Table of Contents

1. Highlights of Financial Results and Operating Results・・ ・2

2. Operation Issues and Future Management Strategy・・・ ・

13

3. External Growth Strategies・・・・・・・・・・・・・ ・

21

4. Development Trends in the Umeda Area・・・・・・・・ ・ 28
5. Overview of Financial Results for the 15th Fiscal Period・・

37

6. APPENDIX・・・・・・・・・・・・・・ ・ ・ ・ ・ ・ ・44This material includes forward-looking statements based on present assumptions and future outlook. Actual results
may differ from the forward-looking statement values due to various factors.
This material is not intended as a solicitation to acquire investment securities of Hankyu REIT nor is it intended as asolicitation to sign contracts relating to transactions of other financial instruments. When undertaking any
investment, please do so based on your own judgment and responsibility as an investor.
Before purchasing investment securities of Hankyu REIT, please consult with a securities company that is a “Type I
Financial Instruments Business Operator.”
This material is an English translation of the original, which was issued in the Japanese language.
There are sections that display property names in abbreviated form.

11. Highlights of Financial Resultsand Operating Results21-1. Summary of 15th Fiscal Period Results
・Searched for excellent properties with particular emphasis on community-based retail properties

External
GrowthInternal
GrowthFinancial
Strategies

・Secure properties by utilizing warehousing capabilities and considering growth to improve portfolio throughcollaboration with the sponsor group

・Focused on improving earning power through proactive efforts to replace tenants and change brands in
HEP Five and attracting service-related tenants in NU chayamachi
・Occupancy rate for total portfolio achieved 99.0% (as of End of 15th Fiscal Period)

・Realized extended years to maturity of borrowings and diversification of debt repayment dates byimplementing solid refinancing
・Achieved both stabilizing finances and suppression of debt financing costs by reinforced collaboration withfinancial institutions.

Results for 15th Fiscal Period
Distribution per unit

Forecast for 16th Fiscal Period

JPY 12,228 (up 1.9％ from the initial forecast)

Portfolio NOI yield* 4.6％
*NOI yield = (Lease operation income + Depreciation) × 2 ÷ Total acquisition priceDistribution per unit forecast

JPY 11,500

Investment unit price at end of 15th fiscal period (closing price):
JPY 394,500
Net assets per unit:
JPY 660,294
Net assets per unit after reflecting unrealized income/loss:
JPY 562,811

3

1-2. Operation Management
Achieving a WIN-WIN-WIN-WIN relationship in operations
Consumers

Investors
Boost stakeholder satisfaction
Maintain
Maintain andand improve
improve rent
rent income
incomeImprove
Improve attractivenessattractiveness toto consumers
consumers
andand sojournsojourn time
time
InviteInvite competitivecompetitive “in“in vogue”
vogue” tenants
tenants

Tenants

Hankyu REIT

≪Results for 15th Fiscal Period≫● HEP Five: Promoted replacement of tenants (3 replacements) and change of brands (4 changes), and enhancing facility’s appeal● NU chayamachi: Aimed to improve attractiveness to customers by inviting an aesthetic salon on 7th floor and attracting service-related
tenants● Shiodome East Side Building: Invited a public interest incorporated foundation to a vacated section on 7th floor, achieved 100%
occupancy rate at end of the 15th fiscal period● Namba-Hanshin Building: Invited a sponsor group company on the entire 8th floor, occupancy rate of 94.9% at end of the 15th fiscal
period (up 9.2 points from previous fiscal period)● Dew Hankyu Yamada: Maintained 100% occupancy throughout the fiscal period. Realized rent increase through rent revisions for a
portion of tenants41-3. Operational Management Initiatives ①
HEP Five

Appeal of the entire Umeda area improved due to the grand opening of Hankyu Umeda Flagship Store in
November 2012, and recently both the number of visitors and the overall sales are on an increasing trend
due to improved customer flow and navigability from JR Osaka Station. (*Refer to graph on page 32)
Rent income down 0.4% year-on-year due to the drop in variable-rent (however, fixed rent maintains stable)
resulting from a temporary drop in occupancy rate and the drop in overall sales associated with proactive
replacement of tenants.

Overall Sales and Rent
●Proactively replaced tenants and changed brands（Rent: JPY mn）

1,400
1,200
1,000
800

（Sales: JPY bn）

12.01
57.5

10.43

10.03

41.6

35.9

600
400
200

775.7

0

Rent income JPY833.2 mn
11th fiscal period
total

768.5

771.4

JPY810.1 mn

JPY 807.4 mn

13th fiscal period

15th fiscal period

Variable-rent

Overall sales

Fixed rent

16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0

Focused on replacing tenants with low sales by increasing thefloor space of strong-sales tenants and attracting Kansai debut
store tenants in order to improve the “freshness,” overall sales
and the rent income of the property.
Replaced tenants in 3 sections and changed brands in 4 sectionsin the 15th fiscal period.
Planning tenant replacements and brand changes in about 20
sections in the 16th fiscal period in an aim for further
improvement in customer attraction and sales.

■Kawaiimarche by Sanrio■ 2012 Xmas Illumination■ Original Fashion Contest

New store of character goods selectedby Sanrio
Opened on October 5 (4F)

Xmas illumination in collaboration withThird-Generation J Soul Brothers

A contest with history held for the 35th time in 2012.
Widely popular as a gateway for youths aspiring tobecome fashion designers.

51-3. Operational Management Initiatives ②
ＮＵ chayamachi

Progressing a strategic leasing plan that includes section changes and tenant replacements inorder to reinforce Umeda Area’s competitiveness. The rent income for the fiscal period
temporarily decreased due to the downtime (period of vacancies) that emerged from replacements
and section aggregations. Will aim for increased number of visitors and rent income from the next
fiscal period and thereafter along with holding various customer attraction events in collaboration
with the surrounding facilities.
● Progressing strategic leasing plans to reinforce competitivenessOverall Sales and Rent
（JPY mn）（JPY bn）

1,000

5.0

800

3.69

600

37.1

3.59
33.1

400
200

494.4

472.6

0

JPY 505.8 mn
Rent income JPY 531.6 mn
11th fiscal period 13th fiscal period
total

Fixed rent

Variable-rent

Photo Studio

3.52

Realized invitation and accumulation of service-related tenants with highlikeliness of being the reason for the visit, such as photo studios andaesthetic salons, for the 7th floor. In addition, even on other floors theplan is to attract a large sporting goods store with high customer
attraction by aggregating tenant sections with weak competitiveness.

4.0 ● Held various “city strolling” events in collaboration with the
3.0

43.7

2.0
1.0

413.8

surrounding facilities
Focused on customer attraction by conducting events in collaboration
with surrounding facilities such as “UMECHA-SAI”, “CHAYAMACHIBAR”, “UMEDA SNOMAN FESTIVAL” and “CANDLE NIGHT”.
⇒ Contributed to improvement in customer attraction and appeal of
Chayamachi area as the only place to enjoy “city strolling” in Umeda

0.0
JPY 457.5mn
15th fiscal period

Overall sales

Aesthetic Salon■ Inviting and accumulating service-related tenants on 7th floor■ Held various collaborative events with surrounding facilities61-3. Operational Management Initiatives ③＜Kitano Hankyu Building＞
Mixed-use restaurant facility in central Umeda
The building’s retail area “DD HOUSE” is increasingly
showing its presence as an “Entertainment Town of ‘Food,
Drinks and Play’” located at central Umeda.
Maintained occupancy rate of 100% throughout the fiscal
period.

＜Dew Hankyu Yamada＞
Revised to increase rent for portion of tenants
Overall sales are solid, realized rent increase through rent
revision for a portion of tenants.
Maintained occupancy rate of 100% throughout the fiscal
period.

■ Dew Hankyu Yamada

Monthly event＜Shiodome East Side Building＞
Achieved occupancy rate of 100% at end of period
A public interest incorporated foundation occupied a vacantsection on 7th floor, and as a result the occupancy raterecovered to 100% at end of the fiscal period.

＜Hotel Gracery Tamachi＞
Listed in the MICHELIN Guide for the second consecutive year

Listed as pleasant hotel for the second consecutive year in“MICHELIN Guide Tokyo Yokohama Shonan 2013.”■ Hotel Gracery Tamachi Guest room photo7

1-4. Rent Systems and Present Conditions of 15 Portfolio Properties (end of 15th fiscal period) ①＜Properties mainly using the sales-based overage rent system＞
Name

Main rent system

Present conditions

HEP Five
Specialty shop buildings (Citycenter SC)

Overage(fixed + variable)

ＮＵ chayamachi
Specialty shop buildings (Citycenter SC)

Overage(fixed + variable)

Although the occupancy rate at end of fiscal period was down 0.4 points from the previous period (14thfiscal period) to 99.6%, maintained 100% occupancy rate other than tenant replacement period.
Aiming for recovery in sales, held collaborative events using Twitter in addition to holding the customary
original fashion contest by having reviewed sales promotion activities in cooperation with tenants and the
PM company.
By promoting the replacement of tenants with low sales and the change of brands (plans to replace andchange brands of approximately 20 tenants in the 16th fiscal period), continue to aim to revitalize theentire property and focus on enhancing the appeal.
The occupancy rate at end of fiscal period was 87.7%, up by 2.7 points from the end of previous fiscal
period (14th fiscal period), and relocation of service-related tenants within the building to increase floor
space and invitation of large sporting goods store are planned for the 16th fiscal period in addition to
focusing on leasing other vacant spaces.
Contributed to improving the appeal and attractiveness to customers of the entire Chayamachi area
through the development of events jointly with surrounding facilities including “CHAYAMACHI BAR,” astreet bar where visitors can go from restaurant to restaurant and pub to pub, and “CHAYAMACHI ARTPICNIC” with exhibitions of original art by popular artists.

＜Properties using the fixed rent system＞
Name

Main rent system

Present conditions

Ueroku F Building
OfficeFixedSphere Tower Tennoz
OfficeFixed

Shiodome East Side Building
OfficeFixed

Occupancy rate was stable at 89.9% at the end of the 15th fiscal period, no change from the end of theprevious fiscal period (14th fiscal period).
Maintained occupancy rate by tenants increasing floor space within the building even though one tenant
vacated during the period.
Utilizing the building attributes that make it competitive in the area (accessibility, visibility and scale),currently focusing on leasing vacant office spaces.
Although the occupancy rate at end of fiscal period was 90.2%, down 2.4 points from the previous fiscal
period (14th fiscal period), due to a contract cancellation of one floor in July 2012, realized new
occupancy by a clinic tenant and expansion of floor space within the building by an office tenant.
Implemented disaster prevention measures such as creating disaster response manuals and adding
stockpiles for disaster response, as requested by tenants; continue to focus on boosting tenantsatisfaction and aim to secure tenant leasing as early as possible.
Invited public interest incorporated foundation to vacated section on 7th floor in November 2012, andachieved occupancy rate of 100% at end of fiscal period.
Reduced BM fee by taking advantage of the fact that a PM company is occupying the building.
Going forward, continue to reinforce tenant relations and focus on improving tenant satisfaction.

Namba-Hanshin Building
OfficeFixed

The occupancy rate at end of fiscal period is 94.9%, up 9.2 points compared to the end of previous fiscal
period (14th fiscal period), due to inviting a sponsor group company to the whole 8th floor.
As the area is attractive to businesses with visits from clients, currently focusing on leasing vacant offices.

8

1-4. Rent Systems and Present Conditions of 15 Portfolio Properties (end of 15th fiscal period) ②＜Properties that mainly use the long-term, fixed rent systems＞
Name

Main rent system

Present conditions

Kitano Hankyu Building
Specialty shop buildings (Citycenter SC)

Long-term, fixed(partly overage)

Maintained occupancy rate of 100% throughout the fiscal period
Planning store renewal for portion of tenants and replacement of tenants, expectations for further customer
attraction. Aim for improvement in attractiveness to customers by continuing to hold collaborative eventswith “CANDLE NIGHT (WINTER)” and “UMEDA SNOWMAN FESTIVAL”.

Dew Hankyu Yamada
NSC (Neighborhood shopping
centers)

Long-term, fixed(partly overage)

Takatsuki-Josai Shopping Center
NSC (Neighborhood shopping
centers)

Long-term, fixed

Stably maintained occupancy rate of 100% throughout the period
Customer-attractive events such as “Summer Fair” and “Anniversary Fair” were regularly held. Because themarket area population is large and the building has strong attractiveness for customers, both overall sales
and rent income are stable.
Realized rent increase through rent revision for a portion of tenants in November 2012
Stable rent income based on the fixed-type master lease method* with Kohnan Shoji Co., Ltd. Tenantcomposition of home improvement center, grocery store, home electronics retailer, sporting goods store,
etc. fulfills the needs of residents in the surrounding area. Construction to expand retail floor spacecompleted in November 2012.

Nitori Ibaraki-Kita Store (site)
Specialty shops

Long-term, fixed

Stable rent income based on a contract for fixed-term land lease for business use with Nitori Holdings Co.,
Ltd. The market area population is increasing mainly due to local residential property
development.

Kohnan Hiroshima NakanoHigashi Store (site)
NSC (Neighborhood shopping
centers)
Hotel Gracery Tamachi
High-grade hotels for businesstravelersLong-term, fixed

Stable rent income based on a contract for fixed-term land lease for business use with Kohnan Shoji Co.,
Ltd. Retail property that offers high transportation convenience with a home improvement center and agrocery store.

Long-term, fixed

Stable rent income based on long-term lease with Fujita Kanko Inc. Hotel occupancy rate has recovered toa high level since summer 2012. The latest average occupancy rate remained at a high level of 98%.
Listed in the hotel section of “MICHELIN Guide 2013” and this was utilized in sales promotion development
and commemoration plans.

LaLaport KOSHIEN (site)
RSC (Regional shopping centers)

Long-term, fixed

Stable rent income based on a contract for fixed-term land lease for business use with Mitsui Fudosan Co.,
Ltd. Property’s competitiveness further boosted by conducting a major renewal in spring 2011 (bringing in
new stores of fast-fashion chains such as H&M, ZARA, UNIQLO and newly adding “LaLaKid’s Park”).

LAXA Osaka
City hotels

Long-term, fixed

Stable rent income based on the fixed-type master lease method* with Hanshin Electric Railway Co., Ltd.
(Note) The occupancy rate of Hotel Hanshin that is under a sub-leasing contract remained at a high level.

Richmond Hotel Hamamatsu
High-grade hotels for businesstravelersLong-term, fixed

Stable rent income based on the fixed-type master lease method* with RNT HOTELS Co., Ltd.
(consolidated subsidiary of ROYAL HOLDINGS Co., Ltd.).
Converted a portion of guest rooms into conference rooms and refurbished guest room interiors.
By providing a wide range of accommodation plans among other incentives, the hotel continues to maintaina high-level occupancy rate in the Hamamatsu City area.

(Note) Fixed-type master lease method: Hankyu REIT receives rent income from the master lessee (sublessor). The amount received is fixed irrespective of
the rent received by sublessor from end-tenants.

9

1-5. Basic Financial Policy・Outstanding Debt
Outstanding Debt by Lender (JPY mn)

Basic Financial Policy● Maintain sound financial position● Maintain favorable trading relationship with financial institutions● Lower fund procurement costs (effective use of security
deposits/guarantees)● Reduce financing risks (diversification of debt repayment dates)● Reduce interest rate risks (focus on long-term, fixed rate loans)Interest-bearing debt
Avg. funding cost（interest-bearing debt＋utilized
amount of security deposits andguarantees)
Avg. debt financing cost (including
investment corporation bonds)
Avg. remaining years
on long-term loans payable andinvestment corporation bonds
Long-term debt ratio
Fixed debt ratio
LTVInterest-bearing debt ratio
Investor rating（R&I)

As of end of
14th period

As of end of
15th period

JPY 56.9 bn

JPY 56.9 bn

1.31%

1.25%

1.43%

1.36%

2.1 years

2.4 years

88.6%
75.9%
55.9%
45.5%
A+
（stable）

89.5%
69.8%
55.8%
45.5%
A+
（stable）(Note) LTV = (Interest-bearing debt + Security deposits/guarantees –Cash deposits of security deposits/guarantees) / (Total amount ofassets* – Cash deposits of security deposits/guarantees)* Appraised value basis

3 ,00 0
5.9 %5,7 00
11 .2%

11 ,20 0
22 .0 %

5,900
11 .6%

5 ,90 01 1.6 %

1 1,0 00
21 .6%
8,2 00
16 .1%

Mitsubishi UFJ Trust and Banking Corporation
Development Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
The Senshu Ikeda Bank, Ltd.

Total JPY 50.9bn
Registration for Issuance of Investment Corporation Bonds

Planned value of issuance (upper limited):
JPY 100,000 mn
Planned issuance period: Dec. 19, 2011 to Dec. 18, 201310

1-6. Trends of Debt Financing Cost and Diversification of Repayments Dates
As of November 30, 2012

Diversification of Repayment Dates

Trend of Debt Financing Costs and Avg.
Remaining Years
Realized reduced debt financing costs and extending
the average remaining years of loans payable（JPY bn）
20
18
2.5 years

1.65%
1.60%

2.4 years

1.59%
1.57%

2.1 years 2.1 years

1.55%

1.6 years
1.5 years 1.5 years

1.5 years
1.43%

6
4
1.0 years

1.35%
As of end o f
10th period

As o f end of
11t h period

As of end of
12th period

As of end o f
13th period

11.2

As of end of
14th perio d

As of end of
15th period

Ave. debt financing cost(including investment corporation bonds)
Ave. remaining years on long-term loans payable and investment
corporation bonds

JPY 6.0bn

9

8

1.40%
1.36%

Investment
corporation bonds

12.5

10

1.51%

1.45%

14

2.0 years 12

1.52%
1.50%

16

7

6

6
4
1.2

2
0
19th
18th
17th
16th
period period period period'13/05 '13/11 '14/05 '14/11

20thperiod'15/05

23rd
22nd
21st
period period period'15/11 '16/05 '16/11

24th
period
'1 7/0525th
period'17/11

JPY 1bn long-term loans payable that will become due on
January 21, 2013 and JPY 1bn short-term loans payable thatwill become due on January 23, 2013 are planned to berefinanced into a long-term loans payable (three years) andshort-term loans payable (one year) each.

111-7. Distribution Forecast for 16th Fiscal Period【Main factors】
・Kitano Hankyu Building: –28 (Decrease of rent income from tenant replacement: –9, increase of BM costs such as maintenance, etc.: –6)
・HEP Five: –23 (Decrease of rent income from tenant replacement: –15, increase of BM costs such as maintenance, etc.: –6)
・NU chayamachi: –20 (Increase of repair expenses from tenant replacement: –26)
（ Uni t: JPY mn）

Item

Results for 15th Fiscal Period ①(Jun. 1, 2012 to Nov. 30, 2012)

Forecast for 16th Fisc al Period ②(Dec. 1, 2012 to May 31, 2013)

Change②- ①

Results for 14th Fiscal Period ③(Dec. 1, 2011 to May 31, 2012)

Change②- ③Operation per iod(days)

183

182

-1

183

-1

Operating revenues

4,736

4,672

-63

4,772

-99

Operating i ncome

1,471

1,402

-69

1,501

-99

Ord inary income

1,045

983

-62

1,054

-70

Net income

1,044

982

-62

1,052

-70

Number of outstanding
investment u nits at end of
period (units)

85,40085,400―85,400―Distri bution per unit (JPY)

12,228

11,500-728

12,324-824

FFO per unit (JPY)

23,78623,016-769

24,013-996[Main preconditions]-There will be no transfers of portfolio properties from the presently held 15 properties and 1 investment interestin silent partnership with real estate trust beneficiary interests.
- There will be no additional issuance of investment units to the present 85,400 units until the end of the period.

12

2. Operation Issues and FutureManagement Strategy

132-1. Issues of Hankyu REIT
Issues on External Growth■ Failed to expand the portfolio size for past 4 years.
■ Failed to clearly show the collaboration with the sponsor group towards the market.

Issues on Internal Growth■ Although portfolio occupancy rate maintains a high level, there are the risks of NOI and distributions
decreasing due to the decreasing sales-based overage rent resulting from retail tenants’ sales
slowdown, as well as relocation of major tenants in the offices.
■ Needs for a major renewal of the facilities is increasing amidst the intensifying competition with thesurrounding facilities resulting from the open rush of retail facilities in Umeda area

Issues on Financial Strategies■ The fund procurement environment of debt financing is favorable, but there are restrictions on
additional debt financing due to the LTV being at a high level and as a result options for acquisition
opportunities of new properties are limited.
■ There are concerns that the LTV will increase if appraisal values continuously drop.

14

2-2. Occupancy Rate for Individual Properties (occupancy by end-tenants)
end of
Total
Total portfolio
portfolio occupancy
occupancy rate
rate 99.0
99.0 ((endof 15th
15th fiscal
fiscal period
period ))The graph excludes the seven properties (Takatsuki-Josai, Nitori Ibaraki, Kohnan Hiroshima, Tamachi, LaLaport
KOSHIEN, LAXA Osaka and Hamamatsu) leased to single tenants (occupancy rates of 100%).
(％ )

100

Total portfo lio

95

HEP
Kitano Hankyu

90

Hankyu Yamada

85

Uero ku F Bldg.

80

NU

75

－z
Tenno

Shiodome70
2012/06

2012/072012/08

20 12/09

2012/10

Namba-Hanshin

2012/11(Note) Figures express the value at the end of each month.

StableStable occupancy
occupancy rates
rates maintained
maintained since
since 1st
1st fiscal
fiscal period
period（％）

100
9599.5 100.0

99.3

98.5

99.3

98.8

98.1

98.5

98.7

98.4

98.7

99.0

99.4

98.5

99.0

2nd
period'06/053rd
period'06/114th
period'07/055th
period'07/116th
period'08/057th
period'08/118th
period'09/059th
period'09/1110th
period'10/0511th
period'10/1112th
period'11/0513th
period'11/1114th
period'12/0515th
period'12/11908580(Note) 1st
period'05/11(Note) Figures indicate the values at the end of each fiscal period.

15

2-3. Trends of Distribution per Unit
Distribution per unit forecast（JPY）
20,00 0 18,962

17,36518,00 016,00 014,00 012,00 010,00 08,00 0Distribution per unit

13, 579 13,723

14,955

14,99015,342

JPY12,228
14, 310

16,500 11,611
12,415 12,694 12, 688 12,32412,228
15,00014,30014,1 00
14,10013,00012,800
12,80012,500
12 ,10012,00012,300 12,00012,000
11,50013, 572

6,00 04,00 02,00 00
10th 11th 12th 13th 14th 15th 16th
9t h
8th
7th
6th
5th
4th
3rd
2nd
1st
period period period period period period period period period period period period period period period period'05/11 '06/05 '06/11 '07/05 '07/11 '08/05 '08/11 '09/05 '09/11 '10/05 '10/11 '11/05 '11/11 '12/05 '12/11 '13/5
Irregular period (303 days)(Compared with 15th fiscal period forecast)
Increase in operating income: JPY 11mn
(Operating revenues increased by JPY 8 mn, reduction of JPY 2
mn in lease operating costs, etc.)
Improvement in non-operating profit or loss: JPY 7 mn
(Decrease of JPY 3 mn in interest expenses, etc.)162-4. Asset Scale and LTV (Loan to Value)

Total acquisition priceTotal appraisal value at the end of period
LTV at end of period (based on management guidelines)
Interest-bearing debt ratio at the end of period
Capital increaseby public offering
57.9

（％）
(JPY bn)
70
180
56.1
55.6
55.9
56.0
55.9
55.8
160
60
55.2
140
46.1
45.6 46.0
50
120
100
49.4 46.9 46.2
31.0 30.0 30.7
28.8
45.4 45.5 45.2 45.5 45.5 4080
40.8 40.3
39.1
30
60
40
20
20
21.3
18.2 18.9
10
0 18.0
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th 11th 12th
13th
14th
15th
period period period period period period period period period period period period period period period'05/11 '06/05 '06/11 '07/05 '07/11 '08/05 '08/11 '09/05 '09/11 '10/05 '10/11 '11/05 '11/11 '12/5 '12/11

Number of
Properties

5

6

7

8

9

11

11 16 15 15 15 15 15 15 15

LTV is generally stable17

2-5. Appraisal Value ①
Appraisal value down by 1.0% Signs of CAP rate decline（JPY mn）

30,0006.0%

25,000

5.0%

20,000(Note 1)

4.0%

15,0003.0%

10,000

2.0%

5,000

1.0%

0

0.0%

1st
(Note 2) period'05/11

2nd
period'06/053rd
period'06/114th
period'07/055th
period'07/11

HEP
TennozHankyu Yamada
Tamachi
Kohnan Hiroshima
Weighted average CAP rate

6th
period'08/057th
period'08/118th
period'09/059th
period'09/11NU
Takatsuki-Josai
LaLaport KOSHIEN
Namba-Hanshin
Hamamatsu

10th
period'10/0511th
period'10/1112th
period'11/0513th
period'11/1114th
period'12/0515th
period'12/11

Shiodome
Kitano Hankyu
LAXA Osaka
Ueroku F Bldg.
Nitori Ibaraki(Note 1) In the 9th fiscal period (November 27, 2009), as 10% of the quasi co-ownership (equity ratio of 50%) of the trust beneficiaryinterests was transferred, the comparison is based on an equity ratio of 45%. For comparison purposes, appraisal values are- fiscal periods calculated at an equity ratio of 45%.
shown for the ends of the 1st to the 8th(Note 2) Figures show the values at the end of each fiscal period.

18

2-6. Appraisal Value ②(Unit：JPY mn)
Acquisition price① End of previous
period(14th fiscal period-end)

Cap
rate

② End of current
period(15th fiscal period-end)

Cap
rate

Change(②-①)

Change(②-①)/①③Value recorded on
the balance sheet at
end of current period

Unrealized
income/loss②-③

Value to book ratio②/③

HEP Five (45% of the quasi
co-ownership of the trust
beneficiary interests)

20,79023,7604.5%

23,895

4.5%

135

0.6%

19,0074,887

125.7%

Kitano Hankyu Building

7,740

6,810

5.6%

6,650

5.6%

-160

-2.3%

7,773

-1,12385.5%

Dew Hankyu Yamada

6,930

6,900

5.5%

7,000

5.5%

100

1.4%

6,009

990

116.5%

Takatsuki-Josai
Shopping Center

8,600

7,371

5.8%

7,371

5.8%

0

0.0%

7,734

-363

95.3%

Ueroku F Building

2,980

2,470

6.0%

2,470

6.0%

0

0.0%

2,831

-361

87.2%

Nitori Ibaraki-Kita Store(Site)

1,318

1,392

6.7%

1,414

6.5%

22

1.6%

1,340

73

105.5%

Kohnan Hiroshima NakanoHigashi Store (Site)

2,175

1,980

6.7%

1,910

6.7%

-70

-3.5%

2,280

-370

83.8%

19,30014,3004.8%

14,200

4.8%

-100

-0.7%

17,682-3,482

80.3%

Sphere Tower Tennoz (33%of the quasi co-ownership of
the trust beneficiary

9,405

8,382

4.6%

7,788

4.6%

-594

-7.1%

8,771

-983

88.8%

Shiodome East Side Bldg.

19,02512,8004.8%

12,600

4.8%

-200

-1.6%

18,316-5,716

68.8%

Hotel Gracery Tamachi

4,160

3,860

5.4%

3,860

5.4%

0

0.0%

3,996

-136

96.6%

LAXA Osaka

5,122

5,100

5.9%

5,110

5.9%

10

0.2%

4,786

323

106.8%

LaLaport KOSHIEN(site)

7,350

6,710

5.0%

6,710

5.0%

0

0.0%

7,748

-1,038

86.6%

Namba-Hanshin Building

4,310

3,030

5.5%

2,860

5.5%

-170

-5.6%

4,045

-1,185

70.7%

Richmond Hotel Hamamatsu

2,100

1,952

6.3%

1,952

6.3%

0

0.0%

1,789

162

109.1%

121,306

106,8175.1%

105,790

5.1%-1,027-1.0%

114,115-8,325

92.7%

NU chayamachi

Total

The cap rate is based on the direct capitalization method used for appraisal value calculations. (Nitori Ibaraki-Kita Store (site),
Kohnan Hiroshima Nakano-Higashi Store (site) and LaLaport KOSHIEN (site) are allocated a discount rate using the DCF method.)
The portfolio total is the weighted average cap rate based on appraisal values.

192-7. Future Management Strategies and Goals
Future Growth Strategies and Management Policies
Distribution
Policies

Implement management that emphasizes on stability of dividends in medium- to longterm
Collaborate with sponsor group and aim to realize measures to improve portfolio
earning power.

External Growth
Strategies

Portfolio growth and improvement by utilizing the strength of Hankyu Hanshin Group
Improve existing portfolio by considering measures such as replacing properties withdeclining earning power, and aim to recover to a growth path.

Internal Growth
Strategies

Deepening operational management
Aiming to bottom out and turn around revenues by supporting each facility in details
such as proactively replacing retail tenants with stagnant sales while maintaining highoccupancy by establishing good relationships with the tenants.

Financial
Strategies

Implementation of Stable Financial Operations and LTV Controls
Realize steady refinancing, diversification of debt repayment dates and reduction ofdebt financing costs by reinforcing cooperation with financial institutions, and aim tostabilize the financial foundation.

Strategy Goals■ Distributions will be set at JPY 12,000 or more on on-going basis, and aim for further build up.
■ Realize return to growth path through portfolio improvement, and aim for growth and expansion of
portfolio properties.
203. External Growth Strategies213-1. Property Information

81% of acquisitions

Network of the Hankyu Hanshin Holdings Group(11 properties)
acquired throughthe sponsor pipeline

Preferential Negotiation Rights
We hold preferential negotiation rights with Hankyu Corporation,
Hankyu Realty Co., Ltd. and Hankyu Investment Partners, Inc.

+
Trend of information leads

Hankyu REIT Asset Management’s Own Network
We obtain highly accurate information by directly approaching
general companies and distributors（leads）
1000

Information leads checked
Information leads considered

900
800
700
600

Hankyu REIT, Inc.
We aim to achieve sustained growth by utilizing theinformation sourcing capabilities and network of the
Hankyu Hanshin Holdings Group that has deeply rooted
connections in the community.

500
400
300
200
100
0
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th
period period period period periodperiod periodperiod period period period periodperiod period period223-2. Property Acquisition Policy for Future
Use

Area
Urban vicinity

City center

Shiodome
OfficeNamba-Hanshin

Urban retailproperties

TennozCommunity-based
retail properties

Ueroku F Bldg.

GMS (general-merchandise stores)
SM (supermarkets)
Specialty shopbuildings(city center SC)

Hankyu Yamada

HEP

Takatsuki-Josai

Department stores

RetailLarge specialty
shops

NSC (neighborhood shopping centers)

NU

Kitahanada*

Kitano Hankyu

LaLaport KOSHIEN

Tamachi

Additionally acquired silent partnership interests related to AEON MALL
SakaiKitahanada (site) on June 1, 2012.

City hotels

Hamamatsu

Specialty shops
Outlet centers

Street-level shops

LAXA Osaka

Kohnan Hiroshima

RSC (regional shopping centers)

Nitori Ibaraki

Hotel

SuburbanHigh-grade hotels forbusiness travelers

Resort hotels

Budget hotels for business travelers

Primary investment target zone

Focal investment zone of retail properties

Focus on community-based retail properties23

3-3. Population Dynamics of Kansai Region ①
・ Concentration of population will heighten due to return of population to central cityand urban vicinity
・ Retail properties of Hankyu REIT are located in most populous municipal regions

Population
Population ofof Kansai
Kansai is
is about
about 20.61
20.61
million.
million.
Nitori Ibaraki
Takatsuki-Josai

Hankyu-Yamada

HEP
NU
Kitano-Hankyu
Laxa Osaka
LaLaport KOSHIEN

Ueroku F Building

Osaka
Osaka Prefecture:
Prefecture: about
about 8.70
8.70 million
millionOf
Of which,which, 62%
62% residereside inin thethe toptop
77 municipal
municipal regions
regions(populationof(population of 300,000
300,000 oror more)more)
including
Osaka
City
including Osaka City
Hyogo
Hyogo Prefecture:
Prefecture: about
about 5.60
5.60 million
millionOf
Of which,which, 68%
68% residereside inin thethe toptop
77 municipal
municipal regions
regions(populationof(population of 200,000
200,000 oror more)more)
includingincluding Kobe
Kobe City
City

Namba-Hanshin
Source: Japan Geographic Data Center“Population Summary of the Basic Resident
Registers” (2012)<Populations as of March 31, 2012 of municipal regionswith populations of 100,000 or more>24

3-3. Population Dynamics of Kansai Region ②
・Population is clearly resurging in central city and urban vicinity
・Populations of Umeda and municipal regions along Hankyu/Hanshin Lines are risingThoughThough Kansai
Kansai population
population fell
fellslightlyslightly at
at -0.1%-0.1% (10-year(10-year period),
period), thethepopulation
population ofof citycity centers
centers such
such as
as in
in
Osaka
Osaka City
City isis +2.4%.
+2.4%.
Nitori Ibaraki
Takatsuki-Josai

Hankyu-Yamada

HEP
NU
Kitano-Hankyu
Laxa Osaka
LaLaport KOSHIEN

Ueroku F Building
Namba-Hanshin

Polarization
Polarization into
into areas
areas thatthat areare either
eitherstrongstrong oror notnot
ReasonReason forfor differentiation:differentiation:
High
High transportationtransportation convenience
convenienceandhighconcentrationand high concentration ofof retailretailfacilities
facilities
A
A plusplus toto thethe profitability
profitability andandstability
stability ofof Hankyu
Hankyu REIT
REIT retail
retailfacilities
facilities

Source: Japan Geographic Data Center“Population Summary of the Basic Resident Registers”(2002, 2012)<10-year population rise/fall in municipal regions withpopulations of 100,000 or more>25

3-4. Location Relation Between Umeda Market Area and Popular Residential Areas

Sakai(Released September 2012)

Ranking1
2
Keihan3
Main Line
4
from/to
Sanjo
5
6
7
8
9
10
11
12
13
Kintetsu14
Nara Line15
from/to15
Kintetsu17
Nara
18
19
20
Time distancefrom Umeda
Ikoma

NagataTennoji

Kawaramachi(Kyoto)Moriguchi
City

Namba

Survey by condominium developer MAJOR7

JR Linefrom/to Maibara
Station

Hirakata
City

Takatsuki
City

Hommachi

Otsu

Kyoto
IbarakiCity

Top 20 in survey

Esaka

Toyonaka

Nishinomiya

AshiyaMikageSannomiya

Kita-Osaka Kyuko Line

Osaka
(Umeda)

Amag
asaki

Nishinomiya
North Exit

Sanno
miya

Hankyu Line
Hanshin Line

Senri-Chuo

Minoo

Takarazuka
Shukugawa

Ashiyagawa

OkamotoMikageSannomiyaAkashi

JR Linefrom/toHimejiSanda

JR Linefrom/toFukuchiyama■Result of Most Desired City to Live

Name
(City/Prefecture)
Ashiya(Ashiya/Hyogo）
Nishinomiya(Nishinomiya/Hyogo）
Shukugawa(Nishinomiya/Hyogo）
Kobe(Kobe/Hyogo）
Okamoto(Kobe/Hyogo）
Umeda(Osaka/Osaka）
Kyoto(Kyoto/Kyoto）
Senri-chuo(Toyonaka/Osaka）
Sannomiya(Kobe/Hyogo）
Osaka(Osaka/Osaka）
Mikage(Kobe/Hyogo）
Within Osaka city (Osaka/Osaka)
Within Kobe city
(Kobe/Hyogo）
Takatsuki(Takatsuki/Osaka）
Namba(Osaka/Osaka）
Tennoji(Osaka/Osaka）
Ibaraki(Ibaraki/Osaka）
Takarazuka(Takarazuka/Hyogo）
Toyonaka(Toyonaka/Osaka）
Minoo(Minoo/Osaka)
are in regions along the Hankyu and Hanshin
lines

Within 15 minutes
Regions along Hankyu and Hanshin Lines/

Within 30 minutes
Kishiwada

Nankai Main Line
from/to KansaiInternational Airport

Nakamozu
SubwayMidosujiLineWithin 45 minutes

Regions with stations of Hankyu Corporation, Hanshin Electric
Railway, Kita-Osaka Kyuko Railway, Nose Electric Railway and Kobe
Rapid Transit Railway

・Most Desired City to Live Survey (Kansai Region)’s higher rank was nearly exclusive to regions along the Hankyu and Hanshin Lines.
Among that, regions along Hankyu Kobe Line such as Ashiya, Nishinomiya and Shukugawa are particularly popular.
・Popular areas are concentrated in the time distance of within 30 minutes from Umeda, and the increasing population trend within the
popular areas continue.

26

3-5. Information Leads and Leads Considered (15th fiscal period)
Area

7
OfficeMulti-used

RetailHotel

SuburbanUrban vicinity

City center

Use

5

2 47

4

1

1 10

20

5

2

42 16

5

3

1

10

1 2 50

9

7

23

2

0

0

0

15

1

0

0

0

6

3

Others

10

15

6 23

3 18

33

8

97

1

5

6

0

0

1

1 18

1

6

19

*Outer circle: Information leads
Kansai region (Osaka, Kyoto, Hyogo,
Nara, Shiga, Wakayama)

3

Inner circle: Leads actually consideredTokyo metropolitan area
(Tokyo, Kanagawa, Saitama,
Chiba)

Other areas

Leads-based retail
Leads considered
considered were
were primarily
primarily community
community-based
retail properties
properties inin thetheKansaiKansai region
region andand Tokyo
Tokyo metropolitan
metropolitan area
area

27

4. Development Trends in the Umeda Area28

4-1. Main Development Projects in “Umeda Area”(1) Rebuilding of Umeda Hankyu Building
Office wing on upper floors opened in May 2010
Entire building of Hankyu Umeda Flagship Store opened in November
2012
Hankyu Corporation (department store, offices, etc.)(2) NU chayamachi Plus (opened in April 2011)
Hankyu Corporation (chief right holder) (retail stores, residences,schools, etc.)(3) GRAND FRONT OSAKA (Umekita Phase I)
Began construction in March 2010
Scheduled completion in spring 2013
[A]South Building (Tower A): Office(Lower floors): Retail (shops and restaurants)
Panasonic Center Osaka[B]North Building (Tower B): Office(Tower C): Hotel, service apartments, office(Lower floors): Knowledge Capital
Retail (shops and restaurants)[C}For-sale condominium: Grand Front Osaka Owner’s Tower
Corporate Group: Mitsubishi Estate Co., Ltd., ORIX Real Estate
Corporation, Sekisui House, Ltd., Hankyu Corporation, etc.
(4) OSAKA STATION CITY
SOUTH GATE BUILDING (opened in March, 2011)
NORTH GATE BUILDING (opened in May, 2011)
Station area, open space areas
West Japan Railway Company, Osaka Terminal Bldg. Co., Ltd.
(department store, retail stores, offices, etc.)(5) Collaborative urban development for Osaka Ekimae* ・・・・ (dotted line) Property under development(solid line) Project in operation for less than 2 years(green line) Owned property

Japan Post Holdings Co., Ltd., West Japan Railway Company(offices, theater, retail stores, etc.)(6) A branch line to JR Tokaido Line and a new station (planned)(7)

Umekita Phase II development zone29

4-2. Development Status of Osaka’s Umeda Area
North Building (Tower B)

North Building (Tower C)

For-sale condominium

Office, retail, knowledge
capitalHotel, serviced apartments,
office, Knowledge Capital,
retailGrand Front Osaka
Owner’s Tower

Kitano Hankyu
Building

South Building (Tower A)
Office, retail

ＮＵ chayamachi

Umekita Phase II
development zone

Hankyu Umeda
StationHankyu-sanbangai

JR Osaka Station
Osaka Station City

Hanshin
Department StoreHEP FIVE
Umeda Hankyu Building(Hankyu Umeda Flagship Store)
Entire building opened in
November 201230

4-3. Full Opening of Concourse in Front of Hankyu Umeda Flagship Store
16.5m-wide, 9m-highconcourse running
north to south

JR Osaka Station
Direction signboard on the concourse
wall on the 2nd floor

The “Hankyu Umeda Honten-mae Concourse” (passage), which had been
under renovation since 2006 associated with the rebuilding of the Hankyu
Umeda Flagship Store, was fully opened on October 20, 2012.
The opening of the concourse has drastically improved the access routefrom JR Osaka Station for HEP FIVE, and significantly enhanced thenavigability and convenience of the Umeda area.

“Festival Plaza” on the 9th floor of Hankyu
Umeda Flagship Store

Combined with the positive impact of the opening of the Hankyu Umeda
Flagship Store, which opened entirely on November 21, it allows
expectations for the ripple effect on HEP FIVE and an increase in customers
visiting it.

31

4-4. Ripple Effect of the Opening of the Hankyu Umeda Honten-mae Concourse■Monthly Operation Results of HEP FIVE for the 14th and 15th Fiscal Periods(year-on-year comparison)
115%

Number of visitors
Building-wide sales

110%
105%

Full opening of
Umeda concourse

100%
95%
90%
Entire building ofHankyu Umeda
Flagship Store opened

85%
80%
Dec.
2011

Jan.
2012

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.
■Visitors coming to bargain sales at
HEP FIVE● Number of visitors and building-wide sales at HEP FIVE in November 2012 increased by more than
100% year-on-year
The full opening of the Hankyu Umeda Honten-mae Concourse in October and the opening of the entire
building of Hankyu Umeda Flagship Store in November have generated synergy effects to the entire area,with new retail properties in central Umeda serving as a core, including the “inflow effect” in which people
flow into Umeda from wider areas in the Kansai region and the “penetration” effect in which people flow out
from Umeda to neighboring retail properties.
● Monthly number of visitors to HEP FIVE (year-on-year comparison)
October: 98% ⇒ November: 105％32

4-5. Status of Retail Properties in the Umeda Area
Changes in Retail Floor Area of Major Large-Scale
Retail Properties in “Umeda”(10,000㎡)
60

2010⇒2011
Increased about 27%

50

52Opening of Large Retail Properties in “Umeda”【Fiscal 2011】

47

Apr.

Floor space increase at Daimaru Umeda(Retail floor area)
Approx. 24,000m2(existing floor area: approx. 40,000m2)

37

40

37

Apr.

NU chayamachi Plus

Approx. 3,000m2

May

JR Osaka Mitsukoshi Isetan

Approx. 50,000m2

LUCUA

Approx. 20,000m2

30【Fiscal 2012】

20

Oct.

EKI MARCHE OSAKA

Approx. 4,000m2

Nov.

Hankyu Umeda Flagship Store (rebuilt)

Approx. 80,000 m2

10
0(before rebuilding: 61,000m2)【Fiscal 2013 (planned)】

2009

2010

OthersDaimaru

2011

HankyuMitsukoshi Isetan

Apr. GRAND FRONT OSAKA

2012
Hanshin
LUCUA

Changes in Sales of Department Stores, etc. in “Umeda”（JPY m n）
Y ea rDai ma ru Um ed a

2 0 0954 ,08 5

2 01 03 7,2 86
68 .9%

2 0 11
61 ,78 1
16 5.7 %1 44 ,07 5

13 1,0 87

1 24, 458

91 .0%

9 4 .9 %9 6,0 4592, 350

104 .2%9 6 .2 %Year-o n-yea r com pa rison

Han k yu Um ed a
F lag sh ip S tore
Year-o n-yea r com pa rison

Han sh in Um ed a
Ma in Store

92 ,18 5Year-o n-yea r com pa rison

J R Osa ka M it su kos hiIset an

-

-

-

-

Year-o n-yea r com pa rison

L UC UA
Year-o n-yea r com pa rison

Approx. 44,000m2

Given the consecutive opening of department stores andlarge-scale retail properties in Osaka City (particularly the
Umeda area), it was initially worried that sales of respective
stores would drop sharply due to saturation as a result ofoversupply (the 2011 problem in Osaka).

31, 000
34, 000
3 43, 589

Tot al2 90 ,34 5
26 4,4 18
Y ear-on -ye ar co mp ariso n
91 .1%
12 9.9 %of t otal am ou nt(Note) Sales of JR Osaka Mitsukoshi Isetan and LUCUA represent theaccumulated amount from their opening in May 2011 through the end of
March 2012.

Sales of existing department stores (Hankyu andHanshin department stores) decreased by onlyaround 4 – 5% despite the impact of the openingof JR Osaka Mitsukoshi Isetan and LUCUA.
Source: Prepared by Hankyu REIT Asset Management based on various disclosurematerials and other information

The Umeda area will further expand and grow, attracting and drawing customers from neighboring

33
6

4-6. Comparison of Office Building Age in Osaka
City by Area
Yodoyabashi
Yodoyabashi andand Honmachi
Honmachi Area
Area

Umeda
Umeda Area
Area

2.1%

0.4%

18.6%

19.9%

17.7%

46.2%
11.4%

10.5%

Over 30 years

Over 30
years

55.2％

13.6%
40 years or more
10-20 years

29.1％

30-409.0%
years
Less than 10 years

31.0%
19.6%

20-30 years
Building age unknown

Source: National Office Building Survey at End of December 2010
by Japan Real Estate Institute

In addition, the office building (NORTH GATE BUILDING) (approx.
20,000m2 (Note 1)) of OSAKA STATION CITY was opened in 2011, and
GRAND FRONT OSAKA (approx. 230,000m2 (Note 1)) will be opened in
2013.
(Note 1) Area of office spaces*The above figures represent total floor area

Buildings
Buildings inin thethe Yodoyabashi
Yodoyabashi andand Honmachi
Honmachi Area,
Area, thethe conventional
conventional businessbusiness center,
center, areare becoming
becoming notably
notably old
old

↓
↓

Shift
Shift toto thethe “Umeda“Umeda area,”
area,” which
which has
has many
many newly-built
newly-built (high-specification)(high-specification) properties,
properties, isis getting
getting accelerated
accelerated

34

4-7. Trend of Large-scale Retail Properties Development in Central Osaka
From Kyoto direction

New 44,000 m²
m²
Main directionof customer flow

Umeda

Existing
520,000 m²(Estimated by Hankyu REIT
Asset Management)

Floor
Floor area
area ofof new
new development:
development:
Approx.
Approx. 85,000
85,000 m²
m²(Retail(Retail floor
floor area
area inin new
new properties
properties between
betweenJanuary
January 20132013 andand 2015)
2015)

Equivalent
Equivalent toto 8.1%
8.1% ofof existing
existing property
propertyfloor
area
floor area
(Total(Total floor
floor area
area ofof large-scalelarge-scale retail
retailproperties
in
3
main
areas:
1,050,000
properties in 3 main areas: 1,050,000 m²)
m²)

From Kobe direction

In
In thethe Umeda
Umeda area,
area, Grand
Grand Front
Front Osaka
Osaka(retail(retail floor
floor area:
area: 44,000
44,000 m²)m²) isis scheduledscheduled
to
open
in
spring2013.
to open in spring 2013.

Shinsaibashi and Namba

New 10,000 m²
m²
Existing
310,000 m²

From Kobe direction

From Nara direction

New 30,000 m²
m²
Existing
210,000 m²

TennojiIn
In thethe Umeda
Umeda area,
area, fresh
fresh demand
demand isisexpected
expected due
due toto thethe new
new supply
supply ofofofficeoffice buildings,
buildings, hotels
hotels andand residential
residentialbuildings
buildings inin thethe area,
area, andand opening
opening ofofhigh-profile
facilities
areexpectedtohigh-profile facilities are expected toboost
boost attractivenessattractiveness andand draw
draw
customers
from
wider
areas.
customers from wider areas.
In
In orderorder toto taptap into
into thethe increasing
increasing
demands
demands ofof customers
customers inin thethe Umeda
Umeda
area,
Hankyu
REIT
plans
to
collaborate
area, Hankyu REIT plans to collaborate
withwith thethe Hankyu
Hankyu Hanshin
Hanshin Holdings
Holdings
Group
to
boost
the
attractivenessGroup to boost the attractiveness ofof itsits
retailretail properties
properties more
more effectively
effectively on
on anan
ongoingongoing basis.
basis.
HankyuREITREITAsset
AssetManagement
Management**Prepared
Created bybyHankyu
basedon various
disclosure
and otherfrompublicly
releasedmaterialmaterials
by CB Richard
information.
35
Ellis K.K. and other sources.

4-8. Trend of Office Supply in Central Osaka
New 260,000 m²
m²

Umeda
Main directionof tenant flow

Existing
3,880,000 m²(Estimated by Hankyu REIT
Asset Management)

Floor
Floor area
area ofof new
new supply:
supply:Approx.
470,000
m²
Approx. 470,000 m²(Total(Total floor
floor area
area scheduledscheduled forfor completion
completion
betweenbetween January
January 20132013 andand 2015)
2015)

Equivalent
Equivalent toto 4.1%
4.1% ofof existing
existing buildingbuildingfloor
area
floor area
(Floor(Floor area
area inin mainmain areas:11,270,000
areas:11,270,000 m²)
m²)

New 110,000 m²
m²

Nakanoshima

Yodoyabashi and Hommachi
Existing
3,420,000 m²

In
In thethe Umeda
Umeda area,
area, Grand
Grand Front
Front Osaka
Osaka(retail(retail floor
floor area:
area: 23,000
23,000 m²)m²) isis scheduledscheduledtoto openopen inin spring
spring 2013.
2013.
Centering
Centering onon thethe Umeda
Umeda and
and
Nakanoshima
Nakanoshima areas,
areas, large
large andand highhighspec
spec buildings
buildings (S(S class)class) inin strongstrong
areas
of
Osaka
will
be
continuously
areas of Osaka will be continuously
supplied.
supplied.

New 30,000 m²
m²

Promotion
Promotion ofof rejuvenation
rejuvenation inin thethe OsakaOsaka
officemarketandconcentrationofoffice market and concentration of city
city
functions.
functions.
Keyword
Keyword isis “polarization”“polarization”(companies(companies moving
moving toto Umeda
Umeda include
includemanufacturers,
manufacturers, trading
trading companies,
companies,
andand audit
audit firms).
firms).

New 70,000 m²
m²

Tennoji*Prepared by Hankyu REIT Asset Management
based on various disclosure materials and otherinformation36

5. Overview of Financial Results for the
15th Fiscal Period375-1. Financial Highlights（Unit:JPY mn）

Item

Operation period (days)

Forecast for 15th Fiscal Period①(as of Jul.13, 2013)

183

Results for 15th Fiscal Period ②(Jun .1, 2 012 to Nov. 30, 2012)

183

Change② -①―(Main factors for increase/decrease in profit)

Operating rev enues

4,727

4,736

8

Operating income

1,460

1,471

11

Ordinary income

1,026

1,045

19

Net income

1,024

1,044

19

Number of outstanding
investment units at end of
fiscal period (units)

85,40085,400―Distribution per unit (JPY)12,00012,228228

23,56923,786217

FFO per unit (JPY)①① Contract breach fine associated withtenant replacement
JPY 11 mn②② Decreased interest expenses JPY 3 mn

38

5-2. Income Statement / Cash Distribution Statement
Income Statement

Cash Distribution Statement（Uni t: JPY mn）

Item

14th Fiscal Period

15h Fiscal Peri od(Operation period:183 days)(Operation period:183 days)

Dec. 1, 2011 to May.31.2012

Jun. 1, 2012 to Nov. 30, 2012

AmountPretax net income for current period

4,772
4,754
17
3,271
2,904
275
3
16
30
7
32
1,501
2
0
2
449
379
27
38
3
1
1,054
1,054

Corporate, local and enterprise tax

1Adjustment for corporate tax, etc.

0
1,052

1. Operating revenues
Lease operating revenues
Distribution revenue of silent partnership

2. Operating expenses
Lease operating costs
Asset management remuneration
Officer remuneration
Asset consignment remuneration
Adminstrative agenc y remuneration
Auditor remuneration
Other operating expenses
Operating income
3. Non-operating revenues
Interest earned
Other non-operating revenues
4. Non-operating expenses
Interest expenses
Loan related expens e
Interest due on investment corporation bonds
Amortization of inves tment corporation bondissuance cos ts

Other expenses
Ordinary income

Net income for c urrent period
Retained earnings carried forwardfrom the previous period
Unappropriated income for current period

Percentage

AmountPercentage

100.0

4,736
4,700
35
3,264
2,892
274
3
16
31
7
38
1,471
6
0
5
432
359
30
37
3
1
1,045
1,045

100.0

68.5

31.5
0.1

9.4

22.1

68.9

(Uni t: JPY thousand)Change

-36

Item

①

ChangeAmountAmountUnappropriated income for current
period

1,052,527

1,044,317-8,209Distributions

1,052,469

1,044,271-8,198(12,324)57(12,228)
46

(-96)
-11

(Distribution per unit (JPY))-7

14th Fiscal Period 15th Fiscal Period

Retained earnings c arried f orward

Amount(Main factors of increase/decrease)
31.1
0.1

9.1

-29
3

-17

① Decrease in operating revenues*

Decreased lease income (Tennoz, HEP etc.) JPY -86 mn
Increased utilities expense income
JPY 32 mn②② Decrease in non-operating expenses
Decreased interest expenses

22.1

-8

22.0

-8

JPY -19 mn

1
22.1

0
1,052

0
1,044
0
1,044

Lease operating revenues and costs
Breakdown: Refer to page 42 and 43
Occupancy rate at end of fiscal period: 99.0%(Occupancy by end-tenants)39

5-3. Balance Sheet（Unit: JPY mn）

Item

14th F iscal Period

15th Fiscal Period(as of May. 31, 2012)(as of Nov. 30, 2012)

AmountRatio (%)

AmountChangeItem

Ratio (%) Amount14th F iscal Period

15th F iscal Period(as of May. 31, 2012)(as of Nov. 30, 2012)

AmountRatio (%)

AmountC han ge

Ratio (%) Amount

Liabilities

AssetsI Current assets total

9,629

7.7

9,781

7.8

152

I Current liabilities total

16,38313.1

11,454Currency an d demand deposit

1,669

1,676

Operating accounts payable

217

340

Currency an d demand depositin trust

7,437

7,672

Short term loans payable

6,500

6,000

Operational income recei vable26

44Long term loans p ayable(return within 1 year)

Deposit pa id

339

295

8,700

4,000

154

90

2

3

Prepaid expense
Deferred income tax assets

II Fixed assets total

115,485

92.3

115,306

92.2

-179

1. Tangible fi xed assets
Buildi ngs

2,236

2,174

Structures

300

284

Tools, furn iture and fi xtu res

1

1

Land

7,938

7,938

Buildi ngs in tr ust

33,31132,494Structures in trust

421

398

Machinery a nd equipment i n trust

196

181

Tools, furn iture and fi xtu res in trust

74

67

69,61369,613

Land in tru st
Tangibl e fixed assets total

114,09491.2

113,154

OthersIntangibl e fixed assets total

957

957

5

4

962

0.8

961

Investment securities

375

1,119

43

60

Guara ntee money d eposit
Investment, other assets total

IIITotal def erred assets
Investment corporation bondiss uance cost s

Assets total

10

185

166

Income taxes payabl e11

Accrued consumption tax

46

42

Advance received

447

475

0

0

(retur n within 1 yea r)

II Total noncurrent liabiliteies

-940

0.8

-0

274
52,362

Interest-bearingdebt
JPY 56,900 mn

417
41.8

57,269Inves tment corporation bonds

6,000

6,000

Long term loans p ayable

35,70040,900

Secur ity depo sits

1,552

1,504

Secur ity depo sits in trust

9,110

8,864

Liabilities total

90.4

45.8

4,906

Total of security
deposits/guarantees:
JPY 10,786mn

68,74654.9

68,72454.9

I Unitholders capital

55,34444.2

55,34444.2

II Total surplus

1,052

0.8

1,044

0.8

-22

JPY 5,049 mn
was allocated forproperty acquisitions

N et assets

Unappropriated i ncome for current
period

1,052

1,044

N et assets total

56,39745.1

56,38945.1-8Liabilities and net assets total

125,144100.0

125,113

100.0

-30

10

428

0.3

1,190

1.0

761

28

0.0

25

0.0

-3

100.0

-30

28
125,144

10

Accrued expenses-4,928

Secur ity depo sits

3. Investments, other assets

Long-fiscal period prepaid expenses

10

Current deposi t received

2. Intangible fixed assets
Land leasehold

Accrued dividend

9.2

25
100.0

125,11340

5-4. Financial Indicators
Item

Operation period

14th Fiscal Period

15th Fiscal Period

183

183

Remarks
14th fiscal period: Dec. 1, 2011 to May. 31, 2012
15th fiscal period: Jun. 1, 2012 to Nov. 30, 2012

0.8%

0.8%

Ordinary income / {(Total assets at beginning of period+ Total assets at end of period) /2 }

1.7%

1.7%

Calculated from duration of operation

1.9%

1.9%

Net income / {(Net assets at beginning of period + Net assets at endof period) /2 }

3.7%

3.7%

Calculated from days of operation

45.1%

45.1%

Net assets / Total assets

55.9%

55.8%

(52.0%)(51.9%)

45.5%

45.5%

5.9times

6.1times

Net Operating Income (NOI)

JPY 2,848 mn

JPY 2,794 mn

Net lease operating income + Depreciation

Funds From Operation (FFO)

JPY 2,050 mn

JPY 2,031 mn

Net income for current fiscal period + Depreciation

Return On Assets (ROA)(per annum)
Return On Equity (ROE)(per annum)
Ratio of net assets at end of period

Loan To Value ratio at end of period (LTV)
Ratio of interest-bearing debts to total assets
at end of period
Debt Service Coverage Ratio (DSCR)(Amount of interest-bearing debt + Security deposits - Matched money to security deposits)/(Total assets(*) - Matched money to security deposits)*Appraisal-value basis (Ratios in brackets are based on book value)Interest-bearing debt / Total assets
Pre-interest and pre-depreciation net income for current fiscal period /Interest expenses

41

5-5. Income and Expenditure by Property ①（Unit： JPY mn）
HEP Fi ve

Item

N um ber of operating daysof 15th fiscal per iod(4 5% of the quasi
co-o wnership of Kitano H ankyu
the tru st
Bldg.
benef iciaryinterests)

Dew Han kyu
Yam adaTakatsukiJosai SC

Nitori IbarakiKita Stor e(site)(No te 1)

Ko hnan
H iroshim a
N akanoHigashi Sto re(site)

183

183

183

183

183

NU
H otel Gracery
Tam achichayam achi

Ri chm ond
Hotel
Ham am atsu
(N ote 1)

LaLaport
KO SHIEN(site)

183

183

183

183

1,011

578

373

284

76

614

121

257

820

385

251

283

76

462

116

257

58

137

54

―

―

67

―

―

132

54

66

0

0

85

4

0

629

401

223

139

7

513

54

106

141

112

73

10

0

103

1

1

82

155

52

0

―

108

―

―

7

0

1

21

―

0

―

0

116

2

0

―

―

69

―

―

18

7

1

1

―

6

―

―

3

2

1

0

―

2

0

0

Tax and public dues

69

50

26

26

6

51

14

102

Other expenses

25

1

3

0

―

2

0

1

164

68

63

78

―

168

36

0

Lease operati ng incom e

382

177

149

144

69

101

67

150

N OI
(Lease operating income +D epreciati on)

546

246

213

223

60

69

270

103

150

65

3

4

0

―

―

―

8

0

―

―

Lease operati ng revenues total
Incom e from lease
Utilities ex pense incom e
Other incomes
Lease operati ng costs total
Property/Facil ity managem ent
fees
Utilities ex pense
Rent paid
Adv ertising and pr om otion
expenses
Repair expense
Nonl ife insurance prem ium

Depreci ation

C apital ex penditure

183(Note 1) Rent information is not disclosed as the consent of the tenant was not obtained.

42

5-5. Income and Expenditure by Property ②（Un it： JP Y m n）
S h io do m e
E as t
S id e B ld g.

Item

U e ro k u F
B ld g .

S p h e re T o w e r
T ennoz(3 3 % o f t h e
q u a si c o o w n e rsh i p o f
th e tr u stb e n e fi cia r y
in te re s ts )L A X A O sa k a

N am baH a n s h in
B u ild in g

Item

Tot al(15 propert ies)

N um be r o f op era tin g d ay s
o f 15 th fi s c al p er io d

1 83

18 3

183

1 83

183

N um be r o f op era tin g d ays
o f 15 th fi scal p er io d

L ea s e o pe ra ti ng re v e nu es tota l

3 92

13 3

316

2 54

147

L ea se o pe ra ti ng re ve nu es tota l

3 67

11 3

245

2 54

120

22

11

23

―

10

U ti liti es ex pe nse i nco m e

3 85

2

8

47

―

16

O the r i nco me s

4 19

1 95

85

189

1 61

123

P ro pe rty /F a c il ity m a na g em en t
fe es

18

22

27

1

22

U ti liti es ex pe ns e

27

10

60

―

In c om e fr om le as e
U ti liti es ex pe ns e i nc o m e
O the r i nc o m e s
L ea s e o pe ra ti ng c os ts tota l

In com e fr om le ase

L ea se o pe ra ti ng costs tota l―
4 ,7 00
3 ,8 95

2 ,8 92

P ro pe rty/Fa cil ity m a na g em en t
fe es

5 39

17

U ti liti es ex pe nse

5 14

R e nt p ai d

49

R e nt p ai d
A dv er tis in g a nd pr om oti on
e x pe n se s
R e pa ir ex p en s e

0

―

―

18

―

―

―

―

―

―

0

3

6

6

6

R e pa ir exp en se

59

N o nl ife in su ra nc e pr em iu m

1

0

0

3

0

N o nl ife in su ra nce pr em iu m

16

22

12

29

49

18

3

1

3

1

0

1 21

34

61

81

56

1 96

47

127

93

23

L ea se o pe ra ti ng in com e

1 ,8 07

N OI( Le ase op era tin g i nco m e +D ep re ciati on )2 ,7 94

T a x a nd pu bli c du es
O the r e x p en se s
D e pr ec i ati on
L ea s e o pe ra ti ng in c om e
NOI
( Le as e op era tin g i nc o m e +D ep re c iati on )C ap ital ex pe nd itur e

3 18

82

188

1 74

79

14

1

6

4

1

A dv er tisin g a nd pr om oti one xpe n se s

Ta x a nd pu bli c du es
O the r e xp en se s
D e pr eci ati on

C ap ital ex pe nd itur e

1 89

4 91
45
9 86

46

(Main capital expenditure)
Shiodome East Side Bldg.
Construction to divide the lease space on the
7th floor into three
JPY 13 mn

43

6. APPENDIX

44

6-1. Features of Hankyu REIT
Two-thirds
Two-thirds ofof investment
investment allocatedallocated toto Umeda
Umeda oror
along
along Hankyu/Hanshin
Hankyu/Hanshin Lines
Lines

Primary
Primary emphasis
emphasis on
on highly
highly competitivecompetitive
retailretail properties
properties
Retailproperties

Retailzone
50%
or more“Kansai region”:6 prefectures consisting of Osaka,
Kyoto, Hyogo, Nara, Shiga, andWakayama

Retailzone

Officezone

Zones forother uses

Zones forother uses

2.5%
Along Hankyu/Hanshin Lines

23.5%
The ratios are calculated based on the acquisition price.
Silent partnership interests are not included.

Office
25.1%

Umeda
43.7%

In Osaka City
(excl. Umeda)

Kansairegion69.6%

Mixed-use
properties

Officezone
Retailuse zone
Zones forother uses

Others0.4%

Other areas
3.5%
Tokyo
26.9%

Officeproperties

Hotel
10.7%

Urban retailproperties
42.0%

Community-based retail properties

21.7%

Retail
74.4%

The ratios are calculated based on the acquisition price.
(For mixed-use zone properties, the amount is proportionate to the rent
income and common service fees for each zone.)
Silent partnership interests are not included.

45

6-2. Portfolio List (end of 15th fiscal period) ①
As of No vem ber 30, 2012Cla ssifi
catio nCode
( Note 1)

Name

Mixed-use Properties

Of fice
Properties

Retail Properties

HEP Five

Total leasable ar ea(m 2 )(Note 3)

O ccupancy rate
(Note 3)

Total numberof tenants(Note 3)PML
(Note 4)

Date of acquisition

Location

Completion date

Buildingage( Note 2)

Kita Ward,
Osaka City

Nov. 1998

14.1

20,370.13(9,51 0.90)

100 .0%(99.6%)

1
(134)

4.6%

Feb. 1, 2005

20,79017.1%

23, 895

4.5%

Acqusition price Investment Appraisal value(JPY mn )(JPY mn)ratio

Cap rate( Note 5)

R1(K )(45% of the quasi co- ownership of
the trust beneficiary inter ests)

R2(K )

Kit ano Hankyu B ldg.

Kita Ward,
Osaka City

J un. 1985

27.5

28,194.15(18,47 7.3 5)

100 .0%(100%)

2(24)

1 0.1%

Feb. 1, 2005

7,7 40

6.4%

6,650

5.6%

R3(K )Dew Hankyu Yamada

Suita City,
Osaka Pr efecture

O ct. 2003

9.2

12,98 2.19

100.0%

28

4.5%

Feb. 1, 2005

6,930

5.7%

7, 000

5.5%

R4(K )

Takatsuki-J osai
Shopping Cent er

Takatsuki City,
Osaka Pr efecture

Apr. 2003

9.7

31,45 1.81

100.0%

1

6.1%

Nov. 15, 2005

8,6 00

7.1%

7,371

5.8%

R5(K )

Nitori Ibaraki-K ita Store(site)

Ibaraki City,
Osaka Pr efecture――

6,54 1.31

100.0%

1―

Mar. 29, 2006

1,318

1.1%

1, 414

6.5%

R6

K ohnan Hiroshima NakanoHiga shi Store (site)

Aki Ward,
Hiroshima City――

100.0%

1―

Oct. 2, 2006

2,1 70

Apr. 9, 2007

5

1.8%

1,910

6.7%

R7(K )NU chayamachi

Kita Ward,
Osaka City

Sep . 2005

7.2

4.8%

Mar. 15, 2007

19,3 00

15.9%

14,2004.8%

R8Hotel Gracery Tamachi

Minato W ar d,
T okyoSep . 2008

R9(K )

LaLaport KOSHIE N(site )

Nishinomiya City,
Hyogo Prefectur e

R10

Richmond Hotel Hamamatsu

O125,46 9.59
6 0.14
15,546.75

100 .0%1(11,44 7.6 4)(87.7%)(66)

4.2

4,943.66

100 .0%1

1 0.2%

Dec. 25, 2008

4,160

3.4%

3,860

5.4%

―

―

126,052.16

100 .0%1

6.0%

Jan. 22, 2009

7,3 50

6.1%

6,710

5.0%

Naka W ard,
Hamamatsu City

Sep . 2002

10.2

6,995.33

100 .0%1

1 3.9%

Jan. 22, 2009

2,100

1.7%

1,952

6.3%

Shiodome East Side B ldg.

Chuo W ar d,
T okyoAug . 2007

5.3

9,28 6.58

100.0%

6

4.6%

Feb. 29, 2008

19,0 25

15.7%

12,600

4.8%

M1(K)

Ueroku F B ldg.

Chuo W ar d,
Osaka City

Sep . 1993

19.2

4,61 1.82

89.9%

11

3.2%

Nov. 1, 2005

2,9 80

2.5%

2,470

6.0%

M2

(33% of the quasi co- ownership of
the trust beneficiary inter ests)

Shinagawa War d,
T okyoApr. 1993(Note 6)19.7

8,80 6.19

90.2%

22

2.7%

Oct . 2, 2007

9,4 05

7.8%

7,788

4.6%

M3(K)

LAXA O saka

Fukushima War d,
Osaka City

Feb. 1999

13.8

30,33 9.91

100.0%

1

3.4%

Jan. 22, 2009

5,1 22

4.2%

5,110

5.9%

M4(K)

Namba-Hanshin Building

Chuo W ar d,
Osaka City

Mar. 1992

20.7

9,959.01(6,45 6.88)

100 .0%（94.9%)

1
(17)

4.5%

Jan. 22, 2009

4,3 10

3.6%

2,860

5.5%

3.3%

―

121,3 06

100.0%

105,790

5.1%

S phere Tower Tennoz

To tal12.1

341,610.73

99 .6%

79(313,43 3.4 7)(99.0%)(315)

In addition to the assets shown above, we own silent partnership interests issued by Bay Leaf Funding GK, which owns trust beneficiary interestsof AEON MALL SakaiKitahanada (site), the targeted real estate under the trust.

46

6-2. Portfolio List (end of 15th fiscal period) ②(Note 1) These codes represent properties owned by Hankyu REIT classified into the following
properties and regions.
Left-side letters represent properties: “R” is for retail property, “O” is for office property, and“M” is for mixed-use property.
The numbers are assigned to properties in order of date of acquisition, and a the letter “K” inparenthesis means the property is located in the Kansai region.
(Note 2) The portfolio total is the weighted average building age by acquisition price.
(Note 3) Figures in parenthesis indicate the total leasable area for end-tenants, the occupancy rate
based on the said area, and the number of end-tenants, respectively.
For HEP Five, 45% quasi co-ownership of the trust beneficiary interests is indicated as theleasable area.
For Sphere Tower Tennoz, 33% quasi co-ownership of the trust beneficiary interests isindicated as the leasable area.
For LaLaport KOSHIEN (site), the leasable area is the total of the retail property site
(86,124.96m2) and the parking garage space (39,927.2m2).
(Note 4) PML of LaLaport KOSHIEN (site) is for the parking garage space administration building(394.88m2) .
(Note 5) The cap rate is based on the direct capitalization method using appraisal value calculations.
(Nitori Ibaraki-Kita Store (site), Kohnan Hiroshima Nakano-Higashi Store (site) and LaLaport
KOSHIEN (site), are allocated a discount rate using the DCF method.)
The portfolio total is the weighted average cap rate based on appraisal values.
(Note 6) The completion date for the office and store portions.

47

6-3. Portfolio View (end of 15th fiscal period) ①
Urban retail properties
HEP Five

NU chayamachi

Kitano Hankyu Building

Community-based retail properties
Dew Hankyu Yamada

LaLaport KOSHIEN (site)

Kohnan Hiroshima Nakano-Higashi Store (site)

Takatsuki-Josai SC

Nitori Ibaraki-Kita Store (site)48

6-3. Portfolio View (end of 15th fiscal period) ②
Hotel
LAXA Osaka

Hotel Gracery Tamachi

Richmond Hotel Hamamatsu

OfficeUeroku F Building

Namba-Hanshin Building

Shiodome East Side Building

Sphere Tower Tennoz49

6-4. Income Ratio by rent Category and Sales-Based Overage Rent System Mechanism
Income Ratio by Rent Category and Variation Factors

Overagerent
tenants

Fixedrent
tenants<Variable-rent portion>
Rent income varies inaccordance with the overallsales of primarily HEP Five
and NU chayamachi<Fixed-rent portion>
Rent income varies inaccordance with theoccupancy rates and rent
levels of primarily HEP Five
and NU chayamachi

2.9%

2.5%

2.6%

32.9%

32.7%

32.4%

97.5%

97.1%
64.2%

Actualfixed-rent
portion

97.4%
64.8%

65.0%

JPY 3.99bn
13thfiscal第13期
periodJPY 3.87bn
15thfiscal第15期
periodRent income varies inaccordance with theoccupancy rates and rent
levels of remaining properties

Total rent income

JPY 4.07bn
11th fiscal(excluding warehouse income) 第11期
periodConcept Diagram of General Sales-based Overage Rent System
Rent income
Variablerent
portionFixedrent
portionTenant sales
Point from where sales-based
variable rent is generated

50

6-5. Hankyu/Hanshin Lines and Properties Held
Properties held
outside the Kansai
regionHankyu Yamada(Tokyo)Tennoz
Shiodome
TamachiNitori Ibaraki(Other areas)
Kohnan Hiroshima
Hamamatsu
Takatsuki-Josai

HEP
NU
Kitano Hankyu
LAXA Osaka

LaLaport KOSHIEN
Ueroku F Building
Namba-Hanshin

51

6-6. Dew Hankyu Yamada and Properties in Vicinity
Osaka University
Osaka Monorail
Chugoku Expressway
Osaka Central
Circular Route

Osaka University HospitalBampaku-kinenkoen

Osaka Monorail
Yamada Sta.
Hankyu Yamada Sta.

Hankyu Senri
Line

Tsukumodai
housing estate

Dew Hankyu
YamadaAerial photograph taken from south side facing north52

6-7. LaLaport KOSHIEN (site) and Properties in Vicinity
Hanshin Koshien
Stadium

Daiei Koshien

甲子園球場

Hanshin Koshien Sta.

Hanshin Expressway
No.3 Kobe Line
阪神高速3号神戸線

Route 43
(national road)

Kidzania Koshien(opened in March 2009)

Prefectural Highway 340

Mukogawa
Women’s
University(Department ofPharmacy)

Aerial photograph taken from south side facing north53

6-8. Takatsuki-Josai Shopping Center and Properties in Vicinity

Takatsuki City Hall

Hankyu Kyoto
Line

JR Kyoto LineJR Takatsuki-shi Sta.
HankyuTakatsuki-shi Sta.

Route 171
(national road)Route 16
(prefectural road)

Takatsuki-Josai
Shopping Center

Aerial photograph taken from south side facing north54

6-9. AEON MALL SakaiKitahanada (site) and Properties in Vicinity
Osaka City
University

SubwayMidosuji Line

Osaka City
Yamato River

Nagai Park

Shinasakayama
Elementary School

Sakai City
Asakayama Municipal
Residential Buildings

Asakayama UR
Rental Apartment
Buildings

Route 28
(prefectural road)Route 187
(prefectural road)

AEON MALL Sakai
Kitahanada (site)

Subway Midosuji Line
Kitahanada Sta.
(underground)(Aerial photograph taken from south side facing north)*The above property is not included in the portfolio properties of Hankyu REIT as of the end of the 15th fiscal period.
**Hankyu REIT owns silent partnership interests in Bay Leaf Funding GK, which owns real estate trust beneficiary interest in the above property
as trust asset, and has been granted priority negotiation rights for acquisition of the above property.

55

6-10. External Growth Results (15th Fiscal Period)
Additional Acquisition of Assets (silent partnership interests)
AEON Mall SakaiKitahanada (site)(Overview of Acquisition)
Asset acquired:

Silent partnership interests with real estate trust
beneficiary interests as portfolio properties*1
Property name:
Bay Leaf Funding GK silent partnership interests
Real estate under trust: AEON MALL SakaiKitahanada (site)
Acquisition amount:
JPY 738 million(additional acquisition of 20.0% investment interest in the entire silent partnership)

Acquisition date:Seller:Acquisition funds:

June 1, 2012
Hankyu Corporation
Cash on hand(Overview(Overview ofof Property)
Property)
Location:
Location:

4-1-32,4-1-32, etc.,
etc., Higashiasakayama-cho,Higashiasakayama-cho, Kita-ku,
Kita-ku, Sakai
Sakai

Lot
Lot area:
area:

64,232.77㎡
64,232.77㎡

External appearance of AEON MALL SakaiKitahanada

・Further reinforced relationship with the sponsor group
・Secured the priority negotiation rights for the above property as a candidate to beacquired for external growth・Dividends from the silent partnership interest contributed to distribution of Hankyu REIT56

6-11. Portfolio PML and Anti-seismic Measures
As of November 30, 2012Cla ssifi
catio nCode
( Note 1)

Nam e

Loc ation

Mixed-use Properties

OfficeProperties

Retail Properties

H EP Five

PM L
Com pleti on date
(Note 4)

K ita W ard,
Os aka City

N ov. 199 8

4.6 %Kit ano H ankyu B ld g.

K ita W ard,
Os aka City

J un. 1985

10. 1%

R3 (K )Dew H ankyu Yam ada

S uita Ci ty ,Os aka Pr efec ture

O ct. 2 003

4.5 %R4 (K )

Takatsuki-J osai
Shop ping C ent er

Tak ats uki Ci ty ,Os aka Pr efec ture

Apr. 2 003

6.1 %R5 (K )

Nitori Ibaraki-K ita Store(site)

Ibarak i City,
Os aka Pr efec ture

―

―

R6

K ohnan H iroshim a N aka noHiga shi Store (site)

A ki W ard,
Hiroshim a City――

R7 (K )

N U chayam achi

K ita W ard,
Os aka City

Sep . 20 05

4.8 %

R8

Ho tel Gracery Tam achi

Mi nato W ar d,
T okyoSep . 20 08

10. 2%

R9 (K )

L aLap ort KOSH IE N
(site )

Nishinom iya City,
Hyogo P refec tur e

―

6.0 %

R 10

R ichmo nd H otel H am amatsu

Naka W ard,
Ham am ats u City

Sep . 20 02

13. 9%

O1

Shiodom e Ea st Side B ld g.

Chuo W ar d,
T okyoAug . 20 07

4.6 %M 1(K)

Ueroku F B ld g.

Chuo W ar d,
Os aka City

Sep . 19 93

3.2 %Shinagawa W ar d,
T okyoApr. 1 993(N ote 6)

2.7 %R1 (K )

(45% of the quas i co- owners hip of
the trus t beneficiary inter ests )R2 (K )

S phere Tow er Tenn oz
M2(33% of the quas i co- owners hip of
the trus t beneficiary inter ests )M 3(K)L AXA O saka

Fukus him a W ar d,
Os aka City

Feb. 199 9

3.4 %M 4(K)

Nam ba-H ansh in Building

Chuo W ar d,
Os aka City

M ar. 199 2

4.5 %To tal3.3 %●What is PML?

PML (Probable Maximum Loss) refers to the estimatedamount of the maximum loss from earthquake damage,and indicates the ratio of projected maximum physicalloss amount of a building from a probable earthquake ofmaximum magnitude (assumed to happen once every
475 years, or a 10% probability of occurring during any
50 year span) during its use (a 90% non-exceedance
probability) against the price to reacquire it.
●Portfolio PML

The total PML value for multiple buildings scattering inwide areas is always smaller than the weighted average
PML value of each building. This is called the portfolio
effect. Hankyu REIT calculates the portfolio PML bytaking into account the geographical diversity of buildings
over wide areas.
As shown in the table to the left, the portfolio PML ofHankyu REIT is 3.3%.
●Policy on earthquake insurance coverage

Hankyu REIT will decide to cover earthquake insurance inaccordance with the following standard set forth in its
management guidelines:“Hankyu REIT will investigate earthquake insurance
coverage when the PML of an individual property
exceeds 15%.”57

6-12. Investment Unit Price
Unit Price (closing price basis)（Unit: JPY thousand）（Units）

1,400

1,400

1,200

1,200

1,000

1,000

800

800

600

600

' 05/1 0/2 6

Per unit trading trends(Oct 26, 2005 - January 8, 2013)
High (closing price basis)
Low (closing price basis)

JPY 1,380,000(June 2007)
JPY 325,000(December 2011)

During 15th fiscal period(June 1, 2012 - November 30, 2012)
High (closing price basis)

400

400

200

200

JPY 413,000(November 26, 2012)
JPY 337,000(June 4, 2012)

Low (closing price basis)

0
'05/5

'05/11'06/5'06/11'07/5'07/11'08/5

Source: QUICK'08/11'09/5'09/11

Volume'10/5'10/11'11/5'11/11'12/5'12/110'13/5

Price as of January 8, 2013 (closing price basis)
JPY 421,000

Unit price

Relative Price (closing price basis)
240

（％ ）

220
200
180
160
140
120
100
80

'0 5 / 1 0 / 2 66040'0 5 / 5' 05/ 11'06/ 5'0 6 / 1 1

Source: QUICK, Tokyo Stock Exchange'0 7 / 5' 07/1 1

Hankyu REＩT

'0 8 / 5'0 8 / 1 1' 09/ 5

TSE REIT Index'0 9 / 1 1'1 0 / 5'1 0 / 1 1

Nikkei Stock Average'11/5'1 1 / 1 1'1 2 / 5' 12/ 11

'1 3 / 558

6-13. Analysis of Unitholder Attributes at End of 15th Fiscal Period
Unitholder Composition

Top 10 Unitholders

Number of
Ratio to number
Number of
Ratio to ownership investment units heldof investment units
unitholders (persons)( units)

Ownership by category
Financial institutions(excluding trust banks)

61

0.63%

16,24519.02%

Trust banks

9

0.09%

20,41823.91%

9,248

96.23%

29,38334.41%

Other organizations

200

2.08%

11,644

13.63%

Foreign organizations, etc.

92

0.96%

7,710

9.03%

9,610

100%

85,400100%

Individuals, etc.

Total

47.27%

13.39%

43.48% 44.25%

27.24% 28.39%

22.27%

36.46% 33.83% 37.17% 35.81% 38.22% 39.22%

33.60%

33.96%

32.53% 32.70% 29.02%

7.78% 8.11%
As of end of
1st period

26.31% 27.56%

21.38% 23.20% 24.78%

26.32%

23.46% 28.52%

23.77%

32.07%

19.02%

As of end of As of end of
2nd period
3rd period

As of end of
4th period

As of end of As of end of
5th period
6th period

Foreign organizations, etc.

As of end of
7th period

Other organizations

As of end of
8th period

As of end of
9th period

As of end of
10th period

Individuals, etc.

As of end of
11th period

As of end of
12th period

Trust banks

Ownership

Japan Trustee Services Bank, Ltd.
(Trust account)

13,10915.35%The Senshu Ikeda Bank, Ltd.

4,150

4.86%

Hankyu Corporation

3,500

4.10%

3,232

3.78%

2,258

2.64%

Nomura Bank (Luxembourg) S.A.

2,051

2.40%

Shikoku Railway Company

1,768

2.07%

Sumitomo Mitsui Banking Corporation

1,332

1.56%

1,221

1.43%

893

1.05%

Total investment

33,51439.24%

Number of outstanding units

85,400100%

The Nomura Trust and Banking Co., Ltd.
(Investment accounts)
Trust & Custody Services Bank, Ltd.
(Securities investment trust account)

23.91%

34.41%

9.63% 13.46% 13.44% 17.05% 18.44%
7.33% 8.62%
11.86% 12.69% 12.78% 13.63%
8.23%
7.37%
11.33%
9.12% 9.78% 11.22% 11.31%
12.98% 10.14%
8.62% 5.32% 4.55% 4.47% 4.83% 4.61% 9.01% 7.18% 8.72% 9.03%
8.82%

13.38% 11.16%
9.29% 7.80%

23.71%

25.95% 25.30% 22.67%

29.72%

Number of units
held (units)

The Master Trust Bank of Japan, Ltd.
(Trust account)
Gibraltar Life Insurance co., Ltd（General Account JREIT）

Ratio of Units by Unitholder Category
34.34% 31.72%

Unitholder nameA s of end of
13th period

As of end of
14th period

As of end of
15th period

Financial institutions(excluding trust banks)

The trend at Hankyu REIT in
recent years is the gradualincrease in the percentage ofindividuals among its
unitholders.
596-14. IR Activities for Individuals and Other Investors
Results of IR and briefing activities forindividuals in the 15th fiscal period

Report on the results of the questionnaire to investors in the 14th fiscal period

Date held
Paticipating event
Jun. 2012 J-REIT Festa 2012 (Tokyo)

Hankyu REIT conducted a postcard-style questionnaire to investors on theregistrar at the end of the 14th fiscal period (May 31, 2012). Calendars withthemes such as Takarazuka Revue and Hanshin Tigers, or a pair of tickets for the
HEP FIVE Ferris wheel were sent to 250 selected respondents.

Jul. 2012 J-REITseminar for individual investors (Fukuoka)

Hankyu REIT will continue to value a management style that listens to its investors.

Aug. 2012 IR briefing for overseas investors (Hong- Kong)
Seminar for individual investors sponsored by aAug. 2012
securities firm (Osaka)
Briefing session of financial results (General
Aug. 2012
Unitholders’ Meeting, Osaka)
Sep. 2012 J-REIT seminar for individual investors (Nagoya)Sep. 2012 J-REIT seminar for individual investors (Sapporo)Oct. 2012 J-REIT Forum (Tokyo)●Basic data
Number of responses Response rate
1,575

75% by male and 24% by female(1% no answer)
29 or

●Age

younger
1.4%

No answer,
2.3%

Oct. 2012 J-REIT Autumn Fair 2012 (by ARES and TSE)
Seminar for individual investors sponsored by a
Nov. 2012
securities firm (Tokyo)

Hankyu REIT believes that expansion of theunitholder base, including individual investors,
should contribute to the stability of the investment
unit prices and the development of the J-REIT
industry as a whole. Based on this thinking,Hankyu REIT continued to implement proactive IR
activities in the 15th fiscal period.
Going forward, Hankyu REIT is committed to
conducting proactive IR activities in order to berecognized and valued by a wide variety ofunitholders.

18.0%

Male/female ratio

30's 6.0%

70's and
older
33.3%

40's
14.0%
50's ,
14.3%

60's
28.8%

●Factors for deciding investment subjects ●Information sources on the Internet(select up to three)(select up to three)
Quality of portfolio properties
Size of portfolio properties
Distribution yield

Tokyo Stock Exchange website
Websites of respective securities firms

Expectation for higher investment
unit price
Future growth strategy/future
prospect
Sponsor credibility

Websites of respective investment vehicles

Recommendation by security firms

Websites operated by investment advisors,
analysts, etc.

Evaluation by analysts, etc.
Financial position
OthersPortal sites of Yahoo! Finance, etc.
Message websites such as online message
boardsName of the website
Others60

6-15. Organization of Hankyu REIT Asset Management, Inc.
(As of November 30, 2012)

Corporate Data

General meeting ofshareholders
Trade nameHankyu REIT Asset Management, Inc.

Headquarters

19-19, Chayamachi, Kita-ku, Osaka
530-0013, Japan

EstablishedMarch 15, 2004

Paid-in capital

JPY 300 mn

Shareholder

Hankyu Corporation (100%)

Number of
employees

21

Auditors
Board of Directors

President &Representative Director

Internal Audit Department
Compliance Committee

Investment Management
Committee

Executive
officers

President &Representative Director

Yoshiaki Shiraki

Director

Toshinori Shoji

Director

Yasuki Fukui

Corporate Auditor (parttime)
Corporate Auditor (parttime)Compliance Department

Toru Ono
Ken Kitano

Financial instruments trading(investment management business)

Investment
Management
Department 1

Investment
Management
Department 2

Corporate
Planning
Department

Corporate
Administrationand Supervision
Department

Principal
businesses Financial product trader:
Director-General of the Kinki Finance
Bureau Ministry of Finance (Kinsho) No. 44
 Real Estate Transaction License:
The Governor of Osaka Prefecture (2) No. 50641
 Approval of discretionary dealing trustee etc.:
No.23 by Minister of land, infrastructure,transportation and tourism

61

6-16. Compliance and Internal Audit Systems of Hankyu REIT Asset Management, Inc.
Systematically ensure multiple checking functions.
Focus on promoting a compliance-conscious corporate
culture.
Constituent members
Directors, Corporate Auditors

Implementation
Implementation

Decision criteria
A majority of directors in attendance, andapproval of a majority of the attending directors
are required.

Board
Board ofof Directors
Directors

President
President && Representative
Representative Director
Director

Constituent members
Chairman: Compliance Officer
Committee members: President & Representative
Director, full-time Directors and outside experts
Observers: auditors and other persons recommended by
the Chairman and approved by the Committee (notparticipating in resolutions)

Compliance System
・ Achieve comprehensive compliance by establishinga Compliance Department and a Compliance
Officer・ The Compliance Committee, including outside
experts, deliberates on conflicts of interest
transactions with interested parties
・ The Compliance Officer attends the Investment
Committee Meeting and checks compliance issues
・ Appointed a person to be in charge of efforts toprevent improper requests and the exclusion ofanti-social forces

Internal Audit System

Decision criteria

Compliance
Compliance Committee
Committee

Approval of all of the attending committee
members is required under the condition where
3/4 or more of them have attended including theCompliance Officer and two outside experts.

Constituent members
Investment
Investment Management
Management Committee
Committee

Proposals
Proposals by
by Departments
Departments

Chairman: President & Representative Director
Vice chairman: Full-time director designated by thechairmanMembers: full-time directors and equivalent directors(excluding the Compliance Officer), general managers ofrespective departments (other than those who are full-time
directors, equivalent directors or the Compliance Officer)

Decision criteria
Approval of all of the attending committee
members is required under the condition where
3/4 or more of them including the chairman andvice chairman are in attendance together with theCompliance Officer.

・Implemented PDCA cycle by systematically
implementing the internal audit system every fiscal
year based on the annual internal auditing plan
・Utilize external consulting entity to secure
independence of internal audit and obtain a highly
effective internal audit
・Introduced semi-full-time Corporate Auditor systemand strengthened auditing functions(Independent system of the Hankyu Corporation andthe group companies. Recognized as part-time
Corporate Auditor under the Companies Act.)・Established the internal control system andstrengthened check and balance functions as aconsolidated subsidiary of Hankyu Hanshin
Holdings, Inc.

62

6-17. Company Structure of Hankyu REIT
( As of November 30, 2012)(Note) In preparation for the event that the number of Supervisory Directors is less than that stipulated in laws and regulations, Toshinori
Shoji was elected as alternate Executive Director and Motofumi Suzuki was elected as alternate Supervisory Director at theGeneral Unitholders’ Meeting held on August 29, 2012.

63