Leading 21st Century Retailing, as Logistics Partners

Transforming Retail
Toward the ultimate shopping experience - any time, any place

Combining Online Shopping with Shopping in StoresConnecting directly to customers, to cater to their needs in an optimal wayOffering the most comfortable and enjoyable shopping experienceLeveraging diverse online or face-to-face interactions with customers for a shopping
experience that matches the brand’s values

Transforming Retail
Towards the ultimate shopping experience - any time, any place
Examples

Customized services, such as providing information that matches personal tastes andoffering adviceEmpowering customers to purchase online and pick up their items quickly at store
locations, or have them delivered to their home

Leverage real-time links between stores and warehouses to deliver merchandise
quickly, and never run out of stockEnabling customers to purchase online, if they cannot find items in the right sizes orcolors at store locations, and have their purchases delivered

Transforming Retail
Towards the ultimate shopping experience - any time, any place

Logistics Play a Key Role in Transforming RetailRetailing-Driven LogisticsPursuing more attentive services

Logistics of Today
Factory

Place ofproduction

Factory

DCDC

Logistics of Tomorrow

FactoryDCFactory

Place ofproduction

Factory

Plant

Warehousing in placesof production

DCCountry ofsaleCountry ofsaleTCTC

DCDC

DCDC

ＤＣDC

Multifunctional logistics
centersStores

ＤＣ: Distribution centerStores

ＴＣ: Transfer center

Overview of Multifunctional Logistics Centers
How they underpin a new retailing paradigm

Logistics model of tomorrow
Develop, produce, and retail merchandise as an SPA , while building our own logistics supply chain

Global flagship stores

Large format and standard stores

Online shop

Mobile accessMultifunctional Logistics Centers
1. Logistics hub close to customers, for significant cost and time savings on deliveries
2. Quick delivery of goods, based on real time response to store sales
3. By providing a backroom-function storage service, rapid delivery of products to ensure
they can immediately be displayed on sales floor - reducing need for on-site stock
4. Manufacturing and processing services, to meet customization needs for customer
products
5. Functional leadership across the entire logistics process, working with stores and otherdelivery partners6. Center for disseminating information to customers, working with stores.

HomeNeighborhood store

Other stores

Hotels, etc.

Fast Retailing and Daiwa House
Building a new partnership+Business scale, as a global retailer
Store operations expertiseProperty development track record inJapan and abroad
Expertise in warehouse construction

Joint Logistics Initiatives
A joint venture to build a logistics framework focused on multifunctional logistics centers
As first step, construct warehouse in Ariake to serve central Tokyo
Then, create new logistics infrastructure around Japan and worldwide
Plan to set up private real estate investment trust (REIT) to secure distribution center sites and financeconstruction

AriakeMultifunctional
Distribution
CenterMultifunctional
Distribution
CenterMultifunctionalDistribution
CenterOverview of Private REIT

Daiwa House set to create its first private real estate investment trust

Starting with Ariake facility, developing and deploying new distribution centers

REIT setup:

2016

Investment:

Fast Retailing logistics facilities

Target yield:

Projected to exceed 4% on profit distribution basis

Asset scale:Around ¥65 billion at inception, expanding thereafter

Asset manager:

Daiwa House REIT Management Co., Ltd.

Overview of Ariake Facility
Serving central Tokyo

1. Name:2. Location:
3. Function:
4. Property size:
5. Building size:
6. Floor space:
7. Structure/scale:
8. Construction:

Provisionally, D Project Ariake I New Construction
1-8, Ariake 1-chome, Koto-ku, Tokyo
Warehouse and office
36,309 square meters
19,474 square meters
112,402 square meters
Steel and reinforced concrete, six floors above ground
Scheduled to start Nov. 15, 2014, ending Jan. 25, 2016

Building specifications
1. Floor load:
Each floor, 1.5 metric tons per square meter
2. Effective beam height: 5.5 meters each floor
3. Outer wall:
DRS panel
4. Emergency generator:
500KVA, within 1,000L
5. Seismic isolation:
Pile top isolation
6. Greenery:
Wall and rooftop vegetation, as well as
seasonal vegetation on site
7. LED lighting:
In office and other locations, andprospectively within warehousing area
8. Solar power:
Facility designed to enable eventual
installation of such facilities