Creating peace of mind through honest and committed management.

December 17, 2012

FINANCIAL REPORT FOR
THE FISCAL PERIOD ENDING OCTOBER 2012
(May 1, 2012 – October 31, 2012)
Ichigo Real Estate Investment Corporation (“Ichigo REIT,” Representative: Yoshihiro Takatsuka, Executive Director,
URL: www.ichigo-reit.co.jp/english) is listed on the Tokyo Stock Exchange with the securities code 8975.
Asset Management Company: Ichigo Real Estate Investment Advisors Co., Ltd.
Representative:
Wataru Orii, President & Representative Statutory Executive Officer
Inquiries:
Masanori Kubota, Statutory Executive Officer (Finance, Accounting)Tel. +81-3-3502-4891
Submission Date for Securities Report:
January 29, 2013 (expected)
Start Date for Dividend Payments:
January 22, 2013 (expected)
Supplement Material to Financial and Business Results: Yes
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1.

Financial Results for the Fiscal Period ending October 2012
(Monetary amounts are rounded down to the nearest million yen)

(1) Earnings(million yen; period-on-period change)

Fiscal Period
ending October 2012
Fiscal Period
ending April 2012

Fiscal Period
ending October 2012
Fiscal Period
ending April 2012

Operating
Revenue

ChangeOperating
IncomeChangeOrdinary
IncomeChangeNet
IncomeChange

4,320

1.1%

1,866

21.6%

663

26.0%

(526)

―

4,273

442.4%

1,534

281.6%

526

118.5%

17,089―Net Income per Unit
(yen)

Ratio of Net Income
to Equity

Ratio of Ordinary
Incometo Total Assets

Ratio of Ordinary
Incometo Operating Revenue(624)(1.0%)

0.6%

15.4%

20,275

50.4%

0.8%

12.3%

(2) Dividends
Dividend per Unit

Fiscal Period
ending October 2012
Fiscal Period
ending April 2012

(Note)(not including
dividends in excessof earnings)

Total
Dividends

Dividend per Unit in
Excess of Earnings

Total Dividends in
Excess of Earnings

PayoutRatio

Ratio of
Dividends to
Net Assets(yen)(million yen)

(yen)(million yen)

(%)

(%)

1,387

1,168

0

0

―

2.3

1,219

1,027

0

0

6.0

3.0

The dividend for the April 2012 period is the total amount of retained earnings less negative goodwill of
16,562 million yen and a dividend reserve of 501 million yen. The dividend for the October 2012 period is
the total amount of retained earnings plus a dividend reserve reversal of 1,695 million yen.

(3) Assets and Equity

Fiscal Period
ending October 2012
Fiscal Period
ending April 2012

Total Assets(million yen)

Net Assets(million yen)

Equity Ratio(%)

Net Assets per Unit(yen)

114,980

51,03044.4

60,547

115,226

52,58445.6

62,390Cash Flow fromOperating Activities

Cash Flow from
Investment Activities

Cash Flow from
Financing Activities(million yen)(million yen)(million yen)

1,847

(2,549)

396

9,323

4,334

(490)

(3,229)9,628(4) Cash Flow

Fiscal Period
ending October 2012
Fiscal Period
ending April 2012

2.

Cash and Cash
Equivalents at End of the
Period(million yen)

Earnings Forecasts for the Fiscal Periods ending April 2013
(million yen; period-on-period change)

Fiscal Period
ending April 2013

Operating
Revenue
4,118

ChangeOperating
Income(4.7%)

1,955

ChangeOrdinary
IncomeChangeNet
IncomeChange

4.8%

1,069

61.1%

1,069

―
(yen)

Dividend per Unit
(not including dividends in excess of earnings)

Fiscal Period
ending April 2013

(Note 1)
(Note 2)
(Note 3)

1,330

0

The forecast Net Income per unit is 1,268 yen for the April 2013 period.
The dividend for the April 2013 period is scheduled to include dividend reserve of 55 million yen.
The acceleration of Ichigo’s growth strategy is introducing some uncertainty in forward earnings, so forthe moment Ichigo REIT is releasing an earnings forecast for the Fiscal Period ending April 2013 only.
The earnings forecast for the fiscal period ending October 2013 will be announced as soon as it isavailable. As appropriate, going forward Ichigo REIT expects to return to issuing two forward fiscal
period earnings forecasts.

(Reference)3.

Dividend per Unit in Excess of Earnings

The Fiscal Period ending October 2012 runs from May 1, 2012 to October 31, 2012.
The Fiscal Period ending April 2013 runs from November 1, 2012 to April 30, 2013.
The Fiscal Period ending October 2013 runs from May 1, 2013 to October 31, 2013.

Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement(i) Changes accompanying Amendments to Accounting Standards:(ii) Changes other than (i):(iii) Changes in Accounting Estimates:(iv) Retrospective Restatement:

No
No
No
No

(2) Number of Investment Units Issued and Outstanding(i) The number of investment units issued and outstanding (including treasury investment units) was
842,823 units at the end of the April 2012 period and the October 2012 period.
2

(ii) The number of treasury investment units was 0 units at the end of the April 2012 period and theOctober 2012 period.

Completion Status of Auditing ProceduresThis document is not subject to the auditing requirements set forth in the Financial Instruments and Exchange
Law of Japan. The auditing procedures in accordance with those requirements have not been completed as of thedate of the publication of this document.
Appropriate Use of Performance Forecasts and Other Matters of Special Note
The forecasts presented above are current figures based on certain preconditions. Accordingly, the actual
operating revenue, operating income, ordinary income, net income, dividend per unit and dividend per unit inexcess of earnings may vary due to changes in circumstances. Moreover, these forecasts should not be
construed as a guarantee of such performance or results.
For details on the preconditions, please refer to the “Preconditions for Earnings Forecasts of the Fiscal Periods
ending April 2013” on pages 4-5.
This English notice is a translation of the original Japanese notice and is provided solely for informational
purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shallprevail.

3

Preconditions for Earnings Forecasts of the Fiscal Periods ending April 2013
Item

Preconditions

Periods

The Fiscal Period ending April 2013: November 1, 2012 – April 30, 2013 (181 days)

Portfolio Assets

 67 properties as of October 31, 2012. Ichigo REIT sold the COI Niigata Building asset on November
15, 2012.
 The total number of portfolio assets may change due to acquisition or sale of properties.

Number ofInvestment Units

 842,823 units, the current issued amount.

Operating Revenue Rent revenue is calculated conservatively based on lease contracts that are in effect as of October 31,
2012, while taking into consideration such factors as historical rents, the competitiveness of theproperties and market conditions.
 The anticipated portfolio occupancy is 94.8% at the end of the April 2013 period.

Operating Expenses

 Among expenses related to rental activity, which are Ichigo REIT’s principal operating expenses, thoseother than depreciation are calculated based on historical data, while taking into consideration variable
expenses.
 The anticipated amount of property tax and city planning tax is 308 million yen for the April 2013
period.
 The amount for building maintenance and repair expenses is estimated to be 106 million yen for the
April 2013 period. However, expenses for each period could differ significantly from these estimatedamounts for various reasons due to the irregularity of maintenance and repair expenses, costs due to
unexpected building damage, etc., and year-to-year changes in costs.
 Service provider expenses including property management fees, etc. are estimated to be 380 million
yen for the April 2013 period.
 Depreciation has been calculated using the straight line method. For the existing 67 properties,
depreciation is calculated by including the depreciation for future additional capital expenditures in theamortization amount. Depreciation of 511 million yen has been anticipated for the April 2013 period.
 Capital loss incurred by sale of COI Niigata Building is booked as loss for the October 2012 period,
and thus estimated to have no impact for the forecasts of the April 2013 period.

Non-operating
Expenses Interest expenses of 642 million yen are anticipated for the April 2013 period.
 Borrowing-related expenses of 247 million yen are anticipated for the April 2013 period.

Borrowings

 Ichigo REIT’s balance of loans payable stands at 57,679 million yen as of October 31, 2012.
 1,400 million yen in a loan payable to The Kagawa Bank, Ltd. and 2,880 million yen in a loan payable
to The Tokyo Star Bank, Limited were matured on November 30, 2012 and extended the maturity date.
 3,800 million yen in a loan payable to The Gibraltar Life Insurance Co., Ltd. will mature during theApril 2013 period. Ichigo REIT assumes refinancing of these loans at the same amount.

Dividend per Unit Dividends (dividend per unit) are based on the assumption that distribution will comply with thedividend distribution policy stipulated in Ichigo REIT’s Articles of Incorporation.
 Dividend for the April 2013 period is assumed to be 1,124 million yen, which is the total amount ofretained earnings of 1,069 million yen plus a dividend reserve of 55 million yen.
 The amount of the dividend per unit is subject to change due to factors such as changes in rent revenue
associated with changes in tenants, other changes in properties, the occurrence of unexpectedmaintenance and repair costs and other expenses, fluctuations in interest rates, and the issuance ofadditional investment units.

4

Dividend in Excess of
Earnings per Unit

 Ichigo REIT does not plan on making any dividend distribution in excess of earnings per unit orretained earnings.

Other The performance forecasts are based on the assumption that revisions impacting the forecast figures
above will not be made to laws and ordinances, the tax system, accounting standards, listing rules,
rules of the Investment Trusts Association, Japan, etc.
 The performance forecasts are also based on the assumption that there will be no unexpected materialchange in general economic trends, real estate market conditions, etc.

5

1. Financial Statements(1) Balance Sheet(Thousand yen)
Fiscal Period
ending April 2012(as of April 30, 2012)

Fiscal Period
ending October 2012(as of October 31, 2012)

AssetsCurrent assets
Cash and deposits

4,307,181

4,391,631

Cash and deposits in trust

5,331,418

4,946,188

Operating accounts receivable

14,912

12,738Prepaid expenses

397,399

410,744―

108,851

Deposit paid

638,096

538,843

Other

15,1695,330

10,704,176

10,414,328

Consumption taxes receivable

Total current assets
Noncurrent assets
Property, plant, and equipment
Buildings

8,867,457

8,718,772

Accumulated depreciation(150,697)(286,933)

Buildings, net

8,716,759

8,431,838

40,07841,535

Accumulated depreciation(2,752)(5,087)Structures, net

37,32636,447Structures

Machinery and equipment

247,588249,890

Accumulated depreciation(9,998)(20,019)

Structures, net

237,590229,870

16,55728,668

Accumulated depreciation(2,489)(4,941)

Fixtures, net

14,06823,727

20,944,358

19,925,346

Fixtures

Land
Construction in progress

1,228

861

22,424,523

23,001,545

Accumulated depreciation(1,228,866)(1,556,258)

Buildings in trust, net

21,195,656

21,445,287

Buildings in trust

Structures in trust
Accumulated depreciation
Structures in trust, net

47,127

56,848(7,922)(9,072)

39,20547,775

Machinery and equipment in trust

150,649

172,636

Accumulated depreciation(22,316)(33,117)

Machinery and equipment in trust, net

128,333

139,518

626,779

638,626

Accumulated depreciation(129,025)(144,175)

Fixtures in trust, net

497,754494,451

52,332,659

53,390,733

3,800

2,721

104,148,742

104,168,580

Fixtures in trust

Land in trust
Construction in progress in trust
Total property, plant, and equipment

6

(Thousand yen)
Fiscal Period
ending April 2012(as of April 30, 2012)

Fiscal Period
ending October 2012(as of October 31, 2012)

Investments and other assets
Investment securities

20,014―

Tenant leasehold and security deposits

25,227

15,227Long-term prepaid expenses

327,977

382,582

Total investments and other assets

373,219397,809104,521,961

104,566,390

115,226,138

114,980,718

270,422
21,060,384
50,972
254,493
168,957
605
102,229594,868
11,80322,514,736

302,841
8,232,500
50,972
242,389
127,637605
27,880624,332
15,9909,625,147

30,460,000
4,685,313
1,962,220
3,012,573
7,052
40,127,159
62,641,896

46,536,500
2,859,827
1,882,897
3,038,728
7,085
54,325,037
63,950,185

14,928,800

14,928,800

20,566,420―
17,089,021
37,655,442
52,584,242
52,584,242
115,226,138

20,566,420
16,061,353(526,040)
36,101,732
51,030,532
51,030,532
114,980,718

Total noncurrent assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Current portion of long-term loans payable in trust
Accounts payable – others
Accrued expenses
Income taxes payable, etc.
Accrued consumption taxes, etc.
Advances received
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Long-term loans payable in trust
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations
Total noncurrent liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Dividend reserve
Unappropriated retained earnings /loss
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

7

(2) Income Statement(Thousand yen)
Fiscal Period
ending April 2012
(From November 1, 2011
to April 30, 2012)

Fiscal Period
ending October 2012
(From May 1, 2012
to October 31, 2012)

Operating revenue
Rent revenue – real estate

3,921,370

3,777,902

Other lease business revenue

351,941

542,243

Dividend income from investment in TK equity
Total operating revenue

14

631

4,273,326

4,320,777

Operating expenses
Expenses related to rent business

1,776,731

1,790,551

Loss on sales of real estate464,210

214,468

Asset management fee

367,377

341,854

Asset custody fee

9,913

9,732

Administrative service fees

28,031

28,827

Directors’ compensations

10,800

9,675

Other operating expenses

81,93959,311

Total operating expenses

2,739,003

2,454,421

1,534,323

1,866,355

Operating income
Non-operating income
Interest income

933

1,520

Reversal of distribution payable

4,205

1,058

Insurance Income

1,524

98

Differences in consumption tax―

25,083

Other

300

2,083

6,963

29,844

Interest expenses

760,523

669,657

Borrowing related expenses

254,107562,64348

112

1,014,679

1,232,413

526,608

663,786

16,562,405

―

980

―

16,563,386――

1,189,489

Total non-operating income
Non-operating expenses

Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on negative goodwill
Other
Total extraordinary income
Extraordinary loss
Impairment loss―

1,189,489

17,089,994(525,702)

Income taxes – current

605

605

Income taxes – deferred

384―

Total extraordinary losses
Income (losses) before income taxes

Total income taxes

989

605

Net income (losses)

17,089,005(526,307)

Retained earnings brought forward
Unappropriated retained earnings/loss

8

16

267

17,089,021(526,040)

(3) Statement of Unitholders’ Equity(Thousand yen)
Fiscal Period
ending October 2012
(From May 1, 2012
to October 31, 2012)

Fiscal Period
ending April 2012
(From November 1, 2011
to April 30, 2012)
Unitholders’ equity
Unitholders’ capital
Balance as restated

14,928,800

14,928,800

Changes during the period――

14,928,800

14,928,800―

20,566,420

Increase by merger

20,566,420―

Total changes during the period

20,566,420―

20,566,420

20,566,420――

Provision of dividend reserve―

16,061,353

Total changes during the period―

16,061,353―

16,061,353

236,110

17,089,021

Total changes during the period
Balance at end of the period
SurplusCapital surplus
Balance as restated
Changes during the period

Balance at end of the period
Dividend reserve
Balance as restated
Changes during the period

Balance at end of the period
Unappropriated retained earnings/loss
Balance as restated
Changes during the period―(16,061,353)

Dividends from surplus(236,094)(1,027,401)

Net income (losses)

17,089,005(526,307)

Total changes during the period

16,852,911(17,615,062)

17,089,021(526,040)

236,11037,655,442

20,566,420―

Provision of dividend reserve

Balance at end of the period
Total surplus
Balance as restated
Changes during the period
Increase by merger――

Dividends from surplus(236,094)(1,027,401)

Net income (losses)

17,089,005(526,307)

Total changes during the period

37,419,331(1,553,709)

37,655,442

36,101,732

15,164,910

52,584,242

Provision of dividend reserve

Balance at end of the period
Total unitholders’ equity
Balance as restated
Changes during the period
Increase by merger

20,566,420―

Dividends from surplus(236,094)(1,027,401)

Net income (losses)

17,089,005(526,307)

Total changes during the period

37,419,331(1,553,709)

52,584,242

51,030,532

15,164,910

52,584,242

Balance at end of the period
Total net assets
Balance as restated
Changes during the period
Increase by merger

20,566,420―

Dividends from surplus(236,094)(1,027,401)

Net income (losses)

17,089,005(526,307)

Total changes during the period

37,419,331(1,553,709)

52,584,242

51,030,532

Balance at end of the period9(4) Cash Flow Statement(Thousand yen)
Fiscal Period
ending October 2012
(From May 1, 2012
to October 31, 2012)

Fiscal Period
ending April 2012
(From November 1, 2011
to April 30, 2012)
Cash flows from operating activities
Income (losses) before income taxes
Depreciation and amortization
Gain on negative goodwill
Impairment loss

17,089,994(525,702)

514,206

510,874(16,562,405)――

1,189,489

Interest income(933)(1,520)Interest expenses

760,523

669,657

Decrease (increase) in operating accounts receivable

88,1662,173

Decrease (increase) in consumption taxes receivable―(108,851)

Decrease (increase) in prepaid expenses

57,834(13,345)

Decrease (increase) in long-term advance charges

186,520(54,605)

Decrease (increase) in deposit paid

(88,671)

99,252

Increase (decrease) in accrued consumption taxes

69,977(74,349)

Increase (decrease) in operating accounts payable(65,860)

44,250

Increase (decrease) in accounts payable – others(60,704)(12,104)

Increase (decrease) in advances received(26,659)

29,464

Decrease by sale of property, plant, and equipment

2,798,690

785,113

Decrease by sale of property, plant, and equipment in trust

365,029―

Amortization of security deposit(2,182)(1,370)

Other, net(16,151)

19,291

Subtotal

5,107,372

2,557,718

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

933

1,520

(768,174)(710,977)(5,918)(605)

4,334,213

1,847,656

Cash flows from investment activities
Purchase of property, plant, and equipment(54,865)(47,084)

Purchase of property, plant, and equipment in trust(119,175)(2,470,471)

Increase in tenant leasehold and security deposits

26,683

26,370Decrease in tenant leasehold and security deposits(60,770)(105,482)

Increase in tenant leasehold and security deposits in trust

219,649

193,808

Decrease in tenant leasehold and security deposits in trust(482,199)(166,284)

Purchase of investment securities(20,000)―

Sale of investment securities
Net cash provided by (used in) investment activities―

20,000(490,677)(2,549,143)(300,000)―

Cash flows from financing activities
Decrease in short-term loans payable
Increase in long-term loans payable―

16,658,000

Decrease in long-term loans payable(1,850,615)(13,409,384)

Decrease in long-term loans payable in trust(275,486)(1,825,486)

Dividends paid

(803,655)(1,026,865)(3,229,756)

396,263

Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents

613,779(305,223)

Cash and cash equivalents at beginning of the period

1,901,531

9,628,561

Increase in cash and cash equivalents by merger

7,113,250―

Cash and cash equivalents at end of the period

9,628,561

9,323,338

10