Disclaimer
This document has been prepared solely for the purpose of providing U.K. and Dutch
investors with certain information under Article 23 of the European Alternative
Investment Fund Managers Directive (European Directive 2011/61/EU) (the “AIFMD”) as
implemented in their respective jurisdictions. Accordingly, you should not use thisdocument for any other purpose.
Netherlands
The units of Advance Residence Investment Corporation (“ADR” or the “AIF”) are being
marketed in the Netherlands under Section 1:13b of the Dutch Financial Supervision Act(Wet op het financieel toezicht, or the “Wft”). In accordance with this provision, ITOCHUREIT Management Co., Ltd. (former AD Investment Management Co., Ltd.) (the“AIFM”) has submitted a notification with the Dutch Authority for the Financial Markets(Authoriteit Financiële Markten, the “AFM”) of its intention to offer these units in the
Netherlands. The units of ADR will not, directly or indirectly, be offered, sold, transferredor delivered in the Netherlands, except to or by individuals or entities that are qualified
investors (gekwalificeerde beleggers) within the meaning of Article 1:1 of the Wft. As aconsequence neither the AIFM nor ADR is subject to the license requirement forinvestment institutions (beleggingsinstellingen) or their managers pursuant to the Wft.
Consequently, the AIFM and CSIF are only subject to supervision of the Dutch Central
Bank (De Nederlandsche Bank, “DNB”) or the AFM for the compliance with the ongoingregulatory requirements as referred to in the Dutch law implementation of article 42 of the
AIFMD. This Article 23 AIFMD Prospectus is not subject to approval by the AFM. No
approved prospectus is required to be published in the Netherlands pursuant to Article 3 of
the Regulation (EU) 2017/1129 (the “Prospectus Regulation”) as amended and applicablein the Netherlands.

United Kingdom
Units of ADR are being marketed in the United Kingdom pursuant to Article 59 of theUnited Kingdom Alternative Investment Fund Managers Regulations 2013. In accordancewith this provision, the AIFM has notified the Financial Conduct Authority (the “FCA”)
of its intention to offer these units in the United Kingdom.

For the purposes of the United Kingdom Financial Services and Markets Act 2000(“FSMA”), ADR is an unregulated collective investment scheme which has not beenauthorized by the FCA.
Accordingly, any communication of an invitation or inducement to invest in ADR may
only be made to (i) investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the“Order”; or (ii) high net worth companies falling within Articles 49(2)(a) to (d) of theOrder and other persons to whom it may lawfully be communicated (all such persons
referred to under (i) and (ii) of this paragraph, together being referred to as “Relevant
Persons”).
In the United Kingdom, this document and its contents are directed only at Relevant
Persons and must not be acted on or relied on by persons who are not Relevant Persons.
The transmission of this document and its contents in the United Kingdom to any person
other than a Relevant Person is unauthorized and may contravene the FSMA and other
United Kingdom securities laws and regulations.
Prohibition of Sales to UK Retail Investors
In addition to the restrictions under the AIFMD, as retained by the United Kingdom in its
domestic laws, the Units of ADR are not intended to be offered, sold or otherwise madeavailable to and should not be offered, sold or otherwise made available to any retailinvestor in the United Kingdom. For these purposes of this provision, a “retail investor”
means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article
2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of theEuropean Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaningof the provisions of the FSMA and any rules or regulations made under the FSMA to
implement Directive (EU) 2016/97, where that customer would not qualify as aprofessional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014
as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as
defined in Article 2 of Regulation (EU) 2017/1129, as it forms part of domestic law byvirtue of the EUWA; and the expression “offer” includes the communication in any formand by any means of sufficient information on the terms of the offer and the international
units to be offered so as to enable an investor to decide to purchase or subscribe theinternational units.
Consequently no key information document required by Regulation (EU) No 1286/2014,as it forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”), for2

offering or selling the international units or otherwise making them available to retailinvestors in the United Kingdom has been prepared and therefore offering or selling theinternational units or otherwise making them available to any retail investor in the United
Kingdom may be unlawful under the UK PRIIPs Regulation.

European Economic Area
In addition to the restrictions under the AIFMD, the units of ADR are not intended, from 1
January 2018, to be offered, sold or otherwise made available to and, with effect fromsuch date, should not be offered, sold or otherwise made available to any retail investor in
the European Economic Area (“EEA”). For these purposes, a retail investor means aperson who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of
Directive 2014/65/EU, as amended, (the “MiFID II”) , including any client, beneficiary,principal, or similar of any person acting as a trustee, agent, nominee, or similar; (ii) a
customer within the meaning of Directive (EU) 2016/97, where that customer would not
qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii)
not a qualified investor as defined in the Prospectus Regulation, as amended.
Consequently no key information document required by Regulation (EU) No 1286/2014(the “PRIIPs Regulation”) for offering or selling the units of ADR or otherwise making
them available to retail investors in the EEA has been prepared and therefore offering or
selling the units of ADR or otherwise making them available to any retail investor in the
EEA may be unlawful under the PRIIPs Regulation.
Transaction Summary
ADR’s asset manager, AD Investment Management Co., Ltd. (“ADIM”), executed amerger agreement on January 27, 2022 between ADIM and ITOCHU REIT Management
Co., Ltd. (“IRM”) on June 1, 2022 through an absorption-type merger, with ADIM as thesurviving entity (the “Merger”).
Since the shareholders of ADIM and IRM and their respective shareholding percentages
remain the same, the Merger did not involve the delivery of new shares or other assets as
consideration. Following the completion of the Merger, ADIM changed its corporate nameto “ITOCHU REIT Management Co., Ltd.”

3

Article 23 (1)(a)Objectives of the AIF

Advance Residence Investment Corporation seeks to maximize unitholder value, aiming tosecure stable profits and achieve asset growth over the medium and long term byinvesting in Japanese domestic real estate primarily used for residential purposes with afocus on diversifying its investments among regions.

Investment strategy

ADR’s investment strategy is to maximize unitholders’ value by utilizing ITOCHU Group’s
and other supporting companies’ networks, knowledge and human resources in areas
concerning leasing, property sourcing and facility management.

Types of assets the AIF

Real estate, trust beneficiary interests in real estate, real estate securities, specified assets

may invest in

and other assets.

Techniques it may

ADR focuses on investing in residential properties which ADR anticipates will provide

employ and all

steady rental revenue especially in Tokyo and other urban areas where there will be

associated risks

continued population growth even though the population as a whole is expected to
decline.
The principal risks with respect to investment in ADR are as follows:•

any adverse conditions in the Japanese economy could adversely affect ADR;•

ADR may not be able to acquire properties to execute the growth and investment
strategy in a manner that is accretive to earnings;•

illiquidity in the real estate market may limit the ability to grow or adjust theportfolio;•

the past experience of the Asset Manager (the “AIFM”) in the Japanese real estatemarket is not an indicator or guarantee of the future results;•

ADR’s reliance on ITOCHU Group, the AIFM and other third party service providers
could have a material adverse effect on business;•

the AIFM operating multiple funds;•

there are potential conflicts of interest between ADR and ITOCHU Group as well as
the AIFM;•

ADR’s revenues largely comprise leasing revenues from the portfolio properties,
which may be negatively affected by vacancies, decreases in rent, and late or
missed payments by tenants;•

ADR faces significant competition in seeking tenants and it may be difficult to findreplacement tenants;•

increases in interest rates may increase the interest expense and may result in a
decline in the market price of the units;•

ADR may suffer large losses if any of the properties incurs damage from a natural
or man-made disaster;4

•about 70% of the properties in the portfolio are concentrated in Tokyo
metropolitan area;•

any inability to obtain financing for future acquisitions could adversely affect thegrowth of the portfolio;•

ADR’s failure to satisfy a complex series of requirements pursuant to Japanese tax
regulations would disqualify ADR from certain taxation benefits and significantly
reduce the cash distributions to the unitholders; and•the ownership rights in some of the properties may be declared invalid or limited.

In addition, we are subject to the following risks:•

risks related to increasing operating costs;•

risks related to ADR’s dependence on the efforts of the AIFM’s key personnel;•risks related to the restrictive covenants under debt financing arrangement;•risks related to entering into forward commitment contracts;•

risks related to third party leasehold interests in the land underlying ADR’sproperties;•risks related to holding the property in the form of stratified ownership (kubunshoyū) interests or co-ownership interests (kyōyū-mochibun);•risks related to holding the property through trust beneficiary interests;•

risks related to properties not in operation (including properties underdevelopment);•risks related to the defective title, design, construction or other defects or
problems in the properties;•risks related to affect by infectious diseases and plagues;•

risks related to suffering impairment losses relating to the properties;•risks related to decreasing tenant leasehold deposits and/or security deposits;•risks related to tenants’ default as a result of financial difficulty or insolvency;•

risks related to the insolvency of master lessor;•

risks related to relying on expert appraisals and engineering, environmental andseismic reports as well as industry and market data;•risks related to the presence of hazardous or toxic substances in the properties, orthe failure to properly remediate such substances;•risks related to the strict environmental liabilities for the properties;•risks related to the insider trading regulations;•risks related to the amendment of the applicable administrative laws and local
ordinances;•risks related to infringing third party’s intellectual property right;•

risks related to holding interests in properties through preferred shares of special
purpose companies (tokutei mokuteki kaisha);5•risks related to holding Japanese anonymous association (tokumei kumiai)interests;•

risks related to investments in trust beneficiary interest;•

risks related to the tight supervision by the regulatory authorities and compliancewith applicable rules and regulations;•risks related to the tax authority disagreement with the AIFM’s interpretations of
the Japanese tax laws and regulations;•risks related to being unable to benefit from reductions in certain real estate taxes
enjoyed by qualified J-REITs;•

risks related to changes in Japanese tax laws;•

risk of dilution as a result of further issuances of units; and•risks associated with the implementation of the Merger.

Any applicable

ADR is subject to investment restrictions under Japanese laws and regulations (e.g., theinvestment restrictions

Act on Investment Trusts and Investment Corporations (the “ITA”), the Financial
Instruments and Exchange Act (the “FIEA”)) as well as its articles of incorporation.
ADR must invest primarily in specified assets as defined in the ITA. Specified assets
include, but are not limited to, securities, real estate, leaseholds of real estate, surface
rights (chijō-ken) (i.e., right to use land for the purpose of having a structure on it) or trust
beneficiary interests for securities or real estate, leaseholds of real estate or surface
rights.
A listed J-REIT must invest substantially all of its assets in real estate, real estate-related
assets and liquid assets as provided by the listing requirements. Real estate in this context
includes, but is not limited to, real estate, leaseholds of real estate, surface rights, andtrust beneficiary interests for these assets, and real estate-related assets in this context
include, but are not limited to, anonymous association (tokumei kumiai) interests forinvestment in real estate.
Pursuant to the ITA, investment corporations may not independently develop land for
housing or to construct buildings, but may outsource such activities in certain
circumstances.
Investment restrictions ADR places in its articles of incorporation are as follows:(1) Restrictions relating to securities and monetary claims
ADR will place importance on stability and convertibility of investments into securities
and monetary claims, and it will not make investments aimed only at gaining positive
management profits.
(2) Restrictions relating to derivatives transactions

6

ADR will place importance on stability and convertibility of investments into securities
and monetary claims when managing surplus funds, and in other instances, shall take
into consideration the relationship with real estate and real estate backed securities.
(3) ADR will restrict its real estate investment targets to real estate located in Japan.
(4) ADR will not invest in assets denominated in a foreign currency.
Circumstances in which ADR may take out loans or issue long-term or short-term corporate bonds for the purpose
the AIF may useof investing in properties, conducting repairs and related work, paying cash distributions,leverage

repaying obligations (including repayment of tenant leasehold or security deposits, andobligations related to loans or long-term or short-term corporate bonds) and otheractivities.

The types and sources

Loans or corporate bonds. ADR currently does not have any outstanding guarantees andof leverage permitted

may be subject to restrictive covenants in connection with any future indebtedness thatand associated risks

may restrict the operations and limit the ability to make cash distributions to unitholders,to dispose of the properties or to acquire additional properties. Furthermore, ADR may
violate restrictive covenants contained in the loan agreements ADR executes, such as themaintenance of debt service coverage or loan-to-value ratios, which may entitle thelenders to require ADR to collateralize the properties or demand that the entire
outstanding balance be paid. Further, in the event of an increase in interest rates, to theextent that ADR has any debt with unhedged floating rates of interest or ADR incurs new
debt, interest payments may increase, which in turn could reduce the amount of cash
available for distributions to unitholders. Higher interest rates may also limit the capacity
for short- and long-term borrowings, which would in turn limit the ability to acquire
properties, and could cause the market price of the units to decline.

Any restrictions on

The maximum amount of each loan and corporate bond issuance will be one trillion yen,leverageand the aggregate amount of all such debt will not exceed one trillion yen.

Any restrictions on

No applicable arrangements.

collateral and asset
reuse arrangements
Maximum level of

ADR has set an upper limit of 60% as a general rule for its loan-to-value, or LTV, ratio inleverage which theorder to operate with a stable financial condition. ADR may, however, temporarily exceed

AIFM is entitled tosuch levels as a result of property acquisitions or other events.

employ on behalf of
the AIF

Article 23(1) (b)7

Procedure by which

Amendment of the articles of incorporation. Amendment requires a quorum of a majority

the AIF may change itsof the total issued units and at least a two-thirds vote of the voting rights represented atinvestment strategy /the meeting. Unitholders should note, however that under the ITA and our articles ofinvestment policy

incorporation, unitholders who do not attend and exercise their voting rights at a general
meeting of unitholders are deemed to be in agreement with proposals submitted at themeeting, except in cases where contrary proposals are also being submitted or cases
regarding (i) election and dismissal of an executive officer or an supervisory officer, (ii)consent to cancellation of the asset management agreement with the AIFM, (iii)
dissolution of ADR, (iv) combination of investment units, (v) exemption from liability of an
executive officer, an supervisory officer or an auditor, or (vi) consent to execution of anabsorption-type merger agreement or a consolidation-type merger.
Additionally, the guidelines of the AIFM, which provide more detailed policies within
ADR’s overall investment strategy and policy, can be modified without such formal
amendment of the articles of incorporation

Article 23(1) (c)Description of the

ADR has entered into a sponsor support agreement with ITOCHU Corporation and ITOCHU

main legal implications

Property Development Co., Ltd governed by Japanese law.

of the contractual
relationship enteredinto for the purpose of

ADR is not involved in or threatened by any legal arbitration, administrative or otherproceedings, the results of which might, individually or in the aggregate, be material.

investment, including
jurisdiction, applicablelaw, and the existenceor not of any legal
instruments providing
for the recognition andenforcement of
judgments in the
territory where the AIF
is established8Article 23(1) (d)The identity of the
AIFM, AIF's depository,
auditor and any other• AIFM (Asset Manager): ITOCHU REIT Management Co., Ltd.
The AIFM provides services related to asset management.
• Auditor: Deloitte Touche Tohmatsu LLC

service providers and a

The Auditor audits financial statements and reports to supervisory officers if it finds any

description of their

misconduct or any material fact of violation of law or the articles of incorporation with

duties and theregarding to execution of the duties of an executive officer.

investors' rights
thereto• Custodian and Transfer Agent: Mizuho Trust and Banking Co., Ltd.
The Custodian provides administrative services related to custody of assets. The
Transfer Agent provides administrative services including services related to theunitholders registry, issuance of investment units, payment of cash distributions tounitholders, addressing unitholders’ claims, offers and notices, and the collection,safekeeping and abolishment of unitholders’ personal or entity number.
• General Administrators: Sumitomo Mitsui Trust Bank, Limited and ITOCHU REITManagement Co., Ltd.
The General Administrator provides administrative services related to calculation,accounting, tax payment and organizational management.
Service providers owe contractual obligations under their respective agreements with the
AIF or AIFM, as the case may be. In addition, the FIEA provides that the Asset Manager
owes the AIF a fiduciary duty and must conduct its activities as the asset manager in goodfaith.
The FIEA also prohibits the Asset Manager from engaging in certain specified conduct,
including entering into transactions outside the ordinary course of business or withrelated parties of the Asset Manager that are contrary to or violate the AIF’s interests.
Pursuant to the ITA, the unitholders have the right to approve the execution or
termination of the asset management agreement at a general meeting of unitholders.

Article 23(1) (e)Description of how the
AIFM complies withthe requirements tocover professional
liability risks (own

Not applicable.

9funds / professional
indemnity insurance)

Article 23(1) (f)Description of any
delegatedmanagement function
such as portfolio
management or risk

Not applicable.
There is no delegation of such functions beyond the AIFM, which is responsible for
portfolio and risk management, and the Custodian, which is responsible for safekeeping
activities.

management and of
any safekeeping
function delegated by
the depositary, theidentification of thedelegate and any
conflicts of interest
that may arise fromsuch delegations
Article 23(1) (g)Description of the AIF’s

ADR makes investment decisions based on the valuation of properties, upon consideration

valuation procedureof the property appraisal value.

and pricing
methodology,
including the methods
used in valuing hardto-value assets

ADR shall evaluate assets in accordance with its Article of Incorporation. The methods andstandards that ADR uses for the evaluation of assets shall be based on the Regulations
Concerning the Calculations of Investment Corporations, as well as the Regulations
Concerning Real Estate Investment Trusts and Real Estate Investment Corporations andother regulations stipulated by ITA, in addition to Japanese GAAP.
J-REITs may only use the valuation methods prescribed in the rules of the Investment
Trusts Association, Japan, which emphasize market price valuation.
Please refer to ADR’s “Article of Incorporation of Investment Corporation, Attachment 2”(https://www.adr-reit.com/files/uploads/Articles%20of%20Incorporation.pdf).

10Article 23(1) (h)Description of the AIF’s

ADR seeks to manage its capital resources and liquidity sources to provide adequate funds

liquidity risk

for current and future financial obligations and other cash needs and acquisitions.

management,
including redemption
rights in normal andexceptional
circumstances and

ADR manages liquidity risk by preparing monthly cash management plans and by acquiring
committed lines of credit from its major lenders.
As ADR is a closed-end investment corporation, unitholders are not entitled to request theredemption of their investment.

existing redemption
arrangements withinvestors

Article 23(1) (i)Description of all fees,

Compensation: The articles of incorporation provide that ADR may pay its executive

charges and expenses

officer up to one million yen per month and each of its supervisory officers up to 500

and a maximum

thousand yen per month. The board of officers is responsible for determining a reasonableamount which iscompensation amount for the executive officer and each of the supervisory officers.

directly / indirectly
borne by the investors

Asset Manager:• Asset Management Fee: ADR will pay the Asset Manager an asset management fee asfollows:oAsset Management Fee 1

ADR will pay, within 2 months after the closing of accounting term, an amountnot exceeding the amount calculated by multiplying the total of real estate rental
business income (if invested assets include equity interests in silent partnerships orreal estate-backed securities involving real estate, including the dividends relating tothese invested assets or other forms of income) after subtracting the total of thereal estate rental business expenses (excluding depreciation expenses and losses on
the sale or retirement of non-current assets) for the relevant accounting term by
7.0%.

11

o

Asset Management Fee 2

An amount not exceeding the amount calculated by the following method shallbe paid within 3 months after the closing of accounting term.
[Calculation formula]
Asset Management Fee 1 for the relevant accounting term) x Adjusted FFO per Unit
× 0.005%(Note)
Where the adjusted FFO per Unit is to be calculated A÷B
A: Net profit for the relevant accounting term before deduction of the amount for
Asset Management Fee 2 plus an amount equivalent to depreciation expenses,
impairment losses, and losses on transfer of real estate, etc. and real-estatebacked securities minus an amount equivalent to gains on transfer of realestate, etc. and real- estate- backed securities and profit on negative goodwill
B: Number of investment units issued as of the closing date of the accounting
term(Note) From the first day of the accounting term during which the applicationof Asset Management Fee 2 commences, the following are to apply:(i) if investment units of the Investment Corporation are divided by aratio of 1:X, the amount calculated through the formula above for
Asset Management Fee 2 shall be multiplied by X for accounting
terms following the relevant accounting term; and(ii) if the investment units of the Investment Corporation are merged at
a ratio of Y:1, the amount calculated through the formula above for
Asset Management Fee 2 shall be divided by Y for accounting terms
following the relevant accounting term.

• Acquisition Fee
When real estate, etc., or real-estate-backed securities are newly acquired, theInvestment Corporation will pay, by the end of the month of the following month of theacquisition date, an amount not exceeding the amount calculated by multiplying thepurchase price of that asset acquired by 1.0%. The “purchase price” is the amount set
out in the purchase agreement and excludes expenses associated with the purchase andconsumption tax and local consumption tax.
• Disposal Fee
When real estate, etc., or real-estate-backed securities are disposed of, theInvestment Corporation will pay, by the end of the month of the following month of12the disposal date, an amount not exceeding the amount calculated by multiplying
the sales price of that asset by 0.50%; provided, however, that the disposal fee shallnot be paid if there is a loss on the disposal.. The “sales price” is the amount set out
in the purchase agreement and excludes expenses associated with the sales andconsumption tax and local consumption tax. Further, a loss on disposal is where thesale price at the time of the disposal was less than the book value.

• Merger Fee
If the asset management company conducts a survey or valuation of the assets
held by a possible merger partner for the Investment Corporation and theInvestment Corporation inherits these assets held by the merger partner through amerger, an amount multiplied by a rate not exceeding 0.5% of assets including realestate, real estate-backed securities, specified bonds, and real estate-related loanson the merger effectuation date shall be paid within 3 months from the end ofmonth which the merger effectuation date falls.
Custodian:• Custodian Fee: ADR will pay the Custodian a monthly fee calculated as follows:
The amount of total assets as indicated on the prior month-end trail balance x
0.03% ÷12
General Administrators:• General Administrators Fee: ADR will pay the General Administrators a monthly fee
calculated as follows:
The amount of total assets as indicated on the prior month-end trial balance x
0.09% ÷12
Transfer Agent:• Transfer Agent Fee (Standard Fee):
Standard transfer agent fees are for services such as preparation, maintenance andstorage of ADR’s unitholder register; preparation and reporting of the end-of-period
unitholders register and unitholder statistical data.
The monthly standard fees will be the total of the amount calculated using thefollowing table divided by 6, with a minimum monthly fee of 200,000 yen.

13

Number of Unitholders

Fees per Unitholder

first 5,000 unitholders

480 yenover 5,000 to 10,000

420 yenover 10,000 to 30,000

360 yenover 30,000 to 50,000

300 yenover 50,000 to 100,000

260 yenover 100,000

225 yenAuditor:• Auditor Fee:ADR may pay the independent auditor up to 20 million yen per fiscal period. The
board of officers is responsible for determining the actual compensation amount.
The AIF may also incur other miscellaneous fees in connection with the issuance of units,
and the operation, acquisition or disposition of properties.
Article 23(1) (j)Description of theUnder Article 77 paragraph 4 of the Act on Investment Trusts and Investment Corporations

AIFM's procedure toof Japan, which applies the requirements of Article 109 paragraph 1 of the Companies Act

ensure fair treatment

to investment corporations, investment corporations are required to treat unitholders

of investors and details

equally depending on the number and content of units held. In addition, upon liquidation,of any preferential

the allotment of residual assets to unitholders is required to be made equally depending

treatment received byon the number units held under Article 77 paragraph 2 item 2 and Article 158 of the ITA.

investors, including
detailing the type ofinvestors and theirlegal or economic links
with the AIF or AIFM
Article 23(1) (k)The latest annual

Additional information may be found in our most recent semi-annual report prepared inreport referred to inaccordance with Article 22 of the AIFMD, which is available at the Asset Manager’s office

Article 22(1)located at 17th Floor, Jinbocho Mitsui Building, 1-105 Kanda-Jinbocho, Chiyoda-ku, Tokyo.

Article 23(1) (l)The procedure and

ADR is authorized under the articles of incorporation to issue up to 6,000,000 units. Its

conditions for the issue

units have been listed on the Tokyo Stock Exchange since March 2, 2010.

and sale of the units

Secondary market sales and transfers of units will be conducted in accordance with therules of the Tokyo Stock Exchange. Unit prices on the Tokyo Stock Exchange are14

determined on a real-time basis by the equilibrium between bids and offers. The Tokyo
Stock Exchange sets daily price limits, which limit the maximum range of fluctuation within
a single trading day. Daily price limits are set according to the previous day’s closing priceor special quote.
Article 23(1) (m)Latest net asset valueof the AIF or latest
market price of theunit or share of the AIF

ADR’s unit’s latest market price is publicly available at the Tokyo Stock Exchange or fromfinancialinformation

venders(including

Reuters,

which

can

be

viewedathttps://en.japan-reit.com/meigara/3269/).

Article 23(1) (n)Details of the historical

The units of ADR were listed on the Tokyo Stock Exchange on March 2, 2010.

performance of the

The most recent five fiscal period performance of the units is as follows.

AIF, where available
Fiscal period

Total Assets

Total Net Assets(JPY million)(JPY million)

Total unitholders’equity per unit
(base value) (JPY)

21st Fiscal Period(August 1, 2020 to458,579

230,966

166,763

457,829

230,491

166,420459,988

230,562

166,470

464,898

230,253

166,248469,629

231,357

167,044January 31, 2021)
22nd Fiscal Period(February 1, 2021 toJune 31, 2021)
23rd Fiscal Period(July 1, 2021 to January
31, 2022)
24th Fiscal Period(February 1, 2022 toJune 31, 2022)
25th Fiscal Period(July 1, 2022 to January
31, 2023)
Article 23(1) (o)Identity of the prime
broker, any material
arrangements of the
AIF with its prime
brokers, how conflictsof interest aremanaged with the

No applicable prime broker.

15prime broker and theprovision in thecontract with thedepositary on thepossibility of transfer
and reuse of AIF
assets, andinformation about any
transfer of liability tothe prime broker that
may exist
Article 23(1) (p)Description of how and

The AIFM will disclose the matters described in Articles 23(4) and 23(5) periodicallywhen periodic

through the AIF Internet website and other public disclosures.

disclosures will bemade in relation toleverage, liquidity andrisk profile of theassets, pursuant to
Articles 23(4) and 23(5)Article 23(2)The AIFM shall inform

Not applicable.

the investors before
they invest in the AIF
of any arrangement
made by thedepository tocontractually discharge
itself of liability inaccordance with
Article 21(13)The AIFM shall also

Not applicable.

inform investors of any
changes with respect
to depositary liability
without delay16Article 23(4)(a)Percentage of the AIF's assets which

There are no assets that are subject to special arrangements arising fromare subject to special arrangements

their illiquid nature.

arising from their illiquid nature. The
percentage shall be calculated as the
net value of those assets subject tospecial arrangements divided by the
net asset value of the AIF concerned
Overview of any special

There are no such special arrangements.

arrangements, including whether
they relate to side pockets, gates orother arrangements
Valuation methodology applied to

There are no such special arrangements.

assets which are subject to sucharrangements
How management and performance

There are no such special arrangements.

fees apply to such assets
Article 23(4)(b)Any new arrangements for managing

Any new arrangements or change in applicable arrangements will be

the liquidity of the AIF

disclosed at an appropriate time.

For each AIF that the AIFM manages
Any new arrangements or change in applicable arrangements will bethat is not an unleveraged closed-end disclosed at an appropriate time.
AIF, notify to investors whenever they
make changes to its liquidity
management systems (which enable
an AIFM to monitor the liquidity riskof the AIF and to ensure the liquidity
profile of the investments of the AIF
complies with its underlying
obligations) that are material inaccordance with Article 106(1) ofRegulation (EU) No 231/2013 (ie.
there is a substantial likelihood that areasonable investor, becoming awareof such information, would reconsider
its investment in the AIF, including
because such information could
impact an investor’s ability to
exercise its rights in relation to its

17

investment, or otherwise prejudice
the interests of one or more investors
in the AIF).
Immediately notify investors where

Any new arrangements or change in applicable arrangements will bethey activate gates, side pockets ordisclosed at an appropriate time.

similar special arrangements or
where they decide to suspend
redemptions
Overview of changes to liquidity

Any new arrangements or change in applicable arrangements will bearrangements, even if not special

disclosed at an appropriate time.

arrangements
Terms of redemption and

ADR is a closed-end investment corporation, and unitholders are notcircumstances where management

entitled to request the redemption of their investment.

discretion applies, where relevant
Also any voting or other restrictions

There are no voting or other restrictions on the rights attaching to units.

exercisable, the length of any lock-up
or any provision concerning ‘first inline’ or ‘pro-rating’ on gates andsuspensions shall be included
Article 23(4)(c)
The current risk profile of the AIF andthe risk management systems
employed by the AIFM to manage
those risks

The appropriateness and effectiveness of the risk management structure
are regularly evaluated and enhanced by the AIFM.
Deposits are exposed to risks of failure of the financial institution holding
the deposit and other credit risks, but such risks are controlled by striving todiversify the financial institutions holding the deposits.
Funds from debts and investment corporation bonds are mainly used for
asset acquisition or debt repayment, etc. These are exposed to liquidity risk
at the time of repayment, but the liquidity risk is controlled through suchmeasures as striving to maintain and strengthen the capacity to procure
funds from the capital market via capital raising, along with securing several
fund procurement sources and diversifying repayment deadlines, executing
commitment lines of credit which provide credit facilities with major
financial lenders, and also preparing monthly cash management plans.
Debt with a floating interest rate is exposed to interest rate fluctuation
risks, but the impact that interest rate rises have on the operations islimited by keeping the appraisal LTV at low levels, maintaining the
proportion of debt that is long-term fixed-rate debt at high levels, andsetting a procurement limit depending on the economic and financial
environment, terms of lease agreements with tenants, asset holding period
and other factors.
Furthermore, derivative transactions (interest rate swap transactions) areutilized as hedging instruments to mitigate the risks of rises in floatinginterest rates.

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Measures to assess the sensitivity ofTenant leasehold and security deposits are deposits from tenants and are
exposed to liquidity risks arising from tenants moving out of properties, but
the liquidity risk is controlled through such measures as preparing monthly
cash management plans.
No such measures have been implemented.

the AIF’s portfolio to the most
relevant risks to which the AIF is or
could be exposed
If risk limits set by the AIFM have

No such situation has occurred.

been or are likely to be exceeded andwhere these risk limits have been
exceeded a description of thecircumstances and the remedial
measures taken
Article 23(5)(a)Any changes to the maximum amountAny new arrangements or change in applicable arrangements will beof leverage which the AIFM may

disclosed at an appropriate time.

employ on behalf of the AIF,
calculated in accordance with thegross and commitment methods. This
shall include the original and revised
maximum level of leverage calculated
in accordance with Articles 7 and 8 ofRegulation (EU) No 231/2013,,
whereby the level of leverage shall becalculated as the relevant exposure
divided by the net asset value of the
AIF.
Any right of the reuse of collateral or

No such right or guarantee exists.

any guarantee granted under theleveraging agreement, including thenature of the rights granted for thereuse of collateral and the nature of
the guarantees granted
Details of any change in service

Any new arrangements or change in applicable arrangements will be

providers relating to the above.

disclosed at an appropriate time.

Article 23(5)(b)Information on the total amount of

The aggregate amount of debt with interest is JPY 231,309 million as ofleverage employed by the AIF

Junuary 31, 2023.

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calculated in accordance with thegross and commitment methods

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