Asset Management Report for the 30th Period(Semi-Annual Report for the 30th Period)
From January 1, 2021 to June 30, 2021

I. Greetings
To Our Unitholders
We would like to express our sincere gratitude for your continued support of Japan Excellent, Inc. (JEI) and Japan Excellent
Asset Management Co., Ltd.
We hereby report the financial results of JEI for the 30th period (from January 1, 2021, to June 30, 2021).
During the 30th period, we acquired Bizcore Jimbocho in the Bizcore series of medium-sized high-end office buildings
developed by sponsor Nippon Steel Kowa Real Estate, and decided to sell Kowa Shirokanedai Building, an old property,
in the 32nd period, which is two periods ahead.
On the leasing front, the period-end occupancy rate of the entire portfolio resulted at 96.4% as the leasing market was lessactive than assumed. Furthermore, for rent revision, we realized upward rent revision of +6.0% for 10.5% of the area
subject to rent revision while responding flexibly by comprehensively taking tenant conditions into account.
On the financial front, JEI strived to enhance asset efficiency through cash management such as acquisition of Bizcore
Jimbocho entirely with funds on hand and release of security deposit. In addition, JEI realized lower interest rates,
extension of remaining period of debt, and diversification of repayment dates through refinancing of long-term loans.
As a result, in the 30th period, JEI recorded operating revenue of 10,567 million yen, operating income of 4,590 million
yen, and net income of 3,975 million yen, while distribution per unit decreased by 62 yen from the previous period to 2,938
yen.
Furthermore, for ESG, JEI made progress in various initiatives including declaration of support for the TCFD and efforts
toward zero CO2 emissions through a shift in electricity source at three owned properties, and achieved inclusion in the
MSCI Japan ESG Select Leaders Index.

About Future Asset Management
In the real estate transaction market, although transaction prices are expected to remain steady for the time being backed
by factors such as vigorous appetite for investment by market participants, JEI believes that there is a need to closely
monitor the impacts of the COVID-19 and investor trends brought about by changes in the economic environment.
Under such environment, JEI will work to acquire competitive properties by means of well-balanced investments based on
size and target area with an aim to expand the asset size over the medium to long term. While mainly utilizing cooperation
with sponsors, JEI will have the asset management company newly cultivate and refine sources of property information inan effort to seize the right business opportunities. At the same, with an aim to improve its portfolio over the medium tolong term, JEI will continue to consider sales of old properties and properties with concerns over future decline incompetitiveness on the assumption that they will be replaced.
In the office building leasing market, with vacancy rates rising gradually, we think there is a need for continued closemonitoring of matters that could have an impact on future office demand such as the revitalization of economic activities
in general thanks to vaccination progress and the emergence of concrete trends related to review of office functions, among
other factors. Under such circumstances, JEI will continue to make efforts to capture the needs of tenants in a timely
manner by further strengthening finely-tuned relationships with existing tenants. As to properties with vacancies at present
or with expected vacancies, JEI will focus on early refilling by cooperating with sponsors and setting flexible conditions
taking into account the level of difficulty depending on the property. As to rent renewal, JEI's policy is to attempt upward
rent revision dynamically on the upturn in environment while placing top priority on prevention of departures bycomprehensively taking tenant conditions into account.
In terms of finance, JEI will strive to conduct stable and sound financial management based on its basic policy of continuing
to reduce financing costs, fixing the interest rates of loans, extending borrowing periods, and diversifying maturity dates.
In regard to ESG, JEI intends to strive to further evolve and deepen its initiatives by taking on challenges in new areas,such as carbon neutrality and expansion of disclosure of non-financial information in line with TCFD recommendations,in addition to ongoing efforts in order to further accelerate our initiatives.
Finally, as always, JEI remains committed to strict adherence to the Financial Instruments and Exchange Act and otherlaws and regulations, and in addition to promoting compliance, we also disclose information on the status of our operations
to our unitholders in an accurate and easy-to-understand manner.
We kindly ask for your continued understanding and support.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

1II. Asset Management Report
1. Outline of Asset Management Operation(1) Operating Results and Financial Position of the Investment Corporation
Fiscal period(Millions of yen)
Operating revenue(Millions of yen)
(Rental revenues)(Millions of yen)
Operating expenses(Property operating expenses) (Millions of yen)
(Millions of yen)
Operating income(Millions of yen)
Ordinary income(Millions of yen)
Net income(Millions of yen)
Total assets(%)(Period-on-period change)(Millions of yen)
Net assets(%)(Period-on-period change)(Millions of yen)
Unitholders’ capital (Note 1)
Total outstanding investment(units)units(yen)
Net assets per unit(yen)
Net income per unit (Note 2)(Millions of yen)
Total distribution(yen)Distribution per unit(yen)(Profit distribution per unit)(Distribution in excess of(yen)earnings per unit)(Note 3)(%)
Return on assets (Note 4)(%)(Annualized rate)(%)
Return on equity (Note 5)(%)(Annualized rate)(%)
Capital ratio (Note 6)(%)(Period-on-period change)(%)
Payout ratio (Note 7)
Number of investment(properties)
properties(tenants)
Number of tenants(m2)
Total leasable area (Note 8, 9)(%)
Occupancy rate
(Millions of yen)
Depreciation(Millions of yen)
Capital expenditure
Net operating income (NOI)(Millions of yen)
(Note 10)Funds from operation (FFO) per(yen)unit (Note 11)(times)FFO multiples (Note 12)
Debt service coverage ratio(times)(DSCR) (Note 13)(Millions of yen)Interest-bearing debt(%)
Loan-to-value (Note 14)(days)
Number of days in operation

27th Period
29th Period
26th Period
28th Period
30th Period
July 1, 2019,
July 1, 2020,
January 1, 2019,
January 1, 2020,
January 1, 2021,
to December 31,
to December 31,
to June 30, 2019
to June 30, 2020
to June 30, 2021
2019
2020
10,668

10,89012,717

11,043

10,567(10,668)(10,890)(11,013)(10,729)(10,567)

6,349

7,978

6,426

6,119

5,977

(5,747)(5,906)(5,697)(5,487)(5,355)

4,318

2,912

6,290

4,924

4,590

3,691

2,247

5,631

4,291

3,976

3,690

2,246

5,631

4,290

3,975

286,172

288,790

293,532

294,004

293,970

(0.3)

(0.9)

(1.6)

(0.2)

(-0.0)

143,822

142,377

152,133

152,418

152,335(0.1)(-1.0)

(6.9)

(0.2)

(-0.1)

139,972

139,972

147,907

147,907

147,9071,305,700

1,305,700

1,353,000

1,353,000

1,353,000

110,149

109,042

112,441

112,652

112,590

2,826

1,720

4,179

3,171

2,938

3,691

3,810

4,004

4,059

3,975

2,827

2,918

2,960

3,000

2,938

(2,827)(1,841)(2,960)(3,000)(2,938)(－)(1,077)

(－)

(－)

(－)

1.3

0.8

1.9

1.5

1.4

(2.6)

(1.6)

(3.9)

(2.9)

(2.7)

2.6

1.6

3.8

2.8

2.6

(5.2)

(3.1)

(7.7)

(5.6)

(5.3)

50.3

49.3

51.8

51.8

51.8

(-0.1)(-1.0)

(2.5)

(0.0)

(-0.0)

100.0

107.0

71.1

94.6

100.0

31

33

35

34

35

204

200

193

191

187

343,830

345,940

332,702331,112336,375

99.4

99.6

99.6

98.0

96.4

1,935

1,929

1,946

1,824

1,847

1,285

1,726

806

1,127

1,547

6,856

6,913

7,263

7,066

7,059

4,309

4,367

4,341

4,287

4,303

18.2

20.3

14.4

15.0

18.3

12.5

9.4

17.0

13.9

13.2

126,600

129,600

125,600

125,600

125,600

44.2

44.9

42.8

42.7

42.7

181

184

182

184

181

(Note 1) Unitholders’ capital does not account for the changes in unitholders’ capital due to the implementation of distribution in excessof earnings related to the allowance for temporary difference adjustments, etc.
(Note 2) Net income per unit is calculated by dividing the net income by the weighted-average number of units outstanding during thesix months period.
(Note 3) Distribution in excess of earnings per unit in the 27th period is from reserve for temporary difference adjustments.
(Note 4) Return on assets = Ordinary income / [(Period beginning total assets) + (Period end total assets) / 2] × 100

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)2

(Note 5) Return on equity = Net income / [(Period beginning net assets) + (Period end net assets)/ 2] × 100(Note 6) Capital ratio = Period end net assets / Period end total assets × 100(Note 7) Payout ratio = (Distribution per unit (not including distribution in excess of earnings per unit) / Net income per unit) × 100(Figures are rounded to the first decimal place.)
As new investment units were issued in the 28th period, the formula below was used to calculate the amount.
Payout ratio ＝ (Total distributions (not including distribution in excess of earnings / Net income) × 100
In addition, when accounting for reversal of allowance for temporary difference adjustments with the following formula, thepayout ratio is 94.8%.
(Total distributions (not including distribution in excess of earnings) / (Net income － Reversal of allowance for temporary
difference adjustments)) × 100(Note 8) For properties with joint ownership (including quasi co-ownership of trust beneficiary interest), a figure obtained bymultiplying the leasable area of the entire property by the ownership ratio (As for AKASAKA INTERCITY AIR, GRANDFRONT OSAKA (Umekita Plaza/South Building), and GRAND FRONT OSAKA (North Building), a figure obtained bymultiplying the ratio of co-ownership interests held by the trustee by the ratio of quasi co-ownership of trust beneficiaryinterest held by JEI.) is indicated as JEI’s leasable area. The same applies hereinafter.
(Note 9) Spaces are rounded to the nearest specified unit. The same applies hereinafter.
(Note 10) NOI = Rental revenues – Property operating expenses + Depreciation(Note 11) FFO per unit = (Net income + Depreciation – Gain on sale of real estate + Loss on sale of real estate + Impairment loss) /Total number of outstanding investment units (the figure is rounded down to the whole number).
(Note 12) FFO multiples = Period end investment unit price / Annualized FFO per unit
(Note 13) DSCR = (Net income before interest and taxes + Depreciation (*)) / (Interest expenses + Interest expense on investment
corporation bonds)* Includes depreciation except for property operating expenses.
(Note 14) Loan-to-value = Period end interest-bearing debt / Period end total assets × 100

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

3

(2) Asset Management Development
Japan Excellent, Inc. (JEI) was founded on February 20, 2006, under the Law Concerning Investment Trusts andInvestment Corporations of Japan (Law No. 198 of 1951, as amended; hereinafter referred to as the “Investment
Trust Law”). On March 15, 2006, it completed the corporate registration to the Kanto Finance Bureau (registration
number 52, issued by the Head of the Kanto Local Finance Bureau) and listed on the Real Estate Investment Trust
Section of the Tokyo Stock Exchange (Securities Code: 8987) on June 27, 2006.
Since the listing, JEI has continued investment management primarily in office buildings with the aim of maintaining
sound corporate growth and stable revenues from the medium- to long-term perspectives. On June 30, 2021, JEI
settled its 30th period.
1) Business conditions and results
In the 30th period (ended June 2021), although the world economy moved towards recovery reflecting thesteady progress of COVID-19 vaccination in major countries in Europe and the U.S., additional measures toboost the economy, etc., and the degree of recovery vary depending on the country. As some regions are seeing
the resurgence of COVID-19, there is a concern that suppression of economic activities to prevent the spreadof the infection could cause a downturn in the economy, and thus the situation requires careful attention.
In the U.S., 10-year government bonds have become highly volatile, evidenced by their sharp fall sharply after
turning upward, due to the mixture of concerns over inflation against the backdrop of the current improvementin economic indicators, the rise in the consumer price index, etc. and concerns over economic slowdown overthe medium to long term, etc.
In Japan, since the Bank of Japan has firmly maintained its monetary-easing stance while keeping a close eyeon the real economy, the yield on over-10-year government bonds has hovered around zero despite a rising
trend in volatility.
In the real estate transaction market, the acquisition appetite of investors within and outside of Japan has
remained strong as the favorable fund procurement environment has continued backed by policies for monetaryeasing, differences in interest rates in Japan and abroad being maintained and such. Therefore, the acquisition
environment remained severe, seeing intense competition for prime properties for sale, etc. Under suchcircumstance, JEI acquired Bizcore Jimbocho (acquisition price: 10.2 billion yen) in June 2021 from Nippon
Steel Kowa Real Estate Co., Ltd., the core sponsor.
In the office building leasing market, there has been an increase in cancellation for reasons such as promotionof telework under the COVID-19 pandemic and reduction of fixed cost due to deterioration of corporate
earnings. The vacancy rate in the five central wards of Tokyo published by Miki Shoji Co., Ltd. showed an
upward trend, standing at 6.2% as of the end of June 2021, up 1.7 points from the end of December 2020. The
average unit rent has shifted downward since August 2020, and that for June 2021 dropped by 3.8% comparedwith that for December 2020. Under such circumstance, the occupancy rate (Note 1) at the end of the period
under review was 96.4%, down 1.6 points from the end of the previous period, because of the impact of stalledleasing activities due to the declaration of a state of emergency, etc.
The total number of properties owned and managed by JEI at the end of the period under review was 35 with a
total acquisition price of 282.5 billion yen and total leasable area of 336,375.40 m2 (101,753.56 tsubos).
2) Fund procurement highlights
JEI will work on stable and sound financial operations over the medium to long term with a basic policy of
procuring funds for the long term at fixed interest rates.
In the 30th period, JEI acquired Bizcore Jimbocho for 10.2 billion yen in June as part of expansion of the asset
size. The acquisition was made entirely using cash on hand in order to improve asset efficiency. Furthermore,at the end of June, JEI refinanced long-term loans of 4.0 billion yen that had matured with long-term loans(borrowing period of 8.8 years, 4.0 billion yen).
As a result, as of the end of the 30th period, the average remaining period of interest-bearing debt (Note 2) was
4.4 years (shortened by 0.2 years from the end of the previous period), the period-end average interest-bearing
debt interest rate (Note 3) was 0.74% (down 0.03 points from the end of the previous period), and the loan-tovalue ratio of total assets (total assets-based LTV) (Note 4) was 42.7% (unchanged from the end of the previous
period).
In addition, JEI continues to have commitment lines of 14.0 billion yen with a credit limit to reduce refinancing
risk and enhance stability for fund procurement, etc.
Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

4The ratings granted to JEI by the following rating agencies are shown below:(Ratings as of June 30, 2021)
Credit rating agency
Japan Credit Rating Agency, Ltd.
(JCR)
Moody’s Japan

Issuer rating (outlook)
Long-term issuer rating
AA- (Stable)
Issuer rating
A3 (Stable)

Individual debt issue rating(Note 5)AA―3) Sustainability initiatives
JEI has worked to reduce the environmental burden and to cooperate/collaborate with stakeholders to achieve asustainable society through corporate social responsibility, while recognizing the importance of consideration
for the environment, society and governance (ESG) in the real estate investment management business.
In order to reduce our environmental impact, JEI has set targets to reduce energy consumption, CO 2 emission
and water consumption intensities by 1% per year compared with the previous period, and over the medium tolong term we aim to reduce average consumption and emission intensities by 5% or more when comparing therates between fiscal 2015 and fiscal 2019 with the rates between fiscal 2020 and fiscal 2024. To meet suchtargets, JEI has promoted upgrading of properties by adopting LED lighting and air-conditioning equipmentwith excellent energy-saving performance. Furthermore, JEI has continuously promoted the acquisition of DBJ
Green Building Certification and the number of certified properties now stands at 21, accounting for 82.7% ofleasable area (as of June 30, 2021; excluding land with leasehold interest). In addition, JEI has sequentiallypressed ahead with switching of electric power sources of properties it owns to reduce CO 2 emissions from useof electricity, and has already done so at Nisseki Yokohama Building, Shiba 2-Chome Building and Daiwa
Minami-morimachi Building.
Such initiatives for sustainability by JEI earned high recognition, specifically a sixth consecutive “Green Star”
rating (Note 7) in the Global Real Estate Sustainability Benchmark (GRESB) (Note 6) Real Estate Assessment
conducted in 2020, as well as “5 Star” in “GRESB Rating” (Note 8). Furthermore, inclusion in MSCI JapanESG Select Leaders Index (Note 9) was decided in May 2021.
Furthermore, in June 2021, JEI’s asset management company Japan Excellent Asset Management Co., Ltd.
(hereinafter, “JEAM”) expressed support for the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) (Note 10), joined the TCFD Consortium (Note 11), and signed the Principles for
Financial Action for the 21st Century (Note 12).
4) Financial results and distribution highlights
As a result of the management above, for the period under review, JEI posted 10,567 million yen in operating
revenue, 4,590 million yen in operating income, 3,976 million yen in ordinary income, and 3,975 million yen in
net income.
Concerning distributions in the period under review, JEI determined to distribute the entirety of unappropriatedretained earnings (except for the portion of less than one yen per unit) to deduct the amount of profit distribution
from its taxable income by applying the special provisions of the tax system on investment corporations (Section
67-15 of the Special Taxation Measures Law). As a result, distribution per unit was 2,938 yen.
(Note 1) Occupancy rate is a percentage of total leased area to total leasable area of each real estate or real estate intrust.
(Note 2) Average remaining period of interest-bearing debt is calculated by applying a weighted average of theremaining period until the repayment date or redemption date of borrowings and investment corporation bonds
at the end of the period to the balance of each interest-bearing debt, for all interest-bearing debt.
(Note 3) Period-end average interest-bearing debt interest rate is calculated by applying a weighted average of interestat the end of the period under review to the balance of each interest-bearing debt, for all interest-bearing debt.
(Note 4) Loan-to-value ratio of total assets ＝ (Period end interest-bearing debt / Period end total assets) ×100
(Note 5) The rating is for 7th series unsecured investment corporation bonds, 8th series unsecured investment
corporation bonds, 9th series unsecured investment corporation bonds, 10th series unsecured investment
corporation bonds, 11th series unsecured investment corporation bonds, 12th series unsecured investment
corporation bonds, 13th series unsecured investment corporation bonds, 14th series unsecured investment
corporation bonds, 15th series unsecured investment corporation bonds and 16th series unsecured investment
corporation bonds.
(Note 6) A benchmark established by a European pension fund group that measures ESG considerations of real estatecompanies and management institutions which is used by major European, American, and Asian institutional
investors for decision-making on investments.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

5

“Green Star” is given when a high evaluation with a score exceeding 50% is made in the two evaluation axes(“Management Policy” and “Implementation & Measurement).
(Note 8) “GRESB Rating” is a rating of the overall score according to the global ranking, and “5 Star” is given to the
top 20% of participants, “4 Star” to the following 20% and so forth.
(Note 9) The MSCI Japan ESG Select Leaders Index is an index consisting of companies that have high Environmental,
Social and Governance performance selected from among the constituents of the MSCI Japan IMI Top 700
Index. The Index has been selected as one of the ESG indices for passive investment by the Government
Pension Investment Fund (GPIF).
(Note 10) The TCFD (Task Force on Climate-related Financial Disclosures) is an international initiative established in2015 by the Financial Stability Board (FSB) at the request of the G20 to discuss climate-related issues to beaddressed by the financial sector.
(Note 11) The TCFD Consortium was established in May 2019 as a Japanese forum for companies and financial
institutions, etc. supporting the TCFD recommendations (report published by TCFD in June 2017) to discuss
effective disclosure and engagement to link disclosed information to appropriate investment decisions
implemented by financial institutions and other organizations.
(Note 12) The Principles for Financial Action for the 21st Century was established in October 2011, based on therecommendations of the Expert Committee on Environment and Finance of the Central Environment Council,
by drafting committee with participation of various financial institutions as the action guidelines of financial
institutions who seek to fulfill their roles and responsibilities in shaping a sustainable society.
(Note 7)

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

6

(3) Capital Increase
The outline of the changes in the total number of outstanding investment units and unitholders’ capital for the mostrecent five years up to the end of the period under review are as follows:
Unitholders’ capital
Capital transaction (units)
Remarks(Millions of yen) (Note 1)
Paid-up Date
Capital transaction
ChangeBalance
ChangeBalance
July 11, 2016
August 10, 2016
January 21, 2020
February 13, 2020

Public offering
Third-party
allotment
Public offering
Third-party
allotment

37,5001,301,950

5,034

139,469(Note 2)3,750

1,305,700

503

139,972(Note 3)43,0001,348,700

7,213

147,186(Note 4)4,300

1,353,000

721

147,907(Note 5)(Note 1) Does not account for the changes in unitholders’ capital due to the implementation of distribution in excess of earnings related
to the allowance for temporary difference adjustments.
(Note 2) New investment units were issued at an issue price of 138,742 yen per unit (purchase price of 134,259 yen per unit) througha public offering in order to partially repay debts procured to acquire properties.
(Note 3) New investment units were issued at a purchase price of 134,259 yen per unit through third-party allotment in order to partiallyfund future acquisitions of specified assets or partially fund repayment of loans.
(Note 4) New investment units were issued at an issue price of 173,355 yen per unit (purchase price of 167,754 yen per unit) througha public offering in order to repay debts procured to acquire properties and partially fund property acquisitions.
(Note 5) New investment units were issued at a purchase price of 167,754 yen per unit through third-party allotment in order to partiallyfund future acquisitions of specified assets or partially fund repayment of loans.
(Note 6) At JEI, there exist no investment units held by JEI (investment units without voting rights provided in Article 308-2 of the
Corporate Law which will be applied mutatis mutandis pursuant to Article 94 of the Investment Trust Law) or cross-heldinvestment units (investment units without voting rights provided in Article 160 of the Investment Trust Enforcement
Ordinance) as of the end of 30th period.

[Market price of the investment securities]
The period-on-period fluctuations in the highest and lowest (closing) prices of JEI’s investment units listed on theReal Estate Investment Trust Section of the Tokyo Stock Exchange during each period is as follows:
30th period
Fiscal period
26th period
27th period
28th period
29th period
(June
2021)
(June
2019)
(December
2019)
(June
2020)
(December
2020)(closing date)
Investment
unit market Highest (yen)163,300
164,500
189,600
200,600
127,900
price
120,000
Lowest (yen)147,600
159,600
75,400110,600(Note)The highest and lowest prices of investment units refer to the closing prices on the Real Estate Investment Trust Section of
the Tokyo Stock Exchange.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

7

(4) Distributions Paid
Concerning distributions in the period under review, JEI determined to distribute the entirety of unappropriatedretained earnings (except for the portion of less than one yen per unit) to deduct the amount of profit distribution
from its taxable income by applying the special provisions of the tax system on investment corporations (Section
67-15 of the Special Taxation Measures Law). As a result, distribution per unit was 2,938 yen.
Fiscal period
Accounting period
Unappropriated retained
earnings at end of period(Thousands of yen)
Retained income(Thousands of yen)
Total cash distribution
amount (Thousands of yen)
(Cash distributions per unit)(yen)
Of which, total profit
distributions(Thousands of yen)
(Profit distribution per unit)(yen)
Of which, total refund ofinvestment equity(Refund of investment
equity per unit)
Of total refund of investment
equity, total distribution
amount from reserve fortemporary difference
adjustments(Of refund of investment
equity per unit, distribution
amount per unit from reserve
for temporary difference
adjustments)
Of total refund of investment
equity, total distribution
amount from distribution
reducing unitholders’ capitalfor tax purpose(Of refund of investment
equity per unit, distribution
amount per unit from
distribution reducing
unitholders’ capital for tax
purpose)26th period

27th period

28th period

29th period

30th period

January 1, 2019, to July 1, 2019, to January 1, 2020, to July 1, 2020, to January 1, 2021, toJune 30, 2019 December 31, 2019 June 30, 2020 December 31, 2020 June 30, 2021
3,691,310

2,246,223

5,631,594

4,291,443

3,975,882

97

469

220,475

232,443768

3,691,213

3,810,032

4,004,880

4,059,000

3,975,114(2,827)(2,918)(2,960)(3,000)(2,938)3,691,213

2,403,793

4,004,880

4,059,000

3,975,114(2,827)(1,841)(2,960)(3,000)(2,938)－

1,406,238

－

－

－

(－)

(1,077)

(－)

(－)

(－)

－

1,406,238

－

－

－

(－)

(1,077)

(－)

(－)

(－)

－

－

－

－

－

(－)

(－)

(－)

(－)

(－)

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

8

(5) Policy and Issues on Future Investment Management
1) Outlook for business environment
In the real estate transaction market, although transaction prices are expected to remain high for the time being
backed by factors such as vigorous appetite for investment by market participants, we believe that there is a need toclosely monitor the impacts of COVID-19 and changes in the environment brought about by changes in economic
conditions, etc.
In the office building leasing market, the present office demand is expected to decrease to a certain degree due totenants’ movements to reduce costs, streamline and consolidate. As such, the vacancy rate is likely to moderately
rise eyeing the increase in new supply in 2023, and thus new contract rent is expected to trend downward.
However, because waiting demand for offices can be also expected to surface along with the gradual receding of theexcessive ‘wait-and-see’ attitude of tenants after the turn of the year due to rejuvenation of economic activities inall fields as a result of the progress in vaccination rollout, there appears to be specific moves upon reviewing therole of office and such. Therefore, it becomes necessary to carefully assess those trends.
2) Policy and issues on future investment management
A. External growth
JEI will work to acquire competitive properties by means of well-balanced investments based on size and area while
gradually shifting its focus from asset replacement to expansion of asset size for external growth. JEI will continue
to have the asset management company newly cultivate and refine property information sources in an effort topromptly gain access to market information on disposition of properties and thereby keep seizing the right business
opportunities while maintaining a focus on cooperation with sponsor companies. At the same time, in order toimprove its portfolio over the medium to long term, JEI will consider disposition of properties that are old or are
likely to lose competitiveness in the future, assuming replacement.
B. Internal growth
JEI will continue to make efforts to capture the needs of existing tenants in a timely manner by further strengthening
finely-tuned relationships.
As to properties with vacancies at present or with expected vacancies, JEI will focus on filling those vacancies at an
early stage by collaborating with the sponsor, setting flexible terms and conditions taking into account the difficulties,
etc. for each property, etc. As for rent revision, while prioritizing prevention of tenant move-outs bycomprehensively considering tenant business conditions and such, JEI is to flexibly negotiate upward rent revisionand quickly shift the policy towards upward rent revision once the environment turns for the better.
Over the medium to long term, JEI aims to enhance earnings of the entire portfolio and improve its ESG evaluation
by making additional strategic investments to maintain asset value and improve property competitiveness whileconsidering energy conservation and BCP measures.
Concerning the requests from tenants in light of the impact of COVID-19, JEI will discuss support individuallywhile continuing to carefully listen and hold discussions.
C. Financial strategy
JEI will consistently work on stable and sound financial operations by continuing to procure funds based on thebasic policy to fix interest rates of loans, extend borrowing periods, and diversify maturity dates while continuing
to reduce interest rates. In addition, JEI will consider new procurement methods such as green bonds andsustainability loans from the perspective of maintaining and strengthening its financial base through diversificationof fund procurement means.
JEI will set the upper limit of total assets-based LTV at 60% and manage it at around 35% to 50%. Furthermore, JEI
will conduct financial operations that emphasize stability by reducing refinancing risks through diversification of
maturity dates of interest-bearing debt.
D. Sustainability initiatives
JEI will work to reduce the environmental burden and to cooperate/collaborate with stakeholders to achieve asustainable society, deeming such as its corporate social responsibility.

(6) Subsequent Events
Not applicable.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

9

(Reference Material)
1. Transfer of Asset (Kowa Shirokanedai Building)
JEI concluded a transaction agreement for trust beneficiary interest on August 18, 2021, as follows.
<Overview of the Asset to Be Transferred>
Asset to be transferred

Trust beneficiary interest in real estate

Name of asset

Kowa Shirokanedai Building

Location

3-19-1 Shirokanedai, Minato-ku, Tokyo

Planned transfer price (Note)

5,400,000,000 yen

Date of conclusion of agreement

August 18, 2021

Transfer dateJune 29, 2022

Transferee

Nippon Steel Kowa Real Estate Co., Ltd.

(Note) Planned transfer price is the transfer value of trust beneficiary interest, excluding transfer-related
expenses, property taxes, city planning taxes settled and consumption taxes.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)10

2. Outline of the Investment Corporation(1) Investment Units
Fiscal period
Total number of units
authorized
Total number of units
issued and outstanding

27th
29th
26th
28th
30th
As of December 31,
As of December 31,
As of June 30, 2019
As of June 30, 2020
As of June 30, 2021
2019
2020
10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

10,000,000 units

1,305,700 units

1,305,700 units

1,353,000 units

1,353,000 units

1,353,000 units

139,972
139,972
147,907
147,907
147,907
million yen
million yen
million yen
million yen
million yen
6,393
6,046
6,746
6,914
6,797
Number of unitholders
individuals
individuals
individuals
individuals
individuals(Note) Does not account for the changes in unitholders’ capital due to the implementation of distribution in excess of earnings related
to the allowance for temporary difference adjustments.
Unitholders’ capital(2) Unitholders
Major unitholders as of June 30, 2021, are as follows:
Number ofunits held
(Units)Ratio of number ofunits held tooutstanding
investment units(%)

1-8-12 Harumi, Chuo-ku, Tokyo

325,78124.08

2-11-3 Hamamatsu-cho, Minato-ku, Tokyo

219,062

16.19

1-8-1 Akasaka, Minato-ku, Tokyo

71,5605.29

1-8-12 Harumi, Chuo-ku, Tokyo

63,0884.66

2-2-2 Otemachi, Chiyoda-ku, Tokyo

52,0533.85

1-13-1 Yuraku-cho, Chiyoda-ku, Tokyo

20,660

1.53

STATE STREET BANK WEST
CLIENT - TREATY 505234

1776 HERITAGE DRIVE, NORTHQUINCY, MA 02171, U.S.A.

19,774

1.46

SSBTC CLIENT OMNIBUS
ACCOUNTONE LINCOLN STREET, BOSTON MA
USA 02111

19,354

1.43

Custody Bank of Japan, Ltd.
(Trust account 7)

1-8-12 Harumi, Chuo-ku, Tokyo

18,936

1.40

Nomura Securities Co., Ltd.

13-1, Nihonbashi, 1-chome, Chuo-ku, Tokyo,
1038011, Japan

17,987

1.33

Total

828,255

61.22

Name

Custody Bank of Japan, Ltd.
(Trust Account) (Note)
The Master Trust Bank of Japan,
Ltd. (Trust Account)
Nippon Steel Kowa Real EstateCo., Ltd.
Custody Bank of Japan, Ltd.
(Securities Investment Trust
Account)
The Nomura Trust and Banking
Co., Ltd.
(Investment trust account)
The Dai-ichi Life Insurance
Company, Limited

Address

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

11

(3) Officers
1) Directors and accounting auditor
Name

Post

Compensation or fee forthe six months ended
June 30, 2021
(Thousands of yen)

Major additional post

Executive
Director

Shuichiro Kayama

President, Japan Excellent Asset Management
Co., Ltd.

Supervisory
Director

Shunichi Maekawa

Part-time Lecturer, Faculty of Modern
Management, Sugiyama Jogakuen University

Eiji Takagi

Eiji Takagi Certified Public Accounting OfficeOsamu Hirakawa

Advisor, Anderson, Mori & Tomotsune

Ernst & Young
ShinNihon LLC–

Supervisory
Director
Supervisory
Director
Accounting
Auditor–

5,580

16,851(Note 2)

(Note 1) There are no investment units of JEI held by either the Executive Director or the Supervisory Directors. Although Supervisory
Directors may have additional posts in companies other than those listed above, there are no conflicts of interest between thosecompanies, including those listed above, and JEI.
(Note 2) The total amount of compensation or fee shown above is an estimated amount and includes the amount paid as compensation
for auditing during the 30th period (11,000 thousand yen), the fee for the English financial statements audit and third-party
assurance engagements.

2) Policy on dismissal and discontinuation of re-election of accounting auditor
The board of directors of JEI shall deliberate dismissal of accounting auditor in accordance with the provisions set
out in the Investment Trust Law, and deliberate discontinuation of re-election based on circumstances in all respects.
3) Matters concerning compensation agreement between directors, etc. and Investment Corporation
Not applicable.

(4) Matters Concerning Directors and Officers Liability Insurance Agreement
JEI has concluded the directors and officers liability insurance agreement as follows:
Scope of the insured

Executive Director andSupervisory Directors

Overview of the directors and officers liability insurance agreement(Overview of insured event covered by the insurance)
Compensation payment, dispute costs, etc. incurred by the insured as aresult of a damage compensation claim arising from an act performed by
the insured based on his or her position will be covered.
(Burden ratio of insurance premium)The entire amount is borne by JEI.
(Measures to ensure the appropriateness of the execution of duties of
directors and officers)
Damages and losses incurred by the insured for an act which was
performed acknowledging that such is a criminal act or violation of laws
and regulations will not be covered by the insurance.

(5) Asset Management Company, Asset Custodian, and Administrative Agents
JEI’s asset management company, asset custodian, and administrative agents as of June 30, 2021, are as follows:
Classification

Name

Asset management company

Japan Excellent Asset Management Co., Ltd.

Asset custodian

Mizuho Trust & Banking Co., Ltd.

Administrative agent(Transfer agent and other administrative work foraccounting and institution operation)

Mizuho Trust & Banking Co., Ltd.

Administrative agent(Investment corporation bonds)

Mizuho Bank, Ltd.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)12

3. Investment Portfolio of the Investment Corporation(1) Investment Portfolio by Area
29th Period(As of December 31, 2020)

30th Period(As of June 30, 2021)

Total
acquisition
price(Millions of yen)
(Note 3)

Investment
ratio inportfolio
(%)

Total
acquisition
price(Millions of yen)
(Note 3)

Investment
ratio inportfolio(%)

Area I

10,9603.7

10,936

3.7

Area II

5,467

1.9

5,428

1.8

Area IV

1,632

0.6

1,625

0.6

Area I104,20835.4

131,012

44.6

Area II

10,772

3.7

10,757

3.7

Area III

84,14928.6

84,292

28.7

Area IV

21,094

7.2

21,061

7.2

OthersTrust beneficiary(commercial
interest in real
Area I
facilities,
estateresidence, etc.)

17,178

5.8

－

－

Total

255,46386.9

265,113

90.2

Deposits in bank and other assets

38,54013.1

28,856

9.8

Total assets

294,004

100.0

293,970

100.0Classification

Use(Note 1)

Real estate
property
Officebuilding
Trust beneficiaryinterest in realestateArea(Note 2)

(Note 1) With the amendment to the Asset Management Guidelines for JEAM (on June 28, 2021), concerning “usage” in investment
ratio by usage, the usage is now determined not only based on the ratio of leasable area for each real estate and the entire realestate securities but also by taking into consideration the ratio of rental revenue, etc. In light of the amendment, the usage of
HAMARIKYU INTERCITY has been changed from others (commercial facilities, residence, etc.) to office building. The
same applies hereinafter.
(Note 2) Areas are classified as follows:
Area I: Six central wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya)
Area II: Central Osaka (Umeda, Dojima, Nakanoshima, Yodoyabashi, Honmachi, etc.), Central Nagoya (Meieki, Fushimi,
Sakae, etc.), and Central Fukuoka (Tenjin, Hakata-ekimae, etc.).
* Central Osaka refers to the areas within about a 10-minute walk of Osaka Station (JR), Osaka-Umeda Station(Hankyu Railway, Hanshin Electric Railway), Umeda Station (Osaka Metro), Yodoyabashi Station (Osaka
Metro), or Honmachi Station (Osaka Metro), respectively. Central Nagoya refers to the areas within about a 10minute walk of Nagoya Station (JR, Nagoya City Subway, and Nagoya Railroad), Fushimi Station (Nagoya City
Subway), or Sakae Station (Nagoya City Subway and Nagoya Railroad), respectively. Central Fukuoka refers to
the areas within about a 10- minute walk of Hakata Station (JR and Fukuoka City Subway), Tenjin Station(Fukuoka City Subway), and Nishitetsu Fukuoka Station (Nishi-Nippon Railroad), respectively. They are,however, not always in line with administrative districts.
Area III: Tokyo other than Area I, and its vicinity (Kanagawa, Saitama, and Chiba)
Area IV: Areas in Osaka, Nagoya and Fukuoka other than Area II, and other government designated cities.
The same applies hereinafter.
(Note 3) Total acquisition price is based on the amounts accounted for in the balance sheets as of the settlement date (amounts of realestate property and trust beneficiary interest in real estate are based on the book value after depreciations).

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

13

(2) Major Properties
The principal properties (top ten properties in net book value) owned by JEI as of June 30, 2021, are as follows.
Ratio of rental
Occupancy
Leasable area Leased area
revenue to total
Book
value
Name
rate
Major use
(Millions of yen) (m ) (Note 1)(m ) (Note 2)
rental revenues(%) (Note 3)(%)
OfficeAKASAKA INTERCITY
26,603
11,021.03
11,021.03
100.0
6.0
building
Nisseki Yokohama
Office22,42640,440.72
40,440.72
100.0
11.4
Buildingbuilding
OfficeOmori Bellport D
20,65325,801.66
25,801.66
100.0
8.7
building
Kowa Kawasaki
Office19,20624,944.17
24,944.17
100.0
6.1
Nishiguchi Buildingbuilding
HAMARIKYU
Office17,03019,718.11
19,433.75
98.6
7.3
INTERCITY
building
Musashikosugi Tower
Office12,33925,043.93
25,043.93
100.0
7.5
Place
building
OfficeMansard Daikanyama
11,1705,420.80
3,940.58
72.7
2.4
building
Kowa Nishi-Shimbashi
Office10,936
8,949.04
8,949.04
100.0(Note 4)
Buildingbuilding
Kowa Kawasaki
Office10,612
18,612.72
18,612.72
100.0(Note 4)
Higashiguchi Buildingbuilding
OfficeBizcore Jimbocho
10,046
5,261.75
5,261.75
100.0(Note 4)
building
2

Total

161,025

185,213.93

2

183,449.35

99.0

－

－

(Note 1) Leasable area refers to area available for lease of which ownership is attributable to JEI as of June 30, 2021. For properties
with joint ownership, the value is obtained by multiplying the total leasable area of the shared property by the percentage ofthe interest owned by JEI, regarding the figure as JEI’s leasable area.
(Note 2) Leased area refers to area with lease contracts or master lease agreements that guarantee a certain amount of fixed rent payment
concluded with end tenants as of June 30, 2021. For properties with joint ownership, the value is obtained by multiplying thetotal leased area of the property by the percentage of the co-ownership interest owned by JEI, regarding the figure as JEI’sleased area. For properties which are used for profit by the master lease company, leased area refers to the portion used, andthe figures indicate area which can be reasonably calculated based on the lease agreement on the master leasing. The leased
area of end tenants who terminated their lease arrangement but have not yet moved out as of the end of period is included in
the leased area. This also applies to any figure which is calculated based on “leased area” in this document.
(Note 3) Occupancy rate is a percentage of total leased area to total leasable area as of June 30, 2021.
(Note 4) The values for Kowa Nishi-Shimbashi Building and Kowa Kawasaki Higashiguchi Building are not disclosed as consent fordisclosure of rent from the end tenants has not been obtained; and that for Bizcore Jimbocho is not disclosed as consent fordisclosure of rent from the owner of other exclusively owned space conducting centralized management has not been obtained.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

14

(3) Portfolio Ownership Breakdown
Real estate properties and their forms of ownership as of June 30, 2021, are as follows:
Property
No.

Property nameLocation (Residential address)

Ⅰ-1

Omori Bellport D

6-26-3 Minami-Oi, Shinagawa-ku, Tokyo

Ⅰ-2

Shiba 2-Chome Building

2-6-1 Shiba, Minato-ku, Tokyo

Ⅰ-3

JEI Hamamatsucho Building

2-2-12 Hamamatsu-cho, Minato-ku, Tokyo

Ⅰ-8

AKASAKA INTERCITY

1-11-44 Akasaka, Minato-ku, Tokyo

Ⅰ-9

Kowa Shirokanedai Building

3-19-1 Shirokanedai, Minato-ku, Tokyo

I-10

Daiba Garden City Building

2-3-5 Daiba, Minato-ku, Tokyo

Ⅰ-12

HAMARIKYU INTERCITY

1-9-1 and 15 Kaigan, Minato-ku, Tokyo

Ⅰ-13

Shintomicho Building

3-10-9 Irifune, Chuo-ku, Tokyo

Ⅰ-14

Kowa Nishi-Shimbashi Building

2-1-1 Nishi-Shimbashi, Minato-ku, Tokyo

Ⅰ-15

Mansard Daikanyama

10-1 Sarugakucho, Shibuya-ku, Tokyo

I-16

AKASAKA INTERCITY AIR

1-8-1Akasaka, Minato-ku, Tokyo

I-17

Bizcore Akasaka-mitsuke

3-1-2 Akasaka, Minato-ku, Tokyo

I-18

Bizcore Jimbocho

Ⅱ-1

NHK Nagoya Housou-Center
Building
Osaka Kogin Building (Land with
Leasehold Interest)

Ⅱ-3

3-9-2 Kanda-ogawamachi, Chiyoda-ku,
Tokyo
Area I
1-13-3 Higashi-Sakura, Higashi-ku,
Nagoya-shi, Aichi

25,90020,653

13,600

8,962

9,060

8,062

30,20026,603

5,010

4,638

10,1009,416

25,90017,030

2,210

1,749

13,70010,936

13,70011,170

7,780

6,503

6,630

6,176

10,30010,046

174,090

141,948

6,170

5,428

4-1-1 Koraibashi, Chuo-ku, Osaka-shi, Osaka

Trust beneficiaryinterest in real estate

2,470

1,865

Trust beneficiaryinterest in real estate

5,050

4,882

Trust beneficiaryinterest in real estate

Ⅱ-4

GRAND FRONT OSAKA (Umekita
Plaza·South Building)

Ⅱ-5

GRAND FRONT OSAKA (North
Building)

3-1 Ohbuka-cho, Kita-ku, Osaka City, Osaka

Ⅲ-1

Musashikosugi Tower Place

Ⅲ-2

Kowa Kawasaki Higashiguchi
Building

Area II
1-403 Kosugi-machi, Nakahara-ku,
Kawasaki-shi, Kanagawa
1-53 Nisshin-cho Kawasaki-ku,
Kawasaki-shi, Kanagawa

Ⅲ-3

JEI Hongo Building

2-38-16 Hongo, Bunkyo-ku, Tokyo

Ⅲ-5

Kawasaki Nisshincho Building

7-1 Nisshin-cho, Kawasaki-ku, Kawasaki-shi,
Kanagawa

Ⅲ-7

JEI Ryogoku Building

3-25-5 Ryogoku, Sumida-ku, Tokyo

Ⅲ-9

Kowa Kawasaki Nishiguchi Building

66-2 Horikawa-cho, Saiwai-ku, Kawasaki-shi,
Kanagawa

Ⅲ-10

Pacific Square Sengoku

2-29-24 Hon-Komagome, Bunkyo-ku, Tokyo

Ⅲ-11

Core City Tachikawa

2-37-7 Akebono-cho, Tachikawa-shi, Tokyo
1-1-8 Sakuragi-cho, Naka-ku, Yokohama-shi,
Kanagawa
4-59 Bentendori, Naka-ku, Yokohama-shi,
Kanagawa
Area III
2-2-48 Kata-machi, Tsushima-ku, Osaka-shi,Osaka
14-4 Hacchobori, Naka-ku, Hiroshima-shi,
Hiroshima
1-1-2 Kitananajonishi, Kita-ku, Sapporo-shi,
Hokkaido

Ⅲ-12

Nisseki Yokohama Building

Ⅲ-13

Yokohama Bentendori Dai-ichi
Seimei Building

Ⅳ-2

JEI Kyobashi Building

Ⅳ-3

JEI Hiroshima Hacchobori Building

Ⅳ-4

SE Sapporo Building

Ⅳ-5

Aoba-dori Plaza

3-2-1 Chuo, Aoba-ku, Sendai-shi, Miyagi

Ⅳ-6

Daiwa Minami-morimachi Building

2-6, 2-chome Kita Tenjinbashi, Kita-ku,
Osaka-shi, Osaka

Ⅳ-7

JEI Naha Building

2-8-1 Kumoji, Naha-shi, Okinawa

Hiroshima Dai-ichi Seimei OS
Building
Senshin Building

1-2-21 Matoba-cho Minami-ku,
Hiroshima-shi, Hiroshima
1-6-27 Chuo, Aoba-ku, Sendai-shi, Miyagi
Area IV
Total

IV-9

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estateAppraisal value
at end of period Net book value(Millions of yen) (Millions of yen)
(Note)

Real estate

4-1 Ohbuka-cho, Kita-ku, Osaka City, Osaka(Umekita Plaza)
4-20 Ohbuka-cho, Kita-ku, Osaka City, Osaka(South Building)

IV-8

Form of ownership

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Real estate

3,850

4,009

17,54016,18521,50012,33910,60010,612

4,650

4,941

4,680

4,127

2,660

2,319

16,40019,206

1,490

1,616

9,460

6,026

31,20022,426682

675

103,322

84,292

4,420

2,767

3,940

2,582

9,160

5,066

4,460

2,194

5,190

4,167

2,020

1,462

3,330

2,820

1,690
34,210329,162

1,625
22,687265,113

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

15

(Note) Appraisal value at end of period indicates the appraisal value described in the real estate appraisal report prepared by real estateappraisers belonging to Japan Real Estate Institute, Chuo Real Estate Appraisal Co., Ltd., Japan Valuers Co., Ltd., Daiwa Real
Estate Appraisal Co., Ltd. and The Tanizawa Sogo Appraisal Co., Ltd. as of June 30, 2021, pursuant to the articles ofincorporation of JEI and the regulations stipulated by the Investment Trusts Association, Japan. For properties with joint
ownership in the current portfolio, the value is obtained by multiplying the total value of the shared real estate by the percentageof the interest owned by JEI or the trustee.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

16

29th Period
30th Period
July 1, 2020, to December 31, 2020
January 1, 2021, to June 30, 2021
Ratio of rental
Ratio of rental
Property name
Property
Total number of Occupancy Rental revenue revenue to Total number of Occupancy Rental revenue revenue to
No.
rate
rate
tenants
tenants
total rental
total rental(Interim)(Interim)(At end of period) (At end of period) (Millions of yen)
(At end of period) (At end of period) (Millions of yen)revenues
revenues(Note 1)
(Note 1)
(%)
(%)
(%)
(%)
I-1
Omori Bellport D
1
100.0
921
8.6
1
100.0
914
8.7
Ⅰ-2
Shiba 2-Chome Building
2
100.0
373
3.5
2
99.2
373
3.5
JEI Hamamatsucho
Ⅰ-3
1
100.0
245
2.3
1
100.0
244
2.3
Building
AKASAKA
Ⅰ-8
13
100.0
615
5.7
13
100.0
633
6.0
INTERCITY
Kowa Shirokanedai
Ⅰ-9
1
97.3
180
1.7
1
92.0
169
1.6
Building
Daiba Garden City
I-10
1
100.0
331
3.1
1
82.6
341
3.2
Building
HAMARIKYU
Ⅰ-12
1
98.6
759
7.1
1
98.6
773
7.3
INTERCITY
Ⅰ-13
Shintomicho Building
11
100.0
74
0.7
11
100.0
74
0.7
Kowa Nishi-Shimbashi
Ⅰ-14
1
93.2
(Note 2)
(Note 2)1100.0(Note 2)
(Note 2)
Building
Ⅰ-15
Mansard Daikanyama
9
94.1
312
2.9
7
72.7
253
2.4
AKASAKA
I-16
1
100.0
(Note 2)
(Note 2)1100.0(Note 2)
(Note 2)
INTERCITY AIR
I-17
Bizcore Akasaka-mitsuke
1
100.0
153
1.4
1
100.0
153
1.5
I-18
Bizcore Jimbocho
1100.0(Note 2)
(Note 2)
Area I
43
98.8
42
96.3
NHK Nagoya HousouⅡ-1
35
98.8
382
3.6
33
94.8
373
3.5
Center Building
JEI Nishi-Honmachi
Ⅱ-2
2
0.0
Building (Note 3)
Osaka Kogin Building
Ⅱ-3(Land with Leasehold
1
100.0
89
0.8
1
100.0
89
0.8
Interest)
GRAND FRONTOSAKA (Umekita Plaza
Ⅱ-4
2
98.0
(Note 2)
(Note 2)2
98.4
(Note 2)
(Note 2)
·South Building)
GRAND FRONT
Ⅱ-5
OSAKA
5
97.6
(Note 2)
(Note 2)597.2
(Note 2)
(Note 2)(North Building)Area II
43
98.6
41
96.4
Musashikosugi Tower
Ⅲ-1
39
100.0
813
7.6
39
100.0
797
7.5
Place
Kowa Kawasaki
Ⅲ-2
1
100.0
(Note 2)
(Note 2)1100.0(Note 2)
(Note 2)
Higashiguchi Building
Ⅲ-3 JEI Hongo Building
1100.0(Note 2)
(Note 2)
1
73.8
(Note 2)
(Note 2)
Kawasaki Nisshincho
Ⅲ-5
1
65.3
204
1.9
1
58.3
137
1.3
Building
Ⅲ-7 JEI Ryogoku Building
1
100.0
117
1.1
1
100.0
112
1.1
Kowa Kawasaki
Ⅲ-9
1
100.0
648
6.0
1
100.0
642
6.1
Nishiguchi Building
Ⅲ-10 Pacific Square Sengoku
1
100.0
60
0.6
1
100.0
61
0.6
Ⅲ-11 Core City Tachikawa
1
100.0
319
3.0
1
97.8
320
3.0
Nisseki Yokohama
Ⅲ-12
1
100.0
1,193
11.1
1
100.0
1,202
11.4
Building
Yokohama Bentendori
Ⅲ-13
1
100.0
42
0.4
1
100.0
41
0.4
Dai-ichi Seimei Building
Area III
48
97.4
48
96.0
Ⅳ-2

JEI Kyobashi Building

1

98.9

187

1.7

1

100.0

185

1.8

Ⅳ-3

JEI Hiroshima
Hacchobori Building

1

94.2

154

1.4

1

98.4

153

1.5

Ⅳ-4

SE Sapporo Building

1

100.0

411

3.8

1

99.3

419

4.0

Ⅳ-5

Aoba-dori Plaza

50

99.4

193

1.8

49

96.0

187

1.8

Ⅳ-6

Daiwa Minamimorimachi Building

1

100.0

198

1.8

1

100.0

194

1.8

Ⅳ-7

JEI Naha Building

1

91.3

76

0.7

1

89.4

77

0.7

IV-8

Hiroshima Dai-ichi
Seimei OS Building

1

97.2

140

1.3

1

95.2

141

1.3

IV-9

Senshin Building

1

92.8

49

0.5

1

94.3

51

0.5

Area IV

57

97.8

-

-

56

97.6

-

-

Total

191

98.0

10,729

100.0

187

96.4

10,567100.0

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)17

(Note 1) Total number of tenants indicates the total number of tenants in each property as of the end of each period. For properties forwhich master lease agreements have been concluded, the number of tenants is counted as one per property. When a tenant has
multiple tenancies in the same property, it is counted as one tenant, and when in multiple properties, it is counted as multiple
tenants. As for Osaka Kogin Building (Land with Leasehold Interest), total number of tenants is counted as one based on thelease agreement for the leased land.
(Note 2) Rental revenue (interim) and ratio of rental revenue to total rental revenues for Kowa Nishi-Shimbashi Building, Kowa
Kawasaki Higashiguchi Building, and JEI Hongo Building are not disclosed as consent for disclosure of rent from the end
tenants has not been obtained; those for AKASAKA INTERCITY AIR, GRAND FRONT OSAKA (Umekita Plaza·South
Building), and GRAND FRONT OSAKA (North Building) are not disclosed as consent for disclosure of rent from the coowners has not been obtained; and those for Bizcore Jimbocho are not disclosed as consent for disclosure of rent from theowner of other exclusively owned space conducting centralized management has not been obtained.
(Note 3) JEI completed transfer of JEI Nishi-Honmachi Building on July 3, 2020.

(4) Securities Portfolio
None(5) Renewable Power Generation Facility
None(6) Right to Operate Public FacilityNone(7) Other Assets
1) Contract amount and fair value of specified transactions and foreign exchange forwards transactions
Fair value
Contract amount (Thousands of yen) (Note 1)(Thousandsof yen)Classification
Type(Note 2)

Over one year

Over-the-countertransaction

Interest rate swap
transactions
Floating interest ratereceivable
Fixed interest rate
payable46,140,000–

40,390,000(Note 1) Contract amount of swap transactions is calculated based on notional principal.
(Note 2) Fair value is omitted for presentation as over-the-counter transactions meet requirements for special accounting under the
Accounting Standard for Financial Instruments.

2) Shares
Name (Note 1)

KMO Corporation

Number ofsharesAcquisition price(Thousands of yen) (Note 4)

Assessed value(Thousands of yen) (Note 5)

Unit price

Unit price833 shares

50

Amount42,06950

Amount42,069Valuation
gains/losses－

Remarks－(Note 1) With the acquisition of GRAND FRONT OSAKA (North Building) (part of trust beneficiary interest in real estate), JEI
purchased 833 common shares of KMO Corporation, an entity that conducts facility management and business development
for Knowledge Capital (Note 2), and acquired the restitution rights of funds (Note 3) of Knowledge Capital’s funds. Moreover,said common shares may not be transferred separately from quasi co-ownership of the trust beneficiary interest in GRANDFRONT OSAKA (North Building).
(Note 2) Knowledge Capital, a center for industry-academia collaboration, is one of the main uses of GRAND FRONT OSAKA (North
Building).
(Note 3) The details of the restitution rights of Knowledge Capital’s funds are recorded below under “3) Securities other than shares”(Note 4) Acquisition price includes the costs of acquisition.
(Note 5) The assessed value of these unlisted shares is stated as the book value.

3) Securities other than shares
Asset type (Note 1)

QuantityBook value (Thousands of yen)
Unit priceAmountAssessed value(Thousands of yen) (Note 2)
Unit priceAmountValuation
gains/losses

Remarks

Restitution rights of
－
－
－
－
1
2,659
2,659
funds
(Note 1) With the acquisition of GRAND FRONT OSAKA (North Building) (part of trust beneficiary interest in real estate), JEI
acquired the restitution rights of funds of Knowledge Capital’s funds. Moreover, said restitution rights may not be transferred
separately from quasi co-ownership of the trust beneficiary interest in GRAND FRONT OSAKA (North Building).
(Note 2) The assessed value of the restitution rights of funds states the book value.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)184) Other Assets
Book value (Thousands of yen)
Asset type (Note 1)

Quantity
Unit priceAmountAssessed value(Thousands of yen) (Note 2)
Unit priceAmountValuation
gains/losses

Remarks

Restitution rights of
1
－
454
－
454
－
－
funds
(Note 1) With the acquisition of GRAND FRONT OSAKA (Umekita Plaza·South Building) and GRAND FRONT OSAKA (North
Building), JEI acquired restitution rights of funds concerning GRAND FRONT OSAKA TMO General Incorporated
Association, which runs businesses related to the revitalization of the area centering on GRAND FRONT OSAKA, theimprovement of the environment and the formation of communities.
(Note 2) The assessed value of the restitution rights of funds states the book value.

(8) Status of JEI’s Properties by Country and Region
None for JEI’s properties in countries or regions other than Japan.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)19

4. Capital Expenditures for Owned Properties(1) Scheduled Capital Expenditures
The following table shows major items of scheduled capital expenditures for repairs and maintenance planned for theproperties owned by JEI as of the end of the 30th period (ended June 30, 2021). The values below include portions
to be expensed for accounting purposes.
Property nameLocation

PurposeSchedule term

Estimated construction costs(Millions of yen)
Payment for the Total of
Total six months ended advanceJune 30, 2021
payment

Kowa Shirokanedai
Building

Minato-ku, Tokyo

Renovation of airFrom Octoberconditioning systems
2021(Phase 1)
To December 2021

122

－

－

Kowa Kawasaki
Higashiguchi Building

Kawasaki-shi,
Kanagawa

Update of gondola
equipment

From April 2021
To December 2021

81

－

－

Shiba 2-Chome
Building

Minato-ku, Tokyo

Renovation of exterior From January 2021
walls
To December 2021

75

－

－

JEI Ryogoku Building

Sumida-ku,
Tokyo

Update of emergency
generator

63

－

－

JEI Hiroshima
Hacchobori Building

Hiroshima-shi,
Hiroshima

62

－

－

Kowa Kawasaki
Higashiguchi Building

Kawasaki-shi,

61

－

－

Kowa Kawasaki
Higashiguchi Building

Kawasaki-shi,

From July 2021
To December 2021

56

－

－

From August 2020
To December 2021

48

－

－

From August 2021
To December 2021

45

－

－

43

－

－

41

－

－

40

－

－

40

－

－

36

－

－

36

－

－

34

－

－

29

－

－

14

－

－

SE Sapporo Building

Omori Bellport D

Kanagawa

Kanagawa
Sapporo-shi,
Hokkaido
Shinagawa-ku,
Tokyo

Nisseki Yokohama
Building

Yokohama-shi,
Kanagawa

Kawasaki Nisshincho
Building

Kawasaki-shi,

Shiba 2-Chome
Building
Kawasaki Nisshincho
Building
SE Sapporo Building

JEI Naha Building

Kowa Kawasaki
Higashiguchi Building

Kanagawa
Minato-ku, Tokyo
Kawasaki-shi,
Kanagawa
Sapporo-shi,
Hokkaido
Naha-shi,
Okinawa
Kawasaki-shi,
Kanagawa

JEI Naha Building

Naha-shi,
Okinawa

Yokohama BentendoriDai-ichi Seimei
Building

Yokohama-shi,
Kanagawa

From October
2021
To December 2021
Renovation of airFrom Octoberconditioning systems
2021(Phase 2)
To December 2021
Renovation of
From July 2021
emergency elevators To December 2021
Renovation of seals
around exterior walls(Phase 1)
Update of extra-highvoltage substation(Phase 1)
Update of automatic
air conditioning
control equipment(Phase 3)
Repair of rooftop,
exterior walls, etc.
(Phase 1)

From February
2021
To August 2021
From October
Renovation of heat2021
storage tank (Phase 1)
To December 2021
Renovation of multi- From August 2021
level parking lot
To December 2021
Renovation of seals
From August 2021
around exterior walls
To December 2021
(Phase 1)
From November
Renovation of multi2021
level parking lot
To December 2021
From October
Renovation of exterior
2021
wall (north side)
To December 2021
Update of lighting in
exclusively-owned
From July 2021
sections and update of To December 2021
guide lights (Phase 1)
From October
Renewal of elevators
2021
To December 2021
From November
Update of substation
2021(Phase 2)
To November 2021

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

20

(2) Capital Expenditures for the Six Months Ended June 30, 2021
The following table shows constructions conducted by JEI during the period ended June 30, 2021, and expensed ascapital expenditures. Capital expenditures for the period ended June 30, 2021, were 1,547 million yen and, whencombined with repairs and maintenance costs of 158 million yen classified as expenses in the period under review,
the amount of constructions completed totaled 1,705 million yen.
Property nameAmount Paid
(Millions of yen)

PurposeTerm

Kawasaki-shi,
Kanagawa

Renovation of air-conditioning
systems (Phase 4)

From July 2020
To June 2021

271

Kowa Kawasaki
Kawasaki-shi,
Higashiguchi Building Kanagawa

Renovation of air-conditioning
systems (Phase 4)

From January 2021
To June 2021

247

Renovation of air-conditioning
systems (Phase 1)

From January 2021
To June 2021

150

Kowa Kawasaki
Kawasaki-shi,
Higashiguchi Building Kanagawa

Renovation of restrooms(Phase 3)

From January 2021
To June 2021

123

JEI Hiroshima
Hacchobori Building

Hiroshima-shi,
Hiroshima

Renovation of air-conditioning
systems (Phase 1)

From April 2021
To June 2021

68

Omori Bellport D

Shinagawa-ku,
Tokyo

Update of heat source
equipment (Phase 2)

From August 2020
To March 2021

57

SE Sapporo Building

Sapporo-shi,
Hokkaido

Renovation of multi-levelparking lot

From May 2021
To June 2021

38

Omori Bellport D

Shinagawa-ku,
Tokyo

Update of extra-high voltage
substation (Phase 2)
Update of ancillary buildings
and facilities in line withrenovation of restrooms
Renewal of elevator control
systemFrom August 2020
To March 2021

37

From January 2021
To June 2021

35

From December 2020
To June 2021

30

–

484

Kowa Kawasaki
Nishiguchi Building

JEI Ryogoku Building

Location

Sumida-ku,
Tokyo

Kowa Kawasaki
Kawasaki-shi,
Higashiguchi Building Kanagawa
Shintomicho Building

Chuo-ku,Tokyo

Other constructions
Total

1,547

(3) Reserved Funds for Long-Term Repairs and Maintenance Plans
Based on the long-term repairs and maintenance plans developed for each property, JEI has set aside the following
cash reserves, derived from depreciation and other excess cash flows, in order to fund large-scale repairs, maintenanceand other construction.
(Unit: Millions of yen)Item

26th Period
27th Period
28th Period
29th Period
30th Period
January 1, 2019, to July 1, 2019, to January 1, 2020, to July 1, 2020, to January 1, 2021, toJune 30, 2019 December 31, 2019 June 30, 2020 December 31, 2020 June 30, 2021

Reserved funds at
beginning of period

290

284

300

473

250

Increase

411

899

1,553

260

963

Decrease

417

884

1,380

484

834

Reserved funds at theend of period

284

300

473

250

380

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)21

5. Expenses and Liabilities(1) Expenses Associated with Asset Management(Unit: Thousands of yen)Account

29th Period
July 1, 2020, to December 31, 2020

30th Period
January 1, 2021, to June 30, 2021

(a) Asset management fees

470,777454,816(b) Custodian fees

21,847

21,880(c) Administrative service fees

40,06540,427(d) Compensation for directors

5,580

5,580

(e) Accounting auditor fees

11,00011,000(f) Other82,42887,788631,698

621,492

Total(2) Borrowings
Borrowings by each financing source as of the end of the 30th period (ended June 30, 2021) are as follows:
Classification
LenderDrawdown
date

Balance at
beginning of
period(Thousands of yen)

Development Bank of Japan Inc.

June 28,
2013
July 31,2014

The Dai-ichi Life Insurance Company
LimitedMizuho Bank, Ltd.
MUFG Bank, Ltd.
November 29,
Sumitomo Mitsui Banking
2016Long-term Corporation
Sumitomo
Mitsui
Trust
Bank
Limitedloans due
within one Mizuho Bank, Ltd.
year
MUFG Bank, Ltd.
December 29,
2014
Mizuho Trust & Banking Co., Ltd.
Resona Bank, Ltd.
Sompo Japan Insurance Inc.
January 31,
Tokio Marine & Nichido Fire
2017
Insurance Co., Ltd.
July 31,Development Bank of Japan Inc.
2014
Subtotal

Average
Balance at interest rate
Repayment
Maturity date method
end of period(%)(Thousands of yen)

2,000,000－

2,000,000－

520,000
540,000

520,000
540,000

1,080,000

1,080,000

1,620,000
1,950,000
2,000,000
1,200,000
600,000－

1,620,000
1,950,000
2,000,000
1,200,000
600,000
2,000,000－

1,000,000－

2,000,000

13,510,000

14,510,000(Note 1)1.60750(Note 2)0.98834(Note 2)0.42738

Use

Remarks

June 30,
2021

November 29,
2021
Lumpsum

0.81875(Note 2)

December 30,
2021

0.35000(Note 2)January 31,
2022

1.15417(Note 2)June 30,
2022

Repayment Unsecuredof existingand nonborrowing guaranteed

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

22Classification

LenderDrawdown
date

Balance at
beginning of
period(Thousands of yen)

Average
Balance at interest rate
Repayment
Maturity date method
end of period(%)(Thousands of yen)

2,000,000－

1,000,000－

2,000,000－

2,000,000

2,000,000

500,000

500,000

500,000

500,000

Mizuho Bank, Ltd.

1,950,000

1,950,000

MUFG Bank, Ltd.

2,000,000

2,000,000

1,200,000

1,200,000

600,000

600,000

2,000,000

2,000,000

3,000,000

3,000,000

Mizuho Bank, Ltd.

420,000

420,000

MUFG Bank, Ltd.

250,000

250,000

Sumitomo Mitsui Banking
Corporation

140,000

140,000

1,560,000

1,560,000

1,500,000

1,500,000

Resona Bank, Ltd.

500,000

500,000

Aozora Bank, Ltd.

750,000

750,000

The Bank of Fukuoka, Ltd.

150,000

150,000

1,000,000

1,000,000

3,500,000

3,500,000

500,000

500,000

500,000

500,000

3,500,000

3,500,000

Mizuho Bank, Ltd.

870,000

870,000

MUFG Bank, Ltd.

590,000

590,000

350,000

350,000

1,560,000

1,560,000

Resona Bank, Ltd.

1,000,000

1,000,000

Aozora Bank, Ltd.

750,000

750,000

The Bank of Fukuoka, Ltd.

150,000

150,000

Sompo Japan Insurance Inc.
Tokio Marine & Nichido Fire
Insurance Co., Ltd.
Development Bank of Japan Inc.
Mizuho Bank, Ltd.
Sompo Japan Insurance Inc.
Tokio Marine & Nichido Fire
Insurance Co., Ltd.

Mizuho Trust & Banking Co., Ltd.

January 31,
2017
July 31,2014
September 30,
2020
November 30,
2017

December 29,
2014

Resona Bank, Ltd.
Development Bank of Japan Inc.
The Dai-ichi Life Insurance
Company Limited

Long-term
Mizuho Trust & Banking Co., Ltd.
loans
The Norinchukin Bank

June 30,
2015
June 29,2018

November 30,
2015

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Resona Bank, Ltd.

November 30,
2017

Aozora Bank, Ltd.
Development Bank of Japan Inc.

Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking Co., Ltd.

November 30,
2015

Use

Remarks(Note 1)0.35000(Note 2)January 31,
2022

1.15417(Note 2)June 30,
2022
September 30,
0.281762022

0.35000 November 30,(Note 2)2022

0.93625(Note 2)

December 30,
2022

1.20250(Note 2)0.46000(Note 2)June 30,2023

0.84375 November 30,(Note 2)2023

Lumpsum

Repayment Unsecuredof existingand nonborrowing guaranteed

0.64801 November 30,(Note 2)2023

0.68431(Note 2)

May 31,2024

0.96275 November 30,(Note 2)2024

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

23

Classification

Lender

Nippon Life Insurance Company

Drawdown
date

December 12,
2019

Average
Balance atBalance at interest rate
Repayment
beginning of
Maturity date method
end of period(%)
period(Thousands of yen)(Thousands of yen)
(Note 1)1,000,000

1,000,000

Mizuho Bank, Ltd.

3,700,000

3,700,000

MUFG Bank, Ltd.

1,000,000

1,000,000

400,000

400,000

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation
The Norinchukin Bank

June 29,2018

Shinkin Central Bank

1,000,000

1,000,000

The Bank of Fukuoka, Ltd.

700,000

700,000

Resona Bank, Ltd.

200,000

200,000

Mizuho Bank, Ltd.

850,000

850,000

850,000

850,000

600,000

600,000

The Norinchukin Bank

1,450,000

1,450,000

Mizuho Bank, Ltd.

2,200,000

2,200,000

MUFG Bank, Ltd.

1,750,000

1,750,000

1,100,000

1,100,000

The Norinchukin Bank

850,000

850,000

Aozora Bank, Ltd.

500,000

500,000

Long-term Mizuho Bank, Ltd.
loans
MUFG Bank, Ltd.

850,000

850,000

850,000

850,000

600,000

600,000

1,450,000

1,450,000

1,300,000

1,300,000

1,300,000

1,300,000

1,000,000

1,000,000

700,000

700,000

Development Bank of Japan Inc.

2,000,000

2,000,000

Mizuho Bank, Ltd.

1,175,000

1,175,000

1,175,000

1,175,000

1,000,000

1,000,000

Mizuho Trust & Banking Co., Ltd.

1,087,500

1,087,500

The Norinchukin Bank

1,162,500

1,162,500

The Dai-ichi Life Insurance
Company Limited

1,000,000

1,000,000－

2,000,000－

2,000,000

Subtotal

74,090,000

73,090,000

Total

87,600,000

87,600,000

MUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Banking
Corporation

Mizuho Trust & Banking Co., Ltd.

November 1,
2018

September 29,
2017

March 8,2019

The Norinchukin Bank
Development Bank of Japan Inc.

September 29,
2017

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

June 29,
2018

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

Development Bank of Japan Inc.
The Dai-ichi Life Insurance
Company Limited

January 31,
2020

June 30,2021
June 30,2021

0.42000(Note 2)

December 12,
2024

0.67400(Note 2)June 30, 2025

0.70600(Note 2)

November 1,
2025

Use

Remarks

Repaymentof existing
borrowing

Unsecuredand nonguaranteed

0.83441(Note 2)
March 31,2026

Lumpsum

0.57100(Note 2)0.83071 September 30,(Note 2)2026
0.79100(Note 2)

December 30,
2026

0.68778(Note 2)

July 31, 2028

0.71200(Note 2)0.77000(Note 2)
0.55801(Note 2)0.65000(Note 2)January 31,
2029

December 30,
2029
June 28, 2030

(Note 1) Average interest rate is calculated by applying a weighted average to the loan balance during the period. Borrowings hedged
by interest rate swaps to avoid interest rate fluctuation risk are calculated by applying a weighted average rate in considerationof the effect of the interest rate swaps.
(Note 2) Loans are fixed-rate loans (including loans with fixed-rate interest using interest rate swaps).

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)

24

(3) Investment Corporation Bonds
The outstanding investment corporation bonds issued by JEI as of June 30, 2021, are as follows:
Classification
Issuancedate

Unsecured investment corporation bonds

Issue(Thousands of yen)

Balance at end ofInterest rate
period(%)

Maturity date(Thousands of yen)

Repayment
methodUse

7th series unsecured
investment corporation bonds

March 10,2014

8,000,000

8,000,000

1.13000

March 11,2024

(Note 1)

8th series unsecured
investment corporation bonds

September 9,2015

5,000,000

5,000,000

1.03000

September 9,2025(Note 2)

9th series unsecured
investment corporation bonds

October 27,
2016

2,000,000

2,000,000

0.45000

October 27,
2026(Note 3)10th series unsecured
investment corporation bonds

December 20,
2016

2,000,000

2,000,000

0.39000

December 20,
2023

11th series unsecured
investment corporation bonds

April 25,2017

7,000,000

7,000,000

0.65000

April 23,2027

2,000,000

2,000,000

0.24000

April 20,2023

2,000,000

2,000,000

0.95000

April 20,2033

1,000,000

1,000,000

1.07000

September 9,2039

29,000,000

29,000,000

August 10,
2018

4,000,000

4,000,000

0.63000

August 10,
2028

October 29,
2020

5,000,000

5,000,000

0.75000

October 29,
2035

Sub Total

9,000,000

9,000,000

Total

38,000,000

38,000,000

Remarks

Lump-sum (Note 2) (Note 4)

12th series unsecured
investment corporation bonds
13th series unsecured
investment corporation bonds
15th series unsecured
investment corporation bonds

April 20,2018

September 10,
2019

Sub Total

Green bonds

Balance at
beginning of
period14th series unsecured
investment corporation bonds
16th series unsecured
investment corporation bonds(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 3)(Note 2)Lump-sum (Note 2) (Note 4)

The funds were used for redeeming existing investment corporation bonds and repaying existing borrowings.
The funds were used for repaying existing borrowings.
The funds were used for redeeming existing investment corporation bonds.
The bonds are with special pari passu conditions among specified investment corporation bonds.

(4) Short-Term Investment Corporation Bonds
None(5) Subscription Rights for New Investment Units
None

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)25

6. Condition of Investment Transactions(1) Transactions of Property, Asset-Backed Securities, Etc. and Infrastructure Assets, Etc.,
and Infrastructure-Related Assets(Millions of yen)Type of asset

Property nameAcquisition
Acquisition
Acquisition
Price
Transfer date
date
(Note)

Transfer
Transfer
price

Net book
value

Gain (loss)
on transfer

Trust beneficiary
Bizcore Jimbocho
June 25, 2021
10,200－－－－interest in real estate
Total－
10,200－－－－(Note) The acquisition price indicates the amount excluding related expenses (brokerage fee, taxes, etc.) required for theacquisition, and is the purchase amount of real estate stated in the trust beneficiary interest purchase agreement.

(2) Transactions of Other Assets
None(3) Appraisal and Research for Specified Asset Value, Etc.
1) Real estate, etc.
Acquisition
Name of property
or transfer

Type ofasset

Acquisition/transfer date

Acquisition/
Appraisaltransfer pricevalue(Millions of yen)
(Millions of yen)
(Note)

Appraisal
dateAppraiser

Trust
The Tanizawa
beneficiary
Acquisition Bizcore Jimbocho
June 25, 2021
10,200
Sogo Appraisal April 1, 2021
10,300interest inCo., Ltd.
real estate(Note) The acquisition/transfer price is the purchase price of the property stated in the trust beneficiary interest purchaseagreement (excluding the amount equivalent to consumption taxes, etc.).

2) OthersNone(4) Transactions with Interested Parties
1) Transactions
Acquisition price or disposal amountClassification

Total amount

Acquisition price

Disposal amount

10,200 million yen- million yen

Nippon Steel Kowa Real Estate Co., Ltd.

10,200 million yen (100.0%)- million yen (-%)

Total

10,200 million yen (100.0%)- million yen (-%)

Breakdown for transactions with interested parties(Note)

Interested parties refers to the interested parties of the asset management company, which has concluded an asset
management agreement with JEI as prescribed in Article 123 of the Investment Trust Enforcement Order and Section 26,
Paragraph 1, Item 27 of the Regulations for Management Reports Concerning Investment Trusts and Investment
Corporations of the Investment Trusts Association, Japan.

Asset Management Report for the 30th period (Semi-Annual Report for the 30th Period)

262) Amounts of fees paid and other expenses(Unit: Thousands of yen)
Breakdown of transactions with interested parties
Classification

Total amount paid (A)B/APaid to

Property management
costs and fees

Total

Amount paid (B)The Dai-ichi Building Co., Ltd.

494,414

35.5%

Nippon Steel Kowa Real EstateCo., Ltd.

481,745

34.6%

Sohgo Housing Co., Ltd.

110,616

7.9%

Akasaka Intercity Management
Co., Ltd.

20,387

1.5%–

1,107,164

79.5%

1,393,314

1,393,314(Note 1) Figures indicate fees paid to interested parties of the asset management company with whom JEI had direct transactions during
the six months ended June 30, 2021.
(Note 2) Other than the Total amount paid indicated above, the following payments were made for maintenance and repair work, etc.
which were ordered to interested parties during the period.
Kowa Real Estate Facilities Co., Ltd.
208,001 thousand yen
Nihon Sekkei Co., Ltd.
32,955 thousand yen
Nippon Steel Kowa Real Estate Co., Ltd.
26,973 thousand yen
The Dai-ichi Building Co., Ltd.
11,939 thousand yen(5) Transactions with Asset Management Company Concerning the Additional Businessesof the Asset Management Company
The Asset Management Company (Japan Excellent Asset Management Co., Ltd.) does not conduct any additional
business falling under the categories of the type I financial instruments business, type II financial instruments
business, building lots and buildings transaction business, or real estate specified joint enterprise, and had no
applicable transactions.

Asset Management Report for the 30th period (Semi-Annual Report for the 30th Period)27

7. Accounting(1) Assets, Liabilities, Principal, and Profit and Loss
For assets, liabilities, principal, and profit and loss, please refer to the attached Balance Sheets, Statements ofIncome and Retained Earnings, Statements of Changes in Net Assets, Notes to Financial Statements andDistribution Information.

(2) Change in Depreciation Calculation Method
No changes were made during the period.

(3) Change in Asset and Infrastructure Assets, Etc. Valuation Method
No changes were made during the period

Asset Management Report for the 30th period (Semi-Annual Report for the 30th Period)28

8. Others(1) Notice1) General unitholders’ meeting
There were no applicable items during the period.
2) Board of directors’ meeting
Of the major contracts entered or amended, etc. by the board of directors’ meeting during the 30th period, thefollowing table summarizes the major items.
Date of approval
by board

Matters approved

Summary
The board of directors made a comprehensive
resolution on investment corporation bonds to beissued in the period from February 17, 2021 to
February 8, 2022. The board of directors approved

February 17, 2021

Entrustment of general administrative

the respective candidate general administrator for“administrative duties concerning offering ofduties concerning investment
corporation bonds

investment corporation bonds” and “administrative
duties concerning acceptance of claims for exerciseof rights and other inquiries from creditors of theinvestment corporation, and other administrative
duties concerning investment corporation bonds
during the period,” and assigned decisions on allother necessary matters to the Executive Director.

(2) Disclosure of Investment Trust Beneficiary Certificates Incorporated by JEIThere were no applicable items during the period.

(3) Disclosure of Juridical Persons Owning Overseas Real Estate and Status of the Owned
Real Estate
There were no applicable items during the period.

(4) Other
Unless otherwise stated, monetary amounts have been rounded down and percentage figures have been rounded
off to the nearest indicated unit in this Report.

Asset Management Report for the 30th period (Semi-Annual Report for the 30th Period)

29

Financial Statements
Japan Excellent, Inc.
For the six-month periods ended
June 30, 2021 and December 31, 2020
with Independent Auditor’s Report

30

31

32

33

Japan Excellent, Inc.
Balance Sheets
As of June 30, 2021 and December 31, 2020
As ofJune 30, 2021

As ofDecember 31, 2020

(Thousands of yen)
AssetsCurrent assets:
Cash and cash equivalents including trust accounts(Notes 4 and 5)
Rental receivables
Consumption taxes refundable
Prepaid expenses and other current assets
Total current assets

26,017,997
294,323
88,018336,986
26,737,327

36,022,399
325,765－
210,063
36,558,228

Property and equipment (Note 7) :Buildings and building improvements
Machinery and equipment
Furniture and fixtures
Land
Construction in progress
Buildings and building improvements for trust accounts
Machinery and equipment for trust accounts
Furniture and fixtures for trust accounts
Land for trust accounts
Construction in progress for trust accounts
Less: accumulated depreciation
Net property and equipment

7,749,590
6,253
59,934
10,609,617
1,396
116,993,567
1,101,196
293,163
155,755,010
13,360(36,575,302)
256,007,787

7,698,591
6,253
59,934
10,609,617
1,396
113,248,694
1,030,829
293,163
148,021,777
115,225(34,727,920)
246,357,561

Intangible assets:
Leasehold rights
Leasehold rights for trust accounts
Software
Other intangible assets for trust accounts
Total intangible assets

1,721,607
7,382,016
6,233
2,550
9,112,408

1,721,607
7,382,016
7,333
2,644
9,113,601

Investments and other assets:
Investment securities(Note 5)
Deferred tax assets
Security deposits
Long-term prepaid expenses
Other assets
Total investments and other assets

44,72926
19,029824,794
1,070,376
1,958,956

44,729－19,029823,528
921,016
1,808,304

154,092
154,092
293,970,571

166,949
166,949
294,004,645

Deferred assets:
Investment corporation bond issuance costs
Total deferred assets
Total assets

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)34

As ofJune 30, 2021

As ofDecember 31, 2020

(Thousands of yen)

Liabilities
Current liabilities:
Accounts payable – tradeLong-term debt due within one year
(Notes 5 and 8)
Accounts payable – otherAccrued expenses
Accrued corporation taxes
Accrued consumption taxes
Advances received
Other current liabilities
Total current liabilities
Long-term liabilities:
Investment corporation bonds (Notes 5 and 9)
Long-term debt (Notes 5 and 8)
Security deposits from tenants (Note 5)
Security deposits from tenants for trust accounts(Note 5)
Total long-term liabilities
Total liabilities
Net assets (Note 10)
Unitholders’ equity:
Unitholders’ capital
Surplus
Voluntary reserve
Reserve for advanced depreciation of non-current
assetsRetained earnings
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

1,618,995

1,674,407

14,510,000
474,398
151,765
1,119－
74,9407,268
16,838,488

13,510,000
466,577
155,114584
119,228
172,768－
16,098,680

38,000,000
73,090,000
1,199,012

38,000,000
74,090,000
1,200,885

12,507,748
124,796,760
141,635,249

12,196,393
125,487,278
141,585,958

147,907,649

147,907,649

451,790

219,594

3,975,882
4,427,673
152,335,322
152,335,322
293,970,571

4,291,443
4,511,037
152,418,687
152,418,687
294,004,645

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
35

Japan Excellent, Inc.
Statements of Income and Retained Earnings
For the periods from January 1, 2021 to June 30, 2021
and from July 1, 2020 to December 31, 2020

For the period
from January 1, 2021 toJune 30, 2021

For the period
from July 1, 2020 to
December 31, 2020

(Thousands of yen)
Revenues (Note 14) :Rental business revenues
Other
Gain on sales of real estate properties (Note 15)
Total revenues
Operating expenses (Note 14) :Property operating expenses
Asset management fees
Custodian fees
Administrative service fees
Compensation for directors
Other
Total operating expenses
Operating income
Other income:Interest income
Other
Other expenses:
Interest expense
Loan arrangement fees
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
Other
Ordinary income
Income before income taxes
Income taxes (Note 13) :Current
Deferred
Net income
Retained earnings at beginning of period
Retained earnings at end of period

9,845,709
722,082－
10,567,792

9,998,859
730,694314,238
11,043,792

5,355,733
454,816
21,88040,427
5,580
98,788
5,977,226
4,590,565

5,487,364
470,777
21,84740,065
5,580
93,428
6,119,062
4,924,730

181
402

136
403

327,031
118,123
149,430
12,856
6,951
3,976,756
3,976,756

336,430
141,088
139,556
12,276
4,751
4,291,167
4,291,167

1,147
(26)
3,975,635
247
3,975,882

605－
4,290,562
881
4,291,443

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
36

Japan Excellent, Inc.
Statements of Changes in Net Assets
For the periods from January 1, 2021 to June 30, 2021
and from July 1, 2020 to December 31, 2020
For the period from January 1, 2021 to June 30, 2021
Net assets
Unitholders’ equity
SurplusNumber ofunits in issue

Unitholders’capitalVoluntary
reserve
Reserve foradvanceddepreciation of
non-current
assetsRetainedearnings

Total surplus

Totalunitholders’equityTotal net
assets(Thousands of yen)
Balance as of December
31, 2020
Changes during
the fiscal period:

1,353,000

147,907,649

219,594

4,291,443

4,511,037

152,418,687

152,418,687

Provision ofreserve for
reduction entry－－

232,196(232,196)－－－

Distributions fromretained earnings

－

－

－

(4,059,000)(4,059,000)(4,059,000)(4,059,000)

－

－

－

3,975,635

3,975,635

3,975,635

3,975,635－－

232,196(315,561)(83,364)(83,364)(83,364)

1,353,000

147,907,649

451,790

3,975,882

4,427,673

152,335,322

152,335,322

Net income
Total changes during the
fiscal period
Balance as of June 30,
2021

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
37

For the period from July 1, 2020 to December 31, 2020
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Number ofunits in issue
Balance as of June 30, 2020
Changes during
the fiscal period:
Provision of reserve for
reduction entry
Distributions from retained
earnings
Reversal of reserve for temporary
difference adjustment
Net income
Total changes during the fiscal
periodBalance as of December 31, 2020

Unitholders’capitalAllowance fortemporary difference
adjustment

Total deduction
from unitholders’capitalUnitholders’capital, net

1,353,000

147,907,649(Thousands of yen)
(1,406,238)(1,406,238)

146,501,410

－
－

－

－

－

－

－
－

－

－

－

－

－
－
－
－

－
－

1,406,238－

1,406,238－

1,406,238－－－
1,353,000－
147,907,649

1,406,238－

1,406,238－

1,406,238
147,907,649

For the period from July 1, 2020 to December 31, 2020
Net assets
Unitholders’ equity
Surplus
Voluntary
reserve
Reserve foradvanceddepreciation of
non-current
assetsBalance as of June 30, 2020
Changes during
the fiscal period:
Provision of reserve for
reduction entry
Distributions fromretained earnings
Reversal of reserve for temporary
difference adjustment
Net income
Total changes during the fiscal
periodBalance as of December 31, 2020

Retainedearnings－

5,631,594

Total surplus(Thousands of yen)
5,631,594

219,594(219,594)－

Total unitholders’equityTotal net
assets152,133,005

152,133,005

－

－

－

(4,004,880)(4,004,880)(4,004,880)(4,004,880)－－(1,406,238)
4,290,562(1,406,238)
4,290,562－
4,290,562－
4,290,562

219,594
219,594(1,340,151)
4,291,443(1,120,556)
4,511,037

285,682
152,418,687

285,682
152,418,687

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
38

Japan Excellent, Inc.
Statements of Cash Flows
For the periods from January 1, 2021 to June 30, 2021
and from July 1, 2020 to December 31, 2020
For the period
from January 1, 2021
to June 30, 2021

For the period
from July 1, 2020 to
December 31, 2020

(Thousands of yen)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance
costs
Interest income
Interest expense
Decrease (increase) in rental receivables
Decrease (increase) in consumption taxes refundable
Decrease (increase) in prepaid expense
Increase (decrease) in accounts payable – trade
Increase (decrease) in accounts payable – other
Increase (decrease) in unpaid consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Decrease in property and equipment for trust accounts due
to saleOther, net
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property and equipment
Purchases of property and equipment for trust accounts
Payments for lease and guarantee deposits
Proceeds from security deposits from tenants
Payments for security deposits to tenants
Proceeds from security deposits in trust accounts fromtenants
Payments for security deposits in trust accounts to tenants
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayment for short-term loans
Proceeds from long-term debt
Repayment for long-term debt
Proceeds from issuance of investment corporation bonds
Distributions to unitholders
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period (Note 4)

3,976,756
1,848,574

4,291,167
1,825,686

12,856

12,276(181)
476,462
31,441(88,018)(124,165)(193,389)(950)(119,228)(97,827)(1,265)(136)
475,986
3,125－(23,890)(68,139)(88,063)(414,325)
2,422
95,783－

1,036,839(145,266)
5,575,798
181(479,810)(584)
5,095,584(54,835)
7,093,897
136(467,492)(586)
6,625,954(85,519)(11,264,469)－
12,585(14,458)(16,478)(600,013)(848)
47,550(44,414)

769,843596,892(458,489)(11,040,506)(361,834)(379,145)－
4,000,000(4,000,000)－(4,059,480)(4,059,480)(10,004,401)
36,022,399
26,017,997(5,000,000)
2,000,000(2,000,000)
4,965,000(4,004,794)(4,039,794)
2,207,014
33,815,385
36,022,399

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
39

Japan Excellent, Inc.
Notes to Financial Statements
For the periods from January 1, 2021 to June 30, 2021
and from July 1, 2020 to December 31, 2020

1.

Organization

Japan Excellent, Inc. (hereinafter, “JEI”), established on February 20, 2006 under the Law
Concerning Investment Trusts and Investment Corporations of Japan (the “Investment TrustLaw”), is a real estate investment corporation which primarily invests in office buildings.
JEI is externally managed by a licensed asset management company, Japan Excellent AssetManagement (“JEAM”). JEAM was originally owned 45% by NIPPON STEEL KOWA REALESTATE CO., LTD., 20% by The Dai-ichi Life Insurance Company, Limited, 15% by Sekisui
House, Co., LTD., and 20% by other corporations. Due to the transfer of ownership by Sekisui
House, Co., LTD., on May 12, 2014, ownership interests of 9% and 6% were each acquired by
NIPPON STEEL KOWA REAL ESTATE CO., LTD., and The Dai-ichi Life Insurance
Company, Limited, respectively.
JEI was listed on the Tokyo Stock Exchange on June 27, 2006. As of June 30, 2021, JEI held
35 properties with 336,375.40 square meters of total leasable space and had leases with 187
tenants excluding residential tenants.

2.

Basis of Presentation

JEI maintains its accounting records and prepares its financial statements in accordance withaccounting principles generally accepted in Japan (“Japanese GAAP”), including provisions set
forth in the Investment Trust Law, the Corporation Law of Japan, the Financial Instruments andExchange Law of Japan and related regulations, which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the financial statements of JEI,
which were prepared in accordance with Japanese GAAP and presented in the securities reportof JEI filed with the Kanto Local Finance Bureau. In preparing the accompanying financial
statements, certain reclassifications and modifications have been made for the convenience ofreaders outside Japan. In addition, the notes to the financial statements include information thatmight not be required under Japanese GAAP but is presented here in as additional information.
The amounts have been rounded down to the nearest thousand yen in the accompanying
financial statements in accordance with the financial statements originally prepared in Japaneseand filed with the regulatory authorities in Japan.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)40

3.

Summary of Significant Accounting Policies

Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks and short-term
investments which are highly liquid, readily convertible into cash with an insignificant risk ofprice fluctuation and with an original maturity of three months or less.
Investment securities
Available-for-sale securities without market value are stated at cost determined by the moving
average method.
Property and equipment including trust accounts
Depreciation is computed by the straight-line method over the estimated useful lives of therespective assets as follows:
Buildings and building improvements
Machinery and equipment
Furniture and fixtures

2 – 60 years
6 – 16 years
3 – 15 years

Intangible assets
Depreciation is computed by the straight-line method over the estimated useful lives of therespective assets as follows:
Software5 years

Deferred assets
Investment corporation bond issuance costs are amortized using the straight-line method over
the amortization periods.
Income taxes
Income taxes are accounted for on the basis of taxable income for financial statement purposes.
The asset and liability method is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the carrying amounts andthe tax bases of assets and liabilities.
Consumption taxes
Consumption taxes received and paid are not included in the accompanying statements ofincome and retained earnings. Consumption tax related to properties, which has not been
deducted, is included in the cost of the properties.
Property-related taxes
Principally, property-related taxes including property taxes, urban planning taxes anddepreciable property taxes are imposed on a calendar-year basis and are expensed as property
and other taxes (refer to Note 14).
Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
41

3.

Summary of Significant Accounting Policies (continued)

JEI capitalizes the property-related taxes allocated to the sellers of properties to JEI at the timeof acquisition of such properties including trust accounts.
The capitalized amount for the period from January 1, 2021 to June 30, 2021 was ¥16,585
thousand.
No property-related taxes were capitalized for the period from July 1, 2020 to December 31,
2020.
Revenue recognition
Rental revenues are generally recognized on an accrual basis over the life of each lease.
Derivatives and hedge accounting
JEI utilizes interest-rate swap agreements as derivative financial instruments solely for the
purpose of hedging its exposure against fluctuation risk in interest rates. JEI has therefore
entered into certain interest-rate swap contracts in order to hedge the risk of variable rates for
its long-term debt obligations.
Each corresponding interest-rate swap is not required to be re-measured to fair value, because
it meets the criteria for the special hedge accounting treatment under Japanese GAAP, which
JEI applies to each interest-rate swap agreement.
Under this special hedge accounting treatment, the differentials paid or received under the swap
agreements are recognized and included in interest expense of the hedged loans, and theinterest-rate swaps are not required to be measured at fair value separately. For interest-rate
swaps that meet the specific criteria for the special accounting treatment, assessments of hedge
effectiveness are not performed.
Properties in trust accounts
All assets and liabilities held in trust, for which real estate in possession of JEI was entrusted,
and all earnings and expenses resulting from such trust, are properly reflected in theaccompanying balance sheets and statements of income and retained earnings, respectively.

4.

Cash and Cash Equivalents

Cash and cash equivalents including trust accounts in the accompanying balance sheets andcash and cash equivalents in the accompanying statements of cash flows at June 30, 2021 andDecember 31, 2020 consisted of the following:

Cash and cash deposits
Cash and deposits in trust
Cash and cash equivalents including trust accounts

As of
As of
June 30, 2021
December 31, 2020
(Thousands of yen)
9,677,336
19,651,182
16,340,661
16,371,216
26,017,997
36,022,399

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)42

5.

Financial Instruments

For the periods from January 1, 2021 to June 30, 2021 from July 1, 2020 to December
31, 2020
Overview(1) Policy for Financial Instruments
JEI borrows from banks, issues investment corporation bonds and issues investment units
to procure funds required to grow its assets under management and to repay liabilities,
based on the financial policy set forth by JEAM and the JEI’s Annual Funding Procurement
Plan. When procuring funds by means of interest-bearing debt, matters such as seeking
longer durations and maturities, securing fixed interest rates over the entire term of the
instrument in order to benefit from the recent favorable financial environment with low
interest rates, and diversifying maturity dates are taken into consideration to achieve a morestable financial situation and avoid the risk of future interest rate hikes. Surplus funds may
be invested in deposits and safe, liquid financial assets and investment securities, but are,in principle, placed in fixed-rate term deposits. Derivative transactions are used solely forthe purpose of hedging against the risk of fluctuations in interest rates of borrowings andinvestment corporation bonds.
(2) Types of Financial Instruments, Related Risks and Risk Management System(a) Market Risks (Interest rate fluctuation risk)
Borrowings and investment corporation bonds are primarily used to acquire properties
or to refinance existing borrowings or bonds. Some of such debt were floating rate
instruments and thus were exposed to the risk of interest rate fluctuations. Based oninterest rate forecasts developed through constant financial market monitoring
activities, JEI has concentrated on hedging against the risk of interest rate fluctuations
principally using interest-rate swaps, through which a floating interest rate is swapped
for a fixed interest rate, which finally led to 95.4% of existing borrowings being
covered by a fixed interest rate swap for the entire maturity as of June 30, 2021. To
reduce credit risk, derivative transactions (interest-rate swaps) are entered into
exclusively with counterparties that are financial institutions with high credit ratings.
For hedging accounting methods, hedging instruments, hedged items, hedging
policies and methods for evaluation of the effectiveness of hedging activities, see“Derivatives and hedge accounting” under Summary of Significant Accounting
Policies.
(b) Liquidity Risk (Risk of being unable to procure funds required for repayments)
Borrowings and investment corporation bonds are exposed to liquidity risk. This risk
is reduced through diversification of maturity dates and funding sources, andarrangement of commitment line agreements (as described in Note 8, “Short-Term
Loans and Long-Term Debt,” there is no balance outstanding under the facility
agreements as of June 30, 2021). Liquidity risk is also mitigated through theconstant management of liquidity on hand.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
43

5.

Financial Instruments (continued)(3) Supplementary Explanation of the Estimated Fair Value of Financial Instruments
The fair value of financial instruments is based on their quoted market price, if available.
When there is no quoted market price available, fair value is reasonably estimated. Sincevarious assumptions and factors are reflected in estimating the fair value, different
assumptions and factors could result in a different fair value.
Fair value of financial instruments
The following are carrying values and fair values as of June 30, 2021 and December 31, 2020of financial instruments and the differences between them. When fair value is extremely
difficult to ascertain, it is excluded from the following table (Note B).
As of June 30, 2021
Fair value
Carrying value
Difference(Note A)
(1) Cash and cash deposits(2) Cash and deposits in trust
Total assets(3) Short-term loans (Note C)(4) Investment corporation
bonds
due within one year (NoteC)(5) Long-term debt
due within one year (NoteC)(6) Investment corporation
bonds(Note C)
(7) Long-term debt (Note C)
Total liabilities(8) Derivative transactions *As of December 31, 2020
Fair value
Carrying value
Difference(Note A)

(Thousands of yen)－
19,651,182－
16,371,216－
36,022,399－－

19,651,182
16,371,216
36,022,399
－

－
－
－
－

－

－

－

44,11813,510,000

13,567,552

57,552

160,172
1,140,931
1,345,222－

38,000,000
74,090,000
125,600,000－

38,127,360
75,380,152
127,075,065－

127,360
1,290,152
1,475,065－

9,677,336
16,340,661
26,017,997－

9,677,336
16,340,661
26,017,997
－

－

－

－

14,510,000

14,554,118

38,000,000
73,090,000
125,600,000－

38,160,172
74,230,931
126,945,222－* The value of assets and liabilities arising from derivative transactions is shown at net value.

(Note A)
Methods for calculating the fair value of financial instruments and matters related toderivatives transactions
Assets(1) Cash and cash deposits and(2) Cash and deposits in trust
Carrying value approximates fair value because of the short maturities of these instruments.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
44

5.

Financial Instruments (continued)

Liabilities(3) Short-term loans
Carrying value approximates fair value because of the short maturities of these instruments.
(5) Long-term debt due within one year and(7) Long-term debt
Where floating rates apply, book value is generally considered appropriate as fair value.
The fair value of such liabilities is considered to approximate book value, since floating
rates reflect market interest rates within a short period of time.
If the loan is part of long-term debt, in the case of floating-rate debt hedged by an interestrate swap, the fair value is calculated in a similar manner using the total principal andinterest amount, treated in combination with the interest-rate swap, given that the interestrate swap is subject to the special treatment of interest-rate swaps under Japanese GAAP.
The fair value of long-term fixed-rate debt and long-term fixed-rate debt due within one
year are calculated by applying a reasonably assumed interest rate as a discount rate, which
was determined to be applicable for the borrowings under similar conditions.
(4) Investment corporation bonds due within one year and(6) Investment corporation bonds
The fair value of investment corporation bonds issued by JEI is based on quoted market
prices.
(8) Derivative transactions
Please refer to Note 17, “Derivative Transactions.”(Note B)・Financial instruments for which fair value is deemed extremely difficult to determine
The fair values of investment securities,security deposits from tenants and security deposits
from tenants for trust accounts are as follows:① Investment securities*② Security deposits from tenants**
Security deposits from tenants for trust③
accounts**
*

As of
As of
June 30, 2021
December 31, 2020
(Thousands of yen)
44,72944,7291,199,012
1,200,885
12,507,748

12,196,393

Investment securities are not subject to fair value disclosure, since such financial instruments have no market
price and measuring their fair value is considered extremely difficult.

** Security deposits from tenants and security deposits for trust accounts from tenants in leased properties are
not subject to fair value disclosure, since such deposits have no market price. Furthermore, due to theircharacteristics, it is extremely difficult to estimate the fair value of security deposits in advance because of
the uncertainty of the timing when the tenant vacates. As a result, it is therefore impossible to rationallyestimate the exact cash flow from such security deposits.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)45

5.

Financial Instruments (continued)

・The scheduled redemption amounts of financial assets after the balance sheet dateCash and cash deposits
Cash and deposits in trust
Total

Cash and cash deposits
Cash and deposits in trust
Total

1 year or less

1 to 2 years

9,677,336
16,340,661
26,017,997－－－

1 year or less

1 to 2 years

19,651,182
16,371,216
36,022,399－－－

As of June 30, 2021
2 to 3 years
3 to 4 years(Thousands of yen)
－
－
－
－
－
－
As of December 31, 2020
2 to 3 years
3 to 4 years(Thousands of yen)
－
－
－
－
－
－

4 to 5 years

Over 5 years－－－

4 to 5 years－－－

Over 5 years

－
－
－

－
－
－

(Note C)The scheduled redemption amounts of borrowings, investment corporation bonds and otherinterest-bearing debt after the balance sheet date

1 year or less
Short-term loans
Investment corporation bonds
due within one year
Long-term debt
due within one year
Investment corporation bonds
Long-term debt
Total

As of June 30, 2021
2 to 3 years
3 to 4 years(Thousands of yen)
－
－

－

－

－

－

－

14,510,000－－
14,510,000－
2,000,000
13,750,000
15,750,000－
10,000,000
14,270,000
24,270,000

1 year or less
Short-term loans
Investment corporation bonds
due within one year
Long-term debt
due within one year
Investment corporation bonds
Long-term debt
Total

1 to 2 years

1 to 2 years
－

－

－

－

13,510,000－－
13,510,000－－
13,750,000
13,750,000－
4,000,000
15,770,000
19,770,000

Over 5 years
－

－

－

－

－

－
－
14,270,000
14,270,000－
5,000,000
13,900,000
18,900,000－
21,000,000
16,900,000
37,900,000

As of December 31, 2020
2 to 3 years
3 to 4 years(Thousands of yen)－－－

4 to 5 years

4 to 5 years

Over 5 years
－

－

－

－

－

－
8,000,000
9,770,000
17,770,000－
5,000,000
11,750,000
16,750,000－
21,000,000
23,050,000
44,050,000

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)46

6.

Investment and Rental Property

For the periods from January 1, 2021 to June 30, 2021 from July 1, 2020 to December
31, 2020
JEI owns rental office buildings and other properties in Tokyo and other regions for the purposeof generating rental income. The following is the carrying value and fair value as of June 30,
2021 and December 31, 2020 for such real estate for lease.
Carrying value
As of
Change during period
As ofJanuary 1, 2021(*1)
June 30, 2021
(Thousands of yen)
255,463,830
9,650,132
265,113,962
Carrying value
As of
Change during period
As ofJuly 1, 2020(*2)
December 31, 2020
(Thousands of yen)
257,186,710(1,722,880)
255,463,830

Fair value
As ofJune 30, 2021
329,552,000

Fair value
As ofDecember 31, 2020
318,162,000

A) Carrying value represents the acquisition cost less accumulated depreciation.
B) Details of change during period:(*1) The increase of ¥9,650,132 thousand during the period is mainly due to an increase of¥10,051,592 thousand related to the acquisition of BIZCORE Jimbocho, and a decreaseof ¥1,847,474 thousand for depreciation costs.
(*2) The decrease of ¥1,722,880 thousand during the period is mainly due to a decrease of¥1,036,839 thousand related to the disposal of JEI Nishi-Honmachi Building and adecrease of ¥1,824,586 thousand for depreciation costs.

C) Fair value
Fair value as of June 30, 2021 is Kowa Shirokanedai Building’s transfer price and for otherproperties,appraisal value provided by third-party real estate appraisers.
Fair value as of December 31, 2020 is appraisal value provided by third-party real estateappraisers.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
47

7.

Property and Equipment

Property and equipment at June 30, 2021 and December 31, 2020 consisted of the following:
As of June 30, 2021
Acquisition
AccumulatedNet
cost
depreciation
book value

As of December 31, 2020
Acquisition
AccumulatedNet
cost
depreciation
book value(Thousands of yen)

Buildings and building
improvements
Machinery and equipment
Furniture and fixtures
Land
Construction in progress
Buildings and building
improvements for trust
accounts
Machinery and equipment
for trust accounts
Furniture and fixtures
for trust accounts
Land for trust accounts
Construction in progress
for trust accounts
Total

7,749,590
6,253
59,934
10,609,617
1,396(2,124,502)(4,495)(29,708)－－

5,625,087
1,757
30,226
10,609,617
1,396

7,698,591
6,253
59,934
10,609,617
1,396(2,007,160)(4,224)(25,558)－－

5,691,431
2,028
34,375
10,609,617
1,396

116,993,567(33,670,916)

83,322,650

113,248,694(31,995,824)

81,252,869

1,101,196(561,488)

539,708

1,030,829(523,993)

506,836

293,163
155,755,010(184,191)
108,971－ 155,755,010

293,163
148,021,777(171,158)
122,004－ 148,021,777

13,360292,583,089－
13,360(36,575,302) 256,007,787

115,225
281,085,482－
115,225(34,727,920) 246,357,561

8. Short-Term Loans and Long-Term Debt
Short-term loans and long-term debt as of June 30, 2021 and December 31, 2020 consisted of
the following:
As of June 30, 2021
Weighted-averageAmountinterest rate (*1)
(Thousands of yen)

As of December 31, 2020
Weighted-averageAmountinterest rate (*1)
(Thousands of yen)

Long-term debt due within one year:
Unsecured loans from a bank due on June 30,
2021
Unsecured loans from an insurance company due
on June 30, 2021
Unsecured loans from banks due on November
29, 2021
Unsecured loans from banks due on December
30, 2021
Unsecured loans from insurance companies due
on January 31, 2022
Unsecured loans from a bank due on June 30,
2022
Subtotal－

1.60750% (*2)

2,000,000

1.60750% (*2)－

0.98834% (*2)

2,000,000

0.98834% (*2)

3,760,000

0.42738%

3,760,000

0.42083%

5,750,000

0.81875% (*2)

5,750,000

0.81875% (*2)

3,000,000

0.35000% (*2)－

0.35000% (*2)

2,000,000

1.15417% (*2)－

1.15417% (*2)

14,510,000

13,510,000

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)48

8.

Short-Term Loans and Long-Term Debt (continued)

Long-term debt:
Unsecured loans from insurance companies due
on January 31, 2022
Unsecured loans from a bank due on June 30,
2022
Unsecured loans from a bank due on September
30, 2022
Unsecured loans from insurance companies dueon November 30, 2022
Unsecured loans from banks due on December
30, 2022
Unsecured loans from a bank due on June 30,2023
Unsecured loans from an insurance company due
on June 30, 2023
Unsecured loans from banks due on November
30, 2023
Unsecured loans from banks due on November
30, 2023
Unsecured loans from a bank due on May 31,
2024
Unsecured loans from banks due on November
30, 2024
Unsecured loans from an insurance company dueon December 12, 2024
Unsecured loans from banks due on June 30,
2025
Unsecured loans from banks due on November 1,
2025
Unsecured loans from banks due on March 31,
2026
Unsecured loans from banks due on March 31,
2026
Unsecured loans from a bank due on September
30, 2026
Unsecured loans from banks due on December
30, 2026
Unsecured loans from a bank due on July 31,
2028
Unsecured loans from banks due on January 31,
2029
Unsecured loans from an insurance company due
on January 31, 2029
Unsecured loans from a bank due on December
30, 2029
Unsecured loans from an insurance company due
on June 28, 2030
Subtotal
Total－

0.35000% (*2)

3,000,000

0.35000% (*2)－

1.15417% (*2)

2,000,000

1.15417% (*2)

2,000,000

0.28176%

2,000,000

0.26586%

1,000,000

0.35000% (*2)

1,000,000

0.35000% (*2)

5,750,000

0.93625% (*2)

5,750,000

0.93625% (*2)

2,000,000

1.20250% (*2)

2,000,000

1.20250% (*2)

3,000,000

0.46000% (*2)

3,000,000

0.46000% (*2)

5,270,000

0.84375% (*2)

5,270,000

0.84375% (*2)

5,500,000

0.64801% (*2)

5,500,000

0.64801% (*2)

3,500,000

0.68431% (*2)

3,500,000

0.68431% (*2)

5,270,000

0.96275% (*2)

5,270,000

0.96275% (*2)

1,000,000

0.42000% (*2)

1,000,000

0.42000% (*2)

8,000,000

0.67400% (*2)

8,000,000

0.67400% (*2)

3,750,000

0.70600% (*2)

3,750,000

0.70600% (*2)

6,400,000

0.83441% (*2)

6,400,000

0.83441% (*2)

3,750,000

0.57100% (*2)

3,750,000

0.57100% (*2)

1,300,000

0.83071% (*2)

1,300,000

0.83071% (*2)

3,000,000

0.79100% (*2)

3,000,000

0.79100% (*2)

2,000,000

0.68778% (*2)

2,000,000

0.68778% (*2)

5,600,000

0.71200% (*2)

5,600,000

0.71200% (*2)

1,000,000

0.77000% (*2)

1,000,000

0.77000% (*2)

2,000,000

0.55801% (*2)－

2,000,000

0.65000% (*2)－

73,090,000

74,090,000

87,600,000

87,600,000(*1)The weighted-average interest rate is weighted-average figures during the period. As for the borrowings hedged by interestrate swaps for the purpose of mitigating interest rate fluctuation risk, the fixed interest rates after entering into the interest rate
swap transactions are used to calculate the weighted-average interest rate.
(*2) These are fixed-rate debt (incl. fixed-rate debt through each interest-rate swap agreement).

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
49

The scheduled repayment amounts of long-term debt as of June 30, 2021 are as follows:
1 year or less 1 to 2 years(Thousands of yen)
14,510,000
13,750,000

Long-term debt

2 to 3 years

3 to 4 years

4 to 5 years

14,270,000

14,270,000

13,900,000

Over 5 years
16,900,000

JEI has commitment lines of ¥14,000,000 thousand with three financial institutions to mitigate
refinancing risk and enhance financial stability. As of June 30, 2021, these commitment lines
have never been utilized.
9.

Investment Corporation Bonds

Details of total investment corporation bonds outstanding as of June 30, 2021 and December
31, 2020 are summarized as follows:
As of June 30, 2021
Weighted-averageinterest rate
Amount(Thousands of yen)Unsecured bond #7
due on March 11, 2024
Unsecured bond #8
due on September 9, 2025
Unsecured bond #9
due on October 27, 2026
Unsecured bond #10
due on December 20, 2023
Unsecured bond #11
due on April 23, 2027
Unsecured bond #12
due on April 20, 2023
Unsecured bond #13
due on April 20, 2033
Unsecured bond #14
due on August 10, 2028
Unsecured bond #15
due on September 9, 2039
Unsecured bond #16
due on October 29, 2035
Total

As of December 31, 2020
Weighted-averageinterest rate
Amount(Thousands of yen)

8,000,000

1.13000%

8,000,000

1.13000%

5,000,000

1.03000%

5,000,000

1.03000%

2,000,000

0.45000%

2,000,000

0.45000%

2,000,000

0.39000%

2,000,000

0.39000%

7,000,000

0.65000%

7,000,000

0.65000%

2,000,000

0.24000%

2,000,000

0.24000%

2,000,000

0.95000%

2,000,000

0.95000%

4,000,000

0.63000%

4,000,000

0.63000%

1,000,000

1.07000%

1,000,000

1.07000%

5,000,000

0.75000%

5,000,000

0.75000%

38,000,000

38,000,000

The scheduled redemption amounts of investment corporation bonds as of June 30, 2021 are as
follows:
1 year or less
Investment corporation bonds

10.

－

1 to 2 years
2,000,000

2 to 3 years
3 to 4 years(Thousands of yen)
10,000,000－

4 to 5 years
5,000,000

Over 5 years
21,000,000

Net Assets

In accordance with the Investment Trust Law, JEI issues only non-par value investment units
and maintains net assets of at least ¥50,000 thousand.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
50

11．Allowance for Temporary Difference Adjustment
For the Period from January 1,2021 to June 30, 2021
None
For the Period from July 1,2020 to December 31, 2020
(1) Reason for recording reserve, related assets, initial difference and reserve amount(Thousands of yen)
Related assets

Reason forrecordingreserve

Buildings andbuilding
improvements
for trustaccounts
Land for trust
accounts

Impairment
loss

Initialdifference

Balance
as of July
1, 2020

Reserve

1,406,238 1,406,238

Reversal－ 1,406,238

Balance
as ofDecember31, 2020

Reasonforreversal

Sale of－ relevant
asset(2) Method of reversal
Impairment loss
Upon sale, the corresponding amount was reversed.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
51

12.

Per Unit Information

Net assets per unit as of June 30, 2021 and December 31, 2020 were calculated based on thenumber of units outstanding as of each date, (1,353,000 units) and (1,353,000 units),
respectively.
Net income per unit for the periods from January 1, 2021 to June 30, 2021 and July 1, 2020 to
December 31, 2020 was calculated based on the weighted-average number of units outstanding
during the corresponding periods, (1,353,000 units) and (1,353,000 units), respectively.
Accordingly, net assets per unit were ¥112,590 as of June 30,2021 and ¥112,652 as ofDecember 31, 2020. Net income per unit was ¥2,938 for the period from January 1, 2021 toJune 30, 2021 and ¥3,171 for the period from July 1, 2020 to December 31, 2020.
13.

Income Taxes

JEI is subject to income taxes in Japan.
JEI’s policy is to make dividend distributions in excess of 90% of distributable income for eachfiscal period in order to meet the condition set forth in the Special Taxation Measures Law ofJapan concerning the deductibility of cash dividends paid for income tax purposes.
Details of significant components of deferred tax assets and liabilities as of June 30, 2021 andDecember 31, 2020 are summarized as follows:
As of June 30,
2021

As of December 31,
2020(Thousands of yen)
Deferred tax assets:
Accrued enterprise taxes
Total deferred tax assets
Net deferred tax assets

－
－
－
－

26
26
26

A reconciliation of the differences between the statutory tax rate and the effective tax rate forthe periods from January 1, 2021 to June 30, 2021 and July 1, 2020 to December 31, 2020 is asfollows:

Statutory tax rate
Reconciliation:
Deductible distributions paid
Reversal of reserve for reduction entry
Other
Effective tax rate

For the period
from January 1,
2021 to June 30,2021
31.46%For the period
from July 1, 2020
to December 31,
2020
31.46%(31.45%)
－
0.02%
0.03%

(29.76%)(1.70%)
0.01%
0.01%

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
52

14.

Breakdown of Revenues and Expenses
For the period
from January 1,
2021 to June 30,
2021

For the period
from July 1, 2020
to December 31,
2020(Thousands of yen)
Revenues:
Rental business revenues
Rental revenues
Common area revenues
Other rental revenues
Subtotal
Other
Utilities revenues
Other revenues
Subtotal
Total rental revenues
Property operating expenses:
Property management costs and fees
Utilities expenses
Property and other taxes
Insurance
Repairs and maintenance
Depreciation
Other
Total property operating expenses
Profit8,248,679
1,331,991
265,038
9,845,709

8,484,786
1,249,688
264,384
9,998,859

582,002140,080
722,082
10,567,792

654,642
76,052730,694
10,729,554

1,393,314
759,875
934,741
20,903
158,083
1,847,474
241,341
5,355,733
5,212,058

1,371,601
831,159
919,625
20,494
282,172
1,824,586
237,725
5,487,364
5,242,190

15. Breakdown of Gain or Loss on Sales of Real Estate Properties
For the period
For the period
from January 1,
from July 1, 20202021 to June 30,
to December 31,
2021
2020
(Thousands of yen)
JEI Nishi-Honmachi Building
Proceeds from sale of real estate
Cost of sales of real estate
Other related sale expenses
Gain on sale of real estate

－
－
－
－

1,351,500
1,036,839
421
314,238

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
53

16．Leases
JEI leases properties on which rental revenues are earned. At June 30, 2021 and December 31,
2020, future lease revenues under non-cancelable operating leases are summarized as follows:
As ofJune 30, 2021

As ofDecember 31, 2020

(Thousands of yen)
Due within one year
Due after one year

1,959,773
3,462,341
5,422,115

Total

1,965,230
3,316,667
5,281,898

17. Derivative Transactions
Derivative Transactions as of June 30, 2021
(1) Transactions to which hedge accounting is not applied:
Not applicable.
(2) Transactions to which hedge accounting is applied:
The following are the contract values or values corresponding to the principal amount as
stipulated by contracts as of June 30, 2021 for each hedge accounting method applied.

Hedge
accounting
methodType of derivativetransaction

Hedgeditem

Specialtreatment ofinterest-rate
swapsInterest-rate swap
Receive floating,pay fixed

Longterm
debt

Contract amount
Fair value
More than
one year(Thousands of yen)

46,140,000

40,390,000

Method ofcalculating
the fair value** Since the above interest-rate swap meets the criteria for the special hedge accounting treatment underJapanese GAAP and therefore qualifies for hedge accounting, the swap is not revalued at fair value on theaccompanying balance sheets, as described in the summary of significant accounting policies.
In addition, since the swap and the long-term debt hedged by the swap are accounted for as a unit, the fairvalue of the swap is disclosed as part of the fair value of the hedged long-term debt in the fair value disclosurein Note 5, “Financial Instruments.”

Derivative Transactions as of December 31, 2020
(1) Transactions to which hedge accounting is not applied:
Not applicable.
(2) Transactions to which hedge accounting is applied:
The following are the contract values or values corresponding to the principal amount as
stipulated by contracts as of December 31, 2020 for each hedge accounting method applied.

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)54

Hedgeaccounting
methodType of derivativetransaction

Hedgeditem

Specialtreatment ofinterest-rate
swapsInterest-rate swap
Receive floating,pay fixed

Longterm
debt

Contract amount
Fair value
More than
one year(Thousands of yen)

46,140,000

40,390,000

Method ofcalculating
the fair value** Since the above interest-rate swap meets the criteria for the special hedge accounting treatment underJapanese GAAP and therefore qualifies for hedge accounting, the swap is not revalued at fair value on theaccompanying balance sheets, as described in the summary of significant accounting policies.
In addition, since the swap and the long-term debt hedged by the swap are accounted for as a unit, the fairvalue of the swap is disclosed as part of the fair value of the hedged long-term debt in the fair value disclosurein Note 5, “Financial Instruments.”

18.

Related Party Transactions

For the period from January 1, 2021 to June 30, 2021
(1) Parent Company and Major Corporate Unitholders
Not applicable.
(2) Subsidiaries and Affiliated Companies
Not applicable.
(3) Sister Companies
Not applicable.
(4) Directors and Major Individual Unitholders
Name

AmountDescription of transaction

Account

Balance at the end of
period(Thousands of yen)Accounts
payable384,298(Thousands of yen)
Shuichiro
KayamaPayment of asset
management fees to JEAM

454,816

For the period from July 1, 2020 to December 31, 2020
(1) Parent Company and Major Corporate Unitholders
Not applicable.
(2) Subsidiaries and Affiliated Companies
Not applicable.
(3) Sister Companies
Not applicable.
(4) Directors and Major Individual Unitholders
Name

Description of transaction

AmountAccount

Balance at the endof period(Thousands of yen)Accounts
payable399,036(Thousands of yen)
Shuichiro
KayamaPayment of asset
management fees to JEAM

470,777

Asset Management Report for the 30th Period (Semi-Annual Report for the 30th Period)
55

19.

Segment Information

For the periods from January 1, 2021 to June 30, 2021 from July 1, 2020 to December
31, 2020
Since JEI has been engaged in the real-estate leasing business as a single segment, segment
information has been omitted.
Information about products and services
Since revenues from external customers for a single segment of similar products and services
accounted for more than 90% of total operating revenues, information about products andservices has been omitted.
Information about geographic area
(1) Revenues
Since 100% of the total operating revenues were generated from external customers within
Japan, geographical breakdown of revenues has been omitted.
(2) Property and equipment
Since 100% of total property and equipment on the balance sheet are located within Japan,
geographical breakdown of such property and equipment has been omitted.
Information about major clients
Since no single external client represents 10% or more of JEI’s total operating revenues,
information about major clients has been omitted.

20.

Distribution Information

In accordance with Section 33.1.2 of the bylaws set forth by JEI for distributions of cash
dividends, the amount of dividends payable, which is limited by the amount of retained earnings
at end of period, shall be in excess of 90% of its distributable income for the fiscal period as set
forth in Section 67.15 of the Special Taxation Measures Law.
Consequently, JEI set income available for distributions of dividends at ¥3,975,114,000, whichis the maximum integral multiple of the 1,353,000 units issued, but not exceeding¥3,975,882,133, which is the amount of retained earnings at June 30, 2021.
No cash distribution exceeding the income amount set forth in Section 33.1.4 of the bylaws of
JEI shall be made.
On August 18, 2021, the Board of Directors approved a resolution to make a cash distributionof ¥2,938 per unit aggregating to ¥3,975,114,000 to unitholders of record as of June 30, 2021.

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21.

Accounting Standards Issued But Not Yet Applied

As of June 30, 2021, JEI has not yet applied the following accounting standards and theirimplementation guidance.
(1) Accounting Standard for Revenue Recognition and its Implementation Guidance“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan(“ASBJ”) Statement No.29, March 31, 2020)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ
Guidance No. 30, March 26, 2021)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No. 19, March 31, 2020)(a) Overview
Conducting a joint project to clarify the comprehensive principles for recognizing
revenues, the International Accounting Standards Board (“IASB”) and the Financial
Accounting Standards Board (“FASB”) in the U.S. issued “Revenue from Contracts with
Customers” (IFRS 15 by IASB and Topic 606 by FASB) in May 2014. IFRS 15 became
effective from fiscal periods beginning on or after January 1, 2018 and Topic 606 became
effective from fiscal periods beginning after December 15, 2017. Under thesecircumstances, ASBJ also developed a comprehensive accounting standard for revenue
recognition and issued a new standard together with its implementation guidance.
As a basic policy for the development of the new standard, ASBJ determined to adopt
the core principles of IFRS 15 in order to enhance comparability of financial statements,
which is one of the benefits of consistency with IFRS 15. In addition, for any item to beconsidered arising from business practices in Japan, alternative treatments shall be added
to the extent that comparability is not impaired.
(b) Scheduled date of application
JEI will apply the aforementioned standard and guidance from the beginning of the
fiscal period ending December 31, 2021.
(c) Effect of application of the new accounting standard
The effect of application of the aforementioned standard on JEI’s financial statements
is currently under evaluation.
(2) Accounting Standard for Fair Value Measurement and its Implementation Guidance“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019)“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, June 17, 2021)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No. 19, March 31, 2020)(a) Overview
Developing accounting standards for fair value measurement, IASB and FASB issued
new common fair value measurement in May 2011 (IFRS 13 by IASB and update to
Topic 820 by FASB). IFRS 13 became effective from fiscal periods beginning on or afterJanuary 1, 2013 and Topic 820 became effective from fiscal periods beginning after
December 15, 2011. Under these circumstances, ASBJ also developed an accounting
standard for fair value measurement and issued a new standard together with its
implementation guidance.
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As a basic policy for the development of the new standard, ASBJ determined togenerally adopt all the principles of IFRS 13 in order to enhance comparability offinancial statements among domestic and overseas companies, by applying the consistentmeasurement methods. However, for any item to be considered arising from businesspractices in Japan, other treatment for the item shall be determined to the extent thatcomparability is not impaired.
(b) Scheduled date of application
JEI will apply the aforementioned standard and guidance from the beginning of the
fiscal period ending December 31, 2021.
(c) Effect of application of the new accounting standard
The effect of application of the aforementioned standard on JEI’s financial statements
is currently under evaluation.
22.

Significant Subsequent Event

Not applicable.

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