Securities Code 3487

Financial Results Briefing for the 5th Period
Ended December 2018 (July 1, 2018 to December 31, 2018)

LogiSquare Hanyu
The site was selected based on the needs of the tenant, a major logistics company, and the facility has maximum floor loading of 2.0 t/m2 to withstandheavy loads. The facility has dual sided berths on the low first floor and an eaves length of 14.0 m to realize the efficiency of tenant’s loading and unloading
operations. Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

February 21, 2019
CRE REIT Advisers, Inc.

Contents
Contents

GLOSSARY
Term

1. Financial Results and Forecasts

2

2. Characteristics of CRE Logistics REIT, Inc.

7

3. Growth Strategies
4. Market Environment
5. Appendix

22
31
38

Definition

Appraisal value

The appraisal value or an investigated value as of the end of the period is stated based on theCertificate of Incorporation of the Investment Corporation and the Regulation on Accountings ofInvestment Corporations (Cabinet Office Order No.47 of 2006 including subsequent revisions)

Unrealized gains(Appraisal value) - (Book value) as of the end of the period

LTV(Outstanding balance of interest-bearing debt) - (Total Assets)

LTV based on
appraisal value(Outstanding balance of interest-bearing debt) / (Total assets + Unrealized gains)

NAV per unit

(Net assets + Unrealized gains - Total amount of distributions) / Total number of investment
units outstanding (231,150 units)

Acquisition price

Acquisition price is the purchase agreement price for each of the trust beneficiary rights statedin the sales agreement and does not include national and local consumption taxes or salescommission and other expenses that are incurred in the acquisition.

NOI yield

Ratio of actual NOI of the portfolio assets to their acquisition price

CRE

CRE, INC.

CRE Group

CRE, INC. and its subsidiaries and affiliates•

This material is not a disclosure material under the Financial Instruments and Exchange Act, the Act on Investment Trusts and Investment Corporations or the
Securities Listing Regulations of the Tokyo Stock Exchange.

•

The purpose of this material is to provide information and not to offer, solicit the purchase of or sell certain products. When you make an investment, please do so
at your own discretion and risk.

•

The market price of investment securities of the Investment Corporation will be affected by the demand and supply of investors at an exchange and will fluctuate
under the influence of the interest rate environment, economic conditions, the real estate market conditions and other factors surrounding the market. Accordingly,
the investment securities may possibly not be sold at a higher price than the acquisition price, and investors could suffer a loss as a result.

•

The investment securities of the Investment Corporation need to be purchased and sold through a securities company with which you undertake business. At thattime, please read the contents of the document provided before concluding the contract (or a prospectus) carefully.

•

While this material contains forward-looking statements and results forecasts, these statements do not guarantee the future results and financial conditions of theInvestment Corporation.

•

In this material, amounts are rounded off to the unit and ratios are rounded to the nearest one decimal place, unless otherwise noted.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

11. Financial Results and Forecasts

LogiSquare Urawa Misono
All LogiSquare facilities held by CRE-REIT have an effective ceiling height of 6m as a basic specification and use signage designed to visuallycommunicate functions within the facility. Different colored signs are used on each floor to facilitate understanding of current location and the(C) 2018
CRE Logistics
REIT, Inc. All Rights Reserved.
numbers onCopyrightpillars are used
as a guideduring loading.

21. Financial Results and Forecasts

Highlights on the 5th Period―Achieved better-than-anticipated results due to stable management
Distributions per unit

NAV per unit

Portfolio

5th period Results

3,351 yen

5th period Results(2018/12)(Compared to forecast: Up 54 yen, Up 1.6%)(2018/12)

6th period Forecasts

2,940 yen

(2019/6)

7th period Forecasts

2,940 yen

(2019/12)
Forecasts
Results

2,540

117,317 yen(+2,380 yen from 4th period)

114,936
114,936

117,317
117,317

3,297 3,351
2,940

2,940

6th period

7th period

2,585

4th period

5th period

Asset

4th period

5th period

Debt
5th period(2018/12)

Compared to
4th period

Portfolio size

7 properties 47.7 billion yen

Occupancy rate

100.0%

Average remaining
lease term

7.1 years

Average property age

2.0 years

Ratio of fixed-termleases100.0%

Ratio of fixed-rate rents

100.0%

Equity(2018/12)

Compared to
4th period

23,820 million yen-1,530 million yen

5th period

5th period(2018/12)

Appraisal value

50,480 million yen+350 million yen

Interest-bearing
debt

Unrealized gains

3,173 million yen+636 million yen

LTV

47.7%

-1.7%

NAV

Unrealized gains ratio

6.7%

+1.4%

LTV based on
appraisal value

44.8%

-2.2%

NOI yield

5.3%

―%

Ratio of fixedinterest debt

88.7%

+5.4%

NOI yield after
depreciation

4.1%

―%

Ratio of long-term
debt

100.0%+5.2%

Averageborrowing interest
rate

0.532%

Repair expense
Capital expenditure0 million yen
0 million yen-0 million yen+0 million yen

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

+0.032%Compared to
4th period

106,940 yen+393 yen

27,117 million yen+550 million yen

NAV per unit

117,317 yen+2,380 yen

Total number ofinvestment units
outstanding

231,150 units― units

Net assets per unit

One characteristic of logistics facilities is that the ratio of building value to landis typically high, and so depreciation expense tends to be higher than for otherasset classes. Since unrealized gains are the difference between appraisal
value at end of period and book value after deduction of depreciation expense,
CRE-REIT, which holds fairly new properties and has minimal capital
expenditure, tends to record increasing unrealized gains because, at the endof each period, the sum of depreciation expense and any increase in appraisal
value at the end of the period is added to unrealized gains at the end of theprevious period.

3

1. Financial Results and Forecasts

Results for the 5th Period (Ended December 2018)
Unit: million yen

5th period(2018/12)
Forecasts (A)

5th period(2018/12)
Results (B)Difference

Major factors fordifference(B) - (A)

1,405

1,413

1

+7

140

145

2

+5

1,265

1,267

+2

287

287

+0

Net leasing revenues (NOI - Dep.)

977

980

+2

General and administrative
expenses, etc.

174

168

803

811

Non-operating income―

3

Non-operating expenses

126

125

-0

Ordinary income

677

689

+12

Net income

676

688

+12

3,297

3,351

+54

2,925

2,979

+54

372

372

―

Operating revenues
Leasing expenses (excluding depreciation)
NOI
Depreciation

Operating income

Distributions per unit (yen)Distributions per unit (yen)OPD per unit (yen)Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

3

-5

+8
4

+3

1 Operating revenues +7• Increase in utilities income +7

2 Leasing expenses +5• Increase in utilities expenses +6• Decrease in repair expenses -1

3 General and administrative
expenses, etc. -5• Unused reserve fund -5

4 Non-operating expenses +3• Occurrence of interest on tax refund+34

1. Financial Results and Forecasts

Forecasts for the 6th and 7th Periods (Ending June 2019 and December 2019)
Unit: million yen

Difference(B) - (A)

7th period(2019/12)
Forecasts (C)

1

-3

1,412

6

+2

2

+100

247

7

+1

1,163

-103

1,164

+0

287

287

―

287

―

Net leasing revenues (NOI - Dep.)

980

876

-103

877

+0

General and administrative
expenses, etc.

168

160

-8

162

811

716

-95

715

-0

Non-operating income

3

―

4

-3

―

―

Non-operating expenses

125

121

5

-3

121

-0

689

594

-94

594

-0

Operating revenues
Leasing expenses (excluding
depreciation)

NOI
Depreciation

Operating income

Ordinary income

5th period(2018/12)
Results (A)

6th period(2019/6)
Forecasts (B)

1,413

1,410

145

246

1,267

Difference(C) - (B)

Major factors fordifference<6th period>
1 Operating revenues -3• Seasonal fluctuation in utilities income -2

2 Leasing expenses +100

3

8

+1

• Increase due to the expensing of fixed asset
taxes and city planning taxes on 5
properties acquired in the 4th period +104
• Decrease in facility management expenses-2• Seasonal fluctuation in utilities expenses -2

3 General and administrative

expenses, etc. -8• Decrease in asset management fees -8

4 Non-operating income -3• Non-occurrence of interest on tax refund -3

5 Non-operating expenses -3• Decrease in interest expense -2<7th period>
6 Operating revenues +2

Net income

688

593

-94

593

-0

• Seasonal fluctuation in utilities income +2

7 Leasing expenses +1• Seasonal fluctuation in utilities expenses +1

Distributions per unit (yen)Distributions per unit (yen)OPD per unit (yen)

3,351

2,940

-411

2,940

―

2,979

2,568

-411

2,568

―

372

372

―

372

―

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

8 General and administrative

expenses, etc. +1• Opening of General Meeting of Unitholders+2, etc.

5

1. Financial Results and Forecasts

Comparison between Each Period

3,500

3,351

3,297
Increase in
NOI

Decrease in
SGA

Increase innonoperating
incomeOthers

+25

+14

+5

372

372

Decrease in
NOI

2,940

3,000

+10

Decrease in Decrease in Decrease in
SGA
nonnonoperating
operatingincomeexpenses

2,500

2,000

-448

2,925

+35

-14

2,940
Increase in
NOI

Increase in
SGA

Others

372

372
+4

+16

-6

+2

2,979
2,568

2,568

1,500

1,000

5th第５期period(yen) Ended
Dec. 20182018年12月
Forecasts期

予想

5th第５期period6th第６期period7th第７期periodEnded
Dec. 20182018年12月
Results

EndingJun. 20192019年6月期
Forecasts

EndingDec. 20192019年12月
Forecasts

期

予想

実績

Profit distributions per unit

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

期予想

OPD per unit6

2. Characteristics of CRE Logistics REIT, Inc.

Manager of Kita Kanto Logistics
Center of Sangetsu Corporation(tenant of LogiSquare Kuki)

LogiSquare Kuki
The facility is used as the Kita Kanto Logistics Center of Sangetsu Corporation, a trading company specializing in interior products.
All properties
held by CRE-REIT
managedby CRE,strongtrack
record in property management, to meet the requirements from the tenant every day.
Copyright(C) 2018 are
CRE
Logistics
REIT,with
Inc.itsAll
RightsReserved.

Member of Property Management
Group of CRE, INC.

7

2. Characteristics of CRE Logistics REIT, Inc.

Characteristics/Advantages of CRE-REIT
Character-istics

1. Portfolio focused on LogiSquare

2. Long-term, stable asset management

3. Distinct external growth strategy

High-quality portfolio(1) Stable cash flow

(2) Long-term contracts withdiverse tenants(3) Good location

Occupancy rate

Ratio of fixed-term leases

Ratio of fixed-rate rents

100.0%

100.0%

100.0%

Average lease contract term

Average remaining lease term

Tenant not using other REIT properties

8.9 years

7.1 years

6 in 10 tenants

Ratio of Tokyo Metropolitan Area

Less than 5km to an interchange

94.0%

100.0%

Within 10 mins’ walk of
public transportation

95.6%

Sponsor is real estate company specializing in logistics properties
Advantages(1) Leasing capability

Companies that have concluded
lease contracts with CRE directly(2) Property management (PM)capability

1,435 properties 4,440,000 m2(3) Development capability

1,070 companies
Managed floor area

Leasing by CRE on its own

154 properties (July 2018)

Holding of private viewings, including
for other listed REITs

PM entrusted by other companies

PM entrusted by other listed REITs

Approx.７0%

850,000 m2• Tenant requirements obtained through day-to-day management and leasing activities are fully reflected in facility
development.
• Has been developing suitable properties for REIT since 2006 when real estate securitization first appeared in Japan.

Capable of flexibly acquiring properties, taking consideration into investment unit price•

Able to make use of bridge functions. Already has experience of acquiring three properties at IPO using bridge schemes.

••

Also able to acquire mid-sized properties and quasi-co-ownership interests using cash on hand.
Already has a pipeline beyond current portfolio consisting of 10 properties, 320,000 ㎡

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

8

2. Characteristics of CRE Logistics REIT, Inc.

High-quality Portfolio (1) Stable cash flow
Plan to maintain average occupancy rate of 100.0% through to the end of April 2021
Contract expiry
dates that will comeat the end of April
2021 at the earliest

Changes in Average Occupancy Rate
Forecast

Actual100%
Listing in February
2018

End of 5th Period
December 2018

End of 7th Period
December 2019

End of 9th Period
December 2020

Form of contract that enables stable operationD
Dec 2021e…

N
Nov 2021o…

O
Oct 2021c…

S
Sep 2021e…

A
Aug 2021u…

J
Jul 2021u…

J
Jun 2021u…

M
May 2021a…

A
Apr 2021p…

M
Mar 2021a…

F
Feb 2021e…

J
Jan 2021a…

D
Dec 2020e…

N
Nov 2020o…

O
Oct 2020c…

S
Sep 2020e…

A
Aug 2020u…

J
Jul 2020u…

J
u…
Jun 2020

M
May 2020
a…

A
Apr 2020
p…

M
Mar 2020
a…

J
a…

F
Feb 2020
e…

Jan 2020

D
Dec 2019
e…

N
Nov 2019
o…

O
Oct 2019
c…

S
Sep 2019
e…

J
u…
Jul 2019

A
Aug 2019
u…

J
u…
Jun 2019

May 2019M
a…

Apr 2019A
p…

Mar 2019M
a…

Feb 2019F
e…

Jan 2019 J
a…

Dec 2018D
e…

Nov 2018N
o…

Oct 2018O
c…

Sep 2018S
e…

Aug 2018A
u…

Jul 2018 J
u…

Jun 2018 J
u…

May 2018M
a…

Apr 2018A
p…

Mar 2018M
a…

0%

Feb 2018F
e…

50%

Mitigation of risk of vacancies through CRE’s leasing
capability• Tenants who cancel early before the end of the contract term are required to pay theequivalent of rent for the whole remaining lease term as a penalty for breach of contract. • See page 16.
• Intention for renewal or termination is ascertained a year before contract expiry.
Ratio of fixed-term lease contracts

Ratio of fixed-rate rents

Ratio of fixedterm lease
contracts
100.0%

Ratio of fixedrate rents
100.0%

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

92. Characteristics of CRE Logistics REIT, Inc.

High-quality Portfolio (2) Long-term contracts with diverse tenants
Diverse tenants ranging from mid-sized enterprises to large enterprises conclude long-term contracts and use facilities as
exclusive distribution bases.
CRE also attracts tenants not using other REIT properties through its leasing capabilities
Average remaining lease term(Note 1)

Average lease contract term
LessLessthan
5 yearsthan514.6%years
14.6%

10 years or more and10 yearsmore
andless than 15
lessorthan
15
years
years
4.4%
4.4%

Ratio of exclusive usage

Less than
5 Lessyearsthan
5 years
27.5%

Multi-tenantMulti-tenant
40.3%
40.3%

27.5%

Average
8.9 years

18.9%

10
more
10 years
years orormore
andand
less
1515
years
less than
than
years
66.5%
66.5%

Property name

Average

Average
7.1 years

5 years or more and5 years or more and lessless than
10 yearthan
10 Year
18.9%

59.7%

5 years or more andyears10or yearmore and
less5thanless than 10 year
68.2%
68.2%

Tenant name

Sector

Exclusive

Exclusive
usage
59.7%
usage
59.7%

Note: Based on the acquisition price

Main business

Listed market

Use of other
REIT property(Note 2)

LogiSquare Kuki

Sangetsu Corporation

Wholesale

Development and sale of total interior goods

TSE 1st Section

Yes

LogiSquare Hanyu

Major large logistics company

Landtransportation

General logistics business and related businesses

Not disclosed

Yes

LogiSquare Kuki II

FUSOGOSEI Co., Ltd.

Manufacturing

Manufacture and sale of building interior materials and interior
products―

No

Nippon Express Co., Ltd.

Land
transportation

General logistics business and related businesses

TSE 1st Section

Yes

Tobu Delivery Co., Ltd.

Land
transportation

Forwarding business, warehousing business, distribution
processing business, etc.

―

No

Wholesale

Purchase, sale, design and lease of medical equipment,
medical materials and hospital facilities―

No

Warehousing andTransportation

Receipt, inventory management and shipment business of
publications and the contract business of the refurbishment
and reproduction of books―

No

Lixus Co., Ltd.

Land
transportation

Forwarding business, warehousing business, distribution
processing business, etc.

―

No

CyberStep, Inc.

Information andcommunications

Development of network entertainment software and thelicensing and operation of online game services

TSE 2nd Section

No

Nippon Express Co., Ltd.

Land
transportation

General logistics business and related businesses

TSE 1st Section

Yes

LogiSquare Urawa
Misono(Wholly-owned subsidiary of Tobu Railway Co., Ltd.)INNOMEDICS Medical Instruments, Inc.
(Wholly-owned subsidiary of ORIX Corporation)

LogiSquare Niiza

Building Book Center Co., Ltd.
(KADOKAWA Group)

LogiSquare Moriya

LogiSquare Tosu

Note 1: The remaining lease term is the period from December 31, 2018 to the expiration date of the lease contract stated in the lease contract
Note 2: According to investigation of Asset Management Company based on annual reports of other listed REITs in the period from January 22, 2018 to January 21, 2019.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

10

2. Characteristics of CRE Logistics REIT, Inc.

High-quality Portfolio (2) Long-term contracts with diverse tenants
Many enterprises want to share a mid-sized logistic facility with a small number of other tenants and there is strong tenant demand forthe logistics facilities developed by CRE.
1

2

Usage area per logistics base in the Tokyo Metropolitan Area

Approximately 80% of logistics bases used by consignors or logistics operators in theTokyo Metropolitan Area are less than 16,500 sq.m. in site area(Note 1).
Less than 3,300 sq.m.
Over 9,900 sq.m. less than 16,500 sq.m.
Over 33,000 sq.m. less than 50,000 sq.m.

41%

Approximately 75% prefer exclusive usage of facilities with up to 2other tenants if they are to lease logistics facilities in the future (Note 2).

Over 3,300 sq.m. less than 9,900 sq.m.
Over 16,500 sq.m. less than 33,000 sq.m.
Over 50,000 sq.m.

21%

Prefer
Exclusive Usage
Prefer Exclusive Usage(single-tenant(single-tenant facility)
facility)）24%
24%

Prefer multi-tenant facility
Prefer multi-tenant facility(with over 3 other tenants)(with over25%
3 other tenants)
25%

n = 655 buildings
Source: Sumitomo Mitsui Trust Research Institute Co., Ltd.

20%

Desirable tenant mix

11% 4% 3%
Basically
preferexclusive
Basically
preferexclusive
usage,
usage,
acceptbut accept
1 orbut
2 othertenants
1 or 2 othertenants
51%
51%

Approx. 80% are less than 16,500 sq.m.
In the case of the CRE-REIT, the average usage area per tenant isapprox. 21,000 sq.m.
3n＝145 companies
Source: Sumitomo Mitsui Trust Research Institute Co., Ltd.

4

Reason for selecting single-tenant facility

Respondents who prefer single-tenant facilities quoted the flexibility interms of usage and layout, the necessity of enhanced information
management and security system, and the availability of long-term lease
contract.
Flexibility in terms of usage andlayout73%

Vacancy rate per facility size in the Tokyo Metropolitan Area

Generally, logistics facilities with an area of less than 50,000 sq.m. have lower vacancy
rates than multi-tenant logistics facilities with an area over 50,000 sq.m.(Note 2), suggesting ahigh level of demand.

20%

Over 50,000 sq.m. multi tenant typeLess than 50,000 sq.m.

15%

Necessity of enhanced information
management and security system

39%

Availability of long-term lease
contract

38%

10%
5%
0%

n = 94 companies
Source: Sumitomo Mitsui Trust Research Institute Co.,
Ltd.

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: CBRE K.K.

Note 1: Figures calculated based on a survey conducted by Sumitomo Mitsui Trust Research Institute Co., Ltd. from August to September 2017 (hereinafter the “Survey”) are presented. In the Survey, a questionnaire
was sent to 3,022 shipping and logistics companies, and the answers obtained from 199 companies are aggregated. Hereinafter the same applies to statements sourced by the surveys of Sumitomo Mitsui
Trust Research Institute Co., Ltd. in this material.
Note 2: “Multi tenant-type” in “Vacancy rate per facility size in the Tokyo Metropolitan Area” refers to logistics facilities that were planned and designed on the premise of being used by multiple tenants at thedevelopment stage in principle.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

112. Characteristics of CRE Logistics REIT, Inc.

High-quality Portfolio (3) Good location
Properties are situated in locations suited to logistics where high demand is expected, with the need to secure laboralso taken into consideration.

Over 3km.
Less than 5 km
18.7%

Outside Tokyo
Metropolitan Area
6.0%

Ratio in Tokyo
Metropolitan
Area
94.0%

Time required from public transportation
facilities

Mileage to an interchange

Ratio in Tokyo Metropolitan Area

Less than 1 km
27.4%

Walk more than 10 mins.
Within 20 mins.
4.4%

Walk within
10 mins
95.6%

Less than 5 km
100.0%
Tokyo
Metropolitan Area
94.0%

Over 1 km.
Less than 3 km
54.0%

Walk within 10 mins
95.6%
Note: Based on the acquisition price.

Example: LogiSquare Urawa Misono
The property is located approximately 700 m from Urawa IC (Tohoku Expressway) and approximately 450 m and a six-minute walk from Urawa Misono Station on the Saitama
Rapid Railway Line.
A large-scale community development project is underway in the surrounding area, which will allow a close proximity between work and the home and be a potential
advantage in securing employee.

Urawa IC

700 m

450 m
Six-minute walk

Urawa Misono Station

LogiSquare Urawa Misono
Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

122. Characteristics of CRE Logistics REIT, Inc.

Features of LogiSquare
LogiSquare is the brand name of high-quality logistics facilities developed by CRE to meet tenant needs.
Semi-flexible pavement is used toinhibit rutting.

Sandwich panels are used on exterior walls to reduceheating and cooling loads and to
give the exterior an attractive appearance.

Facility has roof spraying system that uses well
water to reduce the internal temperature.
The facility has a total of 44 truck berths on
the first and third floors to allow the docking
of up to 44 large trucks simultaneously.

Berth depth 13.5 m

Truck berths are large enough to fit awhole 40ft container truck.

Wooden deck
LogiSquare Urawa Misono

Bicycle parking

0

The facility has truck berths on the first and third floors.
To prevent congestion and accidents, the facility is designed to separate traffic flows and equipped withdedicated gates for the first/second floor tenants and the third/fourth floor tenants, respectively.

Rest area with wooden deck

Note: The logistics facility shown above is an example of the features of LogiSquare. Not all facilities held by CRE-REIT have the features shown above.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

13

2. Characteristics of CRE Logistics REIT, Inc.

Features of LogiSquare
LogiSquare not only improves the efficiency of warehouse operations, creates a pleasant working environment for tenants
but helps reduce costs in the future for CRE-REIT.
Fireproof partition walls are
made of fire-resistant heatinsulating panels that haveexcellent insulation
properties, seismic resistanceand an aesthetically pleasing
appearance.

LED lighting throughout helps
save energy.

Openings in fire partitions are
as wide as possible.
6.0 m

Pillar span 10.3 m  10.35 m

10.3 mThe facility has an effective
ceiling height of 6.0 m, or
5.5 m if cooling panels are
installed.

10.35 mFloor loading 1.5 t/m2
LogiSquare Urawa MisonoInternal signage is designed
to visually communicate
warehouse functions.

Windows

Interior walls between offices and the warehouse
space have windows in them to facilitatecommunication.

The women’s restroom has lockers anddesigned to make female employees feel comfortable.

To help reduce costs in the future, the facility already has windows
and ventilation built in to ensure compliance with laws and regulations
in case it is necessary to expand office areas in the future.

Note: The logistics facility shown above is an example of the features of LogiSquare. Not all facilities held by CRE-REIT have the features shown above.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

14

2. Characteristics of CRE Logistics REIT, Inc.

Sponsor is Real Estate Company Specializing in Logistics Properties
CRE, which sponsors CRE-REIT, has a track record of more than 50 years in the field of logistics real estate in Japan.
Launch of asset management business/Listing of CRE-REIT in February 2018
Participation in development business / Management of large-sized facilities
Small- and medium-sized warehouse asset utilization proposals / Building of relationships with tenants

1964

2005

1980

2014

Established in 1980

Commercial RE

Established in 1964

Tenko Souken

2010:
Businesstransfer
2011:
Absorptiontype merger

Established in 20062014:
Acquisition

Involvement of All Employees in Logistics Properties

Proven Track Record in Providing Services to Other Companies

Number of employees on a consolidated basis (as of July 31, 2018) (Note 1)

CRE-REIT can draw on knowhow gained through management of 4,440,000 m2

Property Management: 25
Leasing: 21
Construction/Design: 26

142

CRE-REIT
5%
Masterlease
26%

Area managed

1,435 properties
4,440,000 m

Property management

11
19
36

Other listed
REITs
19%

Management ofproperties held by othercompanies: 3,080,000 m2

2

Logistics investment

Private fund,
etc.
50%

Asset management
Administration

Total 208
Note 1: Prepared by the Asset Management Company based on Annual Report for Fiscal 2018 of CRE, Inc.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

Note 2: As of October 31, 201815

2. Characteristics of CRE Logistics REIT, Inc.

CRE’s Leasing Capability―Accumulation of Information Through Many Leasing Opportunities
Instantly understands rent trends, including actual rents paid
and rent increases and decreases, through the conclusion ofcontracts directly with diverse tenants not just logistics service
providers.
••

CRE can gain an understanding of rent levels by entering contracts withtenants directly as master tenant under a master lease arrangement
CRE builds relationships with tenants from a variety of industries not
only logistics operators.

Total Number of Master Lease Tenants(Note 1)
Other
Transportation
services

Customer services
Corporation services
Total Number ofMaster Lease Tenants

Retail

1,070 companies
Whole sale
Real estate andconstruction

Mitigation of Vacancy Risk through CRE’s Leasing Capability
Time of Leasing Completion of Properties Held by CRE-REIT
Tenants

BTS

Time of leasing
completion

M-1
LogiSquare Kuki

1

BTS

Before thecompletion of
construction

M-2
LogiSquare Hanyu

1BTS

At the time of landacquisition

M-3
LogiSquare Kuki II

1

BTS

At the time of landacquisition

M-4
LogiSquare Urawa
Misono3―

Six months after thecompletion of
construction

M-5
LogiSquare Niiza

1

―

M-6
LogiSquare Moriya

2

―

O-1
LogiSquare Tosu

1

BTS

Land
acquisition

Completion of
construction

Before thecompletion of
construction
Seven months after
the completion of
construction
Before thecompletion of
construction

Manufacturing

Private viewings for other companies(Note 2)
Around 70% of tenants are
not logistics operators

Note 1: As of July 31, 2018. Includes tenants of properties other than logistics-related facilities.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

•
•
•
•
•

Logicross Fukuoka-Hisayama
I Missions Park Sakai
Redwood Kawajima DC
Redwood Narita DC
Redwood Nanko DC

Note 2: Prepared by the Asset Management Company based on the LogiSquare logistics facility information site.

16

2. Characteristics of CRE Logistics REIT, Inc.

CRE’s Leasing Capability―Information Gathering as a Leading Real Estate Company
Publication of LogiSquare Market Report
Every quarter, CRE publishes a report summarizing market trends in major areas, with afocus on large rental logistics facilities (10,000 m2 or larger). Besides information onlarge logistics facilities, the report also includes information on small and medium-sized
rental logistics facilities (less than 3,300 m 2/only those managed by CRE) based on
CRE’s database of master lease properties.

Holding of CRE ForumThe purpose of the CRE Forum is to share logistics issues facing
companies. Since 2013, CRE has organized a total of 56 meetings,
with a total of 3,242 participants.(Note 1)

Publication of LogiSquare Map (map of large logistics facilities)
Map showing major large rental logistics facilities that have been built over the past 10
years or are planned for development. Published once a year.

Participating Companies (excerpt)(Note 2)• Nittsu Research Institute and Consulting, Inc.
• Hitachi, Ltd.
• Sunstar Group• Tanita Corporation• JD.com Jingdong Japan Co., Ltd.
• Toyota Industries Corporation• Sapporo Group Management Ltd.
• CBcloud Co., Ltd.
• KBS Kubota Corporation• Office FA.com Co., Ltd.
• MUJIN Inc.
Note 1: As of December 31, 2018
Note 2: Prepared by the Asset Management Company based on the LogiSquare logistics facility information site.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

17

2. Characteristics of CRE Logistics REIT, Inc.

CRE’s Property Management Capability―Diverse Customers Including Other Listed REITs
Management of Properties for Other Listed REITs, Private Funds, etc.
Major Customers• LaSalle LOGIPORT REIT

• Tokyo-Kansho-Fukyu Co. Ltd.

• Star Asia Investment Corporation• Yamato Home Convenience Co., Ltd.

• Kenedix Retail REIT

• Takara Sangyo Co., Ltd.

• United Urban Investment Corp.

• Tokyu Land Capital Management Inc.

• Japan Logistics Fund, Inc.

• Universe Development Co., Ltd.

• Industrial & Infrastructure Fund
Investment Corporation• Mitsui & Co. Real Estate, Ltd.

• Mitsubishi Estate Logistics REIT
• Daiwa House REIT
• CRE Logistics REIT

• CRE REIT Advisers, Inc.

Ranks Third Among Logistics Facilities-centered PM
companies

6

5.5

5.2

5.0

5

• Strategic Partners Co., Ltd., etc.
(No particular order)• LaSalle Investment Management Inc.
• Diamond Realty Management Inc.

4

3.4

3

• ESR
• Kokyo Asset Management Co., Ltd.

2

• Sumitomo Realty Management Co., Ltd.
• Sumitomo Corporation• Challenger Ltd.

0.8

1

• Goldman Sachs Realty Japan, Ltd.
• Morgan Stanley Capital K.K.
• Daiei Real Estate & Development Co., Ltd.
• LC Partners, Inc.
• Tozai Asset Management Co., Ltd.
• Mitsui & Co., Realty Management Ltd.

0
(million m2)

Daiwa
House
Property
Management

GLP

Prologis

SG Realty• IDERA Capital Management Ltd.

• PGIM Real Estate (Japan), Ltd.
• Mitsubishi Jisho Investment Advisors, Inc.
• Fortress Investment Group (Japan) GK
Note 1: CRE Inc.’s Summary of Financial Statements for the First Quarter of the Fiscal Year Ending July 31, 2018

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

Note 2: “Logistics facilities-centered PM companies” refer to property management companies with 70% or more of their
entrusted areas those of logistics facilities. “Entrusted areas” include the management areas of real estate otherthan logistics facilities.
Note 3: Prepared by the Asset Management Company based on Monthly Property Management magazine (November
2018 edition).
Entrusted areas are as of August 31, 2018.

18

2. Characteristics of CRE Logistics REIT, Inc.

Development Capability―Development Incorporating Tenant Requirements While Ensuring Versatility
Realization of Long-term Contracts and Mitigation of Tenant Risk by Incorporating Tenant Requirements
While Ensuring Versatility= High-quality logistics facilities developed by CRE to meet tenant needs
Versatility=

Location+

Basic
Specification+

Expandability+

Comfort+Tenant’s unique requirements

Improvement of Convenience Through Full Reflection of Requirements Learned Through Day-to-Day Management andLeasing Activities in Development Plans

Improvement of convenience/
Reduction of future costs

Development / CM teamReflection of requirements and management
status in development plans

Leasing teamProperty management teamCommunication

Tenant companies and potential tenants

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

19

2. Characteristics of CRE Logistics REIT, Inc.

CRE’s Development Capability―Development Giving Tenant Convenience Highest Priority
Development based on optimal plan for characteristics of location, giving tenant convenience the highest priority
Low-type

Slope-type

Box-type

For tenants that attach importance to operational
efficiency

For tenants who attach importance to location andoperational efficiency

For tenants who attach importance to storage
function

Facility with one or two floors for more convenient loading
and unloading.
Ideal for both storage and distribution and suited to tenants
who attach importance to operational efficiency.

Facility situated in location with strong tenant demand andhaving three or four floors to utilize the floor-area ratio.
Facility also has a slope, enabling trucks to access thethird floors directly and allowing them to be used in same
way as the first and second floors.
Ideal for both storage and distribution and suited to tenants
who attach importance to both location and operational
efficiency.

Facility in strategic location with strong tenant demand andclose to city center and having three or four floors to utilize
the floor-area ratio.
Ideal for storage, which is standard function for a logistic
facility, and suited to tenants who attach importance tostorage of personal items.

Example: LogiSquare Hanyu

Example: LogiSquare Urawa Misono

Example: LogiSquare Niiza

2 floors
Truck berths on bothsides of first floor

The facility is designed to direct vehicles to move in one direction,with separate entrance and exit gates.

4 floors
Truck berths on one side offirst and third floors

The facility is designed to separate traffic flows and equipped withdedicated gates for the first/second floor tenants and thethird/fourth floor tenants, respectively.

Storage space on three floors
Truck berths on one side of first floor

The facility is designed to direct vehicles to move in one direction,with separate entrance and exit gates.

All facility types are designed to prevent congestion and accidents.
Traffic flow
Truck berths

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

20

2. Characteristics of CRE Logistics REIT, Inc.

CRE’s Development Capability

Cumulative total floor area

―Development Since the Start of Real Estate Securitization in Japan

Total floor area of properties developed or to be developed during the period

Properties developed by Commercial RE

Properties developed by CRE

Properties jointly developed by Commercial RE and Kenedix

Properties to be developed by CRE (planned)

Properties held by other REITs

Properties held by CRE-REIT

Properties with first refusal right

CRE has been developing logistics properties since real estate securitization started in Japan and has built up
knowhow on the development of properties suitable for REITs.
Track record of development of 28 properties and around 540,000 m2

Undercontemplation

LogiSquare Kuki II

LogiSquare Chiba Kita II

LogiSquare Chitose

LogiSquare Kobe nishi

LogiSquare Tosu

Sayama Hidaka IC Development Plan(provisional)

Under
contemplation
LogiSquare Misato

LogiSquare Yachiyo

LogiSquare Urawa Misono

LogiSquare Kawagoe

LogiSquare Ageo

LogiSquare Mizuho A

LogiSquare Tosu II

LogiSquare Niiza

LogiSquare Kasukabe

LogiSquare Kawagoe II

Miyoshi Development Plan(provisional)(thousand m2)

800

717
700
LogiSquare Mizuho B

LogiSquare Kazo II

LogiSquare Kuki

LogiSquare Sagamihara

LogiSquare Moriya

600

576
34

542

500

LogiSquare Matsuzaki I

LogiSquare Ichikawa-tajiri

LogiSquare Tosu I

LogiSquare Matsuzaki II

LogiSquare Tokorozawa

LogiSquare Soka

LogiSquare Yashio

LogiSquare Hidaka

LogiSquare Hanyu

358

400
300
Yokohama Fukuura Logistics Center

200

118
100

167
49

220
53

267
19

248
29

283
16

75

FP2015/7

FP2016/7

477

141

65

119

LogiSquare Kazo I

8110

FP2006/3

FP2007/3

0

Timing of listingof logistics
REITs

Note:

May 2005

FP2008/3

FP2009/3

FP2013/7

Dec. 2012

Listing of first REIT specializing in
logistics facilities

FP2014/7

Feb. 2013

Feb. 2016 Aug. 2016

FP2017/7

FP2018/7

Sep. 2017

Feb. 2018

FP2019/7(Plan)

FP2020/7(Plan)

Sep. 2018

CRE-REIT listed

While the above properties include properties other than the portfolio assets, CRE-REIT does not engage in specific negotiations with the CRE Group on the assets above, nor does it have any plans to acquire them at the present time nor guarantee their futureacquisition. The above properties also include properties already sold to a third party. In addition, the rendering, the total floor area and the date of completion of development of the properties to be developed by CRE (planned) are based on the plans as of February
18, 2019 and may differ from the actual ones. The above properties are stated with the date of completion of construction as the date of completion of development.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

21

3. Growth Strategies

LogiSquare Kuki II
CRE developed the facility based on a concept developed through its relationships with tenants. A 15-year long-term lease contract was signed for the facility,
which is extremely versatile while at the same time incorporating the specific needs of the tenant.
2, is suited to a single tenant.
This smallish
LogiSquare
total floor areaof Inc.
aroundCopyright(C)facility,
2018 with
CREa Logistics
REIT,
All 11,000m
Rights Reserved.

22

3. Growth Strategies

Approach to Property Acquisitions• Acquisition of property without dilution of distribution per unit/NAV per unit is a prerequisite for the improvement of unitholder
value.
Acquisition cap rate standard is higher than the implied cap rate, suggesting that the above is possible.

• Achieve flexible external growth, taking investment unit price into consideration, including utilizing the bridge function.
CRE acquired three properties from leasing companies at IPO. Currently, one property is still held by a leasing company, enabling adjustment of timing of acquisition
by CRE-REIT with sale of property by sponsor.

• Acquisition of medium-sized properties and acquisition of quasi co-ownership interests using funds on hand is also possible.
Properties with total floor area of 5,000 m2 or larger are the investment targets and the acquisition of properties ranging from several hundred million yen to several
billion yen is possible using funds on hand equivalent to depreciation expense.

• Achieve medium-term asset size target of 100 billion yen alongside improvement in unitholder value rather than focusing on
early achievement.
Take investment unit price into consideration when achieving target asset size two or three years after listing stated in materials for Financial Results Briefing for the
4th Period (June 2018).

Recognition ofcurrent status

Cap rate in Tokyo Metropolitan Area

CRE-REIT Implied Cap Rate(Note 1)

4.5%

4.9%

Current acquisition cap rate standard

Cap rate standard for properties with first refusal right

5.0%

LogiSquare Kasukabe

LogiSquare Kawagoe

4.9%

5.0%

Kasukabe area

Kawagoe area

5.0%Standard forproperty acquisition• Acquisition at reasonable price is possible
thanks to strong sponsor support• Acquisition cap rate standard is higher than

4.5%

4.0%

implied cap rate
3.5%

Cap rate on acquisition of LogiSquare

NOI yield of properties held by other REITs(Note 2)

Note 1: Implied cap rate = Ordinary annual NOI level of 2,327 million yen ÷ (Market cap as of Jan. 31, 2019 + (Interest-bearing debt + Tenant leasehold deposits in trust - (Cash and deposits - Guarantee deposits - Restricted deposits)).
Note 2: Prepared by the Asset Management Company based on ARES database. NOI yield = Actual NOI for last fiscal period × 2 ÷ Appraisal value as of end of last fiscal period

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

23

3. Growth Strategies

Pipeline that Enables External Growth

LogiSquare Chitose(1) November 2017(2) 19,760.00 m2(3) Chitose-shi, Hokkaido

LogiSquare Kawagoe(1) February 2018(2) 7,542.56 m2(3) Kawagoe-shi, Saitama

LogiSquare Kasukabe(1) June 2018(2) 21,315.54 m2(3) Kasukabe-shi, Saitama

LogiSquare Ageo
(1) April 2019(2) 19,507 m2(3) Ageo-shi, Saitama

LogiSquare Kawagoe II(1) May 2019(2) 14,400 m2(3) Kawagoe-shi, Saitama

LogiSquare Kobe nishi(1) May 2020(2) 16,000 m2(3) Kobe-shi, Hyogo

Sayama Hidaka IC
Development Plan(provisional)(1) June 2020(2) 84,132 m2(3) Hanno-shi, Saitama

Under contemplation

Miyoshi Development Plan(provisional)(1) June 2020
(2) 41,217 m2(3) Miyoshi-machi, Saitama

Completion photograph
Conceptual drawing

Property name(1) Completion month andyear (planned)(2) Total area (planned)(3) Location

Suminoe Logistics Center(1) January 1992
(2) 17,081.16 m2(3) Osaka-shi, Osaka

Under contemplation

Under contemplation

LogiSquare Osaka Katano(1) Not yet determined(2) 83,700 m2(3) Katano-shi, Osaka

10 properties
324,655.26 m2

Properties with first refusal right

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

24

3. Growth Strategies

CRE’s Approach to Property Sales―Provision of Maximum Support for Stable Operation of CRE-REIT

CRE supports external growth of CRE-REIT by providing CRE-REIT with Generation of level of profits that is maintainable asopportunity to acquire all properties it develops and holds.
developer
Past result of cap rate on sale to CRE-REIT

Performance Trend in Development Business(Note 2)
Million yen

5.0%
Stable operation of CRE-REIT over medium and long term is CRE’s toppriority
CRE’s Positioning of Asset Management Business(Note 1)

Fiscal year
ended July
2016

Fiscal year
ended July2017

Fiscal year
ended July
2018

Net sales

17,53623,19014,285

Segment
income

3,514

4,233

1,837

Profit margin

20.0%

18.3%

12.9%

• Grow asset management business into second pillar of stock business.
• Continuously earn asset management fees and property management fees by
selling properties developed by CRE to CRE-REIT.

Properties
sold (Note 3)• Kuki• Hanyu• Kuki II• Niiza• Urawa
Misono• Moriya• Tosu• Kasukabe

Note 1: September 12, 2016 Long-Term Management Policy of CRE, Inc.
Note 2: Prepared by the Asset Management Company based on financial statement of CRE, Inc.
Note 3: LogiSquare omitted.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

25

3. Growth Strategies

CRE’s Approach to Property Sales―Site Acquisition Process with Eye on Sale

The Asset Management Company is involved from the time ofsite acquisition to implement development projects with discipline

Leasing

Since CRE attaches importance to capital efficiency and sells
properties immediately after completion and leasing, CRE-REIT
can acquire relatively new properties.

Rent assessment (scoring of location,road access, etc.)
Support for growth

Development

Formulation of plan incorporating
development risks
Holding and investment

Asset Management

Sharing of level of cap rates onacquisitions in REIT market

Can acquire relatively
new properties
Sells immediately after
completion/leasing

Construction
Management
Leasing

Appropriate cost control

Attraction of tenants

Development, sale andmanagement

Circulation of capital forfurther development

Generation of higher profits than planned

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

26

3. Growth Strategies

Long-term Stability/Internal GrowthLong-term Stability Backed by High-quality Portfolio (see pages 9-14)
Ongoing Cost Reduction Efforts
Thousand yen

287,097

300,000

Capitalexpenditures

4th period

5th period(2018/6)(2018/12)

Forecast

ActualForecast

Actual

―

―

1,412

682

200,000

10.0%

100,000

5.0%－
0

Repair expense

2,200

972

2,600

869

15.0%

251,765

972
0.0%

682

4th period (2018/6)(Thousand yen)

Depreciation

Capital expenditures

Repair expense

869
0.2%

0.0%

5th period (2018/12)
Capital expenditures/Depreciation (Right axis)

Initiatives for Internal Growth
Details of Initiatives

Effect on distribution
per unit (1 fiscal period)(Note)

Schedule

Name of Property

Already implemented

LogiSquare Urawa Misono

Improvement of vending machine sales+1 yenAlready implemented

LogiSquare Urawa Misono

Improvement of parking lot occupancy+1 yenAlready implemented

LogiSquare Moriya

Improvement of parking lot occupancy+7 yenMar. 2019

LogiSquare Urawa Misono

Reduction of electricity bill through switch to power producer and supplier+3 yenMay 2019

LogiSquare Moriya

Reduction of electricity bill through switch to power producer and supplier+1 yenNote: The effect is the estimated impact on one fiscal period for reference purposes only and is not the effect in the current or future fiscal periods.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

27

3. Growth Strategies

Efficient Cash Management
Efficient use of funds on hand from depreciation for maximization of distributions and expansion of financial reserve
300,000

Effect of reduction in interest
expense, etc.(Note 1)+0.7 yen per unit

Depreciation

Repayment
before maturity,
200,000

200,000
Repayment before
maturity

Surplus cash
distribution
100,000

Depreciation,
287,097

Effect of reduction of LTV-0.2%

Capital expenditures

Surplus cash distribution,
85,987
Capital expenditures, 682

Increase in distributions+372 yen per unit

0
(Thousand yen)

5th period (December 2018)

Assumed Uses of Funds on Hand
Use

Specific measures / policies

Effect/Impact(Note 2)
Increase in distributions through cost reduction

Repayment of loans
payableReduce interest expense and other costs through repayment

Property acquisitions

Acquire properties ranging from several hundred million yen to several billion yen
and quasi co-ownership interests

OPD

Make OPD every period continuously, as a general rule, based on examination ofother options including using for repairs or capital expenditures, repaying loans
payable, and financing new property acquisitions.
Aim to make OPD which corresponds to 30% of depreciation expenses for the time
being.

Repayment of 200 million yen increases DPU by 4 yen
Increase in financial reserve through reduction of LTV
Contributes to continuous increase in distributions

Acquisition of 500 million yen property increases DPU
by 37 yen
Enables continuous accumulation of distributions

Increases DPU by 372 yen
Meanwhile, net assets decrease

Note 1: Estimated on the assumption of repayment on October 31, 2018 and continuation of interest expense for the remaining two months of the loan.
Note 2: The estimated effect is for reference purposes only and is not a forecast of the effect in the current period or future periods.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

28

3. Growth Strategies

Status of Interest-Bearing Debt
Improvement of LTV Through Repayment of 1,530 million yen
in October 2018

Approach to Liabilities

4th period

5th period(2018/6)(2018/12)

Compared toprevious period

25,350 million yen

23,820 million yen-1,530 million yen

LTV

49.3%

47.7%

-1.7%

• CRE-REIT conducts financial operations with emphasis on long-term
stability by taking out long-term loans with fixed interest rates.

LTV based on
appraisal value

47.0%

44.8%

-2.2%

• After examining using funds on hand for property acquisitions, CREREIT examines using them to repay loans in order to increasefinancial strength and reduce borrowing costs.

Ratio of fixedinterest debt

83.4%

88.7%

+5.4%

Ratio of long-termdebt(Note 1)

94.8%

100.0%+5.2%

Average borrowinginterest rate

0.501%

0.532%+0.032%Average life ofinterest-bearing debt

2.6 years

2.7 years+0.1 years• CRE-REIT’s LTV is set at around 45% and the upper limit of LTV is
50% in principle.

• The above level is slightly higher than that of other logistics REITs but
since cash flow is stable due to long-term contracts, CRE-REIT has
the option to make effective use of loans.

Borrowing to upper limit of LTV (50%) would generateacquisition capability of around 1.5 billion yen

Interest-bearing
debt

Note 1: Current portion of long-term debt is included in long-term debt.

Distribution of repayment dates
Refinanced loans in July 2018 and repaid consumption tax loans of 1,330 million yen
and 200 million yen before their due dates in October

The Nishi-Nippon City Bank,
Ltd.
8.5%

Refinancing of loans on July 31, 2018

8,000

4,000
2,000

Existing loans

6,680
200

6,000

3,700
600

3,000
1,330

Stable bank formation centered on
three mega banks

Loans refinanced in July 2018

3,680

3,680

3,680

2,400

Development Bank of Japan
Inc.
12.0%
Resona Bank,
Limited.
14.6%

3,100

0
2018/12 2019/6 2019/12 2020/6 2020/12 2021/6 2021/12 2022/6 2022/12 2023/6 2023/12 2024/6

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

Sumitomo Mitsui
Banking Corporation
25.3%

MUFG Bank, Ltd.
19.2%

Mizuho Bank, Ltd.
20.4%

29

3. Growth Strategies

Governance―Operation from a Unitholder’s Standpoint
High Level of Independence of Asset Management Company,
CRE REIT Advisers

Holdings of Investment Units by Management of CRE (Sponsor)
and CRE REIT Advisers (Asset Management Company)• Almost all employees are proper employees. CRE is not involved in
hiring them or their personnel evaluations.

• CRE REIT Advisers:Introduced cumulative investment plan (start of purchases from
October 2018); units are held in accordance with internal regulations

Number of
persons

Title

Name

Units held

Standing directors

2

Representative Director andPresident

Tsuyoshi Ito

22 units

Employees

9Managing Director, General
Manager of Investment
Management Dept.

Takeshi Oka

10 units

Category

1(Note 1)(Of which, employees temporarily transferred from CRE)

Held by 8 out of 9 other employees

11

Total

Note 1: Individual in question is in charge of IR in Planning Dept. and is not involved in property acquisitions, etc.

• Established as Independent Asset Management Company

Note 2: As of December 31, 2018

• CRE: Units are held by many officers and employees in accordance withinternal regulations

Start of Examination of Revision of Asset Management Fees
Current Fee Structure

Date

July 2006

History
Establishment of Strategic Partners Co., Ltd.

Fee

Upper limit

Management fee 1

Total assets  0.4%

Management fee 2

Income before income taxes  5.0%

Fee on acquisition

Acquisition cost  1.0% (0.5% in case of

Fee on sale

Sale price  0.5%

(now CRE REIT Advisers, Inc.)
August 2014

CRE acquired all shares

July 2016

Acquisition and operation of properties by CRE-REIT

February 2018

Listing of shares of CRE-REIT on Tokyo Stock
Exchangetransactions with interested party)

Examination of fee structure that will provide a greater incentive toimprove unitholder value
Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

30

4. Market Environment

LogiSquare Niiza
Situated around
3km from
Niiza
Kamotsu
Terminal
Station
withRights
excellent
access to the city center, LogiSquare Niiza encourages modal shift initiatives.
Copyright(C) JR
2018
CRE
Logistics
REIT,
Inc. All
Reserved.

31

Summary of Market Trends
Recent Market Trends
Vacancy rate: 2.59%, QoQ: Improved (-1.78%)

Tokyo Metropolitan Area
Page 33 and 34

Falling vacancy rate despite highest level of new supply since survey began

Vacancy rate: 7.68%, QoQ: Improved (-2.46%)

Osaka Area
Page 33

Vacancy rate halved over past year, supported by strong demand

Rising Demand for Rental Logistics Facilities(1) Reconstruction Demand for
Logistics Facilities

Around 30% of logistics facilities in the Tokyo Metropolitan Area are 40 to 50 years old.
Page 35

3PL Market Size

EC Market Size/EC Ratio

2009(2) Expansion of 3PL Market and EC
Market2017

2.8 trillion yen
1.2 trillion yen
2.2-fold increasein 8 years

2010

2017

7.8 trillion yen

16.5 trillion yen

2.8%

5.8%
2.1-fold increase

Page 36

in 7 years(3) Rising Importance of Logistics
Network Strategy

The most important cost reduction measure to be implemented is a restructuring of logistics
facilities.
Page 37

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

32

Market Trends(1) Tokyo Metropolitan Area and Osaka Area (from LogiSquare Market Report)
Tokyo Metropolitan Area
Falling vacancy rate despite highest level of new supply since survey began

Vacancy rate: Less than 5%
Vacancy rate: 5% or more and less than 10%
Vacancy rate: 10% or more

Vacancy rate: 2.59%, QoQ: Improved

Overall, demand increased sharply, rising just over 50% from the previous quarter, to slightly less than 200,000 tsubo. Meanwhile, newsupply in the current quarter was just under 110,000 tsubo, which is a little over 70% of the level in the previous quarter. As a result, thevacancy rate improved 1.78 percentage points, to 2.59%.
In 2018, new supply was at the highest level since survey began at around 620,000 tsubo but the vacancy rate improved 1.29
percentage points, supported by strong demand.
In 2019, a record level of new supply of around 720,000 tsubo is planned. However, according to market watchers, this is unlikely to leadto a major deterioration in the vacancy rate as informal agreements have already been concluded for more than 50% of the new supply.
1,800

10%

1,600
8%

1,400
1,200

6%

1,000
800

4%

600
400

2%

200
0
(Ten thousand m2)

0%201606 201609 201612 201703 201706 201709 201712 201803 201806 201809 201812
総賃貸面積
Total area

空室面積
Vacant area

空室率
Vacancy rate

Osaka Area
Vacancy rate halved over past year, supported by strong demand

Vacancy rate: 7.68%, QoQ: Improved

The vacancy rate improved 2.46 percentage points from the previous quarter, to 7.68%. This was because, in the current quarter,
demand (around 90,000 tsubo) far exceeded supply (just over 55,000 tsubo).
Although supply has remained at a high level throughout 2018, the vacancy rate has halved since the fourth quarter of 2017,supported by strong demand.
In 2019, the improvement in the vacancy rate is expected to continue because new supply will be around 80,000 tsubo, which isaround 30% of the 2018 level and informal agreements have been concluded for around 70% of the new supply.
600

20%

500
15%
400
300

10%

200
5%
100
0
(Ten thousand m2)

0%201606 201609 201612 201703 201706 201709 201712 201803 201806 201809 201812
総賃貸面積
Total area

空室面積
Vacant area

空室率
Vacancy rate

Source: “LogiSquare Market Report on Warehouses and Logistics Properties December 2018” of CRE, Inc.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

33

Market Trends(2) Individual Areas of Tokyo Metropolitan Area (from LogiSquare Market Report)
Urawa MisonoSouthern Saitama Area

Saitama Kan-Etsu and Tohoku Expressway Area

Vacancy rate: 0.00%, QoQ: Stagnant

Vacancy rate: 8.25%, QoQ: Improved

The vacancy rate was 0%, maintaining an extremely low level as in the previous quarter. While
about 40,000 tsubo is to be newly supplied in 2019, informal agreements have already beenconcluded for just over 60% of the new supply, reconfirming that this is an area of strong needs.
The vacancy rate is expected to remain extremely low in 2019.

The vacancy rate was 8.25%, improving 1.86 percentage points from the previous quarter. In
the current quarter, over 50,000 tsubo was newly supplied and just under 40% of this new
supply has yet to be absorbed. However, the elimination of vacancies at existing properties led
to improvement in the vacancy rate.
Over 80,000 tsubo is to be newly supplied in 2019 and informal agreements have already beenconcluded for just over 50% of this new supply. However, vacant floor space in the fourth
quarter of 2018 was around 70,000 tsubo, which is around double that in the fourth quarter of
2017, suggesting that there is still little room for optimism.

1,500

15%

3,000

15%

2,500
1,000

10%

2,000

10%

1,500
500

5%

1,000

5%

500
0

0%
201606(thousand m2)

201609201612

201703

201706

総賃貸面積
Total area

201709201712

201803

201806

空室面積
Vacant area

20180920181200%201606(thousand m2)

201609空室率
Vacancy rate

201612

201703

201706

総賃貸面積
Total area

201709201712

201803

空室面積
Vacant area

201806201809201812

空室率
Vacancy rate

Breakdown: Saitama Kan-Etsu and Tohoku Expressway Area
Niiza

Saitama Kan-Etsu Expressway Area

Kuki

Saitama Tohoku Expressway Area

Vacancy rate: 5.68%

Hanyu

Kuki II

Vacancy rate: 11.22%

1,500

30%

1,500

30%

1,000

20%

1,000

20%

500

10%

500

10%

0
(thousand m2)

0%201606201609201612

201703

総賃貸面積
Total area

201706201709201712

空室面積
Vacant area

201803

201806201809空室率
Vacancy rate

2018120(thousand m2)

0%201606201609201612

201703

総賃貸面積
Total area

201706201709201712

空室面積
Vacant area

201803

201806201809201812

空室率
Vacancy rate

Source: “LogiSquare Market Report on Warehouses and Logistics Properties December 2018” of CRE, Inc.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

34

Rising Demand for Rental Logistics Facilities(1) Reconstruction Demand for Logistics Facilities• About 30% of logistics facilities in the Tokyo Metropolitan Area were constructed during the period of high economic growth or the economic
bubble, and they are 40 to 50 years old.
• Given that the useful life of logistics facilities under the tax code is 38 years(Note 1), demand for reconstruction in pursuit of functionality appears to
be increasing.
Percentage of logistics facilities in the Tokyo Metropolitan Area by year of construction
Distribution of locations by the number of facilities

100%

10%

To 1969

80%

18%

60%

23%

1970 - 1979
1980 - 1989
1990 - 1999
From 2000

40%

24%

About 30% of logistics
facilities are more than
40 to 50 years old.

These facilities are
20 to 40 years old andwill reach demand forreconstruction in the
future.

10-29 facilities

20%

25%

Construction from 2000, when
foreign-affiliated developers
began development in Japanand advanced logistics
facilities began being
constructed.

30-59 facilities
60 facilities or more
Expressway, etc.

0%Note 1: Steel-reinforced concrete or reinforced concrete structures
Note 2: Tokyo Metropolitan Area includes Tokyo, Kanagawa, Saitama, Chiba, central and southern Ibaraki, southern Tochigi and southern Gunma
Note 3: Prepared by the Asset Management Company based on data from Tokyo Metropolitan Transportation Planning Association

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

35

Rising Demand for Rental Logistics Facilities(2) Expansion of 3PL Market and EC Market• The market for third-party logistics (3PL) is growing as increasingly
companies are tending to comprehensively outsource their logistic
operation.

• The EC market is expanding year by year. However, in Japan, theEC rate is low compared with other advanced economies and there
is still much room for expansion.

3PL (Third-Party Logistics) Market Size

Growth in the BtoC e-commerce market size in Japan

2.85

3.0

2.48
2.5

1.5

2.59

8.1%

2.25
1.78

2.0

1.27

1.88

U.S.

25.0

15.0

1.46

4.7%

4.3%
10.0

1.0
5.0

0.5

7.8

8.5

2.8%

3.2%

5.2%
9.5
3.4%

5.8%
11.2
3.9%

6.4%
12.8
4.4%

13.8
4.8%

10%
9%

7.3%

20.0

2.04

8.9%

8%

16.5

15.1

7%
6%

5.4%

5.8%

5%

Japan

4%
3%
2%
1%

0.0

0.0
(trillion yen)

2009

2010

2011

2012

2013

2014

2015

2016

2017

(year)(trillion yen)

0%

2010

2011

2012

2013

2014

2015

E-commerce market size in Japan (left axis)
E-commerce rate in the U.S. (right axis)

Source: “The monthly Logistics Business” September 2018 issue

2016

2017

(year)

E-commerce rate in Japan (right axis)

Note 1: Prepared by the Asset Management Company based on data of the Ministry of Economy, Trade and Industry for the
BtoC e-commerce market size and the e-commerce rate in Japan and data of the United States Census Bureau for the
e-commerce rate in the U.S.
Note 2: The ratio of the e-commerce market size to the amount of all commercial transactions (the commercial transaction
market size). The e-commerce rate in BtoC e-commerce refers to the value in the field of product sales.

• In 2014, warehouses overtook retail in terms of the floor space of new construction starts.
Trends in Floor Space of New Construction Starts
20,000Retail

18,000Warehouses

16,00014,00012,00010,000
8,000
6,000
4,000
2,000
0
(thousand m2)

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

(Fiscal Year)

Note: Prepared by the Asset Management Company based on the Japan Construction Starts Report by the Ministry of Land, Infrastructure, Transport and Tourism.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

36

Rising Demand for Rental Logistics Facilities(3) Rising Importance of Logistics Network Strategy• A majority of companies mention a review of logistics bases as animportant cost-cutting measure that needs to be implemented.

Important Cost-cutting Measures to be Implemented

Warehouse Rents as Percentage of COGs at Major Logistics Companies

29

Review of logistics bases
Reduction of inventories

15

Tie-up in transportation and delivery

14

Improvement of loading ratio

14

Company A

12

Review of delivery frequency
Review of transportation anddelivery channels

10Modal shift

10

Review of outsourcing fees

7

Introduction of logistics information
system7(Number of answers)• Warehouse rents account for less than 10% of the cost of goods sold ofmajor logistics companies, which is a small percentage compared toother costs such as labor costs.
• There is perhaps much room to reduce and curb other costs by reviewing
logistics bases and optimizing logistics.

020Company B

Warehouse rents as % of COGs

7.0%

8.5%

Labor cost as % of COGs

23.8%

10.2%

40

Note 1: Prepared by the Asset Management Company based on the “Fiscal 2017 Research Report on Logistics
Costs” of JILS

Note 2: Prepared by the Asset Management Company based on Annual Reports of each company.

Network strategy will become increasingly importantdue to driver shortages, difficulties securing warehouse workers and rising fuel prices.
Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

37

Appendix

LogiSquare Moriya
The property is located in the Moriya-shi Matsunami land rezoning project area, within walking distance of Moriya Station on the Tsukuba Express Line. It has great advantages interms of securing employee.
CRE-REIT leases
the roof
spaceof Logistics
5 out of theREIT,
7 properties
holds andthe lessees contribute to the creation of renewable energy through photovoltaic power generation.
Copyright(C) top
2018
CRE
Inc. Allit Rights
Reserved.

38

Portfolio List

No.

Property nameLocation

Acquisition
price(millionsof yen)Appraisalvalue(millionsof yen)Appraisal
NOI yield1
(%)

Total
floor area2
(m2)

Age3
(years)Numberoftenants(tenants)

BTS4

Occupancy
ratio
(%)

Developer

M-1

LogiSquare Kuki

Kuki-shi,
Saitama

9,759

10,3004.8

40,907.13

2.6

1

BTS

100.0

CRE

M-2

LogiSquare Hanyu

Hanyu-shi,
Saitama

6,830

7,060

4.9

33,999.61

2.5

1

BTS

100.0

CRE

M-3

LogiSquare Kuki II

Kuki-shi,
Saitama

2,079

2,170

5.1

11,511.22

1.9

1

BTS

100.0

CRE

M-4

LogiSquare Urawa Misono

Saitama-shi,
Saitama

13,06013,900

4.7

48,738.29

1.8

3

―

100.0

CRE

M-5

LogiSquare Niiza

Niiza-shi,
Saitama

6,960

7,270

4.8

25,355.82

1.8

1

―

100.0

CRE

M-6

LogiSquare Moriya

Moriya-shi,
Ibaraki

6,157

6,630

5.1

32,904.90

1.7

2

―

100.0

CRE

O-1

LogiSquare Tosu

Tosu-shi,
Saga

2,880

3,150

5.2

16,739.40

0.9

1

BTS

100.0

CRE

47,72550,4804.9

210,156.37

2.0

10

―

100.0

―

Total/Average

Note 1: “Appraisal NOI yield” is the ratio of appraisal NOI of each asset acquired to its acquisition price and rounded to the nearest one decimal place. The average NOI yield is a weighted average NOI yield based on the acquisition price.
Note 2: For “Total floor area,” the total floor area of each property presented in the real estate register is stated.
Note 3: For “Age,” the age of each property from the date of its new construction on the real estate register to December 31, 2018 is stated by rounding it to the nearest one decimal place. The average age is a weighted average age
based on the acquisition price.
Note 4: “BTS” stands for build-to-suit. It is logistics real estate developed by incorporating a specific company’s demands in its specifications.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

39

Overview of Appraisal

60,00012.0%

47,5934th period

5th period(2018/6)(2018/12)

Compared toprevious period

50,13047,30650,480

6.7%

40,0008.0%

5.3%
20,000Appraisal value

50,130 million yen 50,480 million yen

4.0%+350 million yen
0Book value

47,593 million yen 47,306 million yen-286 million yen

0.0%

4th period(2018/6)(yen)

5th period(2018/12)

Book value

Appraisal value

Ratio of unrealized gains

Unrealized gains
and losses

2,536 million yen

3,173 million yen+636 million yen
150,000

Unrealized gains

5.3%

6.7%

+1.4%

114,936 yen

117,317 yen+2,380 yen

114,936

117,317

4th period(2018/6)

5th period(2018/12)

100,000

50,000

NAV per unit0
One characteristic of logistics facilities is that the ratio of building value to land is typically high, and so
depreciation expense tends to be higher than for other asset classes. Since unrealized gains are thedifference between appraisal value at end of period and book value after deduction of depreciation expense,
CRE-REIT, which holds fairly new properties and has minimal capital expenditure, tends to record increasing
unrealized gains because, at the end of each period, the sum of depreciation expense and any increase inappraisal value at the end of the period is added to unrealized gains at the end of the previous period.

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

(yen)

NAV per unit

40

Overview of Appraisal

Book value
Acquisition at the end ofprice
the 5th(millionsperiodof yen)(millionsof yen)At the end of the
At the end of the
5th period
4th period
Changes
Unrealized(December 31, 2018)(June 30, 2018)
gains andAppraisal
Appraisal
AppraisallossesDirectDirectDirect
value
value
value
(millionscapitalization
capitalization
capitalization(millions(millions(millionsof yen)rate (%)
rate (%)
rate (%)
of yen)of yen)of yen)Ratio ofunrealized
Gains
(%)

No.

Property nameAcquisition
month and
year

M-1

LogiSquare Kuki

Jul. 2016

9,759

9,485

10,300

4.5

10,300

4.5

―

―

814

8.6

M-2

LogiSquare Hanyu

Jul. 2016

6,830

6,640

7,060

4.7

7,060

4.7

―

―

419

6.3

M-3

LogiSquare Kuki II

Feb. 2018

2,079

2,081

2,170

4.8

2,160

4.8

+10

―

88

4.2

M-4

LogiSquare Urawa
MisonoFeb. 201813,06013,092

13,9004.4

13,600

4.5

+300

-0.1

807

6.2

M-5

LogiSquare Niiza

Feb. 2018

6,960

6,962

7,270

4.6

7,240

4.6

+30

―

307

4.4

M-6

LogiSquare Moriya

Feb. 2018

6,157

6,162

6,630

4.7

6,620

4.7

+10

―

467

7.6

O-1

LogiSquare Tosu

Apr. 2018

2,880

2,881

3,150

4.7

3,150

4.7

―

―

268

9.3

Total / Average―

47,72547,30650,480―50,130

―

+350

―

3,173

6.7

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

41

Location of Assets Held and Assets in the Pipeline

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

42

High Convenience of the Ken-O Expressway Area
• 838 business facilities were newly opened in the Prefecture in the last 11
years.
• Out of them, approximately 60% are located in the area surrounding the
Ken-O Expressway.

• Between the Chuo Expressway and the Joban Expressway, approximately 70%
of traffics pass through the Ken-O Expressway.

Usage Situation between the Chuo Expressway and
the Joban Expressway after Ken-O Expressway opening

Business facilities opened in Saitama Prefecture

Opened Feb.2017
Sakaikoga IC

North Area

Ken-O
Area

Kuki-Shiraoka JCT
Tsukuba-Chuo IC
Tsukuba JCT

South Area

Tsurugashima JCT

Switchform
Metropolitan EXP to

Ken-O EXP
Misato JCT
Bijogi JCT

Oizumi JCT

Note: From January 2005 to December 2015
Source: The Ministry of Land, Infrastructure, Transport and Tourism

Chuo EXP• Between the Tomei Expressway and the Tohoku Expressway, more than 80% oftraffics pass through the Ken-O Expressway.

Via Ken-O EXPWY

Hachioji JCT

Via Metropolitan
EXPWY

Usage Situation between the Tomei Expressway and
the Tohoku Expressway after Ken-O Expressway opening
Before opening
N=243 vehicles/day

By way of theMetropolitan
Expressway
15%

After opening
N=269 vehicles/day

By way of the Ken-O
Expressway
85%

N = 2,592 vehicles/day
Note: For 334 days from April 2016 to March 2017 (excluding May)
Source: The Ministry of Land, Infrastructure, Transport and Tourism

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

Ken-O Expressway

Metropolitan Expressway

Other

17%

70%

13%

71%

27%

2%

Note: For 30 days in June 2016 and 30 days in June 2017
“Other” includes vehicles by way of the Tokyo Gaikan Expressway (both ways)
Source: The Ministry of Land, Infrastructure, Transport and Tourism

43

Status of Investors
Major investors

Number of investors by type of owner
Number ofinvestment units(units)

Ratio(%)

Japan Trustee Services Bank, Ltd. (Trust Account)

35,674

15.4

CRE, Inc.

33,100

14.3

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

29,642

12.8

FUKUOKA JISHO Co.,Ltd.

10,000

4.3

Kyushu Leasing Service Co., Ltd.

5,000

2.2

The Nomura Trust and Banking Co., Ltd. (Investment
Trust Account)

4,789

2.1

Kinki Sangyo Credit Union

4,380

1.9

GOLDMAN,SACHS&CO.REG

3,835

1.7

The Bank of Yokohama, Ltd.

3,662

1.6

GOLDMAN SACHS INTERNATIONAL

3,249

1.4

Name

133,331

Total

Other domestic corporations,
173 persons, 2.2%

Securities companies,
18 persons, 0.2%

Financial institutions,34 persons, 0.4%

8,004
persons
Individuals/others,
7,724 persons, 96.5%

Number of investment units by type of owner
Individuals/others
Other domestic corporations
Securities companies

57.7
At the end of the
5th period(December 31, 2018)

Same-boat investment

Foreigners,
55 persons, 0.7%

25.2%,
58,214

Financial institutions
Foreigners

41.6%,
96,232

231,150 unis

26.1%,
60,395

6.0%, 1.0%,
13,984 2,325

CRE will sincerely consider holding a certain percentage of investment units issued andoutstanding (maximum approx. 10%) to share its own interests with the interests ofinvestors in CRE-REIT. It has been confirmed that CRE will continue to hold theinvestment units of CRE-REIT unless the circumstances are exceptional.
At the end of the
4th period(June 30, 2018)

21.3%,
49,12842.1%,
97,214

26.4%,
61,122

9.7%,
22,361

0.6%,
1,325

14.3% holding
Note: As of December 31, 2018

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

44

Initiatives for ESG
The CRE Group promotes the development and operation of environmentally friendly facilities and contributes to the cultivation of humanresources that will engage in logistics. (See page 30 for details of Governance initiatives.)
All properties acquired BELS, and 80% acquired CASBEE(Note).
Property nameBELS

All properties have acquired fivestars, the highest rating, under
BELS.

CASBEE

Installation of Solar Panels

CRE-REIT leases roof top space
and the lessees contribute to thecreation of renewable energy
Around 80% of properties (based on through photovoltaic power
the acquisition price) have acquired generation.
CASBEE.

Sandwich Panels

LED Lights

All the properties use sandwich
panels with outstanding design anda high heat insulating effect for theirexterior walls to reduce the thermalload when refrigerating and heating
equipment is installed.

The use of LED lights contributes
not only to energy savings and the
reduction of CO2, but also the
reduction of electric bills, which are
to be paid by tenants, along withthe replacement cost of lighting and
an improvement in the working
environment.

M-1 LogiSquare Kuki★★★★★

Saitama Prefecture Rank A







M-2 LogiSquare Hanyu★★★★★

Saitama Prefecture Rank B+







M-3 LogiSquare Kuki II★★★★★

Saitama Prefecture Rank A







M-4 LogiSquare Urawa Misono★★★★★

Saitama Prefecture Rank A

―





M-5 LogiSquare Niiza★★★★★

Saitama Prefecture Rank A







M-6 LogiSquare Moriya

★★★★★

―







O-1 LogiSquare Tosu

★★★★★

―

―





Wall greening
Wall greening has the effect of reducing the surface
temperature of the building and contributes to the reduction of
CO2.

Installation of roof sprinkler systems
Roof sprinkler systems using well water are installed, which
contributes to the reduction of the temperature inside thewarehouse.

Initiatives of sponsor
Endowed “Logistics” chair initiated at
Sophia University
It was initiated in 2015 under the auspices of Professor
Emeritus Tsutomu Araki at Sophia University, an authority on
logistics and RFID, for the purpose of cultivating humanresources that will engage in logistics and supply chain
management in the future.

Note: Based on cost of acquisition

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

45

Overview of the Asset Management Company
Founded in 2006 as an independent asset management company and operated mainly by career employees
Overview of CRE REIT Advisers, Inc.

History

Trade name

CRE REIT Advisers, Inc.

July 2006

Established Strategic Partners Co., Ltd.

Representative

Representative Director and President Tsuyoshi Ito

January 2007

Moved head office to Nihonbashi Kayabacho,
Chuo-ku, Tokyo

Established
Address

LicenseJuly 2006
February 2007

Started business (Operation)

East Tower 19F, Toranomon Twin Bldg., 2-10-1,
Toranomon, Minato-ku, Tokyo

August 2014

CRE acquired all shares

Real Estate Brokerage Business / Governor of Tokyo (3)No. 87859

October 2014

Moved head office to Toranomon, Minato-ku,
TokyoFinancial Instruments Business / Kanto Finance Bureau
Director (Registration of financial instruments firm)
No.1325 (Investment management industry)

May 2015

Registered Investment management

March 2016

Entrustment-based agency services fortransactions in Real Estate Brokerage Act

May 2016

Establishment of CRE-REIT

July 2016

Acquisition and operation of properties by CREREIT

Approval for discipline of transactions etc. Approval No.
104 of the Minister of Land, Infrastructure, Transport andTourism
Business

Operation of CRE-REIT assets

Shareholder

CRE, Inc. (100%)
February 2017

Number of officers and employees

Transferred private investment fund managementbusiness through company split
Company name changed to CRE REIT Advisers,
Inc.

Standing directors: Two
Employees:

Nine (including one employee seconded from CRE)

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

46

IR Activities and Topics
Actively undertake IR activities to expand the investor segments. IR expenses are borne by the Asset Management
Company not by CRE-REIT.
IR activities for institutional investors• Overseas IR
October 2018
Implemented Overseas IR and visited a total of 25 institutional
investors in Singapore, Hong Kong, Korea, and North America• Local IR

IR activities for retail investors• Presentation meeting for retail investors
July 8, 2018 Daiwa J-REIT Festa 2018 (Tokyo)
August 29, 2018

Nihon Securities Journal IR Seminar(Sapporo)

September 21, 2018 ARES/TSE J-REIT Fair (Tokyo)
Japan Investor Relations and Investor
Support Seminar (Tokyo)

August to September 2018

September 26, 2018

Visited a total of 35 companies, including 17 in Tokyo and 18 outside
Tokyo.

September 26, 2018 Radio Nikkei-1 AsazaiNovember 22, 2018 Daiwa J-REIT Caravan (Fukuoka)• OtherNovember 23, 2018

SMBC Nikko Securities J-REIT Seminar(Nagoya)November 24, 2018

J-REIT Fan 2018 Autumn (Tokyo)

August 2018
CRE delivered a lecture at second “Logistics Real Estate Seminar”
hosted by Daiwa Securities, which was attended by 42 participants.

December 4, 2018 Morning Star Seminar (Tokyo)
December 21, 2018 Nikkei J-REIT Seminar (Tokyo)

Topics• Introduction of the unit accumulative investment system
Contributions began in September 2018.

• Selection as loan margin trading issue
Selected on January 22, 2019.
Note: From July 2018 to February 21, 2019

Copyright (C) 2018 CRE Logistics REIT, Inc. All Rights Reserved.

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