Presentation Material
for the 1st Fiscal Period Ended August 2018
Securities Code: 3488

Contents

Ⅰ. IPO Summary

Ⅵ. Basic Policy of the Investment Corporation

Ⅱ. Characteristics and Advantage of The Investment
Corporation

1. Investment policy of the investment corporation

28

Ⅲ. Overview of the financial results for the 1st fiscal period
and earnings forecast for the 2nd and 3rd fiscal periods

2. Evaluation of portfolio

296

3. Advantage by asset type

30

2018

8

4. Years of engagement and trend of average occupancy rate31

3. Earnings forecast for the 2nd fiscal period ending February 2019 and3rd fiscal period ending August 20199

5. Portfolio List

32

4. Distribution forecast for the 2nd and 3rd fiscal periods

10

6. Portfolio map

34

1. Financial highlights for the 1st fiscal period ended August 2018
2. Overview of the financial results for the 1st fiscal period ended AugustⅦ. Market Analysis

Ⅳ. Management highlights for the 1st fiscal period
1. Management results

12

Ⅴ. Future Growth Strategy

1. Accumulation and utilization of original data by XYMAX Real Estate Institute36

2. Scarcity of small- and medium-scale office buildings37

1. Steady growth with the three strengths

18

3. Trend of contract rents by office building scale38

2. Internal growth19

4. Trend of tenant demand realized from the distribution of office rent

39

3. External Growth23

5. Trend of tenant demand realized from the location of office buildings

40

4. Financial management and LTV control

25

6. Growth strategy by grasping the trend of building owners at an early stage

41

Appendix

2

IPO Summary

Newly listed on February 15, 2018
Overview of IPO

Change in investment unit price*2

As of August 31(yen)

Approval date of listing

Closing price
114,600yen
As of September 28

118,000

January 11, 2018

116,000
114,000

Date of listing

112,000

February 15, 2018

110,000

Number of investment
units issued

Number of units issued:
Over allotment:

209,905 units
10,495 units

108,000

104,000

Total number ofinvestment units issued
and outstanding

223,400 units

Issue price

105,000 yen

Issue price 105,000yen

106,000
2/15 3/2 3/17

XYR

Portfolio size

23.14 billion yen

12 properties 33.04 billion yen(based on acquisition price)

Tokyo Stock Exchange REIT Index

Market response CAPITAL EYEOffering amount4/1 4/16 5/1 5/16 5/31 6/15 6/30 7/15 7/30 8/14 8/29 9/13 9/28 10/13

CAPITAL EYE NEWS (February 13, 2018)

Allocation of investment units is 75 percent to general individual investors and 25 percent to institutional
investors. The ratio of allocation to application is 1:4 for general individual investors, 1:20 for institutional
investors and 1:8 overall. Presentations concerning the IPO were conducted at approximately 50 locations
from January 15 to 24. The characteristics of XYMAX REIT are a sense of inexpensiveness and the acquisition
price of properties. The total portfolio value is 33 billion yen, which is 20 percent less than the appraisal value(41.2 billion yen) prior to acquisition.

 Thomson Reuters DEALWATCH (February 13, 2018)

Asset managementcompany

SponsorXYMAX REAL ESTATE INVESTMENTADVISORS Corporation

XYMAX Corporation⎜XYMAX REIT, Stable management utilizing track records of operational management andbrokerage service⎜
We will invest in office buildings, retail properties, hotels, etc. We will utilize the management know-how andnetwork of XYMAX group which has a solid contracting record in real estate management field and is engaged
in real estate brokerage. XYMAX Group, the sponsor, has a real estate management record encompassing
800 buildings with a total floor area of approximately 3.4 million tsubo as of the end of March 2017. It also
has a record in PM entrustment from J-REITs and conducts “scientific building management based on
databases” (XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation) including rent, building
maintenance, repair and utility expense gained from such property management.

3

Characteristics and Advantage of The Investment Corporation“3 FORCES” of The Investment Corporation
Aiming to realize strong growth from a long-term perspective by utilizing the remarkable 3 FORCES generated from the business baseof XYMAX GroupWe will accurately assess the stability and future prospect of profitability of each property by utilizing the real estate
management*3 expertise and know-how
Acquired the assets at an inexpensive price level in the IPO whose earnings stability were assessed with the long-term operation track records

Construction of portfolio
utilizing Assessment
Capability

 Ratio of office buildings in the 8 Wards of Tokyo*4 85.5% , favorable location which is a 3.0 minute walk on average Average engagement period*5 by XYMAX Group 12.5 years
 Appraisal NOI yield 6.0%, unrealized gain as of the end of the 1st fiscal period 8.3 billion yen*6 or 24.8%*7

We will maximally utilize the real estate management capability of XYMAX Group boasting thehighest record in Japan
Internal growth utilizing
Management Capability

 Real estate management record: 799 buildings, total floor area: approximately 3.5 million tsubos Human resource with 1,963 people engaged in real estate management, 82 in leasing and 72 in corporate sales(as of September 1, 2018)
 Value enhancement and risk management leading know-how to the improvement of NOI

We will utilize the direct relation with real estate owners based on the track records of XYMAX
GroupExternal growth utilizing
Sourcing Capability

 Relationship with owners of real estate of XYMAX Group: 244 companies
 XYMAX Groupʼs track records in real estate sales and brokerage: 231 buildings, approximately 434.2 billion yen(accumulated total from April 1, 2010 to March 31, 2018)
 XYMAX Groupʼs track records in real estate sales and brokerage cover various types of assets throughout Japan

Stable financial base to realize strong growth（LTV（based on total assets）：33.0％）
4Overview of Financial Results for the 1st Fiscal Period andEarnings Forecasts for the 2nd and 3rd Fiscal Periods

Overview of Financial Results for the 1st Fiscal Period and Earnings Forecasts for the 2nd and 3rd Fiscal Periods

Financial highlights for the 1st fiscal period ended August 2018
Financial highlights
Distribution per unit

NAV per unit*9

LTV*102,610 yen

138,262 yen

33.0%(+301 yen from forecast*8)(Net assets per unit 101,100 yen)(Appraisal LTV 27.0%)

Overview of portfolio
Portfolio assets at theend of period

Appraisal NOI uponacquisition/acquisition price

Estimated value at theend of period*12

12 properties
33.04 billion yen*11

6.0 %41.82 billion yen

Ratio by asset type*14
8.2%
8.2%
13.3%

Ratio by geographical area*14■Office■Retail■Hotel■Main asset■Other

21.5%
21.5%
43.0%

Occupancy rate at theend of period*13

Unrealized gains

8.3 billion yen

99.0%(Unrealized gain ratio 24.8%)

Ratio by year engaged by XYMAX G*18

■5 wards of Tokyo*15■23 wards of Tokyo excl. 5 wards■Tokyo economy*16■designated cities■Tokyo metropolitan area*17■Other8.2%
6.1% 8.2%
25.0%

Average
12.5yrs.

24.2%
54.3%
91.8%

32.1% 3.5%
78.5%

2.4%

■less than 4 yrs.
■4〜5 yrs.
■5〜10 yrs.
■10〜15 yrs.
■15〜20 yrs.
■ over 20 yrs.
■ over 4yrs.

35.6%
91.8%

6

〜 Memo 〜7Overview of Financial Results for the 1st Fiscal Period and Earnings Forecasts for the 2nd and 3rd Fiscal Periods

Overview of financial results for the 1st fiscal period ended August 2018

Unit: million yen
Forecast for the 1st fiscal
period(A)
Announced on
February 15, 2018

Operating revenue

1,338

Actual results for the
1st fiscal period
(B)

1,374

Main factors of difference

Difference(B)-(A)

1st FP actual vs. 1st FP forecast

36

Difference in income andexpenditure in lease business(+30)
 Rent, CAM and other income (+8)
 Repair expenses and restoration costs (＋5)

Operating expenses

478

477

-1

Operating income

859

897

37

Ordinary income

516

584

67

Decrease in general administrative
expenses (+7)

Difference in non-operating
expenses (+29)
Net income

515

583

67

Distribution
per unit
(yen)

2,309

2,610

301

197 days

197 days－Days*19

 Investment unit issuance expenses, etc.
(＋29)

8

Overview of Financial Results for the 1st Fiscal Period and Earnings Forecasts for the 2nd and 3rd Fiscal Periods

Forecast for the 2nd fiscal period ending February 2019 and 3rd fiscal period
ending August 2019
Unit: million yen

Operatingrevenue

Operatingexpenses

Operating income

Actual results
for the 1st
fiscal period
ended August
2018
(A)

Forecasts forthe 2nd fiscal
period ending
February
2019
(B)

1,374

1,270

Difference(B)-(A)-103

Forecasts forthe 3rd fiscal
periodendingFebruary
2019
1,289

Main factors of difference（利益増減）
2nd FP forecast vs. 1st FP results
Difference in income andexpenditure in lease business(-74)
 Decrease of days（-73）

477

897

443

827

-33

-69

586

702

 Rent, CAM and other income（＋27）
 Repair and other（-5）

Difference in non-operating
expense（＋262）
 Investment unit issuance expenses,
etc. （+262）

Ordinary income

584

776

192

657

Net income

583

775

192

656

Difference in income andexpenditure in lease business(-124)

Distribution
per unit
(yen)

2,610

3,473

863

2,937

 Rent, CAM and other income（＋9）
 Fixed property taxes（-134）

197 days

181 days-16 days

184 daysDays*19

3rd FP forecast vs. 2nd FP forecast

9Overview of Financial Results for the 1st Fiscal Period and Earnings Forecasts for the 2nd and 3rd Fiscal Periods

Distribution forecast for the 2nd and 3rd fiscal periods*Normalization period
Distribution for
the 1st fiscal eriod

Distribution
forecast forthe 2nd fiscal period

2,610 yen per unit

3,473 yen per unit

2,937 yen per unit

+20 yen increase from the forecast
as of February 15

Achieved +301 yen increase from the forecast
as of February 15

Forecast forthe 1st fiscal
periodDistribution
forecast forthe 3rd fiscal period

Actual results forthe 1st fiscal period (ended August 2018)

Forecast forthe 2nd fiscal period (ending February 2019)

Forecast forthe 3rd fiscal period (ending August 2019)

（yen）

4,000
<Decrease in income andexpenditure in lease business>

3,500+1,174

Decrease in the number ofbusiness days
Increase in repair and other cost

<Income and expenditure in lease business>
Increase in rent and other revenue
Decrease in repair and restoration cost

3,000

‐557

+2

Increase inadministrative
expenses+24

Others

+135

‐3

‐2

+32

2,500

<Decrease in income andexpenditure in leasebusiness>

+18
+136

2,000
Decrease inadministrative
expenses

1,500

2,309
1,000

＜Non-operating expenses＞

Expensing of fixed property tax
and city planning tax‐331

OthersDecrease inadministrative
expenses

3,473

2,610

Decrease in investment unit issuance
expenses, etc.

Decrease in non-operating
expenses

2,937＜Non-operating expenses＞
Decrease in investment unit
issuance expenses, etc.

500

0
1st fiscal period(ended August 2018)
Forecast

1st fiscal period(ended August 2018)
Actual results

2nd fiscal period(ending February 2019)
Forecast

3rd fiscal period(ending August 2019)
Forecast

10Management Highlights for the 1st Fiscal Period

Management Highlights for the 1st Fiscal Period

Management results: Operational status of portfolio and topics
Achieved an occupancy rate of 99.0% as of the end of the fiscal period.

Operational status by asset typeOccupancy rate as of the end of August 2018

(Comparison vs. acquisition date)

Occupancy rate by asset type
(%)
100.0

Occupancy rate of portfolio as of the end of the fiscal period

99.0%● Office

99.3%(+0.6%)● Retail

100.0%(+0.0%)● Hotel100.0%(+0.0%)

99.0%(+0.1%)● Entire portfolio(Accrued to August 2018)

Comparison versus acquisition date

+0.1%
95.0
End ofOctober
2017

End ofNovember
2017

End ofDecember
2017

End ofJanuary
2018

OfficeEnd ofFebruary2018

End ofMarch
2018

RetailEnd ofApril
2018

End of
May
2018

Hotel

End ofJune
2018

End ofJuly
2018

End ofAugust2018

Entire portfolio

Operational status by use

Move-inMove-out
Expansion of floor space
Reduction of floor space
Increase (Decrease)

Office(excluding
residential units
within the officebuildings)
6
4
0
0
2

Operational status of Hotel
88.6%

Guestroom occupancy rate
ADR

8,936 yen

RevPAR

7,920 yen(Accrued to August 2018)

Retail/hotel

Other(Residential)

Operational status of other space (residential)
0
0
0
0
0

22
23
0
0
-1

Occupied area/increased floor area

319.75 tsubo

0.0 tsubo397.38 tsubo

Vacated area/reduced floor area
Increase (Decrease)197.85 tsubo
121.90 tsubo

0.0 tsubo
0.0 tsubo431.47 tsubo-34.09 tsubo(Accrued to August 2018)(Includes residences within office buildings)

Number of move-in

22

Number of move-in with higher rent

18

Average unit rent

+88yen/tsubo(+1.5%)

12

〜 Memo 〜13Management Highlights for the 1st Fiscal Period

Management results: Improvement in revenue due to tenant replacement
Improved profitability through rent increase associated with tenant replacement at 7 office buildings and multi-tenant retail facility(Muza Kawasaki)

Results of tenant replacements and future forecast (excluding residential units within the office buildings)※Number of replacement, area, and monthly rent fluctuation are only applicable for the tenants those execute a new contract or termination agreement and delivered a termination noticeas of October 18, 2018

┃ Number of replacements┃┃ Replaced floor area ┃┃Monthly rent variance by replacement┃（unit：tsubo）

8

End of 1st FP

End of 2nd FP

End of 1st FP

400.00End of 2nd FP

6
4
2

200.00

0
‐2

2

0.00

‐4

‐200.00‐197.85‐4

153.664,000‐231.43

2,000‐400.00■Move-in

2,958

4,106

End of 1st FP
0 +1,168

‐4
‐6

8,000
6,000

319.75

6（unit：thousand yen）

■Move-out■Move-in■Move-out┃Breakdown of rent increase by area┃‐2,000End of 2nd FP+323‐2,938‐4,000‐3,803End of 1st FP‐6,000New lease

New lease with higher rent

Rent increase rate

23 wards of Tokyo

1

0

-

Tokyo economy

5

3

5.6％

Total

6

3

-

New lease

New lease with higher rent

Rent increase rate

1

1

25.0%

‐8,000■Move-in■Move-out

End of 2nd FP
23 wards of Tokyo
Tokyo economy

1

1

9.8%

Total

2

2

-

Definite monthly rent increase by tenant
replacements through the end of 2nd
financial period is 323,000yen

14

Management Highlights for the 1st Fiscal Period

Management results: Improvement in revenue due to contract renewal
Improved profitability through rent increase associated with rent revision at 7 office buildings and multi-tenant retail facility (Muza
Kawasaki)

Results of tenant renewals and future forecast (excluding residential units within the office buildings)※Number of renewals, area, and monthly rent fluctuation are only applicable for the tenants those execute a renewal contract and reached an agreement to renew as of October 18, 2018

┃ Number of replacements┃┃ Replaced floor by geographical area ┃■23 wards of Tokyo

End of 1st FP

20

2
3

15
10

End of 2nd FP

2
3

12
10

2

8

6

3

6

7

5

2

0

0
■renew with same rent ■under and planned to discuss■agreed higher rent
current rent is same as market■conclude higher rent contract

End of 1st FP
12

12

3

10

10

8

8

6

6

5

4

3

End of 1st FP

End of 2nd FP

1
1

4

8

2

2
0

（unit：thousand yen）

End of 2nd FP

1■renew with same rent ■under and planned to discuss■agreed higher rent
current rent is same as market■conclude higher rent contract┃Monthly rent variance by lease renewal┃■Retail facility■Tokyo economy

End of 2nd FP

4

13

5

End of 1st FP

1

0

3
0

Number of renewals through end of 1st Financial period
Number of leases agreed to raise rent
Increase rate (vs. before renewal):18:5:+19.5％

Number of renewals through end of 2nd Financial period
Number of leases agreed to raise rent
Increase rate (vs. before renewal):18:5:+6.9％

1,200
1,000

330

800
600

263

400
200

End of 1st FP+431

End of 2nd FP+1,024

311■Amount of monthly rent increased by renewal through end of 2nd FP→1,024 thousand yen (contracted and agreed)■ Total amount of monthly rent increased by renewal and replacement→1,348 thousand yen (contracted and agreed)

1200■agreed higher rent■conclude higher rent contract15

Management highlights for the 1st fiscal period

Management results: cost reduction, value enhancement work
Intending to realize long-term internal growth by conducting value enhancement work eyeing future effective leasing and cost reduction.

Example of construction work conducted in the 1st fiscal period
Construction work for adopting LED lighting
at common area (XYMAX Iwamotocho Building)

BeforeExamples of other construction work conducted in the
1st fiscal periodConstruction work for adopting LED lighting at common area
(XYMAX Shinjuku-Gyoen Building, XYMAX Kamiyacho Building)

Renewal work of security camera(XYMAX Shinjuku-Gyoen Building)

Renewal of toilet(XYMAX Nishi-Shimbashi Building, XYMAX Hachioji Building)

Renewal work of emergency broadcasting system(XYMAX Hachioji Building)

Renewal work of water supply pump
(Renaissance 21 Chihaya)

After

Control of capital expenditure (1st fiscal period)(thousand yen)

Expected Effects of the adoption of LED lighting
1. Reduction of carbon dioxide emission
2. Reduction of utility expenses
3. Decreasing the frequency of bulb exchange and reducing running costs

150,000
150,000

123,830

100,000
100,000

Depreciation

50,00050,00000

Capital expenditure was 39.6% ofdepreciation

48,995
Capitalexpenditure
1st fiscal
period (ended August 2018)
第1期(2018年8⽉期)

16Future Growth Strategy

Future Growth Strategy

Utilizing the “3 FORCES” to maximize unitholder value

The Investment Corporation aims to maximize unitholder value, utilizing “Assessment Capability,” “Management Capability,” and“Sourcing Capability.”

Stable operational and financial base established through the IPO
 Portfolio with a low LTV level (33.0% at the end of 1st fiscal period) realized through the acquisition of properties at an
inexpensive price Establishing a stable lender formation centering on correspondent financial institutions of the sponsor
 Flexible property acquisition with bank loans is also possible by utilizing available borrowing capacity

Assessment Capability

Management utilizing
the “3 FORCES”
Management Capability

Sourcing Capability

Internal Growth Strategy

External Growth Strategy

 Property management utilizing XYMAX Groupʼs real estate management capability
 Increase income by optimization of rents through tenant replacement and contract
renewal Realize both cost control and maintenance and improvement of property value
through repair work conducted utilizing the database of XYMAX Group XYMAX Groupʼs relationship with real estate owners
 XYMAX Groupʼs track record in real estate disposal and brokerage

Maximization of Unitholder Value
18

Future Growth Strategy

Internal growth: One of the leading domestic real estate management power
The Group has a proven track record in the real estate management business that covers the main assets owned by XYMAX REIT
Investment Corporation (hereinafter referred as “Investment Corporation”) such as office buildings, retail properties and hotels acrossJapan.
Above all, the Group has been ranked as the No.1 domestic service provider in the PM business in terms of contracting record of realestate management projects for six years in a row since 2010*20.

Proven prominent track record in real estate
management field throughout Japan

Hokkaido Region
23 bldg.
Real estate management record

Real estate management record(As of the end of March 2018)

Actual number
799 buildings

Gross floor area
Approx.

3.5 million tsubo(Approx. 11.6 million m²)

FM record

FM*21 record(As of the end of March 2018)

Actual number
13,500 stores

Number ofcustomers
159 corporations

The Group has the largest team of PM professionals
in Japan*22
RankCompany

Hokkaido · Tohoku region

Central · Koushin'etsu Region

Chugoku · Shikoku Region

Central · Koushin'etsu
RegionKanto region

Kanto region

55

474

6,000 stores

buildings

Chugoku · Shikoku Region
15

buildings

1

XYMAX Group

1,794

２

A Company

1,072

3

B Company

564

Kyushu-Okinawa Region

4

C Company

487

1,300 stores

5

D Company

369

8

buildings

2,000 stores

700 stores

Number of
personnel incharge900 storesTohoku Regionbuildings

Kansai Region160

buildings

Okinawa Region
Kyushu Region(Source) According to "Monthly Property Management November 2017“ and created by this Asset Management Company

54buildings

Kansai region10

buildings

2,600 stores

19

Future Growth Strategy

Internal Growth: “Management capability” contributing to the growth of the
J-REIT market
Unrivalled track record as a PM service provider in terms of contract record with J-REITs*23
XYMAX Groupʼs contract record as a PM service provider for J-REITs places it as the No. 1 domestic contractor (as of the end of September2017) in terms of total number of Office, Retail and Hotel assets, which are the main assets of the Investment Corporation.
Despite not having been a sponsor to a J-REIT until IPO, we have greatly exceeded the PM entrustment records of companies that are sponsor
to a J-REIT*24.

Number of properties owned by J-REITs under management by XYMAX Group and number of J-REITs entrusting PM
service to XYMAX Group Number of properties

182 (as of March 2018)

 Number of J-REITs entrusting XYMAX Group31 (as of March 2018)

Ranking of PM service providers relating to properties included in the portfolio of J-REITs (Office, Retail and Hotel)(based on acquisition price by J-REITs)
Other than J-REIT sponsor(10 billion yen)

80

J-REIT sponsor*24

72

60

53

51
41

40

38

36

36

CompanyE

Company
F

32

31

29

CompanyG

CompanyH

Company
I

20
0
XYMAX Group

CompanyA

Company
B

CompanyC

Company
D(Source) According to "Monthly Property Management November 2017” and created by this Asset Management Company

20

Future Growth Strategy

Internal Growth: Maximization of revenue through strategic leasing
XYMAX REIT Investment Corporation has positioned the strategy to maximize revenue using the Groupʼs expertise and know-how aswell as the financial strength supporting such strategy as the key factor of internal growth.

Realization of strategic leasing supported by stable financial base Especially, the rent in the office leasing market is on an upward trend and there is an opportunity for internal growth with the elimination of rent gap upon the rent revision
for existing tenants.
 However, negotiations for upward rent revisions may sometimes lead to the move-out of tenants and may cause risks of temporary revenue decrease due to the downtime
and free rent during the period for soliciting new tenants.
 The Investment Corporation is able to implement a business plan with redundant capacity based on the financial base as well as absorb temporary revenue decrease arisingfrom rent negotiations and achieve an appropriate rent without any significant decrease of DPU.

Status of rent gap in the market

Use of the Groupʼs expertise, know-how , and network
associated with real estate management

Comparison of new contracted rent index andpaying rent index
New contracted rent index

Rent index （100＝2010Q1）

Direct Approach

Network with Leasing Agencies

XYMAX INFONISTA Corporation is a leasing
brokerage business arm of the Group,developing its business in the Tokyo
Metropolitan Area (Tokyo and surrounding
prefectures of Chiba, Saitama, andKanagawa).

Relationship with approx. 2,000 leasing
agencies and their 5,000 brokers. The
Group is providing strategically precious
and most updated information to broker incharge.
The Group is providing the vacant room
information of approx. 500 buildings (asof August, 2018) on a nationwide basis
and in a way that may most facilitate thedaily practice of leasing brokerage business.

Paying rent index

200
There is a gap between newcontracted rent and paying rent

150

100

50

2018
Q1
2018Q1

2017
Q1
2017Q1

2016
Q1
2016Q1

2015
Q1
2015Q1

2014
Q1
2014Q1

2013
Q1
2013Q1

2012
Q1
2012Q1

2011
Q1
2011Q1

2010
Q1
2010Q1

2009
Q1
2009Q1

2008
Q1
2008Q1

2007
Q1
2007Q1

2006
Q1
2006Q1

2005
Q1
2005Q1

2004
Q1
2004Q1

2003
Q1
2003Q1

2002
Q1
2002Q1

2001
Q1
2001Q10

Achieve a high contract rate and unit rent

(Source) Created by the Asset Management Company based on the data of XYMAX Real Estate Institute21

Future Growth Strategy

Internal Growth: Cost optimization through the control of repair works
We will realize cost optimization and a reliable construction/repair work execution with consistent construction management based on theaccumulated data
Construction Management Based on Data
Technical Section of Member Companies of the Group×

Database and construction work history management system
First-class Architect, Facility Manager,
Licensed Electrician, Certified Building Administrator, etc.
Track record of construction/repair works: 129,888

What Is Construction Management?
Compiling Construction History into DatabasePlanning of Repair Schedule Utilizing the SystemPlanning and Management of Large-scale Renovation/Renewal
ProjectArrangement of Competitive BiddingSupport Difficult Repair Works on an Ad-Hoc Basis(during the period between April 1, 2000 and March 31, 2018)(Source) XYMAX Corporation

Intending to improve efficiency related to repair work by utilizing the engineers and database of XYMAX Group

Controlling repair work through construction management


Reliable direction of construction work based on track record of construction
work accumulated over several years

Appropriate adjustment for construction companies and general contractors
by utilizing networkSetting an appropriate construction period with the review of repair projects
in line with the current status



Utilization of know-how in large-scale renovation and renewal construction
work by XYMAX REIT



Optimization of costs in comparison with track record of similar construction
work and through assessment of engineersAppropriate repair work on an ad-hoc basis utilizing know-how and engineers

22

Future Growth Strategy

External Growth: Identifying property acquisition opportunity through
XYMAX Groupʼs customer baseBased on the sponsor support agreement with the Group, the Investment Corporation aims to cultivate opportunities of property
acquisition by identifying the needs for real estate disposal of the Groupʼs customer base.

Direct relation with real estate owners

Acquisition

The Investment Corporation

The Asset Management Company

Ratio of attribute of owners entrusted with real estate
management business (As of the end of March 2018)

Number of buildings
under management

799

J-REIT

OthersXYMAX Group

Trap disposal needs

Diversity of real estate owners having a
relationship

23%

36%

Owner relation · customer base
Building owners

General businesscompany

Other

Individual, etc.
41%

Inheritance

Financing
ROE management

Financing

J-REIT
J-REITs including the Investment Corporation
Individual, etc.
Individuals, asset management companies, general business companies, etc.
OthersPrivate REITs, private funds, real estate companies, etc. .

23

Future Growth Strategy

External Growth: Sourcing utilizing XYMAX Groupʼs track record ofreal estate disposals and brokerage
The Investment Corporation will promote souring leading to external growth by utilizing XYMAX Groupʼs track records of disposal andbrokerage of various real estate including its main assets.

XYMAX Groupʼs track record of real estate disposals and real estate brokerage
Accumulated track record of real estate disposals and real estate brokerage service(accumulated total from April 1, 2010, excluding sales to the Investment Corporation)(billion yen)
500
5,000
450
400
4,000
350

Sale and intermediary to other than investment corporation, etc.

Fiscal year average 54.2 billion yen
17.2 billion yen to investment corporation, etc.
(2010.4.1〜2018.3.31)

Sale and intermediary to investment corporation, etc.

300
3,000

296.4

250
207.1

200
2,000
150
100
1,000

64.5

50
0
0

260.7

93.4

167.6

125.1

26.9

42.7

58.5

69.4

75.6

2011/32011年3⽉末

2012/32012年3⽉末

2013/32013年3⽉末

2014/32014年3⽉末

2015/32015年3⽉末

Number of buildings and scale in real estate disposals
and real estate sales brokerage

Whole
Disposals and sales
brokerage Number of cases

231

To Investment
Corporations, etc.

33434.2 billion

137.8 billion yen

2016/32016年3⽉末

2017/32017年3⽉末

1.9 billion

4.1 billion yen

2018/32018年3⽉末(Source) XYMAX Corporation

 Covers a wide range of central areas, major cities and local areas.
2.2%

オフィス
Office
10.5%

0.6%

商業
Retail

8.6%
55.4%

都⼼5区

5 Wards of Tokyo

0.7%

物流

5.4%

レジ

5.8%

Residential

⼟地

東京23区
23 Wards of Tokyo

13.6%
6.4%

Logistics

15.0%

2.0%

ホテル
Hotel

Land

Average per building

137.8

 Covers various uses such as office, retail, hotel, residential, etc.

7.7%
Disposals and sales
brokerage Total

114.8

Use and geographical area of real estate in real estate
disposals and real estate sales brokerage Also engaged in a large number of real estate disposals and real estate sales
brokerage for investment corporations, etc.
 Also has abundant track records especially in disposals and sales brokerage of
medium-and large-scale properties for investment corporations, etc.

107.5

40.9%

Other

(Source) XYMAX Corporation

Other Tokyo
その他⾸都
Metropolitan Area

圏Osaka Area
⼤阪圏

Nagoya Area
名古屋圏

25.2%

Fukuoka Area

福岡圏

その他
By asset (whole)(based on transaction price)

東京都内
Tokyo

By area (whole)(based on transaction price)

Others(Source) XYMAX Corporation

24

Future Growth Strategy

External Growth: Financial management and LTV control
The Investment Corporation establishes a financial base that put emphasis on stability and soundness in pursuit of flexibility of financing.

Actual results for the 1st fiscal period

Lender formation

 Constructing a wide range of and stable bank formation centering on mega banks
and local banks that have a financial and business relationship with sponsors.

(As of the end of 1st fiscal period) Realizing the diversification of maturity date
Balance of interest-bearing debts

Average remaining
years*25/Average interest rate*26

LTV (based on total assets)

12.26 billion yen

2.4 years /0.495%

33.0%

Fixed interest rate ratio*27

Long-term loan ratio*28

LTV（forecast after the repayment ofconsumption tax loan）

60.0%

80.0%

Number of financial
institutions

13 companies

31.9%

Borrowing amount12.26 billion yen

Forecast of the 2nd fiscal period and thereafter Scheduled to conduct partial early repayment of borrowings using consumption tax refund
during the 2nd fiscal period
 Scheduled to refinance 2,336 million yen maturing in the 2nd fiscal period

Maturity dates of interest-bearing debts

26.6%

Sumitomo Mitsui
三井住友銀⾏Banking Corporation

20.6%

MUFG Bank
三菱UFJ銀⾏

15.0%

The Nishi-Nippon
⻄⽇本シティ銀⾏
City Bank

6.3%

Fukuoka Bank
福岡銀⾏

6.3%

Resona Bank
りそな銀⾏

6.3%

Shinsei Bank
新⽣銀⾏

4.1%

Aozora Bank
あおぞら銀⾏

3.1%

Hiroshima Bank
広島銀⾏

3.1%

Hokkaido Bank
北海道銀⾏

3.1%

Chiba Bank
千葉銀⾏

1.9%

Higo Bank
肥後銀⾏

1.9%

Fukoku-life
富国⽣命

1.9%

Borrowing capacity by LTV level (after
repayment of consumption tax loan)(million yen)
5,000
5,000
4,500
4,500
4,000
4,000
3,500
3,500
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
500
500
00

Mizuho Bank
みずほ銀⾏

Scheduled to repay 580 million yen
of consumption tax loan

LTV levelvs. total assets

Possible loan
amountAppraisal
LTV

40.0％

4.9 billion yen

Approx.33%

45.0％

8.6 billion yen

Approx.38%

50.0％

13.2 billion yen

Approx.43%

2,916
2,336

2nd period(Fiscal period ending
February 2019)

3rd fiscal period(Fiscal period ending
August 2019)

4th fiscal period(Fiscal period ending
February 2020)

5th fiscal period(Fiscal period ending
August 2020)

6th fiscal period(Fiscal period ending
February 2021)

2,336

2,336

2,336

7th fiscal period(Fiscal period ending
August 2021)

8th fiscal period(Fiscal period ending
February 2022)

9th fiscal period(Fiscal period ending
August 2022)

10th fiscal period(Fiscal period ending
February 2023)

25

〜 Memo 〜26Basic Policy of the Investment Corporation

Basic Policy of the Investment Corporation

Investment policy of the investment corporation
XYMAX REIT Investment Corporation aims to maximize unitholdersʼ value by utilizing the knowledge and know-how
of real estate management accumulated by the XYMAX Group.

Characteristics of the Investment Corporation
Utilization of real estate management expertiseand know-how accumulated throughout thehistory of the Group

Growth of managed assets over the
medium to long term basis
Secure stable revenue

Maximization ofUnitholdersʼ Value

Evaluation of cash flow stability andprecise value of the real estate

Advantage of the Investment Corporation
 The Investment Corporation has secured an outlook for stability and future prospect of revenue supported by XYMAX Groupʼs real estate management
expertise and know-how and operational track records by incorporating properties operated by XYMAX Group even before the IPO into its portfolio.

Construction of portfolio
utilizing assessment
capability

The Investment Corporation will assess the stability and future prospect of the
profitability of properties by utilizing the expertise and know-how of real estate
management

Internal growth utilizing
management capability

The Investment Corporation will maximally utilize the real estate management capabilityof XYMAX Group boasting the highest record in Japan

External growth utilizing
sourcing capability

The Investment Corporation will utilize the direct relationship between real estate owners
and XYMAX Group28

Basic Policy of the Investment Corporation

Evaluation of portfolio
XYMAX REIT believes that it can secure an outlook on stability and future prospects of the entire portfolio based on assets for which
XYMAX Groupʼs real estate management expertise and know-how can be utilized.

Focus point of each asset type
OfficeRetailHotel

Focus on real estate with strong
appeal to tenants

Focus on stability of tenant rent or
inexpensive property price

Focusing on hotels specialized in“lodging” located at transport hubs

→ Emphasizing unit rent, traffic convenience andsafety including earthquake resistance→ Emphasizing the stability of revenue or
profitability as an investment target→ Emphasizing inbound tourism and abundantdomestic accommodation needs

Properties located in the 8 central wards ofTokyo, Central Nagoya, Central Osaka andCentral Fukuoka

Properties whose revenue of facilities are available foranalysis

Hotels specialized in “stay” whose revenue trends canbe analyzed based on the operational know-how of thesponsor

Properties located within an approximate 5-minute walkfrom the nearest station

Properties whose rent burden on tenants are available foranalysis

Properties located in areas offering excellent access totransport hubs

Properties with a unit rent of 10,000 yen to 25,000 yen

Properties whose sales price is lower than the market
price

Properties located in areas where the number of foreign
visitors is expected to increase

Acquire properties by comprehensively judging the above factors for each asset type
80% or more of the portfolio consists of office, retail, and hotel properties
29

Basic Policy of the Investment Corporation

Advantage by asset type
The portfolio of the Investment Corporation consists mainly of assets that match with the focus points gained from the expertise andknow-how of real estate management

Advantage by asset type
OfficeTime required from the nearest station*30
3.0 minutes on average

Average unit rent*29

14,937 yen

8.9%

11.3%

23.1%
10,000 yen - 15,000 yen

42.1%

Average engagement period*31
16.2 years

49.0%

Less than 3 minutes

15,000 yen - 20,000 yen
20,000 yen -76.9%

4 〜5 minutes

Retail properties
Composition of retail properties*32

10 years or more andless than 15 years

23.1%
65.6%

15 years or more andless than 20 years
20 years or more

Hotel

Average engagement period*34
10.1 years

Ratio of “Staying type”*35

9.9%■Station-front■Other90.1%
100.0%

38.8%
51.3%

4 years or more andless than 5 years■Staying type5 years or more andless than 10 years■Neighborhood*33

9.9%

10 years or more

100%

30

Basic Policy of the Investment Corporation

Years of engagement and trend of average occupancy rate
The portfolio of XYMAX REIT has been operated by XYMAX Group for years and consists mainly of properties that are expected to havean advantage due to proven track record in operation

Years of engagement in portfolio

Acquisition by XYMAX REIT
(Age)

OfficeRetailOther (Residential)
Hotel

25 25年前
years

15年前
15
years

2020年前years

5年前
5 years

10年前
10
years

XYMAX Kamiyacho Building

27.4 years

XYMAX Higashi-Ueno Building

19.4 years

XYMAX Higashi-Azabu Building

18.8 years

XYMAX Hachioji Building

25.6 years

Muza Kawasaki

14.7 years

XYMAX Nishi-Shimbashi Building

18.0 years

XYMAX Shinjuku-Gyoen Building

17.5 years

XYMAX Iwamotocho Building

17.5 years

Life Kawasaki Miyuki store

21.6 years

Vita Seiseki-Sakuragaoka

19.0 years

Hotel Vista Sendai

2.5 years

Renaissance 21 Chihaya

11.9 years

0年前
0 years

Trend of average occupancy rate of 7 office buildings of XYMAX REIT (Comparison with J-REITs)
September 2008 Global Financial Crisis

（％）
97.6
97.5

98.9

98.7

100.0

97.7

96.4

96.4

95.9

96.6

96.5
95.3

94.3

92.5

92.4

90.0

96.8

Maximum of 4.6pt

97.7

95.0

93.2

96.4

97.4

97.2

94.3

97.8

98.6
98.6

99.5
99.1

7 office buildings of XYMAX REIT*36
Average occupancy rate of J-REIT properties(office buildings)*37

Achieved an occupancy rate higher than that of J-REIT properties (officebuildings) even when the office market deteriorated

87.5
85.0
2006/04
April
2006

96.7

97.8

2007/04
April
2007

2008/04
April
2008

2009/04
April
2009

2010/04
April
2010

2011/04
April
2011

2012/04
April
2012

2013/04
April
2013

2014/04
April
2014

2015/04
April
2015

2016/04
April
2016

2017/04
April
2017

2018/04
April
2018

31

Basic Policy of the Investment Corporation

Portfolio List

Asset no.

OF-01

OF-02

OF-03

OF-04

OF-05

OF-06

Asset type

OfficeOfficeOfficeOfficeOfficeOfficeProperty nameXYMAX Nishishimbashi Building

XYMAX Iwamoto-cho Building

XYMAX Shinjukugyoen Building

XYMAX Kamiya-cho Building

XYMAX Higashiazabu Building

XYMAX Higashiueno Building

Location

Minato-ku, Tokyo

Chiyoda-ku, Tokyo

Shinjuku-ku, Tokyo

Minato-ku, Tokyo

Minato-ku, Tokyo

Taito-ku, Tokyo

Access3 minutes on foot from
“Uchisaiwaicho” station on the
Toei Subway Mita line
6 minutes on foot from
"Shimbashi“ station on the JRTokyo metro Ginza line other3 minutes on foot from
"Iwamoto-cho" station on the
Toei Subway Shinjuku line

2 minutes on foot from "Shinjuku
Gyoenmae" station on the Tokyo
metro Marunouchi line

1 minute on foot from
"Kamiyacho" station on theTokyo metro Hibiya line

5 minutes on foot from "Akabane
Bridge" station on the Toei
Subway Oedo Line
7 minutes on foot from
"Kamiyacho" station on theTokyo metro Hibiya line

3 minutes on foot from "NakaOkachimachi" station Tokyo
metro Hibiya line
4 minutes on foot from JR"Okachimachi" station otherAcquisition price(million yen)

2,500

4,250

5,020

880

1,550

1,150

Land area

402.53 m²

864.83 m²

839.09 m²

228.83 m²

365.05 m²

368.84 m²

Total floor area

2,517.50 m²

6,261.06 m²

6,084.32 m²

1,356.51 m²

2,570.13 m²

1,942.54 m²

Leasable area

1,897.75 m²

4,152.30 m²

4,792.13 m²

1,205.29 m²

2,016.00 m²

1,735.34 m²

Completion

2000

2001

2001

1991

1999

1999

Steel-framed reinforced concrete
structure with flat roof B1F/9F

Steel-framed reinforced concrete
structure with flat roof B1F/9F

Steel-construction with flat roof
8F

Steel-framed reinforced concrete
structure with flat roof B1F/9F

Steel-framed reinforced concrete
structure with flat roof 8F

Structure/Number of Floors

Reinforced concrete structurewith flat roof 9F

Number of tenant(As of the end of 1st fiscal period)

8

14

6

7

5

8

Occupancy rate
(As of the end of 1st fiscal period)

100.0%

100.0%

100.0%

95.3%

100.0%

100.0%

32

Basic Policy of the Investment Corporation

Portfolio List

Property no.

OF-07

RT-01

RT-02

RT-03

HT-01

OT-01

Asset type

OfficeRetailRetailRetailHotel

Other (Residential)

Property nameXYMAX Hachioji Building

Muza Kawasaki

Life KawasakiMiyuki store

Vita Seiseki-Sakuragaoka

Hotel Vista Sendai

Renaissance 21 Chihaya

Location

Hachioji-shi, Tokyo

Kawasaki-shi, Kanagawa

Kawasaki-shi, Kanagawa

Tama-shi, Tokyo

Sendai-shi, Miyagi

Fukuoka-shi, Fukuoka

Access4 minutes on foot from "KeioHachioji" station on the Keio
Electric Railway Keio Line
5 minutes on foot from JR"Hachioji" station

JR "Kawasaki" station directconnection

15 minutes on foot from JR"Kashimada" station and "Yako"stationKeio Electric Railway Keio Line
“Seiseki Sakuragaoka" Station
Directly Connected

4 minutes on foot from JR"Sendai" station
1 minute on foot from "Miyagino
Dori" station on the Sendai City
Subway Tozai Line

6 minutes on foot from "Chihaya"station” on the JR Kagoshima
main line and "Nishitetsu
Chihaya" station on the West
Nippon Railway Kaizuka line

Acquisition price(million yen)

2,600

4,100

790

3,100

4,400

2,700

Land area

1,220.58 m²

742.44 m² (Note 1)

1,879.15 m²

4,467.51 m² (Note 2)

1,461.36 m² (Note 3)

2,644.63 m²

Total floor area

7,404.81 m²

3,671.09 m² (Note 1)

2,596.80 m²

27,161.00 m² (Note 2)

6,977.47 m²

10,856.15 m²

Leasable area

5,556.03 m²

3,703.87 m²

2,677.54 m²

27,610.61 m²

7,066.25 m²

10,287.93 m²

Completion

1993

2004

1997

1999

2016

2006

Structure/Number of Floors

Steel-framed reinforced concrete/
Steel-construction with flat roof
B1F/9F

Steel-framed/Steel-framed
reinforced concrete structure withflat roof/stainless steel plateroofing B2F/27F

Steel-construction with flat roof
2F

Steel-framed reinforced concrete
structure/reinforced concrete
structure/steel-construction withflat roof B3F/27F

Steel-construction with flat roof
12F

Steel-framed reinforced concrete
structure with flat roof 14F

Number of tenant(As of the end of 1st fiscal period)

25

17

1

1

1

139

Occupancy rate
(As of the end of 1st fiscal period)

98.2%

100.0%

100.0%

100.0%

100.0%

94.3%(Note 1) Land area indicates the figure equivalent to 6.9% of the right of site (rounded down to the first decimal place) held by the Investment Corporation within the site area of Muza Kawasaki. In addition, building area
indicates the total building area based on the real estate registry for the components the trust beneficiary rights held by the Investment Corporation.
(Note 2) Land area indicates the figure equivalent to 49.6% of the right of site (rounded down to the first decimal place) held by the Investment Corporation within the site area of Vita Seiseki-Sakuragaoka. In addition, building
area indicates the total building area based on the real estate registry for the components the trust beneficiary rights held by the Investment Corporation (floor area of 2 jointly-owned components, building No. 72-3 and72-7 is the figure multiplied by ownership ratio of 937,995/1,000,000 and 591,485/1,000,000, respectively), and is rounded down to the second decimal place.
(Note 3) Superficies have been established for 524.21 m2 of the land area.

33

Basic Policy of the Investment Corporation

Portfolio map
Portfolio located in favorable locations
Tokyo Area

Tokyo Economy Area

Fukuoka
Area

SendaiArea

34

Market Analysis

Market Analysis

Accumulation and utilization of original data by XYMAX Real Estate Institute
XYMAX REIT believes that it can establish strategies foreseeing the market by not only possessing accumulated data but also utilizing
original research and analysis results through having XYMAX Real Estate Institute in the XYMAX Group.

XYMAX
Group
business

Technology/
information
providing

XYMAX Real
EstateResearch
Institute Corp.

Mass media

Publication of
information

Various media

Contract rent data

108,151 cases,
36,306 buildings (past 22 years)

Asking rent data

25,601 cases,
47,194 buildings (past 7 years)

Construction data

129,888 cases,(past 18 years)

Posting, contribution and lecture in mass media and various media(example)■ PostingNihon Keizai Shimbun, Nikkei Business Daily, etc.

■ Contribution

ARES Real Estate Securitization Journal• ”Top Ten Issues Affecting Real Estate in 2018-2019” Announced by The Counselors of Real Estate• Considering Small-and Medium-Scale Office Buildings

Office pyramid (2016)(Source) XYMAX Real Estate Institute
Extracted from “Office Pyramid 2016”

Real Estate Economic Fund Review
BUILDING TOKYO• “Existence of Offices Changing with Work Style Reform”, etc.

■ Lecture

Waseda University Advanced Collaborative Research Organization for Smart Society• New Viewpoint for Enhancing Building Value ~Work Style Reform and Oﬃce Market ―Land Economy and Construction and Engineering Industry Bureau, Ministry of Land,
Infrastructure, Transport and Tourism• Review Meeting of the Existence of Real Estate Supporting Work Style Reform

Institute for Building Environment and Energy Conservation（IBEC）• Social Reform through the Spread of CSBEE Assessment and Latest Trend of Evaluation Tool Development, etc.

Survey on building owner's condition (2015)
Currently in trouble with the building business(Source) XYMAX Real Estate Institute
Extracted from “Survey on Building Owner's Condition(2015)”

36

Market Analysis

Scarcity of small- and medium-scale office buildings realized fromoffice supply dataXYMAX REIT believes that the scarcity of small- and medium-scale office buildings, especially those supplied after the bubble period,
will improve considering the floor area of existing small- and medium-scale office buildings as well as future supply trend.

Office Stock Pyramid 2018 covering the 23 Wards (Net rentable area)
23 Wards of Tokyo: 12.61 million tsubo, 8,899 buildings, Average building age: 30.0 years

Small- and medium-scale office buildings

Large-scale office buildings

70(Gross floor area: 300-5,000 tsubo)(Gross floor area: 5,000 tsubo or more)

65

Whole: 6.68 million tsubo, 737 buildings, 23.0 years on average

60
55

Old seismic standard:

1.55 million tsubo(26%)

Old seismic standard:

1.22 million tsubo
(18%)

50

40
20 years or older:
4.86 million tsubo
(82%)

35
30
25
20

Building age (years)

45
20 years or older:3.34 million tsubo
(50%)

15

Less than 20 years:
1.07 million tsubo(18%)

Less than 20 years:
3.33 million tsubo
(50%)

10
5
0

50
0.5

40
0.4

30
0.3

20
0.2

10
0.1

00
10
0.1
賃貸⾯積（万坪）
Net rentable area (million tsubo)

20
0.2

30
0.3

40
0.4

50
0.5

(Source) Survey Report by XYMAX Real Estate Research Institute Inc.
“[23 Wards of Tokyo] Supply of New Office Space 2018 & Office Stock Pyramid 2018”37

Market Analysis

Trend of contracted rents by office building scale realized fromnew contract rents
XYMAX REIT believes that the volatility of rent for small-and medium-scale office buildings is relatively lower than that for large-scalebuildings and is highly stable

New contracted rent by office building scale
Rent Index（100＝2010Q1）
200

190

180

Small-and medium-scale office buildings(total floor area: less than 5,000 tsubo)160

Large-scale office buildings(total floor area: 5,000 tsubo or more)

140
146

116

120

115

100

79

80
76

60
2001
Q2

2002
Q2

2003
Q2

2004
Q2

2005
Q2

2006
Q2

2007
Q2

2008
Q2

2009
Q2

2010
Q2

2011
Q2

2012
Q2

2013
Q2

2014
Q2

2015
Q2

2016
Q2

2017
Q2

2018
Q2

2008
Q2

2010
Q1

2012
Q2

2018
Q2

Small-and medium-scale office buildings(total floor area: less than 5,000 tsubo)

146

100

79

115

Large-scale office buildings(total floor area: 5,000 tsubo or more)

190

100

76

116

(Source) Survey Report by XYMAX Real Estate Research Institute Inc.
“Office Market Report Tokyo Q2 2018”38

Market Analysis

Trend of tenant demand realized from the distribution of office rent
XYMAX REIT believes that there will be robust tenant needs within the range of 10,000 yen to 20,000 yen level in general regardless ofthe market condition.

Distribution of contracts concluded in the 23 Wards of Tokyo (by unit price of contract rent)
（%）
20
18
16
14
12
8
6
4
2
0
（%）
20
18
16
14
12
8
6
4
2
0
（%）
20
18
16
14
12
8
6
4
2
0

Approximately 60% ~ 70%of the contracts concluded in
the market are distributed2010 Q1

Number of cases: 1,287
Number of targeted properties: 1,031

2012 Q2

Number of cases: 593
Number of targeted properties: 568

2018 Q2

Number of cases: 1,478
Number of targeted properties: 1,228

Unit rent (yen/tsubo)(Source) Created by XYMAX Real Estate Institute upon the request of the Asset Management Company

39Market Analysis

Trend of tenant demand realized from the location of office buildings
XYMAX REIT believes that there is a certain correlation between “location,” in other words convenience concerning the time required
from the nearest station on foot, and the occupancy rate.

Vacancy rate by the time required from the nearest station on foot in the 23 Wards of Tokyo
（％）
14.0
Whole
Within a 3-miunte walk from the nearest station

12.0
3-5 minute walk from the nearest station
More than a 5-minute walk from the nearest station

10.0

8.0

6.0

4.0

2.0

0.0
April
2011042011

October
2011102011

April2012042012

October
2012102012

April2013042013

October
2013102013

April2014042014

October
2014102014

April2015042015

October
2015102015

April2016042016

October
2016102016

April2017042017

October
2017102017

April2018042018(Source) Created by XYMAX Real Estate Institute based upon the request of the Asset Management Company

40Market Analysis

Realization of external growth strategy by grasping the trend of building
owners at an early stageXYMAX REIT believes that a favorable opportunity to realize external growth can be gained through XYMAX Groupʼs direct relations
with owners of real estate.

 Identifies needs for property disposal through daily communication with real estate owners
 More than 70% of building owners are concerned about large-scale renovations of owned properties, tenant
management, and securement of funds upon reconstruction→ Identiﬁes needs of property disposal arising due to the problem or concern about necessary funds

Realization of
external growth Concern for inheritance and business succession tends to increase as building owners get older→ Identiﬁes needs of property disposal upon business succession and inheritance by building owners

Survey on building owner's condition by XYMAX Real Estate InstituteAnxiety in future building businessCurrently in trouble with the building business(by the number of owned buildings)

1-21〜2棟
buildings

3棟以上
3 buildings
Measures against
inheritance andbusiness succession

24%

16%

1-21〜2棟
buildings

20%

0%

23%

52%

30%

or more42%

39%

Concerned

40%

不安に思う

Securement of funds
upon large-scalerenovation andreconstruction

24%
45%

45%

20%

Management of tenants
upon large-scalerenovation andreconstruction

24%

46%

Measures against
inheritance andbusiness succession

35%

60%

Slightly concerned

やや不安に思う

80%

継の対策 の資⾦確保 ントの調整

or more20%

相続.事業承 や建替え時 の⼊居テナ

3 buildings
3棟以上

36%

50%

⼤規模改修 や建替え時

Securement of funds
upon large-scalerenovation andreconstruction

30%

⼤規模改修

3 buildings
3棟以上Management of tenants
or moreupon large-scalerenovation and1-21〜2棟
buildings
reconstruction(By age, multiple answers)

100%

Not concerned

不安に思わない(Source) “Survey on building owner's condition 2017” by XYMAX Real Estate Institute40 or under

〜40歳代
50
50歳代
60
60歳代
70 or older
70歳以上
40 or under
〜40歳代
50
50歳代
60
60歳代
70 or older
70歳以上
40 or under
〜40歳代
50
50歳代
60
60歳代
70 or older
70歳以上
0%

20%
Concerned

40%

60%

Slightly concerned

80%

100%

Not concerned(Source) Created by XYMAX Real Estate Institute based on the request from the Asset Management Company

41

〜 Memo 〜42Appendix

Appendix

Balance Sheet and Statement of Income For the First Fiscal Year
Balance Sheet
AssetsCurrent assets
Cash and bank deposits
Cash and bank deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Deferred tax assets
Other
Non-current assets
Property, plant and equipment
Tools, furniture and fixtures
Buildings in trust
Structures in trust
Tools, furniture and fixtures in trust
Land in trust
Investments and other assets
Long-term prepaid expenses
Lease and guarantee deposits
Other
Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Accounts payable - other
Income taxes payable
Advances received
Other
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits in trust
Total liabilities
Net assets
Unitholdersʼ equity
Unitholdersʼ capital
Surplus
Total net assets
Total liabilities and net assets

1st fiscal period(As of Aug. 31, 2018)(thousand yen)
3,528,741
943,567
1,958,065
19,92832,703572,370
28
2,077
33,621,462
33,521,850
93,436
8,773,693
44,635
3,814
24,606,271
99,611
43,50422,60033,507
37,150,203
3,409,184
201,1312,916,000
106,382
1,687
181,442
2,540
10,572,116
9,344,000
1,228,116
13,981,301

Statement of Income
Operating revenue
Lease business revenue
Other lease business revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directorsʼ compensations
Other operating expenses
Operating income
Non-operating income
Interest income
Non-operating expenses
Interest expenses
Borrowing related expenses
Investment unit issuance expenses
Deferred organization expenses
Business commencement expenses
Ordinary income
Income before income taxes
Total income taxes
Income taxes - current
Income taxes - deferred
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

1st fiscal period(As of Aug. 31, 2018)(thousand yen)
1,374,843
1,268,583
106,260
477,330
352,220
85,797882
12,0404,800
21,588897,51216
16
312,710
32,979102,607
93,42372,045
11,654
584,818584,818
1,662
1,690
-28
583,155－
583,155

23,168,901
22,585,746
583,155
23,168,901
37,150,203

44Appendix

Overview of Appraisal Report

End of 1st FY(August 31, 2018)

At time of acquisition
Acquisitiondate

Acquisition
price(million yen)Book value asof the end of
1st FY(million yen) Appraisal value(million yen)

Asset
no.

Asset name

OF-01

XYMAX Nishishimbashi Building

February
2018

2,500

2,527

OF-02

XYMAX Iwamoto-cho Building

February
2018

4,250

OF-03

XYMAX Shinjukugyoen Building

February
2018

OF-04

XYMAX Kamiya-cho Building

OF-05

ChangeUnrealized
profit or
loss*40 (million
yen)Appraisal value(million yen)

Capitalization
rate based on
directcapitalization
method(%)

Appraisalvalue*38(million yen)

Capitalization
rate based on
directcapitalization
method*39
(%)

3.7

3,080

3.7

+10

0.0

The Tanizawa Sōgō
Appraisal Co., Ltd.

552

5,240

3.8

5,350

3.7

+110

-0.1

Japan Real Estate
Institute

1,046

5,076

6,190

3.8

6,340

3.7

+150

-0.1

Japan Real Estate
Institute

1,263

880

895

1,130

3.8

1,140

3.8

+10

0.0

The Tanizawa Sōgō
Appraisal Co., Ltd.

244

February
2018

1,550

1,573

2,090

3.9

2,090

3.9

0

0.0

Daiwa Real EstateAppraisal Co., Ltd.

516

XYMAX Higashiueno Building

February
2018

1,150

1,162

1,590

4.0

1,590

4.0

0

0.0

Daiwa Real EstateAppraisal Co., Ltd.

427

OF-07

XYMAX Hachioji Building

February
2018

2,600

2,627

3,430

5.0

3,510

4.9

+80

-0.1

Japan Real Estate
Institute

882

RT-01

Muza Kawasaki

February
2018

4,100

4,126

5,070

4.2

5,200

4.1

+130

-0.1

The Tanizawa Sōgō
Appraisal Co., Ltd.

1,073

RT-02

Life KawasakiMiyuki store

February
2018

790

800

973

4.2

974

4.2

+1

0.0

Daiwa Real EstateAppraisal Co., Ltd.

173

RT-03

Vita Seiseki-Sakuragaoka

February
2018

3,100

3,185

3,830

5.1

3,870

5.0

+40

-0.1

The Tanizawa Sōgō
Appraisal Co., Ltd.

684

HT-01

Hotel Vista Sendai

February
2018

4,400

4,431

5,510

4.6

5,550

4.6

+40

0.0

The Tanizawa Sōgō
Appraisal Co., Ltd.

1,118

OT-01

Renaissance 21 Chihaya

February
2018

2,700

2,810

3,130

5.0

3,130

5.0

0

0.0

The Tanizawa Sōgō
Appraisal Co., Ltd.

319

33,04033,521

41,253-

41,824-+571-

Capitalization
rate based on
directcapitalization
method
(%)

3,070

4,303

5,020

February
2018

XYMAX Higashiazabu Building

OF-06

Total / Average

Appraiser

8,302

45

Appendix

Status of Unitholders
Major Unitholders

Number of unitholders by owner
Note: As of August 31, 2018

Name

Number ofinvestment units(unit)

Other domestic corporations

Foreigners

106 holders, 2.6%

70 holders, 1.7%

Ratio
(%)

Securities companies
16 holders, 0.4%

Financial institutions
41 holders, 1.0%
The Master Trust Bank of Japan, Ltd. (Trust account)

43,556

19.49

Japan Trustee Services Bank, Ltd. (Trust account)

34,186

15.30

4,055
holders
Individuals, others

XYMAX Corporation

12,500

5.59

The Nomura Trust and Banking Co., Ltd. (Trust account)

12,191

5.45

Goldman Sachs International

8,795

3.93

Trust & Custody Services Bank, Ltd.
(Securities investment trust account)

6,388

2.85

3,822 holders, 94.3%

Number of investors by owners
Foreigners
44,289Units, 19.8%

The Bank of New York GCM Client Accounts (E) ISG

5,103

Individuals, other

2.28

29,099units,13.0%

Securities Companies
Yamato Shinkin Bank

5,000

2.23

Aozora Bank, Ltd.

4,776

2.13

SIX SIS Ltd

4,286

1.91

136,781

61.16

Total

Individuals, other

2,051units, 0.9%
Other domestic companies
22,516units, 10.1%

29,084units, 13.0%

223,400
Units

Financial institutions
125,460units, 56.2%

Corporations
194,301units, 87.0%

46

Appendix

Overview of Asset Management Company
Overview
Company nameLocation

History
XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation

Establishment of the company

XYMAX Akasaka 111 Building, 1-1-1 Akasaka, Minato-ku, Tokyo

Establishment

August 6, 2007

Capital

0.2 billion yen

Major
shareholders

XYMAX Corporation (100% stake)

Number of
employees

30 (as of April 1, 2018)

Lines ofbusiness

August 6,
2007(1) Financial instruments business as prescribed in the Financial Instruments andExchange Act

September 22,
2007

June 17,
2008

Registered as investment management business as well as investment advisory
and agency business under the Financial Instruments and Exchange Act(Registration No. Director-General of the Kanto Local Finance Bureau
Registration (FIBO) No. 1907)

June 28,2011

Registered as type II financial instruments business under the Financial
Instruments and Exchange Act(registered the change)(Registration No. Director-General of the Kanto Local Finance Bureau
Registration (FIBO) No. 1907)

April 22,2015

Joined Japan Investment Advisers Association

June 30,
2017

Obtained approval to conduct discretionary transaction agency, etc. businessunder the Real Estate Brokerage Act(Approval No. Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 118)(2) Real estate investment advisory business and discretionary real estate
investment business(3) Asset management business for investment corporation

Obtained real estate brokerage business license(License No. Governor of Tokyo License (3) No. 88223)

Nobuhito Inatsuki, Representative Director and President

Executives

Yasushi Yamaguchi, Director
Ryuichi Yoshimura, Director
Shigeki Kawakita, Auditor
Financial instruments business: Director-General of the Kanto Local Finance
Bureau Registration (FIBO) No. 1907 (Investment Management Business,
Investment Advisory and Agency Business, and Type II Financial Instruments
Business)

Licenses

Discretionary transaction agency, etc. business: Minister of Land, Infrastructure,
Transport and Tourism Approval No. 118
Real Estate Specified Joint Enterprise: License No. 75 granted by Commissionerof the Financial Services Agency and Minister of Land, Infrastructure, Transport
and Tourism (for businesses referred to in items (iii) and (iv))

September 4,
2017

Obtained approval to conduct concurrent business related to specified
investment management activities

October 19,
2017

Joined The Investment Trusts Association, Japan

Real estate investment advisory business: Registration No. Sogo-57
Real estate brokerage business: Governor of Tokyo License (3) No. 88223

47

Appendix

Corporate History

Started Office Property Management Business
1982： Started the services such planning,development, management for the
Recruit Groupʼs own office bothinvestment and utilization after thecreation of the “Buildings-related
Division” of Recruit Group.

Made a Full-scale Entry to Retail Property Management Business
2001： Establishment of Retail Property Management Business Division of
XYMAX

1996： Started the property management service
to corporate and private owners otherthan Recruit Group.

Entry into Hotel-related Business

2000： MBO from Recruit Group which gave birth
to XYMAX Group

2012： Acquired 100% stake of Abilitas Hospitality Co., Ltd.

Started Asset Management Business2007： Set up Real Estate Investment Advisors Corporation

2000

2001

Started the provision of
hybrid service of realestate and finance bysetting up MAX-REALTY,
a joint venture with
Sumitomo Mitsui
Banking Corporation.

2002

2003

2004

Made an entry into thebuilding management(BM) service by setting
up XACU Techno Service
Corporation, a joint
venture with Haseko
Anesis

2005

2006

2007

Enhanced the BM
business by acquiring
100% stake of Asahi
Building Management
Services, Inc., asubsidiary of the Daiei
Inc.

2008

2009

2010

Entered into a businesstie-up with SG Holdings
Co., Ltd., a holding
company of Sagawa
Express Co., Ltd.

2011

2012

2013

Started the private
placement REIT businessthrough SG Asset Max
Co., Ltd., a joint venturewith SG Realty Co., LTD.

2014

2015

2016

Opened karaksa hotel
Osaka Shinsaibashi I andkaraksa hotel Kyoto I.

2017

2018

Made an entry
into the J-REIT
business48

Appendix

XYMAX Groupʼs Track Record and Challenge
Track Record of Retail Facilities
 Proven track record of the Group associated with retail facility development and renewal/renovation
projects– Track record of retail facility development:– track record of retail facility renewal/renovation:

Development example

Renewal example

OYAMA YUEN HARVEST WALK*41(Oyama city, Tochigi)

LINOAS*41(Yao city, Osaka)

19 projects
35 projects(as of September 30, 2018)

 Established partnership with retail companies through forming joint ventures– Valor Max Co., Ltd. (joint venture with Valor Holdings Co., Ltd.; established in 2017)– Y Estate Co., Ltd. (joint venture with Yoshizuya Company Limited; established in 2018)

Track Record of Hotels
 Track record of development and operation of “karakusa hotels,” the Groupʼs own brand– Opened: 5 hotels, 533 rooms;– To be opened: 5 hotels, 934 rooms (as of September 30, 2018)
 Accumulation of expertise and know-how on improving earnings and operation efficiency of hotel
developments including conversion of existing buildings

Development and Operation of karaksa
hotels (on a cumulative basis)
1,600

12
Number of hotels
Number of rooms

10

1,467

1,000

6

533
356

4
2

1,200

1,137

8

105

4

10
8

600

200

0
karaksa hotel Osaka Namba *34

800

400

5

2
karaksa Spring hotel Kansai Air Gate *34

1,400

0
2016
2016年

2017
2019
2017年 2018 2018年

2019
2019年

Opening date
開業時期未
unknown

定(Source) XYMAX Corporation

Development and expansion of Mobile Work Office “Choku Choku...” Development of mobile work office business by catching the wave of “workstyle reform” in advance– Number of offices opened: 37 offices, 8 offices with space for kids (as of September 30, 2018)– Number of openings scheduled : 7 offices, 7 offices with space for kids (as of September 30, 2018)
 Number of member companies: 740 member companies and approximately 113,000 members(as of September 30, 2018)
Image of kidsʼ space49

Appendix

ESG Initiatives
Initiatives by the Investment Corporation
Implementation of construction work for adopting LED
lighting at common areas at XYMAX Iwamotocho Building,etc.
 The Investment Corporation is implementing construction work for adopting LRD lighting
at common areas and making efforts to reduce environmental burden at XYMAX
Iwamotocho Building, XYMAX Shinjuku-Gyoen Building and XYMAX Kamiyacho Building

Cases of construction work at XYMAX Iwamotocho Building

After

BeforeMeasures at Sponsor Group
Received DBJ Green Building Certification for groupheadquartersXYMAX Akasaka 111 Building*42

Asset Management Company
Signing of Principles for Financial Action for the 21stCentury
 Principles for Financial Action towards a Sustainable Society (Principles for Financial Action
for the 21st Century) was established on October 4, 2011 as an action guideline forfinancial institutions expressing concern about the future of the earth and intending to fulfill
their responsibilities and roles to form a sustainable society.
 XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation, the Asset Management
Company of the Investment Corporation, has agreed with the ideas of the Principles andsigned it on December 27, 2013.

Contribution activities to the real estate industry
 Nurturing real estate business personnel through “Karakusa Fudosanjuku”

XYMAX Tameike-Sanno Building*42

 CASBEE Real EstateAppointed as assessor

 Holding lectures at Real Estate Sustainability & Energy-Efficiency Diffusion Review
Committee, Ministry of Land, Infrastructure, Transport and Tourism
 Holding lectures at Land Economy and Construction and Engineering Industry Bureau,
Ministry of Land, Infrastructure, Transport and Tourism
 Contributing to “ARES Real Estate Securitization Journal”
 Serving as lecturer of “ARES Real Estate Securitization Master” training course50

〜 Memo 〜51

Notes*１

The amounts indicated in this document are rounded down to the nearest unit unless otherwise specified and the ratios are rounded down to the nearest unit.

P3*２

The Investment Corporation has indicated the issue price with 105,000 yen as the starting point and indexed the Tokyo Stock Exchange REIT Index based on the opening price as of February 15, 2018.

P4*３

The term “real estate management” refers collectively to the services of property management (PM), general-building-maintenance service, property management, multiple general-building-maintenance works on a basis ofcomprehensive contract (including those under sublease contract). The term “general real estate management” refers collectively to the services of real estate management, facility management (FM), asset management, andconstruction management. The term “construction management” refers to the project-based service where the Group, acting as a project manager associated with repair works or large-size renovation project, is entrustedwith the direction of such a project, making necessary adjustments among the project members such as property owner, architects, contractors, and tenants.

*４

Refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya, Toshima, Taito and Shinagawa within Tokyo. The same hereinafter.

*５

The term “Average engagement period” refers to the period in which any member company of the Group engaged in the general real estate management service for a given property, including the period prior to the MBO
when XYMAX Corporation had been a property management service arm of Recruit Group. Averaged values are simple averages based on the number of properties.

*６“Unrealized gain” is calculated using the following formula; estimated value at the end of period – sum of the book value of assets owned by the Investment Corporation as of the last day of the current fiscal period. It should
be noted, however, that the Investment Corporation does not guarantee that such unrealized gain will be realized in the future.

*７“Unrealized gain ratio” is calculated using the following formula; unrealized gain/book value of assets owned by the Investment Corporation as of the last day of the current fiscal period.

*８Comparison with forecasted distribution per unit for the fiscal period ended August 2018 (1st fiscal period) announced in “Notice Concerning Operating Forecasts for the Fiscal Period Ending August 2018, Fiscal Period Ending
February 2019 and Fiscal Period Ending August 2019” dated February 15, 2018 is indicated.

*９

NAV per unit is calculated using the following formula; (unitholdersʼ capital+ unrealized gain)/total number of investment units issued and outstanding (223,400 units), and net asset per unit is calculated using the following
formula; unitholdersʼ capital/ total number of investment units issued and outstanding (223,400 units)*10

LTV is calculated using the following formula; balance of interest-bearing liabilities/total assets, and appraisal LTV is calculated using the following formula; balance of interest-bearing liabilities/(total assets + unrealized gain).

*11

Total acquisition price*12

Estimated value at the end of period indicates the sum of the value appraised by the appraisers of the assets owned by XYMAX REIT or the research price based on the Articles of Incorporation of XYMAX REIT and the“Ordinance on Accountings of Investment Corporations” (Ministry of Finance Ordinance No. 47 of 2006, as amended) with the last day of the current fiscal period as the research date.

*13

Occupancy rate at the end of period is calculated using the following formula; floor area for which lease contracts are concluded as of the last day of the current fiscal period/total leasable area of the Investment Corporation.

*14

The ratio of acquisition price in each asset category to the total acquisition price is indicated.

*15

Refers to Chiyoda, Chuo, Minato, Shinjuku and Shibuya within Tokyo. The same shall apply hereinafter.

*16

Refers to Tokyo (exclusive of 8 central wards), and prefectures of Kanagawa, Saitama, and Chiba.

*17

8 central wards and Tokyo economy*18

The figures are the simple average of the average engagement period of each portfolio asset. The breakdown is calculated based on the acquisition price.

P9

*19

The number of days in the 1st fiscal period indicates the number of days from February 16, 2018 when the Investment Corporation acquired portfolio assets and commenced substantive management to August 31, 2018.

P19

*20

Associated with the Property Management Service Provider Ranking, which is announced by the monthly industry magazine “Property Management” in November every year, the Group had been ranked as No.1 service
provider in terms of entrusted floor area for 6 years in a row from 2010 through to 2016. In this regard and for the purpose of ranking in 2015, the Group had reported to the magazineʼs publisher the figures in terms of
aggregate floor area under management and control, which include the floor space of building maintenance (BM) contract on top of PM contract. Therefore, this should be noted when making comparison with other service
providers that had reported the figures on a PM contract basis for the raking in 2015.

*21

Facility management refers to a package of services associated with maintenance, repair, and renovation of building or building equipment (including the cases where the customer is using part of building), provided on a onestop basis to customers operating their businesses at multiple stores or sites.

*22

Based on the “aggregate number of staff engaged in PM business” associated with the “integrated and office-centric types.”*23

The figures for the track record in PM services stand for the sum of acquisition values in terms of “entire survey target area” for each of the 3 segments of “office building” “urban retail property” and “suburban retail property.”*24

Including those whose parent companies are sponsors of J-REITs.

P6

P20

52

NotesP25*25 Calculated as follows：Deducting 580 million yen of balance of interest-bearing liabilities related to consumption tax loan from the balance of interest-bearing liabilities as of August 31, 2018 (the balance of interest-bearing
liabilities calculated from this formula are hereinafter referred to as “interest-bearing liabilities after repayment of consumption tax loan”), and then calculating the weighted average of the remaining period of interest-bearing
liabilities after repayment of consumption tax loan from August 31, 2018 to the repayment date based on loan balance.
*26 As for interest-bearing liabilities after repayment of consumption tax loan, the weighted average interest rate after taking into account the effect of interest rate swap is indicated.
*27 The ratio of fixed interest rate for interest-bearing liabilities after repayment of consumption tax loan.
*28 The ratio of long-term loan for interest-bearing liabilities after repayment of consumption tax loan is indicated.

P30*29 Calculated based on the aggregate of monthly rents (inclusive of CAM but exclusive of monthly rents of store and residential space and parking lots) stipulated in the property leasing agreements concerning office properties in
the portfolio as of August 31, 2018. “Average rent per unit” is calculated; the aggregate monthly rents divided by the aggregate leased area of the current office properties. The breakdown is calculated according to the data ofleased area.
*30 The figures are the simple average of the time required from the nearest station for office properties in the portfolio. The breakdown is calculated based on the acquisition price.
*31 Average engagement period of office properties in the portfolio is indicated. The breakdown is calculated based on the acquisition price.
*32 The breakdown is calculated based on the acquisition price of retail properties in the portfolio.
*33 Retail facilities whose majority of customer can easily comes on foot or by bicycle in a short time.
*34 Average engagement period of retail properties in the portfolio is indicated. The breakdown is calculated based on the acquisition price.
*35 The ratio of hotels specialized in “stay” among hotel properties in the portfolio is calculated based on the acquisition price.

P31*36 The average occupancy rate refers the ratio of Occupied Area to Leasable Area. The figures stated herein are calculated concerning the office properties under the acquisition during the period between April 2006 and October
31, 2017 and are rounded off to the first decimal place. Regarding “XYMAX Iwamoto-cho Building” and “XYMAX Shinjukugyoen Building,” the occupancy rate is calculated concerning the period from February 2008 forward,
when the Properties have been put under the property management service by the Group.
*37 The average occupancy rate of J-REIT properties is calculated concerning the select group of J-REIT names that held office properties at given points. The figures stated herein are the simple average based on the number ofsuch J-REIT names and the sum of the statistics of occupancy rate disclosed by them.

P45*38 The difference between the estimated value at the end of the 1st fiscal period and the real estate appraisal value upon property acquisition is indicated.
*39 The difference between the direct capitalization rate adopted in the real estate appraisal report for each portfolio asset and the direct capitalization rate adopted in the real estate appraisal upon property acquisition is indicated in
the calculation of estimated value at the end of the 1st fiscal period.
*40 The difference between the estimated value at the end of the 1st fiscal period and the book value at the end of the 1st fiscal period for portfolio assets is indicated.

P49*41 As of August 31, 2018, the Investment Corporation has not officially decided to acquire these properties. Similarly, there is no guarantee that the Investment Corporation will acquire these properties in the future.

P50*42 As of August 31, 2018, the Investment Corporation has not officially decided to acquire these properties. Similarly, there is no guarantee that the Investment Corporation will acquire these properties in the future.

53

Disclaimer

This document is provided solely for informational purposes with regard to XYMAX REIT Investment Corporation (hereinafter, “XYMAX REIT”)
and is not intended to serve as an inducement or solicitation to trade in any product offered by XYMAX REIT. Decisions on investments are to bemade using your own discretion and responsibility.
Purchase, sale and such of XYMAX REITʼs investment units entail the risk of incurring a loss due to fluctuations of the investment unit price.
Please consult with your securities company regarding the purchase of XYMAX REITʼs investment units or investment corporation bonds.
Information presented in this document should not be interpreted, unless otherwise specified, as constituting disclosure documents or an asset
management report required under Financial Instruments and Exchange Act or the Act on Investment Trusts and Investment Corporations.
XYMAX REIT and XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation (hereinafter, the “Asset Management Company”) to which XYMAXREIT entrusts the management of its assets are taking all possible measures to make the information contained in this document the best
available. However, no assurances can be given regarding the accuracy, validity and completeness of the information, regardless of whether it isinformation prepared by XYMAX REIT or the Asset Management Company, or information received from a third party.
Among the information provided in this document, statements other than those pertaining to facts in the past or present are forward-looking
statements presented by XYMAX REIT or the Asset Management Company according to assumptions or judgement based on information
available as of the date of this document (the date if specified otherwise in the document). Forward-looking statements are based onassumptions such as the investment policy of XYMAX REIT, applicable laws and regulations, market environment, interest rate environment,
business practice and other facts as of the preparation date of this document, and do not reflect or consider changes in situations after the
preparation date. Forward-looking statements include, explicit or implied, uncertainties of existing risks, unknown risks and other factors, andmay materially differ from actual performance, business results, financial status and such of XYMAX REIT. Although this document includes
statements concerning future performances, expectations and other forecasts, such statements do not guarantee the future performances,
expectations and other forecasts.
The content of this document is subject to change or repeal without prior notice. XYMAX REIT and the Asset Management Company are under
no obligation to update or publicly disclose the content of this document (including forward-looking statements).
Duplication or reproduction of any content presented in this document without the prior consent of XYMAX REIT or the Asset Management
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