 30, 2018
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Land leasehold interests in trust
Other
Total intangible assets
Investments and other assets
Long-term prepaid expenses
Derivatives
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets- 13 -

As of May 31, 201910,023,157
3,067,204
848,825
294,817
3,066
14,237,072

9,257,380
3,542,901
866,251
507,244
7,987
14,181,766

83,354,620(10,879,394)
72,475,226
696,585(168,417)
528,167
1,390,538(330,343)
1,060,195
193,307(98,107)
95,200346,689,270
6,708
420,854,767

84,710,063(12,065,901)
72,644,162
698,826(185,296)
513,529
1,406,968(359,497)
1,047,471
222,204(113,714)
108,489
415,408,426
5,928
489,728,007

9,130,097
2,118
9,132,216

9,092,591
1,695
9,094,287

1,080,595
54,24518
38,322
1,173,181
431,160,166

1,258,702–
24
38,322
1,297,049
500,119,344

67,64567,645445,464,883

58,103
58,103514,359,213

(Unit: Thousands of yen)
As of November 30, 2018
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Current portion of investment corporation bonds
Current portion of long-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Other
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term borrowings
Leasehold and guarantee deposits received intrust
Derivatives liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed
loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets*2- 14 -

As of May 31, 2019

913,616
9,100,000
4,000,000
19,600,000
73,949902,125976
457,386
428,888566–
35,477,509

614,988
14,000,000
6,000,000
20,400,000
375,773929,635
1,099
165,430
574,299
11,019043,072,245

14,000,000
152,650,000

8,000,000
185,950,000

19,494,916

21,239,977–
2
186,144,918
221,622,427

11,474–215,201,452
258,273,697

217,091,520

248,370,846

6,696,690

7,726,143

6,696,690
223,788,210

7,726,143
256,096,990

54,24554,245
223,842,455
445,464,883(11,474)(11,474)
256,085,515
514,359,213*2

(2) Statement of Income(Unit: Thousands of yen)Previous fiscal period(From June 1, 2018
to November 30, 2018)
Operating revenue
Leasing business revenue
Other leasing business revenue
Gain on sales of real estate properties
Total operating revenue
Operating expenses
Expenses related to leasing business
Asset management fee
Asset custody fee
Administrative service fees
Remuneration for directors (and other officers)
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Interest income
Reversal of distributions payable
Interest on tax refund
Insurance claim income
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
Investment unit issuance expenses
Borrowing related expenses
Other
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings (undisposed loss)

Current fiscal period(From December 1, 2018
to May 31, 2019)*1*1

12,673,479
1,141,921–
13,815,400

*1
*1
*2

13,472,375
1,030,063
341,051
14,843,490*1

5,076,357
1,077,918
12,63832,2483,300
66,403
6,268,867
7,546,533*1

4,973,578
1,127,058
14,02135,1683,300
90,8306,243,957
8,599,533- 15 -

55
830
409
149
1,443

73
913
–
–
986

595,52237,928634,549
36,262

9,938

9,542

54,545
151,997500
850,432
6,697,544
6,697,544
984
(12)
971
6,696,573
117
6,696,690

25,013
167,716500
873,583
7,726,936
7,726,936
1,110
(6)
1,104
7,725,832
311
7,726,143

(3) Statement of Unitholders’ Equity
Previous fiscal period (From June 1, 2018 to November 30, 2018)(Unit: Thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning of
period217,091,520

Deferred
gains orlosses onhedgesTotalvaluationandtranslation
adjustments

74,90474,904

Total net
assetsUnappropriatedretained earnings(undisposed loss)

Total surplus

Totalunitholders’equity6,611,254

6,611,254

223,702,774(6,611,137)(6,611,137)(6,611,137)(6,611,137)

6,696,573

6,696,573

6,696,573

6,696,573

223,777,679

Changes in items during
periodDividends ofsurplusProfitNet changes in
items other than

(20,659)(20,659)(20,659)

unitholders’ equity
Total changes in
items during period
Balance at end of
period–*1
217,091,520

85,43585,43585,435(20,659)(20,659)

64,776

6,696,690

6,696,690

223,788,210

54,24554,245

223,842,455

Current fiscal period (From December 1, 2018 to May 31, 2019)(Unit: Thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning of
period217,091,520

Unappropriatedretained earnings(undisposed loss)

Total surplus

Totalunitholders’equity6,696,690

6,696,690

223,788,210

Deferred
gains orlosses onhedgesTotalvaluationandtranslation
adjustments

54,24554,245

Total net
assets

223,842,455

Changes in items during
periodIssuance of new
investment units

31,279,326

Dividends ofsurplusProfit31,279,326

31,279,326(6,696,379)(6,696,379)(6,696,379)(6,696,379)

7,725,832

7,725,832

7,725,832

7,725,832

Net changes in
items other than(65,719)(65,719)(65,719)

unitholders’ equity
Total changes in
items during period
Balance at end of
period31,279,326*1
248,370,846

1,029,453

1,029,453

32,308,779(65,719)(65,719)

32,243,059

7,726,143

7,726,143

256,096,990(11,474)(11,474)

256,085,515- 16 -

(4) Statement of Cash Distributions
Previous fiscal period(From June 1, 2018
to November 30, 2018)

Current fiscal period(From December 1, 2018
to May 31, 2019)

AmountAmount¥6,696,690,398¥7,726,143,417

I

Unappropriated retained
earnings

II

Additional amount of cash
distributions in excess ofearnings–¥10,797,136

Of which, allowance fortemporary difference
adjustments–¥10,797,136¥6,696,379,136¥7,725,350,808[¥9,584][¥10,017]

Of which, distributions ofprofits¥6,696,379,136¥7,714,553,672[Of which, distributions ofprofits per unit][¥9,584][¥10,003]

Of which, allowance fortemporary difference
adjustments–¥10,797,136[Of which, cash
distributions in excess ofearnings per unit
(Related to allowance fortemporary difference
adjustments)]

[–]

[¥14]

IV Earnings carried forward¥311,262¥11,589,745

III Distributions[Cash distributions per unit]- 17 -

Calculation method for
distributions

Based on the distribution policy
Based on the distribution policy
set forth in Article 35, Paragraph set forth in Article 35, Paragraph
1 of the Articles of Incorporation 1 of the Articles of Incorporationof the Investment Corporation,of the Investment Corporation,
distributions shall be limited to
distributions shall be limited tothe amount of net profit in excess the amount of net profit in excess
of an amount equivalent to ninety of an amount equivalent to ninety
hundredths (90/100) of
hundredths (90/100) of
distributable profits, as stipulated distributable profits, as stipulated
in Article 67-15, Paragraph 1 ofin Article 67-15, Paragraph 1 of
the Act on Special Measures
the Act on Special Measures
Concerning Taxation. In
Concerning Taxation. In
consideration of this policy, we
consideration of this policy, we
will pay distributions at the total will pay distributions of profits ofamount of ¥6,696,379,136, which ¥7,714,553,672, which is almostis the amount that does not
the entire amount of the net profit
exceed the unappropriateddefined in Article 136, Paragraphretained earnings and is the
1 of the Act on Investment Trusts
greatest value among integral
and Investment Corporations.
multiples of 698,704, which is the Based on the policy on
total number of investment units distribution of cash exceeding net
issued; provided, however, thatprofit set forth in Article 35,
we will not pay the portion of
Paragraph 2 of the Articles ofamount that exceeds the net profit Incorporation of the Investment
defined in Article 35, Paragraph 2 Corporation, distributions inof the Articles of Incorporation of excess of earnings shall be madethe Investment Corporation.
in an amount decided by theInvestment Corporation andequivalent to a deduction in net
assets (refers to stipulations ofArticle 2, Paragraph 2, Item 30(b) of the Regulations on
Accountings of Investment
Corporations), taking into accounteffects of the deduction in net
assets on distribution amounts.
During the fiscal period underreview, the Investment
Corporation has accordingly
decided to distribute ¥10,797,136
as distributions related toallowance for temporary
difference adjustments (refers to
stipulations of Article 2,
Paragraph 2, Item 30 of theRegulations on Accountings ofInvestment Corporations),
calculated to exclude a fraction ofless than ¥1 of distributions inexcess of earnings per investment
unit, with the amount equivalent
to deferred losses on hedges of¥11,474,393. As a result,distributions are to amount to¥7,725,350,808 for the fiscal
period under review.

- 18 -

(5) Statement of Cash Flows(Unit: Thousands of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Loss on retirement of non-current assets
Amortization of investment corporation bondissuance costs
Interest income and interest on securities
Interest expenses
Investment unit issuance expenses
Borrowing related expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Decrease in property, plant and equipment in trust
due to sale
Decrease in intangible assets in trust due to sale
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Refund of leasehold and guarantee deposits received
in trust
Proceeds from leasehold and guarantee deposits
received in trust
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of investment corporation bonds
Proceeds from issuance of investment units
Distributions paid
Other, net
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Previous fiscal period(From June 1, 2018
to November 30, 2018)

Current fiscal period(From December 1, 2018
to May 31, 2019)

6,697,544
1,267,428–

7,726,936
1,295,168
3,793

9,938

9,542

(55)
633,450
54,545
151,997(202,992)(73)
670,81125,013
167,716(17,425)

47,699–457,386
166,083(291,956)(172,582)–

1,495,081–
11,232(78,334)
9,346
114,615(12,281)(18,142)
9,309,462
55(600,021)(717)
8,708,779

37,505(75,397)–
72,335
145,410
9,113(5,940)11,095,053
73(668,083)(987)
10,426,056(354,286)(71,588,974)(1,879,200)(326,192)

786,882

2,082,892(24,459)(1,471,063)–(69,832,274)

4,997,750(5,000,000)
11,878,013(12,000,000)––(6,609,955)(28,233)(6,762,426)
475,289
12,615,072
13,090,361

18,095,107(13,200,000)
40,234,648(6,500,000)(4,000,000)
31,199,767(6,695,537)(17,847)
59,116,138(290,079)
13,090,361
12,800,282*1- 19 -*1

(6) Notes on Assumption of Going Concern
Not applicable.

(7) Notes on Important Accounting Policies
1. Method ofdepreciation of noncurrent assets(1) Property, plant and equipment (including trust assets)
The straight-line method is used.
The useful lives of major property, plant and equipment are listed below.
Buildings
2 to 70 years
Structures
2 to 66 years
Machinery and equipment
2 to 33 years
Tools, furniture and fixtures
2 to 15 years(2) Intangible assets
Internal use software is amortized by the straight-line method over the
expected useful life (5 years).
(3) Long-term prepaid expenses
The straight-line method is used.

2. Accounting methodfor deferred assets(1) Investment unit issuance expenses
The full amount is recorded as expenses when incurred.
(2) Investment corporation bond issuance costs
Amortized by the straight-line method over the period until maturity.

3. Accounting for
Property-related taxes
income and expenses
For property tax, city planning tax, depreciable asset tax for real properties
held, the amount of tax levied corresponding to the calculation period isrecorded as expenses related to leasing business.
The settlement money for property tax that is paid to the transferor for
acquisition of real properties (so-called “amount equivalent to propertytax”) is not recorded as expenses related to leasing business but included in
the acquisition costs for the related properties. The amount equivalent toproperty tax included in acquisition cost for properties for the current fiscal
period is ¥366,528 thousand.
4. Method of hedge
accounting(1) Method of hedge accounting
Deferred hedge accounting is applied. For interest rate swaps that satisfy
the requirements for special treatment, special treatment is applied.
(2) Hedging instruments and hedged items
Hedging instruments: Interest rate swaps transactions
Hedged items: Long-term borrowings(3) Hedging policy
Based on the management policy of financial market risks, the Investment
Corporation makes interest rate swaps for the purpose to hedge risks set
forth in the Articles of Incorporation of the Investment Corporation.
(4) Method of assessing hedge effectiveness
The Investment Corporation assesses hedge effectiveness by comparing
the cumulative total changes in the cash flows of the hedged items withthose of the hedging instruments, and then verifying the ratio of thechanges in both amounts. However, hedge effectiveness is deemed tohave been ensured with respect to interest rate swaps that satisfy therequirements for special treatment.

- 20 -

5. Scope of cash (cash Cash and cash equivalents include cash on hand, cash in trust, demandand cash equivalents) deposits, deposits in trust, and highly liquid short-term investments that arein the statement ofreadily convertible, bear little risk in price fluctuations, and mature withincash flows
three months of the date of acquisition.
6. Other important(1) Accounting method for trust beneficiary interest with real estate, etc. as
matters related to thetrust asset
preparation ofWith regard to trust beneficiary interest with real estate, etc. in holding as
financial statements
trust asset, all assets and liabilities as well as all revenue and expense items
associated with all trust assets are accounted for under the respective
account items of the balance sheet and statement of income.
Of the trust assets accounted for under the respective account items, thefollowing items with significance are separately indicated on the balance
sheet.
i) Cash and deposits in trustii) Buildings in trust; structures in trust; machinery and equipment intrust; tools, furniture and fixtures in trust; land in trust; construction inprogress in trust; and land leasehold interests in trustiii) Leasehold and guarantee deposits received in trust(2) Accounting method for consumption tax and local consumption tax
Consumption tax and local consumption tax are accounted for by the taxexclusion method. Consumption taxes unqualified for deduction for tax
purposes for non-current assets, etc. are included in acquisition cost foreach asset.
Additional information
Notes on Provision and Reversal of Allowance for Temporary Difference Adjustments
Previous fiscal period (From June 1, 2018 to November 30, 2018)
Not applicable.

Current fiscal period (From December 1, 2018 to May 31, 2019)
1.

2.

Reason for Provision, Related Assets, etc. and Amount of Provision

Related assets, etc.

Reason for provision

Deferred gains or losses on hedges

Recognition of loss on valuationof interest rate swaps(Unit: Thousands of yen)
Allowance fortemporary difference
adjustments
10,797

Specific Method of Reversal
Deferred gains or losses on hedges
The reversal is to accord with changes in fair value of derivative transactions that are the hedging
instruments.

- 21 -

(8) Notes to Financial Statements
Notes to Balance Sheet
1. Commitment Line Contracts
The Investment Corporation has the commitment line contracts with three of the banks with which it does
business.
As of November 30, 2018
Total amount specified in the commitmentline contracts¥21,000,000 thousand¥21,000,000 thousand––¥21,000,000 thousand¥21,000,000 thousand

Loan balance
Net balance

As of May 31, 2019

*2. Minimum Net Assets Stipulated in Article 67, Paragraph 4 of the Act on Investment Trusts andInvestment Corporations
As of November 30, 2018
¥50,000 thousand- 22 -

As of May 31, 2019
¥50,000 thousand

Notes to Statement of Income*1. Breakdown of Profit (Loss) from Real Estate Leasing Business
Previous fiscal period(From June 1, 2018
to November 30, 2018)(Unit: Thousands of yen)
Current fiscal period(From December 1, 2018
to May 31, 2019)11,463,285

12,235,271

Common service fees

810,382

836,999

Parking lot fees

285,449

291,993

Other rent revenue

114,361

A. Real estate leasing businessrevenues
Leasing business revenue
Rent

B.

12,673,479

108,110

13,472,375

Other leasing business revenue

1,141,921

1,030,063

Total real estate leasing businessrevenues

13,815,400

14,502,439

Real estate leasing business
expenses
Expenses related to leasing
business
Management operation
expenses

1,236,276

1,235,835

Utilities expenses

1,001,848

940,529

Tax and public dues

988,148

998,158

8,875

9,402

281,326

189,963

1,267,174

1,294,914

Loss on retirement of noncurrent assets

–

3,793

Other expenses related toleasing business

292,707

Insurance
Repair and maintenanceexpenses
Depreciation

C.

5,076,357

300,981

4,973,578

Total real estate leasing business
expenses

5,076,357

4,973,578

Profit (loss) from real estateleasing business (A – B)

8,739,043

9,528,861- 23 -

*2.

Breakdown of Gain (Loss) on Sales of Real Estate Properties
Previous fiscal period (From June 1, 2018 to November 30, 2018)
Not applicable.

Current fiscal period (From December 1, 2018 to May 31, 2019)(Unit: Thousands of yen)
A-FLAG AKASAKA (50% co-ownership interest)
1,875,000
Income from sales of real estate properties
1,532,587
Costs of sales of real estate properties
1,361
Other costs of sales
341,051
Gain on sales of real estate properties
Notes to Statement of Unitholders’ Equity
Previous fiscal period(From June 1, 2018
to November 30, 2018)

Current fiscal period(From December 1, 2018
to May 31, 2019)*1. Total number of authorized investment units
and total number of investment units issued
Total number of authorized investment units
Total number of investment units issued

4,000,000 units

4,000,000 units

698,704 units

771,224 units

Notes to Statement of Cash Flows*1. Reconciliation between Cash and Cash Equivalents at End of Period and the Amount on the Balance
Sheet
Previous fiscal period(From June 1, 2018
to November 30, 2018)

Current fiscal period(From December 1, 2018
to May 31, 2019)

Cash and deposits¥10,023,157 thousand¥9,257,380 thousand

Cash and deposits in trust¥3,067,204 thousand¥3,542,901 thousand

Cash and cash equivalents¥13,090,361 thousand¥12,800,282 thousand- 24 -

Notes on Financial Instruments
1. Matters Regarding Financial Instruments(1) Policy for Financial Instruments
The Investment Corporation raises funds by borrowing, issuing investment corporation bonds, or issuinginvestment units for the purpose of acquiring real estate-related assets and repaying interest-bearing debt.
When raising funds, the Investment Corporation aims to sustain stable financing capability for a long time
at low cost by enhancing its capital adequacy and maintaining conservative interest-bearing debt, looking
for attributes such as extended borrowing periods for interest-bearing debt, fixed interest rates, anddiversified due dates to ensure financial stability and avoid the risk of interest-rate hikes.
We also invest temporary excess funds in deposits in general, taking safety and liquidity, etc. into accountand carefully considering the interest-rate environment and our cash management.
We may carry out derivatives transactions for the purpose of hedging the interest-rate risk of borrowings
and other risks, but do not engage in speculative transactions.
(2) Content and Risks of Financial Instruments and Risk Management System
As the excess funds of the Investment Corporation are invested in deposits, they are exposed to credit
risks such as the insolvency of the financial institutions in which the excess funds are deposited. However,
we deposit excess funds carefully by limiting the period of deposits to the short term, taking safety andliquidity, etc. into account and carefully considering the financial environment and our cash management.
Borrowings and investment corporation bonds are mainly for the purpose of acquiring real estate andrefinancing of existing borrowings. Leasehold and guarantee deposits received are deposits provided bytenants. Borrowings, investment corporation bonds, leasehold and guarantee deposits received are
exposed to liquidity risks at the time of repayment or redemption. However, these risks are managed
through management of liquidity in hand by preparing a monthly funding plan, efforts to reduce liquidity
risk on borrowings and investment corporation bonds by diversifying repayment periods, etc., and othermeans.
Floating-rate borrowings are also exposed to the risk of fluctuations in interest-rates. However, these risks
are managed through derivative transactions (interest rate swaps) as hedging instruments in certain
floating-rate borrowings.
(3) Supplemental Remarks on the Fair Value of Financial Instruments
The fair value of financial instruments is based on market prices or reasonably calculated value if it has nomarket price. As certain assumptions are made in calculating these values, if different assumptions, etc.
are used, these values could vary.
2. Matters Regarding Fair Values of Financial Instruments
Carrying amounts, fair values, and the differences between the two values as of November 30, 2018, are asshown below. Financial instruments whose fair value is considered to be extremely difficult to determine
are not included in this table (please refer to (Note 2)).
(Unit: Thousands of yen)
Carrying amount
Fair value
Difference(1) Cash and deposits

10,023,157

10,023,157–(2) Cash and deposits in trust

3,067,204

3,067,204–

Total assets

13,090,361

13,090,361–(1) Short-term borrowings

9,100,000

9,100,000–(2) Current portion of investment
corporation bonds

4,000,000

4,006,417

6,417(3) Current portion of long-termborrowings

19,600,000

19,663,090

63,090(4) Investment corporation bonds

14,000,000

14,199,701

199,701(5) Long-term borrowings

152,650,000

154,031,795

1,381,795

Total liabilities

199,350,000

201,001,005

1,651,005

54,24554,245–Derivative transactions- 25 -

Carrying amounts, fair values, and the differences between the two values as of May 31, 2019, are as shown
below. Financial instruments whose fair value is considered to be extremely difficult to determine are notincluded in this table (please refer to (Note 2)).
Carrying amount

Fair value(Unit: Thousands of yen)
Difference(1) Cash and deposits

9,257,380

9,257,380–(2) Cash and deposits in trust

3,542,901

3,542,901–

Total assets

12,800,282

12,800,282–(1) Short-term borrowings

14,000,000

14,000,000–(2) Current portion of investment
corporation bonds

6,000,000

6,003,546

3,546(3) Current portion of long-termborrowings

20,400,000

20,446,855

46,855(4) Investment corporation bonds

8,000,000

8,327,254

327,254(5) Long-term borrowings

185,950,000

188,220,631

2,270,631

Total liabilities

234,350,000

236,998,287

2,648,287(11,474)(11,474)–

Derivative transactions(Note 1) Measurement Methods for Fair Values of Financial Instruments
Assets(1) Cash and deposits, (2) Cash and deposits in trust
The book value is used as the fair value of these assets, given that the fair value is almost the same as
the book value, as it is settled in a short time.
Liabilities(1) Short-term borrowings
The book value is used as the fair value of these liabilities, given that the fair value is almost the sameas the book value, as it is settled in a short time.
(2) Current portion of investment corporation bonds, (4) Investment corporation bonds
These fair values are determined by discounting the total of principal and interest at a rate taking into
account the remaining period and credit risk of the said investment corporation bonds.
(3) Current portion of long-term borrowings, (5) Long-term borrowings
These fair values are determined by discounting the total of principal and interest at the rate assumed
when a new loan is made corresponding to the remaining period. The book value is used as the fairvalue of those borrowings with floating interest rate, given that the fair value is almost the same as thebook value, as their interest rates are reviewed on a short-term interval to reflect market interest rates(however, for long-term borrowings with floating interest rate to which special treatment for interest
rate swaps is applied, the fair value is the value calculated by discounting the sum of principal andinterest, which are treated in combination with the said interest rate swap, at a reasonable rateestimated for a similar new loan).
Derivative transactions
Please refer to “Notes on Derivative Transactions” on pages 28 and 29.

- 26 -

(Note 2) Carrying Amounts of Financial Instruments Whose Fair Value Is Considered to Be Extremely
Difficult to Determine
Category

As of November 30, 2018

Leasehold and guarantee
deposits received in trust **(Unit: Thousands of yen)
As of May 31, 201919,494,916

21,239,977

As there are no market prices for leasehold and guarantee deposits received in trust from tenants forleasehold properties and the actual period of deposit from move-in of the tenant to move-out isdifficult to determine, it is extremely difficult to reasonably estimate the cash flow. Therefore, the fairvalue for leasehold and guarantee deposits received in trust is not subject to the disclosure of fairvalue.

(Note 3) Expected Amounts of Redemption of Monetary Claims after the Account Closing Date
(November 30, 2018)
Within1 year

1–2 years

2–3 years

3–4 years(Unit: Thousands of yen)Over
4–5 years
5 years

Deposits

10,023,157

–

–

–

–

–

Deposits in trust

3,067,204

–

–

–

–

–

Total

13,090,361

–

–

–

–

–

Expected Amounts of Redemption of Monetary Claims after the Account Closing Date
(May 31, 2019)
Within1 year

1–2 years

2–3 years

3–4 years(Unit: Thousands of yen)Over
4–5 years
5 years

Deposits

9,257,380

–

–

–

–

–

Deposits in trust

3,542,901

–

–

–

–

–

Total

12,800,282

–

–

–

–

–

(Note 4) Expected Amounts of Repayment of Borrowings and Investment Corporation Bonds after the
Account Closing Date (November 30, 2018)
Within1 year

1–2 years

2–3 years

3–4 years(Unit: Thousands of yen)Over
4–5 years
5 years

Short-term borrowings

9,100,000

–

–

–

–

–

Investment corporation
bonds

4,000,000

6,000,000–

1,000,000–

7,000,000

Long-term borrowings

19,600,000

7,300,000 12,500,000 21,100,000 25,250,000 86,500,000

Total

32,700,000 13,300,000 12,500,000 22,100,000 25,250,000 93,500,000- 27 -

Expected Amounts of Repayment of Borrowings and Investment Corporation Bonds after the
Account Closing Date (May 31, 2019)
Within1 year

1–2 years

2–3 years

3–4 years(Unit: Thousands of yen)Over
4–5 years
5 years

Short-term borrowings

14,000,000

–

–

–

–

–

Investment corporation
bonds

6,000,000––

1,000,000–

7,000,000

Long-term borrowings

20,400,000 12,500,000 22,850,000 26,500,000 25,750,000

98,350,000

Total

40,400,000 12,500,000 22,850,000 27,500,000 25,750,000 105,350,000

Notes on Derivative Transactions
1. Derivative Transaction to Which Hedge Accounting Is Not Applied(As of November 30, 2018)
Not applicable.
(As of May 31, 2019)
Not applicable.
2. Derivative Transaction to Which Hedge Accounting Is Applied(As of November 30, 2018)
The following table shows contract amount or principal amount, etc. set forth in the contract as of theaccount closing date by method of hedge accounting.
(Unit: Thousands of yen)Hedge
accounting

Type ofderivativetransactions

Deferred hedge
accounting

Interest rate
swaps
Receive floating
Pay fixed

Interest rate
Special treatment
swaps
for interest rate
Receive floating
swaps
Pay fixed

Major
hedgeditems

Amount of contract
Portion due
after 1 year

Long-term
14,400,000 12,000,000
borrowings

Long-term
borrowings- 28 -

5,000,000

5,000,000

Fair value

Calculation
method forfair value

54,245

Based onprices, etc.
indicated bypartnerfinancial
institutions*–

(As of May 31, 2019)
The following table shows contract amount or principal amount, etc. set forth in the contract as of theaccount closing date by method of hedge accounting.
(Unit: Thousands of yen)Hedge
accounting

Type ofderivativetransactions

Deferred hedge
accounting

Interest rate
swaps
Receive floating
Pay fixed

Major
hedgeditems

Amount of contract
Portion due
after 1 year

Long-term
14,400,000 12,000,000
borrowings

Fair value

Calculation
method forfair value(11,474)

Based onprices, etc.
indicated bypartnerfinancial
institutions

Interest rate
Special treatmentswapsLong-term
for interest rate
18,140,000 18,140,000*–
Receive floating borrowings
swaps
Pay fixed* Interest rate swap transactions to which special treatment is applied are accounted for as an integral
part of long-term borrowings, a hedged item. Thus, their fair values are included in the fair value of
long-term borrowings. (Please refer to the preceding “Notes on Financial Instruments, 2. Matters
Regarding Fair Values of Financial Instruments, (Note 1) Liabilities (5)” on page 26.)
Notes on Tax Effect Accounting
1. Components of Deferred Tax Assets and Deferred Tax Liabilities
As of November 30, 2018

As of May 31, 2019

Deferred tax assets
Non-deductible amount for tax purposesof enterprise tax payable¥18 thousand¥24 thousand

Total deferred tax assets¥18 thousand¥24 thousand¥18 thousand¥24 thousand

Net deferred tax assets

2. Reconciliation of Significant Difference between Effective Statutory Tax Rate and Effective Income Tax
Rate after Application of Tax Effect Accounting
As of November 30, 2018
Effective statutory tax rate

As of May 31, 201931.51%

31.51%(31.50)%(31.50)%

0.00%

0.00%

0.01%

0.01%

Adjustments
Distributions paid included indeductibles
Other
Effective income tax rate after applicationof tax effect accounting- 29 -

Notes on Transactions with Related Parties
Previous fiscal period (From June 1, 2018 to November 30, 2018)
Not applicable.
Current fiscal period (From December 1, 2018 to May 31, 2019)
Not applicable.
Notes on Investment and Rental Properties
The Investment Corporation holds Urban Retail and Tokyo Office properties, etc. in Tokyo and other regions
for rental revenue. The carrying amounts on the balance sheet, changes during the fiscal period, and fairvalues of investment and rental properties are as follows.
(Unit: Thousands of yen)
Current fiscal period
Previous fiscal period(From December 1, 2018
(From June 1, 2018
to November 30, 2018)
to May 31, 2019)

Use
Carrying amount on the balance sheet
Urban Retail
Properties

Balance at beginning of period

172,148,067

151,044,711

Changes during period(21,103,355)

49,479,865

Balance at end of period

151,044,711

200,524,577

189,637,000

242,147,000

Balance at beginning of period

175,402,564

195,900,898

Changes during period

20,498,333(344,767)

Balance at end of period

195,900,898

195,556,130

223,770,000

228,760,000

83,348,268

83,038,644

Changes during period(309,624)

19,701,246

Balance at end of period

83,038,644

102,739,890

98,280,000

119,660,000

430,898,900

429,984,254

Changes during period(914,646)

68,836,344

Balance at end of period

429,984,254

498,820,598

511,687,000

590,567,000

Fair value at end of period
Carrying amount on the balance sheet
Tokyo Office
Properties

Fair value at end of period
Carrying amount on the balance sheet
Activia
Account
Properties

Balance at beginning of period

Fair value at end of period
Carrying amount on the balance sheet
Balance at beginning of period
Total

Fair value at end of period(Note 1) The carrying amount on the balance sheet is the acquisition cost less accumulated depreciation.
(Note 2) The main reason for the increase in the current fiscal period is the acquisition of three properties(Tokyu Plaza Ginza (Land), Q plaza HARAJUKU and EDGE Shinsaibashi) worth ¥71,254,331
thousand. The decrease is mainly due to the transfer of A-FLAG AKASAKA worth ¥1,532,587
thousand and the provision of depreciation worth ¥1,294,914 thousand.
(Note 3) The fair value at end of period is the appraisal value provided by an outside real estate appraiser.

The profit/loss concerning investment and rental properties for the current fiscal period is indicated under“Notes to Statement of Income.”- 30 -

Per Unit Information
Previous fiscal period(From June 1, 2018
to November 30, 2018)
Net assets per unit
Basic earnings per unit

Current fiscal period(From December 1, 2018
to May 31, 2019)¥320,368¥332,050¥9,584¥10,118(Note 1) Basic earnings per unit is calculated by dividing profit by the day-weighted average number ofinvestment units for the period (previous fiscal period 698,704 units; current fiscal period 763,508
units). Diluted earnings per unit is not stated, as there is no potential investment unit.
(Note 2) The basis for calculating basic earnings per unit is as follows:
Previous fiscal period(From June 1, 2018
to November 30, 2018)

Current fiscal period(From December 1, 2018
to May 31, 2019)

6,696,573

7,725,832––

Profit attributable to common investment units(Thousands of yen)

6,696,573

7,725,832

Average number of investment units for theperiod (Units)698,704

763,508

Profit (Thousands of yen)Amount not attributable to common
unitholders (Thousands of yen)

Significant Subsequent Events
Not applicable.

Omission of Disclosure
As the need for disclosing notes on lease transactions, securities, retirement benefits, equity in earnings ofaffiliates, asset retirement obligations, and segment information in this financial report is not considered to be
substantial, the disclosure of these items is omitted.

- 31 -

(9) Changes in Total Number of Investment Units Issued and Outstanding
The Investment Corporation carried out issuances of new investment units on December 19, 2018, andJanuary 7, 2019 (67,320 units in a capital increase through public offering and 5,200 units in a third-party
allotment), thus procuring funds of ¥31,279 million. Changes in total investments and the number ofinvestment units issued up to the current fiscal period are as follows:

Date

Summary

Total investments(Thousands of yen)
ChangeBalance

Total number ofinvestment units
issued(Units)ChangeRemarks

Balance

September 7, 2011

Establishment
through private
placement

200,000

200,000400

400 (Note 1)

June 12, 2012

Capital increase
through public
offering

90,834,705

91,034,705

204,100

204,500 (Note 2)

July 10, 2012

Capital increase
through thirdparty allotment

339,128

91,373,833

762

205,262 (Note 3)

December 16,
2013

Capital increase
through public
offering

32,636,569 124,010,403

43,100248,362 (Note 4)

January 15, 2014

Capital increase
through thirdparty allotment

2,044,518 126,054,921

2,700

251,062 (Note 5)

December 17,
2014

Capital increase
through public
offering

22,800,626 148,855,547

24,050275,112 (Note 6)

January 8, 2015

Capital increase
through thirdparty allotment

1,915,063 150,770,610

2,020

277,132 (Note 7)

October 1, 2015

Investment unit
split

– 150,770,610

277,132554,264 (Note 8)

December 15,
2015

Capital increase
through public
offering

19,152,091 169,922,702

41,870596,134 (Note 9)

January 6, 2016

Capital increase
through thirdparty allotment

1,610,111 171,532,813

3,520

599,654 (Note 10)

December 1, 2016

Capital increase
through public
offering

28,583,994 200,116,808

61,040660,694 (Note 11)

December 15,
2016

Capital increase
through thirdparty allotment

2,116,639 202,233,447

4,520

665,214 (Note 12)

December 13,
2017

Capital increase
through public
offering

13,793,296 216,026,743

31,090696,304 (Note 13)

December 26,
2017

Capital increase
through thirdparty allotment

1,064,776 217,091,520

2,400

698,704 (Note 14)

December 19,
2018

Capital increase
through public
offering

29,036,462 246,127,982

67,320766,024 (Note 15)

January 7, 2019

Capital increase
through thirdparty allotment

2,242,864 248,370,846

5,200

771,224 (Note 16)- 32 -

(Note 1) The Investment Corporation was established with an offering price per unit of ¥500,000.
(Note 2) New investment units were issued by public offering with an offering price per unit of ¥460,000(paid-in amount of ¥445,050 per unit) in order to raise funds for the acquisition of new
properties, etc., and then investment operations were commenced.
(Note 3) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥445,050 per unit.
(Note 4) New investment units were issued by public offering with an offering price per unit of ¥782,925(paid-in amount of ¥757,229 per unit) in order to raise funds for the acquisition of new
properties, etc.
(Note 5) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥757,229 per unit.
(Note 6) New investment units were issued by public offering with an offering price per unit of ¥979,020(paid-in amount of ¥948,051 per unit) in order to raise funds for the acquisition of new
properties.
(Note 7) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥948,051 per unit.
(Note 8) A two-for-one split of the investment units has been implemented, with September 30, 2015 as
the record date and October 1, 2015 as the effective date.
(Note 9) New investment units were issued by public offering with an offering price per unit of ¥472,360(paid-in amount of ¥457,418 per unit) in order to raise funds for the acquisition of new
properties, etc.
(Note 10) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥457,418 per unit.
(Note 11) New investment units were issued by public offering with an offering price per unit of ¥483,326(paid-in amount of ¥468,283 per unit) in order to raise funds for the acquisition of new
properties.
(Note 12) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥468,283 per unit.
(Note 13) New investment units were issued by public offering with an offering price per unit of ¥458,150(paid-in amount of ¥443,657 per unit) in order to raise funds for the acquisition of new
properties.
(Note 14) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥443,657 per unit.
(Note 15) New investment units were issued by public offering with an offering price per unit of ¥445,410(paid-in amount of ¥431,320 per unit) in order to raise funds for the acquisition of new
properties.
(Note 16) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥431,320 per unit.

- 33 -

3. Reference Information(1) Composition of Invested Assets

Type ofassetsPrevious fiscal period

Current fiscal period(As of November 30, 2018)(As of May 31, 2019)

Total amount
held(Millions ofyen)(Note 1)

Percentage tototal assets

Total amount
held(Millions ofyen)(Note 1)

Percentage tototal assets

Urban Retail Properties

–

–

–

–

Tokyo Office Properties

–

–

–

–

Activia Account Properties

–

–

–

–

The five central wards ofTokyo (Note 3)

–

–

–

–

Wards of Tokyo other than
the five central wards

–

–

–

–

Three major metropolitan
areas (Note 4)

–

–

–

–

Other locations

–

–

–

–

Subtotal

–

–

–

–

Urban Retail Properties

151,04433.9

200,524

39.0

Tokyo Office Properties

195,900

44.0

195,556

38.0

Activia Account Properties

83,03818.6

102,739

20.0

The five central wards ofTokyo (Note 3)

266,900

59.9

316,270

61.5

Wards of Tokyo other than
the five central wards

33,2207.5

33,095

6.4

Three major metropolitan
areas (Note 4)

118,80226.7

138,395

26.9

Other locations

11,0602.5

11,0592.2

Subtotal

429,984

96.5

498,820

97.0

Total real estate assets

429,984

96.5

498,820

97.0

Deposits and other assets

15,4803.5

15,5383.0

Total assets (Note 5)

445,464100.0

514,359

100.0

Category(%)(Note 2)(%)
(Note 2)

By property type

By locationRealestateBy property type

By locationRealestate intrust- 34 -

Amount(Millions ofyen)

Percentage tototal assets(%)(Note 2)

Amount(Millions ofyen)

Percentage tototal assets(%)(Note 2)

Total liabilities (Notes 5, 6)

221,62249.8

258,273

50.2

Total net assets (Note 5)

223,84250.2

256,08549.8(Note 1) The total amount held is based on the carrying amounts on the balance sheet as of the end ofeach fiscal period (for real estate and real estate in trust, book value less depreciation expenses),in accordance with the asset valuation method set forth in the Articles of Incorporation of theInvestment Corporation.
(Note 2) Figures are rounded to the nearest tenth.
(Note 3) “The five central wards of Tokyo” refers to Chiyoda ward (Chiyoda-ku), Chuo ward (Chuo-ku),
Minato ward (Minato-ku), Shinjuku ward (Shinjuku-ku) and Shibuya ward (Shibuya-ku) inTokyo.
(Note 4) “Three major metropolitan areas” refers to the Tokyo area (Tokyo, Kanagawa Prefecture,
Saitama Prefecture and Chiba Prefecture), the Chukyo area (Aichi Prefecture) and the Kinki
area (Osaka Prefecture, Kyoto Prefecture and Hyogo Prefecture); the same shall apply
hereinafter.
(Note 5) Total assets, total liabilities and total net assets represent the amounts reported in the balance
sheet as of the end of each fiscal period.
(Note 6) Total liabilities include the obligation to refund leasehold and guarantee deposits.

(2) Investment Assetsi) Major investment securities
Not applicable.

ii) Investment properties
Properties in trust held by the Investment Corporation are included in the below section “iii) Other
investment assets.”- 35 -

iii) Other investment assets(A) Overview of real estate and beneficiary interests of real estate in trust
The following table shows property name, acquisition price, book value at the end of the fiscal period,
assessed value at the end of the fiscal period, return price and investment ratio related to the assets
held by the Investment Corporation as of the end of the 15th fiscal period. Figures shown in the table
are as of May 31, 2019 unless otherwise provided.
a. Overview of assets held (1)(As of May 31, 2019)Urban Retail Properties

Category

Return price (Note 4)
Property
number(Note 1)

Property name

Direct capitalization
DCF method
methodBook value Assessed
Acquisition
Investment
at end ofvalue at Price based
price
ratio
on direct
Direct Price based
Terminal
periodend ofDiscount
capitaliza- capitaliza- on DCF
capitalizaperiod
rate
tion
tion rate
methodtion rate
method(Millionsof yen)(Note 2)

(Millionsof yen)(Note 3)

(Millionsof yen)(Note 4)

(Millionsof yen)(%)(Millionsof yen)

(%)

(%)

(%)

UR-1

Tokyu Plaza Omotesando
Harajuku (Note 6)

45,00044,75462,47563,225

2.7

61,650

2.4

2.8

9.0

UR-2

Tokyu Plaza Akasaka(Note 6)

11,45011,711

15,50015,7004.0

15,400

4.1

4.2

2.3

UR-3

Q plaza EBISU (Note 7)

8,430

8,233

11,90012,0003.2

11,8003.4/3.3

3.4

1.7

UR-5

Kyoto Karasuma Parking
Building

8,860

8,720

11,000

11,1004.9

11,000

4.9

5.1

1.8

UR-6

A-FLAG AKASAKA(Notes 6, 8)

1,500

1,531

1,875

1,905

3.5

1,840

3.3

3.7

0.3

UR-7

Kobe Kyu Kyoryuchi
25Bankan

21,33020,64527,30027,7003.9

26,900

3.7

4.1

4.3

UR-8

A-FLAG SAPPORO

4,410

4,735

7,150

7,160

5.5

7,150

5.3

5.7

0.9

UR-9

A-FLAG SHIBUYA(Note 5)

6,370

6,351

8,120

8,150

3.9

8,100

3.7

4.1

1.3

UR-10 Q plaza SHINSAIBASHI

13,35013,427

14,70014,6003.6

14,700

3.4

3.8

2.7

UR-11 A-FLAG KOTTO DORI

4,370

4,397

4,890

4,940

3.5

4,870

3.2

3.6

0.9

A-FLAG BIJUTSUKAN
UR-12 DORI

4,700

4,716

4,920

5,010

3.6

4,830

3.4

3.8

0.9

A-FLAG DAIKANYAMA
UR-13
WEST

2,280

2,343

2,350

2,390

3.9

2,310

3.7

4.1

0.5

A-FLAG KITA
UR-14 SHINSAIBASHI

4,725

4,842

4,780

4,890

3.9

4,660

3.6

4.0

0.9

DECKS Tokyo Beach
UR-15 (Note 6)

12,74012,884

12,887

13,0834.0

12,642

3.8

4.2

2.5

Tokyu Plaza Ginza (Land)
UR-16 (Note 6、9)37,50037,89539,00038,4002.6

39,000

2.5

–

7.5

Q plaza HARAJUKU
UR-17 (Note 6)

13,20013,334

13,30013,4403.0

13,140

2.7

3.1

2.6

200,215

200,524

242,147

243,693–239,992

–

–

40.0

Subtotal- 36 -

Tokyo Office Properties

Category

Return price (Note 4)
Property
number(Note 1)

Direct capitalization
methodProperty name(Millionsof yen)(Note 2)

(Millionsof yen)(Note 3)

(Millionsof yen)(Note 4)

(Millionsof yen)(%)(Millionsof yen)

(%)

(%)

(%)
(Note 5)

TO-1

TLC Ebisu Building

7,400

7,246

11,40011,6003.6

11,300

3.7

3.8

1.5

TO-2

A-PLACE Ebisu Minami

9,640

9,382

15,00015,1003.5

15,000

3.6

3.7

1.9

TO-3

A-PLACE Yoyogi

4,070

3,892

4,860

4,930

3.9

4,790

3.7

4.1

0.8

TO-4

A-PLACE Aoyama

8,790

8,595

10,10010,1004.0

10,100

3.8

4.2

1.8

TO-5

Luogo Shiodome

4,540

4,231

6,220

6,280

3.6

6,200

3.4

3.8

0.9

TO-6

TAMACHI SQUARE(Land)

2,338

2,362

2,920

3,050

3.5

2,860

3.9

3.7

0.5

TO-7

A-PLACE Ikebukuro

3,990

3,737

5,230

5,320

4.0

5,140

3.8

4.2

0.8

TO-8

A-PLACE Shinbashi

5,650

5,828

7,250

7,300

3.8

7,190

3.5

3.9

1.1

TO-9

A-PLACE Gotanda

5,730

5,502

7,400

7,470

3.6

7,330

3.4

3.8

1.1

TO-10 A-PLACE Shinagawa

3,800

3,782

5,120

5,220

3.5

5,010

3.3

3.7

0.8

TO-11 OSAKI WIZTOWER

10,690

10,664

14,60014,6003.5

14,600

3.1

3.5

2.1

Shiodome Building
TO-12 (Note 6)

71,60071,017

77,70082,2503.3

75,950

3.1

3.5

14.3

TO-13 A-PLACE Ebisu Higashi

7,072

7,088

7,700

7,870

3.7

7,530

3.5

3.9

1.4

4,810

4,958

5,350

5,420

3.6

5,270

3.3

3.7

1.0

7,280

7,534

7,710

7,810

3.8

7,610

3.5

3.9

1.5

18,80018,85820,00020,4003.9

19,600

3.7

4.1

3.8

20,50020,872

20,20020,700

3.6

20,000

3.3

3.7

4.1

A-PLACE Shibuya
TO-14 Konnoh
A-PLACE Gotanda
TO-15 Ekimae
A-PLACE Shinagawa
TO-16 Higashi
A-PLACE Shinbashi
TO-17 Ekimae
Subtotal

Activia Account Properties

DCF method
Book value Assessed
Acquisition
Investment
at end ofvalue at Price based
price
ratio
on direct
Direct Price based
Terminal
periodend ofDiscount
capitalizacapitalizaon
DCF
capitalizaperiod
rate
tion
tion rate
methodtion rate
method196,700

195,556

228,760

235,420–

225,480

–

–

39.3

AA-1

Amagasaki Q’s MALL
(Land)

12,00012,113

13,90014,0004.3

13,700

4.0

4.5

2.4

AA-2

icot Nakamozu (Note 10)

8,500

8,103

10,70010,9004.9

10,600

4.8
/4.9
/5.0

5.1

1.7

AA-4

icot Mizonokuchi

2,710

2,621

3,190

3,260

5.5

3,110

5.3

5.9

0.5

AA-5

icot Tama Center

2,840

2,627

3,950

3,960

5.1

3,940

4.7

5.3

0.6

AA-6

A-PLACE Kanayama

6,980

6,327

8,820

8,970

5.1

8,660

4.9

5.3

1.4

AA-7

Osaka Nakanoshima
Building

11,10010,91015,00015,2003.9

14,700

3.7

4.1

2.2

AA-8

icot Omori

5,790

5,656

6,870

6,940

4.4

6,800

4.2

4.6

1.2

AA-9

Market Square Sagamihara

4,820

4,685

5,020

5,040

5.3

5,000

5.1

5.5

1.0

AA-10 Umeda Gate Tower

19,00019,36821,40021,9003.7

21,200

3.4

3.8

3.8

AA-11 A-PLACE Bashamichi

3,930

3,995

4,520

4,600

4.9

4,430

4.6

5.1

0.8

AA-12 Commercial Mall Hakata

6,100

6,324

6,290

6,310

4.8

6,260

4.5

4.9

1.2

AA-13 EDGE Shinsaibashi

19,80020,00620,00020,1003.8

19,800

3.5

3.9

4.0

Subtotal

103,570

102,739

119,660

121,180–

118,200

–

–

20.7

Total

500,485

498,820

590,567

600,293–583,672

–

–

100.0

(Note 1)

(Note 2)

(Note 3)(Note 4)

A property number is assigned to each of assets held by the Investment Corporation, which are divided into the three
categories: UR (meaning Urban Retail Properties), TO (meaning Tokyo Office Properties) and AA (meaning Activia
Account Properties).
Acquisition price represents trading value of beneficiary interests in trust stipulated in each beneficiary interest sales
agreement in relation to the assets held (excluding consumption tax and local consumption tax, and expenses such as
trading commissions, rounding down to the nearest million yen).
Book value at end of period represents book value for each property less depreciation expenses as of May 31, 2019,
rounding down to the nearest million yen.
The appraisal of properties is commissioned to Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd.,The Tanizawa Sōgō Appraisal Co., Ltd., Japan Valuers Co., Ltd. or JLL Morii Valuation & Advisory K.K. Assessedvalue at end of period and return price show value described in each real estate appraisal report with the date of value
estimate of May 31, 2019.
- 37 -

(Note 5)

Investment ratio is calculated by dividing the acquisition price for each property by the total acquisition price(excluding consumption tax and other acquisition-related expenses). Figures are rounded to the nearest tenth.
(Note 6) As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, A-FLAG AKASAKA, DECKS Tokyo Beach,Tokyu Plaza Ginza (Land), Q plaza HARAJUKU, and Shiodome Building, the figures are in proportion to the pro
rata share of our trust beneficiary co-ownership interests (jun kyōyū-mochibun) (75%, 50%, 50%, 49%, 30%, 60%
and 35%, respectively).
(Note 7) The discount rates of Q plaza EBISU represent 3.4% from the first year to the fourth year and 3.3% in and after thefifth year.
(Note 8) Co-ownership interests of 50% in A-FLAG AKASAKA have been transferred as of March 1, 2019 (15th fiscal
period), and again in June 3, 2019 (16th fiscal period); the same shall apply hereinafter.
(Note 9) The price based on direct capitalization method stated for Tokyu Plaza Ginza (Land) has been calculated by means of
the fixed term capitalization method.
(Note 10) The discount rates of icot Nakamozu represent 4.8% from the first year to the third year, 4.9% from the fourth year to
the eighth year and 5.0% in and after the ninth year.

- 38 -

b. Overview of assets held (2)Category(As of May 31, 2019)
Property
number

Property nameLocation

Date ofconstruction

Urban Retail Properties(Note 1)

Number Contractedof
rent
tenants(Annual)(Note 2)

Leaseholdandguarantee
deposit(Millions of (Millions of
yen)
yen)
(Note 3)(Note 4)

Total
Total leased
leasable area
area

Occupancy
rate

(m2)
(Note 5)(m2)
(Note 6)(%)(Note 7)

UR-1

Tokyu Plaza
Omotesando
Shibuya, Tokyo
Harajuku (Note 8)

March 14, 2012

35

2,062

1,699

4,918.44

4,918.44

100.0

UR-2

Tokyu Plaza
Akasaka (Note 8)

Chiyoda, Tokyo

September 10,
1969

98

960

400

16,609.75

16,609.75

100.0

UR-3

Q plaza EBISU

Shibuya, Tokyo

August 20, 2008

4

485

475

4,024.88

4,024.88

100.0

UR-5

Kyoto Karasuma
Parking Building

Kyoto, Kyoto

July 24, 2006

2

(Note 9)(Note 9)21,616.04

21,616.04

100.0

UR-6

A-FLAGAKASAKA(Note 8)Minato, Tokyo

February 18, 2008

8

87

71

1,140.11

1,140.11

100.0

UR-7

Kobe Kyu
Kyoryuchi
25Bankan

Kobe, Hyogo

January 31, 2010

7

1,254

1,431

19,653.90

19,653.90

100.0

UR-8

A-FLAGSAPPORO

Sapporo,Hokkaido

May 23, 1980

17

626

131

21,229.16

21,229.16

100.0

UR-9

A-FLAGSHIBUYA

Shibuya, Tokyo

June 29, 1988

2

420

179

3,403.07

3,403.07

100.0

UR-10

Q plaza
SHINSAIBASHI

Osaka, Osaka

November 16,
2007

6

671

433

2,820.23

2,820.23

100.0

UR-11

A-FLAG KOTTO
DORI

Minato, Tokyo

January 22, 1992

7

234

181

2,656.53

2,656.53

100.0

A-FLAG
UR-12 BIJUTSUKAN
DORI

Minato, Tokyo

December 1, 1998

4

239

241

1,994.65

1,994.65

100.0

A-FLAG
UR-13 DAIKANYAMA
WEST

Shibuya, Tokyo

April 21, 1992

1

(Note 9)(Note 9)2,579.08

2,579.08

100.0

UR-14

A-FLAG KITASHINSAIBASHI

Osaka, Osaka

March 25, 2008

5

196

125

2,536.75

2,536.75

100.0

UR-15

DECKS Tokyo
Beach (Note 8)

Minato, Tokyo

June 20, 1996

85

663

504

16,125.56

16,119.47

100.0

UR-16

Tokyu Plaza Ginza
Chuo, Tokyo(Land) (Note 8)

1

1,143

572

1,130.04

1,130.04

100.0

16

457

340

3,378.49

3,378.49

100.0

298

–

–

125,816.68

125,810.59

100.0

Q plaza
UR-17 HARAJUKU(Note 8)Subtotal

Shibuya, Tokyo–
March 5, 2015–

- 39 -

CategoryTokyo Office Properties

Property
number

Property nameLocation

Number Contractedof
rent
tenants(Annual)(Note 1)

(Note 2)

Leaseholdandguarantee
deposit(Millions of (Millions of
yen)
yen)
(Note 3)(Note 4)

Total
Total leased
leasable area
area

Occupancy
rate

(m2)
(Note 5)(m2)
(Note 6)(%)(Note 7)

TO-1

TLC Ebisu
Building

Shibuya, Tokyo

March 5, 1993

12

613

530

7,342.60

7,342.60

100.0

TO-2

A-PLACE Ebisu
MinamiShibuya, Tokyo

January 31, 1995

11

726

595

7,950.49

7,950.49

100.0

TO-3

A-PLACE Yoyogi Shibuya, Tokyo

February 22, 2007

3

241

221

3,106.17

3,106.17

100.0

TO-4

A-PLACE Aoyama Minato, Tokyo

September 6,
1966

8

554

520

7,303.69

7,303.69

100.0

TO-5

Luogo Shiodome

Minato, Tokyo

July 30, 2004

7

330

291

4,476.35

4,476.35

100.0

TO-6

TAMACHISQUARE(Land)

Minato, Tokyo

–

1

125

–

1,287.96

1,287.96

100.0

TO-7

A-PLACE
Ikebukuro

Toshima, Tokyo

October 13, 20111

(Note 9)(Note 9)3,409.73

3,409.73

100.0

TO-8

A-PLACE
Shinbashi

Minato, Tokyo

March 4, 1999

9

364

307

5,052.14

4,987.58

98.7

TO-9

A-PLACE Gotanda

Shinagawa,Tokyo

February 27, 2012

11

350

314

4,028.69

4,028.69

100.0

TO-10

A-PLACE
ShinagawaMinato, Tokyo

September 20,
1991

7

213

194

2,986.36

2,986.36

100.0

TO-11

OSAKI
WIZTOWER

Shinagawa,Tokyo

January 10, 2014

5

650

650

7,193.28

7,193.28

100.0

TO-12

Shiodome Building
Minato, Tokyo(Note 8)December 14,
2007

39

3,231

2,668

28,136.05

28,136.05

100.0

TO-13

A-PLACE Ebisu
Higashi

Shibuya, Tokyo

January 10, 1992

8

325

228

4,010.69

4,010.69

100.0

TO-14

A-PLACE Shibuya
Shibuya, Tokyo
KonnohMarch 18, 1992

4

215

149

2,995.72

2,995.72

100.0

TO-15

A-PLACE Gotanda Shinagawa,EkimaeTokyo

November 30,
1993

10

341

294

4,316.89

4,316.89

100.0

August 31, 1985
(main building)
September 13,
1999 (annex)

9

938

843

14,658.98

14,658.98

100.0

April 25, 2008

6

781

600

6,484.57

6,484.57

100.0

–

151

–

–

114,740.36

114,675.80

99.9

–

1

714

341

27,465.44

27,465.44

100.0

A-PLACE
TO-16
Minato, Tokyo
Shinagawa Higashi
TO-17

A-PLACE
Shinbashi Ekimae

AA-1

Amagasaki Q’s
MALL (Land)

Amagasaki,
Hyogo

AA-2

icot Nakamozu

Sakai, Osaka

June 27, 2007

2

619

430

28,098.02

28,098.02

100.0

AA-4

icot Mizonokuchi

Kawasaki,Kanagawa

July 15, 1998

1

(Note 9)100

14,032.05

14,032.05

100.0

AA-5

icot Tama Center

Tama, Tokyo

March 7, 2006

9

240

237

5,181.58

5,181.58

100.0

AA-6

A-PLACE
Kanayama

Nagoya, Aichi

February 10, 2009

20

512

409

9,314.90

9,314.90

100.0

AA-7

Osaka
Nakanoshima
Building

Osaka, Osaka

March 5, 1984

40

965

688

20,226.77

20,197.61

99.9

Ota, Tokyo

March 6, 2007

8

388

359

6,209.79(Note 10)

6,209.79(Note 10)

100.0

Sagamihara,
Kanagawa

June 13, 2014

3

(Note 9)(Note 9)15,152.42

15,152.42

100.0

AA-10 Umeda Gate Tower Osaka, Osaka

January 15, 2010

15

849

586

13,624.49

13,624.49

100.0

A-PLACE
AA-11
Bashamichi

Yokohama,
Kanagawa

May 31, 1975

34

323

203

9,775.50

9,775.50

100.0

Fukuoka,
Fukuoka

November 3, 2005

18

342

156

9,612.88

9,327.53

97.0

Minato, Tokyo

Subtotal

Activia Account Properties

Date ofconstruction

AA-8 icot Omori
AA-9

AA-12

Market Square
Sagamihara

Commercial Mall
HakataAA-13 EDGE Shinsaibashi Osaka, Osaka

19

837

637

15,916.34

14,431.18

90.7

Subtotal

April 22, 1986
–

170

–

–

174,610.18

172,810.51

99.0

Total

–

619

–

–

415,167.22

413,296.90

99.5- 40 -

(Note 1)

Date of construction of the main building, as described in the property registry. For properties with several mainbuildings, the construction date of the oldest building is listed. The construction date is omitted in case of acquisitionof land only (Land represents the part of site on which the building is established under a land lease right; the same
shall apply hereinafter). However, for A-PLACE Shinbashi and A-FLAG SHIBUYA, the date of inspection
confirming completion of construction written on the certificate of inspection is provided.
(Note 2) At each property, the number of tenants is equal to the aggregate number of tenants as of May 31, 2019 described in
the lease agreements in relation to buildings, except that for properties with master lease agreements, the total numberof end-tenants is listed. For properties for which we acquire only land, the total number of tenants of the land is listed.
(Note 3) The contracted rent (annual) for each property other than properties for which we acquire only land is calculated bymultiplying the aggregate anticipated monthly rent (limited to rent for rooms which were occupied by tenants as of
May 31, 2019), including common service fee and excluding usage fee for warehouses, signboards and parking lots,
and also excluding revenue-based rents, regardless of free rents and rent holidays as of May 31, 2019, as indicated in
the lease agreements in relation to buildings as of May 31, 2019 by 12 (for where multiple lease agreements areconcluded in relation to buildings, the aggregate anticipated monthly rent for all lease agreements) (excluding
consumption tax) and rounding to the nearest million yen. For properties for which we acquire only land, it iscalculated as the annual contracted rent (excluding consumption tax) as indicated in the lease agreement for such land
as of May 31, 2019, rounding to the nearest million yen. For properties with master lease agreements, the annual
contracted rent is calculated by multiplying the aggregate anticipated monthly rent (limited to rent for rooms;
including common service fees and excluding usage fees for warehouses, signboards and parking lots, and also
excluding revenue-based rents, regardless of free rents and rent holidays as of May 31, 2019), as indicated in therelevant sublease agreement with end-tenants by 12.
(Note 4) The leasehold and guarantee deposit is calculated as the total amount on the lease agreement for each property as of
May 31, 2019 (limited to leasehold and guarantee deposit based on the lease agreement for leased property that was
occupied by the tenant as of May 31, 2019), rounding to the nearest million yen. For properties with master leaseagreements, the leasehold and guarantee deposit is calculated as the total amount required based on the subleaseagreements with end-tenants, rounding to the nearest million yen.
(Note 5) The total leasable area represents the total of gross floor area considered to be leasable based on the lease agreements
for building or floor plans as of May 31, 2019 of each property other than properties of which we acquire only land,
and gross land area considered to be leasable based on the lease agreement for land or land plans as of May 31, 2019of each property of which we acquire only land.
(Note 6) The total leased area is equal to the total of leased area presented in each lease agreement for properties held as of
May 31, 2019. For properties with master lease agreements, counted is the total of the area of properties for which
sublease agreements are concluded with end-tenants and that are actually subleased.
(Note 7) The occupancy rate is calculated by dividing total leased area for each property by the total leasable area as of May
31, 2019, rounding to the nearest tenth. The subtotal and total are calculated by dividing aggregate leased area by
aggregate leasable area, rounding to the nearest tenth.
(Note 8) As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, A-FLAG AKASAKA, DECKS Tokyo Beach,Tokyu Plaza Ginza (Land), Q plaza HARAJUKU, and Shiodome Building, the figures are in proportion to the pro
rata share of our trust beneficiary co-ownership interests (jun kyōyū-mochibun) (75%, 50%, 50%, 49%, 30%, 60%
and 35%, respectively). However, the numbers of tenants provided are the numbers for each whole building.
(Note 9) Since we have not obtained permission from the tenant of this property to release the information, the information is
not disclosed.
(Note 10) The calculation of total leasable area and total leased area for icot Omori includes part of an external bicycle parking
lot (approximately 21 m2) and part of a common area on the second floor (approximately 28 m2).
(Note 11) For lease agreements with end-tenants that have been asked to be terminated or cancelled, or for which the rent has
not been paid, number of tenants, contracted rent (annual), leasehold and guarantee deposit, total leased area andoccupancy rate are shown in the above table if these agreements continued as of May 31, 2019, assuming that thelease agreements with the end-tenants remained effective; the same shall apply hereinafter.

- 41 -

(B) Capital expenditure for assets under managementa. Scheduled capital expenditure
The following table shows major estimated capital expenditure for renovation work, etc. that theInvestment Corporation plans to conduct for assets held in the 15th fiscal period as of May 31, 2019.
The estimated construction cost below includes the portion expensed for accounting purposes.

Name of real
property(Location)

Estimated construction cost
(Millions of yen)
PurposeScheduled period

TotalamountPayment
for theperiodTotalamountpaid

Osaka Nakanoshima Complete replacementof elevator machinery From June 2019
Building
to October 2019and equipment(Osaka, Osaka)

107

–

–

Replacement of
A-FLAG SAPPORO
emergency power(Sapporo, Hokkaido)
generators

From April 2019
to September 2019

89

–

–

Large-scale repair
work

From June 2019
to November 2019

87

–

–

A-FLAG SAPPORO Replacement of(Sapporo, Hokkaido) escalators

From October 2019
to October 2019

41

–

–

Osaka Nakanoshima
Repair of lavatory
Building
plumbing(Osaka, Osaka)

From August 2019
to November 2019

34

–

–

Renewal of power
A-FLAG SAPPORO
control board (Second From August 2019
(Sapporo, Hokkaido)
to November 2019
period)30––

Replacement of air
A-FLAG SAPPORO
conditioning units of(Sapporo, Hokkaido)
main building

27

–

–

23
(Note)

–

–

22

–

–

icot Omori(Ota, Tokyo)

From October 2019
to November 2019

Shiodome Building(Minato, Tokyo)

Thorough inspection
and maintenance of
emergency power
From September 2019
generation equipment to October 2019and replacement of its
worn out parts

Kobe Kyu
Kyoryuchi
25Bankan(Kobe, Hyogo)

Renovation ofmultilevel car park
From October 2019
system (Computers
for system operations, to November 2019
etc.)

A-PLACE Gotanda
Installation of LED
Ekimaelighting(Shinagawa, Tokyo)

From July 2019
to November 2019

20

–

–

A-PLACE Ebisu
Minami(Shibuya, Tokyo)

Replacement of
humidifier drain
extraction pipes

From August 2019
to October 2019

18

–

–

DECKS Tokyo
Beach(Minato, Tokyo)

Replacement of
package air
conditioning units

From October 2019
to November 201915
(Note)––DECKS Tokyo
Beach(Minato, Tokyo)

Repair of pipeline
system for collecting
waste

From October 2019
to November 201914
(Note)––- 42 -

Estimated construction cost
(Millions of yen)

Name of real
property(Location)

PurposeScheduled period

A-PLACE Ebisu
Minami(Shibuya, Tokyo)

Maintenance of air
conditioning units(replacement ofsensors, and motors
for electronic
expansion valves)(First period)

From September 2019
to November 2019

DECKS Tokyo
Beach(Minato, Tokyo)

Sign andenvironment-related
improvement work

From October 2019
to November 2019

Payment
for theperiodTotalamount
paid

12

–

–

12
(Note)––

Total
amountRepairs involving
waterproofing and
A-FLAG SAPPORO
top-coating(Sapporo, Hokkaido)
application work forstructures on rooftop

From May 2019
to August 2019

12

–

–

Replacement of DC
A-FLAG SAPPORO
power supply on new(Sapporo, Hokkaido)
annex

From October 2019
to October 2019

11

–

–

Shiodome Building(Minato, Tokyo)

From July 2019
to November 201910(Note)––(Note)

Replacement of
humidifying element

The shown estimated construction cost with regard to DECKS Tokyo Beach and Shiodome Building is theamount equivalent to the ratio of the Investment Corporation’s co-ownership interests of real estate trust
beneficiary (49% and 35%, respectively).

- 43 -

b. Capital expenditure during the fiscal period
For assets held by the Investment Corporation in the 15th fiscal period, construction work
conducted by the Investment Corporation during the fiscal period ended May 31, 2019 that falls into
capital expenditure is as follows. The capital expenditure for the fiscal period ended May 31, 2019
amounted to ¥413 million, and repair and maintenance expenses that were accounted for as expensein the fiscal period ended May 31, 2019 came to ¥189 million. On aggregate, construction work of¥603 million was carried out during the fiscal period.
Name of real property(Location)

PurposeA-PLACE Shinbashi(Minato, Tokyo)

PeriodConstruction cost
(Millions of yen)

Large-scale renovation work

From July 2018
to April 2019146

Tokyu Plaza
Omotesando Harajuku(Shibuya, Tokyo)

Renewal works

From February 2019
to March 2019

A-FLAG SAPPORO(Sapporo, Hokkaido)

Renewal of power control
board

From June 2018
to April 2019

29

A-FLAG SAPPORO(Sapporo, Hokkaido)

Work to replace hotel card
locks

From January 2019
to March 2019

22

A-FLAG SAPPORO(Sapporo, Hokkaido)

Renewal of hot water main
pipe and horizontal rainwater
pipe for upper floors (First
period)From January 2019
to April 2019

22

A-PLACE Shinagawa
Higashi(Minato, Tokyo)

Renewal of air conditioning
equipment

From December 2018
to January 201912

Shiodome Building(Minato, Tokyo)

Renewal of ITV camera
surveillance system

From January 2019
to February 2019

Other

10
(Note)
130

Total(Note)

39(Note)

413

The shown construction cost with regard to Tokyu Plaza Omotesando Harajuku and Shiodome Building is
the amount equivalent to the ratio of the Investment Corporation’s co-ownership interests of real estate
trust beneficiary (75% and 35%, respectively).

- 44 -

(C) Information concerning major tenants
a. Summary of major tenants
For assets held in the 15th fiscal period, the table below shows tenants whose leased area accounts
for 10% or more of the total leased area in the entire portfolio (major tenants) based on the data asof May 31, 2019. The forms of agreements with the tenants in the table are ordinary leaseagreements.
As for certain assets held, the Investment Corporation has entered into lease agreements (master
lease agreements) with Tokyu Community Corp. and Tokyu Land SC Management Corporation
with the objective of allowing them to be master lease companies and sublease the leased assets to
end-tenants. The table below shows information on the major tenants with master lease agreements
based on the data as of May 31, 2019. Rents received by the Investment Corporation from themaster lease companies are equal to the rents received by these companies from sublessees (endtenants) (pass-through master lease), and such rents are not guaranteed.

TenantTokyu Community
Corp.

Business

Property nameLeased area (m2)(Note 1)

Contracted rent
(Annual)(Millions ofyen)(Note 2)

Leasehold andguarantee
deposit(Millions ofyen)(Note 3)

Expiration date
(Note 4)

A-FLAG KOTTO DORI

2,656.53

234

181

December 31, 2026

TLC Ebisu Building

7,342.60

613

530

May 31, 2025

A-PLACE Ebisu Minami

7,950.49726

595

May 31, 2025

A-PLACE Yoyogi

3,106.17241

221

May 31, 2025

A-PLACE Aoyama

7,303.69

554

520

May 31, 2025

Luogo Shiodome

4,476.35330

291

May 31, 2025

A-PLACE Ikebukuro

3,409.73(Note 5)(Note 5)

May 31, 2025

A-PLACE Shinbashi

4,987.58

364

307

May 31, 2025

A-PLACE Gotanda

4,028.69

350

314

May 31, 2025

A-PLACE Shinagawa

2,986.36

213

194

May 31, 2025

OSAKI WIZTOWER

7,193.28650

650

May 31, 2025

4,010.69

325

228

May 31, 2025

A-PLACE Shibuya Konnoh

2,995.72

215

149

September 30, 2025

A-PLACE Gotanda Ekimae

4,316.89

341

294

June 30, 2026

A-PLACE Shinagawa
Higashi

14,658.98

938

843

March 31, 2027
May 31, 2028

Real EstateManagement A-PLACE Ebisu Higashi

A-PLACE Shinbashi Ekimae

6,484.57

781

600

A-PLACE Kanayama

9,314.90

512409

May 31, 2025

Osaka Nakanoshima Building

20,197.61

965

688

November 30, 2024

Umeda Gate Tower

13,624.49

849

586

April 30, 2028

A-PLACE Bashamichi

9,775.50323

203

October 31, 2026

Commercial Mall Hakata

9,327.53

342

156

March 31, 2027

150,148.35

–

–

–

Total

- 45 -

Tenant

Tokyu Land SC
Management
Corporation(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)

Business

Property nameLeased area (m2)(Note 1)

Contracted rent
(Annual)(Millions ofyen)(Note 2)

Leasehold andguarantee
deposit(Millions ofyen)(Note 3)

Expiration date
(Note 4)Q plaza EBISU

4,024.88

485

475

Kyoto Karasuma Parking
Building

21,616.04(Note 5)(Note 5)

November 30, 2024

A-FLAG AKASAKA(Note 6)

1,140.11

87

71

August 31, 2023

Kobe Kyu Kyoryuchi
25Bankan

19,653.90

1,254

1,431

August 31, 2023

A-FLAG SAPPORO

21,229.16

626

131

December 31, 2023

A-FLAG SHIBUYA

3,403.07

420

179

December 31, 2023

Q plaza SHINSAIBASHI

2,820.23

671

433

December 31, 2025

A-FLAG BIJUTSUKAN
DORI

1,994.65

239

241

December 31, 2026

2,579.08(Note 5)(Note 5)

December 31, 2026

2,536.75

196

125

June 30, 2027

DECKS Tokyo Beach(Note 6)

16,119.47

663

504

January 31, 2028

Q plaza HARAJUKU(Note 6)

3,378.49457

340

January 31, 2029
June 30, 2022

Real Estate A-FLAG DAIKANYAMA
Management WEST
A-FLAG KITASHINSAIBASHI

June 30, 2022

icot Nakamozu

28,098.02

619

430

icot Mizonokuchi

14,032.05(Note 5)100

June 30, 2022

icot Tama Center

5,181.58

240

237

November 30, 2024

icot Omori

6,209.79

388

359

December 31, 2023

Market Square Sagamihara

15,152.42(Note 5)(Note 5)January 31, 2025

Total

169,169.69

–

–

–

The leased area is the leased area to end-tenants in respect to the leased area provided in the master lease agreement
as of May 31, 2019 where the tenant is the master lease company and sublessor, rounding to the nearest hundredth.
Under master lease contracts concluded with tenants, for properties of which the master lease rent payable by thetenant equals to the rent payable by the end-tenant to the tenant, the contracted rent (annual) for each property is
calculated by multiplying the monthly rent (limited to rooms which were occupied by tenants as of May 31, 2019),
including common service fee and excluding usage fee for warehouses, signboards and parking lots, and also
excluding revenue-based rents, regardless of free rents and rent holidays as of May 31, 2019, as indicated in thesublease agreement concluded with the end-tenant as of May 31, 2019 by 12, rounding to the nearest million yen.
The leasehold and guarantee deposit is calculated as the total amount on the sublease agreement with the end-tenant
as of May 31, 2019 (limited to leasehold and guarantee deposit based on the lease agreement for leased property thatwas occupied by the tenant as of May 31, 2019), rounding to the nearest million yen, where the tenant is the master
lease company and sublessor.
The expiration date is the date provided in the lease agreement where the tenant is the lessee, including where thetenant is a sublessor and master lease company under a sublease agreement. Concerning the method of renewing themaster lease agreement entered into with the above-mentioned major tenant who is the master lease company,
assuming that the lessor or lessee has not expressed in writing their intention to refuse renewal at a time that is at least
three full months before the expiry of the lease agreement, the agreement shall be renewed for a further two years
under the same conditions, and the same will apply thereafter.
Since we have not obtained permission from the tenant of this property to release the information, the information is
not disclosed.
As for A-FLAG AKASAKA, DECKS Tokyo Beach and Q plaza HARAJUKU, the figures are in proportion to the
pro rata share of our trust beneficiary co-ownership interests (jun kyōyū-mochibun) (50%, 49% and 60%,
respectively).

- 46 -

b. End-tenants in the top 10 in terms of total leased area
For assets held by the Investment Corporation, the following table shows end-tenants ranked in the
top 10 in terms of total leased area in the entire portfolio as of May 31, 2019.
End-tenants

Property name

Total leased area (m2)(Note 1)

Lease expiration date

Form of agreement(Note 2)30,182.69

October 31, 2021

Fixed-term building leaseagreement
General fixed-termleasehold land agreement
Ordinary leasehold land
agreement
Fixed-term business-use
lease agreement

Tokyu Hotels Co., Ltd.

Tokyu Plaza Akasaka
A-FLAG SAPPORO

Sumitomo Mitsui Trust
Bank, Limited (Note 3)

Tokyu Plaza Ginza (Land)
TAMACHI SQUARE (Land)
Amagasaki Q’s MALL (Land)

29,883.44(Note 4)January 9, 2089
May 31, 2074
January 31, 2042

Kohnan Shoji Co., Ltd.

icot Nakamozu

26,529.03

July 11, 2027

Fixed-term building leaseagreement

Times24 Co., Ltd.

Kyoto Karasuma Parking Building

21,224.14–

Fixed-term building leaseagreement

Plan∙Do∙See Inc.

Kobe Kyu Kyoryuchi 25Bankan

14,195.42––

Room’s-Taishodo

icot Mizonokuchi

14,032.05

July 24, 2023

Fixed-term building leaseagreement

K’S HOLDINGSCORPORATION

Market Square Sagamihara

11,863.92

June 30, 2034

Fixed-term building leaseagreement

NTT Communications
Corporation

Shiodome Building

10,336.62––

YANMAR Co., Ltd.

Umeda Gate Tower

7,870.86––

April 30, 2020

Ordinary building leaseagreement

Swing Corporation(Note 1)

(Note 2)
(Note 3)(Note 4)(Note 5)

A-PLACE Shinagawa Higashi

6,100.88

The total leased area is equal to the total leased area in each property under the lease agreement with the end-tenant asof May 31, 2019. As for Tokyu Plaza Akasaka, Tokyu Plaza Ginza (Land) and Shiodome Building, the figure isbased on the amount in proportion to the pro rata share of our trust beneficiary co-ownership interests (jun kyōyūmochibun) as of May 31, 2019 (50%, 30% and 35%, respectively).
The form of agreement is equal to the form of agreement described in the lease agreement with the end-tenants as of
May 31, 2019.
Tenant is the trustee of the building on the land; SPADE HOUSE Limited Liability Company is the trust beneficiaryunder such trust of Tokyu Plaza Ginza (Land); Tokyu Land Corporation is the trust beneficiary under such trust of
TAMACHI SQUARE (Land) and Amagasaki Q’s MALL (Land).
Total leased area for Tokyu Plaza Ginza (Land), TAMACHI SQUARE (Land) and Amagasaki Q’s MALL (Land) isin respect of the land.
Since we have not obtained permission from the tenant of the properties to release the information, the information
missing from this table is not disclosed.

- 47 -

(D) Overview of lease and profit and loss
15th fiscal period (From December 1, 2018 to May 31, 2019)(Unit: Thousands of yen)
UR-6

Property number

UR-1

UR-2

UR-3

UR-5

Property name

Tokyu Plaza
Omotesando
Harajuku(Note 1)Tokyu Plaza
Akasaka(Note 1)

Q plaza EBISU

Kyoto Karasuma
Parking Building

Number of business days in the 15th
fiscal period
a. Real estate leasing business revenues
Leasing business revenue

A-FLAGAKASAKA(Note 2)

182

182

182

182

182

1,081,530

613,632

271,722(Note 3)79,5591,035,000

510,536

242,794(Note 3)66,740

Other leasing business revenue

46,529103,096

28,928(Note 3)

12,818b. Expenses related to leasing business

260,449

246,753

61,97038,59424,531

Management operation expenses

97,45579,56816,428

3,720

6,204

Utilities expenses

27,60074,61324,275–

9,293

Tax and public dues

59,311

69,487

8,688

33,643

7,644

190

409

75

158

26

Repair and maintenance expenses

9,551

11,122

2,633

345

–

Other expenses related to leasing
business

66,34011,551

9,868

727

1,362

c. NOI (a – b)

821,080

366,879

209,751(Note 3)55,027d. Depreciation, etc. (Note 4)

51,82739,50318,301

15,8106,706

Profit (loss) from leasing business(c – d)769,252

327,375

191,449(Note 3)48,321

Property number

UR-7

UR-8

UR-9

UR-10

Property name

Kobe Kyu
Kyoryuchi
25Bankan

Insurance

Number of business days in the 15th
fiscal period
a. Real estate leasing business revenues

A-FLAG SAPPORO A-FLAG SHIBUYA(Unit: Thousands of yen)
UR-11

Q plaza
SHINSAIBASHI

A-FLAG KOTTO
DORI

182

182

182

182

182

805,383

448,991

217,481353,208

122,203

Leasing business revenue

738,461

366,310

209,911335,429

116,821

Other leasing business revenue

66,922

82,681

7,569

17,7785,381

b. Expenses related to leasing business

201,851

246,501

51,05844,694

31,387

Management operation expenses

82,244

107,857

12,819

8,023

8,754

Utilities expenses

55,10587,146

6,672

14,524

6,028

Tax and public dues

46,632

24,609

11,105

14,347

13,182

Insurance

616

590

53

64

72

Repair and maintenance expenses

13,037

7,660

18,543

1,596

1,510

Other expenses related to leasing
business

4,214

18,637

1,863

6,138

1,838

c. NOI (a – b)603,532

202,489

166,422

308,51490,815d. Depreciation, etc. (Note 4)

121,373

67,2208,303

16,707

4,933

Profit (loss) from leasing business(c – d)482,158

135,268

158,119

291,806

85,882- 48 -

Property number

UR-12

UR-13

UR-14

UR-15

(Unit: Thousands of yen)
UR-16

Property name

A-FLAG
BIJUTSUKAN
DORI

A-FLAGDAIKANYAMA
WEST

A-FLAG KITASHINSAIBASHIDECKS Tokyo
Beach (Note 1)

Tokyu Plaza Ginza(Land) (Notes 1, 5)

Number of business days in the 15th
fiscal period

182

182

182

182

142

124,811(Note 3)

106,644583,811448,596

117,289(Note 3)98,322

466,376

448,596

Other leasing business revenue

7,522(Note 3)

8,322

117,435–

b. Expenses related to leasing business

32,49130,42722,590273,075

235

Management operation expenses

3,363

12,134

5,648

112,485–

Utilities expenses

7,341

300

8,509

103,376–

Tax and public dues

2,190

13,167

5,969

1,533

–

36

58

70

604

–

Repair and maintenance expenses

1,717

2,340

673

11,858–Other expenses related to leasing
business

17,842

2,426

1,719

43,217235

c. NOI (a – b)

92,320(Note 3)84,053

310,735

448,361

d. Depreciation, etc. (Note 4)

6,491

2,665

4,671

22,035–

Profit (loss) from leasing business(c – d)85,828(Note 3)79,381

288,700

448,361

TO-1

TO-2

TO-3

A-PLACE
Ebisu Minami

A-PLACE
YoyogiA-PLACE
Aoyamaa. Real estate leasing business revenues
Leasing business revenue

Insurance

Property number
Property name

UR-17

Q plaza HARAJUKUTLC Ebisu Building(Notes 1, 5)

Number of business days in the 15th
fiscal period
a. Real estate leasing business revenues(Unit: Thousands of yen)
TO-4

142

182

182

182

182

184,813343,327

374,943

130,674

303,306

Leasing business revenue

172,584

307,768

360,896

123,811286,318

Other leasing business revenue

12,22835,55814,047

6,863

16,988b. Expenses related to leasing business

31,44885,89091,31431,72867,995

Management operation expenses

16,96436,37329,311

10,817

19,076

Utilities expenses

11,93918,956

20,5889,126

19,571

Tax and public dues

3

17,22932,375

10,377

21,857

Insurance

69

192

245

83

180

Repair and maintenance expenses

396

2,346

4,726

291

2,865

Other expenses related to leasing
business

2,074

10,792

4,065

1,030

4,443

153,365

257,436

283,629

98,946

235,311

5,353

44,082

32,98015,42923,614148,011

213,354

250,648

83,516211,697

Property number

TO-5

TO-6

TO-7

TO-8

(Unit: Thousands of yen)
TO-9

Property name

Luogo Shiodome

TAMACHISQUARE (Land)

A-PLACE
Ikebukuro

A-PLACE
Shinbashi

A-PLACE
Gotandac. NOI (a – b)d. Depreciation, etc. (Note 4)
Profit (loss) from leasing business(c – d)Number of business days in the 15th
fiscal period
a. Real estate leasing business revenues

182

182

182

182

182

179,80962,502(Note 3)

199,698

182,820

Leasing business revenue

167,93162,502(Note 3)

186,328

172,357

Other leasing business revenue

11,878–(Note 3)

13,36910,463b. Expenses related to leasing business

47,927

8,955

34,60553,74744,573

Management operation expenses

12,263–

10,693

16,922

14,306

Utilities expenses

13,006–

9,127

12,825

10,527

Tax and public dues

18,6838,700

10,713

15,623

14,409

157

–

83

132

106

Repair and maintenance expenses

2,053

–

2,947

2,910

3,071

Other expenses related to leasing
business

1,762

255

1,038

5,333

2,152

c. NOI (a – b)131,881

53,546(Note 3)145,951

138,247

d. Depreciation, etc. (Note 4)

27,379–20,68521,931

26,844

Profit (loss) from leasing business(c – d)104,50253,546(Note 3)

124,020

111,402

Insurance- 49 -

Property number

TO-10

TO-11

TO-12

TO-13

(Unit: Thousands of yen)
TO-14

Property name

A-PLACE
Shinagawa

OSAKI
WIZTOWER

Shiodome Building(Note 1)

A-PLACE Ebisu
HigashiA-PLACE Shibuya
Konnoh

182

182

182

182

182

116,662

337,640

1,524,068

175,004

115,433

109,854

325,837

1,446,125

165,129

109,653

Other leasing business revenue

6,808

11,802

77,943

9,874

5,779

b. Expenses related to leasing business

30,13791,007

346,984

37,46930,131

Management operation expenses

9,200

58,231

104,352

11,637

11,388

Utilities expenses

7,025

8,808

78,439

9,154

6,616

Tax and public dues

10,98921,821116,090

14,022

9,696

Insurance

71

302

911

100

76

Repair and maintenance expenses

853–

22,792567

593

Other expenses related to leasing
business

1,996

1,843

24,398

1,986

1,760

c. NOI (a – b)

86,525

246,633

1,177,083

137,535

85,302d. Depreciation, etc. (Note 4)

8,930

48,275

149,973

23,742

13,034

Profit (loss) from leasing business(c – d)77,595

198,357

1,027,110

113,792

72,268

TO-16

TO-17

AA-1

Number of business days in the 15th
fiscal period
a. Real estate leasing business revenues
Leasing business revenue

Property number
Property name
Number of business days in the 15th
fiscal period

TO-15

A-PLACE Gotanda A-PLACE Shinagawa A-PLACE Shinbashi
EkimaeHigashiEkimae(Unit: Thousands of yen)
AA-2

Amagasaki Q’s
MALL (Land)

icot Nakamozu

182

182

182

182

182

185,621518,513399,332

356,759

311,321

176,404

479,612

380,509356,759

310,491

Other leasing business revenue

9,216

38,901

18,823–830

b. Expenses related to leasing business

51,337140,396

81,60356,38939,756

Management operation expenses

13,28946,96819,210–

5,661

Utilities expenses

11,691

36,406

18,768–30

Tax and public dues

18,306

48,47934,57456,13430,423a. Real estate leasing business revenues
Leasing business revenue

Insurance

116

460

155

–

234

Repair and maintenance expenses

1,744

4,163

4,406

–

2,504

Other expenses related to leasing
business

6,189

3,917

4,488

255

903

c. NOI (a – b)

134,283

378,117

317,729

300,369

271,564

d. Depreciation, etc. (Note 4)

12,371

30,55352,325–34,767

Profit (loss) from leasing business(c – d)121,912347,564

265,404

300,369

236,797

Property number

AA-4

AA-5

AA-6

AA-7

Property nameicot Mizonokuchi

icot Tama Center

A-PLACE
Kanayama

Osaka Nakanoshima
Building

Number of business days in the 15th
fiscal period
a. Real estate leasing business revenues(Unit: Thousands of yen)
AA-8
icot Omori

182

182

182

182

182

(Note 3)

146,957

287,942535,365

233,223

Leasing business revenue(Note 3)

135,589

267,940

505,556

202,775

Other leasing business revenue(Note 3)

11,36720,00229,80830,448b. Expenses related to leasing business

15,254

46,34378,817

178,686

53,233

Management operation expenses

2,340

18,77724,451

57,2308,821–

13,52723,28542,21930,202

10,073

11,75325,802

51,131

12,520

100

144

251

745

93

Repair and maintenance expenses

1,980

1,072

2,789

22,774

674

Other expenses related to leasing
business

760

1,069

2,237

4,586

921

(Note 3)

100,613

209,125

356,678

179,990

8,424

18,944

51,76772,22017,553(Note 3)

81,668157,357

284,457

162,437

Utilities expenses
Tax and public dues
Insurancec. NOI (a – b)d. Depreciation, etc. (Note 4)
Profit (loss) from leasing business(c – d)- 50 -

(Unit: Thousands of yen)
Property number

AA-9

Property nameMarket Square
Sagamihara

Number of business days in the 15th
fiscal period
a. Real estate leasing business revenues

AA-10

AA-11

AA-12

AA-13

Umeda Gate Tower

A-PLACE
Bashamichi

Commercial Mall
HakataEDGE Shinsaibashi(Note 5)

182

182

182

182

142

(Note 3)464,740

184,747

210,449

351,179

Leasing business revenue(Note 3)

430,721

168,938

176,908

317,792

Other leasing business revenue(Note 3)34,01815,80933,54033,387b. Expenses related to leasing business

37,263103,074

68,63255,592

67,958

Management operation expenses

15,91331,725

19,903

20,76732,524

Utilities expenses

5,186

28,20521,87824,30524,325

Tax and public dues

13,784

34,134

16,917

–

15

132

363

291

173

397

Repair and maintenance expenses

–

5,889

3,769

4,040

5,146

Other expenses related to leasing
business

2,247

2,755

5,872

6,305

5,548

c. NOI (a – b)(Note 3)361,666

116,115

154,857

283,221d. Depreciation, etc. (Note 4)

23,86369,08429,914

14,94813,157

Profit (loss) from leasing business(c – d)(Note 3)

292,581

86,200139,908

270,063

Insurance(Note 1)

(Note 2)

(Note 3)(Note 4)(Note 5)

As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, DECKS Tokyo Beach, Tokyu Plaza Ginza (Land),Q plaza HARAJUKU and Shiodome Building, the figures are in proportion to the pro rata share of our trust
beneficiary co-ownership interests (jun kyōyū-mochibun) (75%, 50%, 49%, 30%, 60% and 35%, respectively).
Co-ownership interests of 50% in A-FLAG AKASAKA have been transferred as of March 1, 2019. Therefore,
figures after the transfer date are presented in proportion to the pro rata share of our remaining 50% trust beneficiaryco-ownership interests (jun kyōyū-mochibun).
Since we have not obtained permission from the tenant of this property to release the information, the information is
not disclosed.
“Depreciation, etc.” includes loss on retirement of non-current assets.
Tokyu Plaza Ginza (Land), Q plaza HARAJUKU and EDGE Shinsaibashi were acquired on January 10, 2019.
Therefore, figures after the acquisition date are presented.

- 51 -