Fiscal Period Ended February 28, 2021

Asset Management Company
April 15, 2021

Securities Code：3481

Table of Contents
1.

Overview of 4th Follow-on Offering and
New Acquisition

4

2. Financial Results and Forecasts

7

3. Growth Strategy

10

4. Logistics Market Overview

19

5. ESG Initiatives

22

6. Appendix

26

Logicross Narashino1

Highlights after Oct. 2020

HYBRID External Growth● Acquired 3 Sponsor-Developed properties and 2 Asset Management Company-Sourced properties. Successfullycompleted follow-on offering for 2 consecutive periods and expanded asset size to 170.4 bn yen● Achieved stabilized DPU growth by ＋16.2％ and NAV per unit growth by +10.7％ (Note 1)

HYBRID Internal Growth● Maintained high occupancy and achieved rent growth for 6 consecutive periods despite the COVID-19
pandemic. Upward trend is expected to continue
Average rent growth(Note 2)

9th period+8.5%

10th period (forecast)+13.4%

Financial Strategy● Extended debt duration and maintained low debt-cost through new debt. LTV still remains low at 32.4%● Achieved diversification of financing method through issuance of Green Bonds and extension of debt duration

ESG● Awarded the prestigious 5 Stars and recognized as Global Listed Sector Leader ranked No.1 globally in listed
industrial sector in GRESB Real Estate Assessment (2020)● Introduced cumulative investment for employees of Sponsor and Asset Management Company
Note 1: Data at the time of 4th follow-on offering
Note 2: Average rent growth for the leases that expired or will expire during the relevant period, and lease contracts that are not yet contracted are assumed to be unchanged for the calculation2

Management Policy Designed to Maximize Unitholders’ Value in
Mid-to Long-term
Progress of Management Policy based on “Three Pillars”
Execution of Growth Strategy based on “Three Pillars” (Since April 2019)

Alignment
Align interest
withunitholders

Inclusion in the
FTSE EPRA
NareitGlobal Real
Estate IndexSeriesAssetmanagement
fee fully linked
to unit priceperformance

Discipline
Achievedisciplined
growthHybridExternal growthutilizing LTV

Flexible property
acquisition
strategy utilizing
bridge funds

Enhanced
Enhance MEL’s collaboration with
Tokyo Ryutsu
uniqueCenter (TRC)

strategyHybrid Model

Measures for the Future

Acquisition ofhighest ratingfrom GRESB Real
Estate andgreening of theportfolio

Introducing
cumulative
investment for
employees ofSponsor and
AssetManagement
Company Aim for further inclusion in major
indices and improve liquidity bysteadily increasing market
capitalization

External growth Flexible financing
with attention
carefully
to portfolio yieldwatching
and implied
the market
cap rateconditions

Issuance ofGreen Bond todiversify
financingmethods

 Maximize unitholder value throughdisciplined acquisitions and utilizing
low LTV

Support from
Sponsor andcontinued
same-boat
investment

Internal growthutilizing
management
capability of AssetManagement
Company andleasing capacity ofSponsor

ExpandingIntroducing new
pipelines frompipeline method
both Sponsor andof “PDP” by Asset
Asset
Management
Management
Company
Company Continue “Hybrid” internal growth Secure pipelines continuously from
Sponsor Secure pipelines through utilizing
Asset Management Company’svarious sourcing methods, such as
CRE proposals

Note: Executed measures after Oct. 2020 are highlighted in red

3Overview of 4th Follow-on Offering and
New Acquisition

Overview of 4th Follow-On Offering and New Acquisition
Offering format

Domestic Public Offering(with Extraordinary Report)

Launch dateFeb. 18, 2021 (Thursday)

Pricing dateMar. 1, 2021 (Monday)

Issue price403,650 yen per unit

Total number ofissued units

No. of Properties /Total Acquisition Price

５

28.2

properties/

Average Appraisal
NOI Yield

Units issued：41,000 units(Designated Purchaser 1,750 units)
Overallotment：1,898 units

4.6

Total amount issued 17.3 bn yen
Logicross Narashino (Narashino, Chiba)
Acquisition Price 11,851 mn yen
Appraisal Value
Appraisal
NOI Yield
Total Floor Area
Main Tenant

MJ Industrial Park Kobe (Land) (Kobe, Hyogo)

4.3%
36,437.92m2

Appraisal
NOI Yield

Occupancy
100%

4.3%

Total Floor Area
Main Tenant

Average
Property Age

2.4

years

Appraisal Value

5,670 mn yen

Main Tenant

CRE
Occupancy
100%

5.1%
40,050.71m2
ORIX Auto Corporation

MJ Industrial Park Chiba-Kita (Land) (Chiba, Chiba)

e-LogiT Co., Ltd., otherAcquisition Price 5,719 mn yen
Appraisal
NOI Yield

bn yen4,000 mn yen

Logicross Nagoya Kasadera (40％ additional co-beneficiary interest) (Nagoya, Aichi)
Appraisal Value

4,970 mn yen

Total Floor Area

Total Floor Area 36,619.48m2
Main TenantAcquisition PriceAppraisal
NOI Yield

Nihon Realest Co., Ltd.

Logicross Osaka (40% additional co-beneficiary interest) (Osaka, Osaka)
Appraisal Value

％

30.4

Occupancy
100%

12,400 mn yen

Acquisition Price 3,868 mn yen

bn yenTotal
Appraisal Value

6,400 mn yen
5.0%

Occupancy
100%

Acquisition Price

1,800 mn yen

CREAppraisal Value

1,950 mn yen

Occupancy
100%

Appraisal
NOI Yield
Total Floor Area
Main Tenant

4.4%
14,986.64m2
Kinugawa Rubber
Industrial Co., Ltd.

72,376.03m2
YAGAMI Co., Ltd., others

Note： Data at the time of 4th follow-on offering

5Effect through 4th Follow-On Offering
DPU per Unit (Stabilized basis)

Asset Size
2,000

1,500

+28.2 bn yen

28.4 bn yen+

1,704億円
170.4 bn yen

+7.3%

7,500
7,000

8.3%

+

6,500

142.1 bn yen
1,421億円

6,000

1,137億円
113.7
bn yenProperty tax
expensedyen
6,910円yen
6,438円yen
5,947円

5,500

1,000

5,000
4,500

0
500

FP 2020/8
2020年8月期（第8期）(8th FP)

Post-3rd
第3回公募増資後
Follow-on Offering

Post-4th
第4回公募増資後
Follow-on Offering

NAV per Unit

320,000

Pre-3rd
第3回公募増資前
Follow-on Offering

Post-3rd
第3回公募増資後
Follow-on Offering

Post-4th
第4回公募増資後
Follow-on Offering

LTV・Debt Capacity+4.1%

340,000
330,000

0
4,000

6.3%

+

yen
329,777円

yen
316,918円

LTV
FP 2020/8 (8th FP)

Forecasted LTV
post-3rdfollow-on offering

Forecasted LTV
FP 2022/2 (11th FP)

29.4%

30.9%

32.4%

310,000
300,000

298,032 yen

290,0000
280,000

FP 2020/8
2020年8月期（第8期）(8th FP)

Post-3rd
第3回公募増資後
Follow-on Offering

Post-4th
第4回公募増資後
Follow-on Offering

Debt capacity(up to 40%)

Debt capacity(up to 50%)

22 bn yen

63 bn yen

Note: Data at the time of 4th follow-on offering. Forecasted LTV post-4th follow-on offering is as of Apr. 15, 2021

6

Financial Results and Forecasts

Financial Results for the Fiscal Period Ended Feb. 2021
FP Ended Aug.
2020 Actual(8th FP)(A)FP Ended Feb.
2021 Actual(9th FP)(B)

3,342

4,203

Operating Rental Revenues

3,342

Operating Rental Expenses(excluding depreciation)

Operating Results (mn yen)

Difference（B）－（A）

1

FP Ended Feb.
2021 Forecast(As of Oct. 15,
2020)(9th FP)

Main Factors of Variance
8th FP Actual vs. 9th FP Actual

+860

4,222

4,203

+860

4,222

582

723

+141

781

2,759

3,479

+719

3,440

Depreciation

604

773

+169

770

Operating Income

1,729

2,204

+474

2,177

1,655

2,074

+418

2,040

2

1,654

2,073

+418

2,039

・Increase in expenses fromproperties acquired in 9th FP(341)mn yen

・Increase in expenses fromexisting properties(44)mn yen

Operating Revenues

NOI

Ordinary Income
Net Income

2
3

Distributions Per Unit (yen)Distributions Per Unit
(including SCD)

6,003

6,619

+616

6,520

5,411

5,953

+542

5,857

592

666

+74

663

305,815

348,237+42,422348,237

AFFO (mn yen)

2,214

2,733

+518

2,618

AFFO payout ratio

82.9％

84.3%

+1.4%

86.7％

LTV

29.4％

31.4%

+2.0%

31.5％

298,032

323,737+25,706

-

99.9%

99.7%

(0.2)%

99.8%

Distributions Per Unit
(excluding SCD)
Surplus Cash Distributions (SCD)Per Unit
Number of investment units issued
and outstanding (units)
Other Statistics

NAV per unit
Average Occupancy

1・Increase in revenue from properties
acquired in 9th FP
・Rent increase, others from existing
properties
Increase in rent
Decrease in utility cost

Increase in depreciation
Increase in facility management fee, etc.
Increase in G&A expenses such as AM fee, etc.

+856mn yen+4mn yen+14mn yen(16)mn yen(167)mn yen(98)mn yen(75)mn yen

Increase in leasing fee(28)mn yen

Increase in repair and maintenance expense(26)mn yen

Decrease in utility cost

+16mn yen

3・Increase in non-operating expenses(54)mn yen

Increase in interest expenses from debt in 9th FP(18)mn yen

Temporary increase in expense from offering in Aug. 2020(34)mn yen

8Forecasts for the Fiscal Periods Ending Aug. 2021 and Feb. 2022
FP Ended Feb.
2021 Actual(9th FP)(A)FP EndingAug. 2021
Forecast(10th FP)(B)

4,203

4,941

Operating Rental Revenues

4,203

Operating Rental Expenses(excluding depreciation)

Operating Results (mn yen)

Difference（B）－（A）

1(Reference)
FP Ending Feb.
2022 Forecast(11th FP)

+738

5,035

4,941

+738

5,035

723

940

+216

909

3,479

4,001

+521

4,125

Depreciation

773

880

+106

892

Operating Income

2,204

2,521

2,074

2,336

2,073

2,335

Operating Revenues

NOI

Ordinary Income
Net Income

2

+316

1

+261

3

+261

2,613
2,493

2

Distributions Per Unit
(excluding SCD)
Surplus Cash Distributions (SCD)Per Unit
Number of investment units issued
and outstanding (units)

・Increase in revenue from properties
acquired in 10th FP+723mn yen

・Rent increase from existing properties+14mn yen

2・Increase in expenses from properties
acquired in 10th FP(239)mn yen

Increase in depreciation
Increase in G&A expenses such as AM fee, etc.

・Increase in expenses fromexisting properties(96)mn yen(98)mn yen(181)mn yen

Property tax, expensed from properties in 9th FP

3
6,619

6,685

+66

(95)mn yen

2,492

Distributions Per Unit (yen)Distributions Per Unit
(including SCD)

1Main Factors of Variance
9th FP Actual vs. 10th FP Forecast

・Increase in non-operating expenses

7,099

5,953

5,969

+16

6,372

666

716

+50

727

348,237

391,135+42,898

391,135

Other Statistics
AFFO (mn yen)

2,733

2,974

+241

3,234

AFFO payout ratio

84.3%

87.9%

+3.6%

85.9%

LTV

31.4%

32.7%

+1.3%

32.4%

Average Occupancy

99.7%

99.7%

±0%

100.0%

Increase in interest expenses from debt in 10th FP
Temporary increase in expenses from offering in Feb. 2021
and issuance of investment corporation bonds(56)mn yen(30)mn yen(25)mn yen

Main Factors of Variance10th FP Forecast vs. 11th FP Forecast
1・Full contribution from properties
acquired in 10th FP

2

・Decrease in non-operating expenses
No temporary expense from offering in Feb. 2021 andissuance of investment corporation bonds＋93mn yen

＋65mn yen
＋60mn yen9Growth Strategy

Features of Mitsubishi Estate Logistics REIT Investment Corporation
Stable Growth Strategy with Hybrid Model “Developer × Real Estate Asset Manager”

No. of Properties /Asset Size

22 properties /170.4bn yen

Sponsor-developed
Properties / AssetManagement
Average Occupancy
Company-sourced
Properties
%
%/

99.8

61.1
38.9%

Appraisal
NOI Yield

Forecasted LTV(2022/2)

Credit Rating
(JCR)

4.8%

32.4%

AA-

(Stable)Asset Management Company

SponsorDevelopment/
Facilities Management

Overview

 Dedicated to city development in the Marunouchi area (Tokyo) for over 120 years
 Contributing to the society through a variety of business activities as one of thelargest comprehensive real estate developers
 Promoting the logistics facility business as a growth area
Support Constant supply of pipeline properties from sponsor through development /operation of advanced logistics facilities
 Utilization of Sponsor’s know-how and corporate customer relations in the leasing
activities
 Formulation of capital market-oriented long-term management plan to promote
recycling business in domestic asset business and to expand AUM consistently
in non-asset businesses

Investment/
Asset Management

Overview

 Established in 2001, when the scheme of real estate securitization was
emerging in Japan
 Its track record includes structuring and managing various types of real estate
funds, such as the larger private REIT in Japan
 Proven track records in a variety of asset types in investment and asset
management
Support Unique property sourcing capacity with discerning judgment
 Flexible and diverse acquisition strategies, using a wide range of schemes,
including bridge funds
 Competitive real estate fund management capability backed by a diverse deal
track record

Note: As of Feb. 28, 2021. However, the properties acquired during 10th FP are included

11External Growth Strategy
13 properties / Total floor area: 1,091,000m2 (preferential negotiation rights)
Sponsor-Developed Properties

Asset Management Company-Sourced Properties Capability to develop logistics facilities independently
based on extensive land information
 Capability to co-develop facilities backed by MEC’s ability
and credibility for development Capability to assess properties backed by experience incontinuous acquisitions of properties since 2001
 Flexible and diversified property acquisition strategy
leveraging the capability to manage real estate funds

LogicrossBrand of logistics facilities
MEC develops throughout Japan

Asset Management Company-Sourced properties withexpected preferential negotiation rightSponsor-Developed properties with expected preferential negotiation rightOccupancy
100%

Logicross Yokohama Kohoku(16,000m2)
Completed in 2019

MJ Logipark

Properties which MEL acquired orintends to acquire from the 3rd parties

Pre-leased
100%

Logicross Hasuda(79,000m2)
Completed in 2021

Logista・LogicrossIbaraki Saito (B) (31,000m2)
To be completed in 2021

Occupancy
100%

Logicross Atsugi II

LOGIPORT Kawasaki Bay(35,000m2)
Completed in 2019

(296,000m2)
Completed in 2019

PDP

Pre-leased
100%

Pre-leased
100%

New
BridgeOccupancy
100%

PDP

New

Occupancy
100%

Logista・LogicrossIbaraki Saito (A) (115,000m2)
To be completed in 2021

Logicross Kasukabe(39,000m2)
To be completed in 2021

Logicross Funabashi(23,000m2)
To be completed in 2021

Pre-leased100%

MJ Logipark Kakogawa 1*

MJ Logipark Takatsuki 1*（33,000m2）
To be completed in 2022

（19,000m2）
Completed in 2021

New

PDP

(Partnership Development Program)
Logicross Zama Komatsubara（44,000m2）
To be completed in 2022

* Tentative Name
Note: As of Apr. 15, 2021

Logicross Zama*(183,000m2)
To be completed in 2023

Sagamihara Chuo Fuchinobe Project*（173,000m2）
To be completed in 2023

Unique development initiative by the asset
manager to incorporate properties developed bypartners into the pipeline

Other Projects

12

Portfolio Map
Properties Acquired in 10th FP

Note 1: As of Apr. 15, 2021
Note 2: For Logicross Osaka and Logicross Nagoya Kasadera, 60% co-beneficiary interest was acquired in 9th FP and 40% co-beneficiary interest in 10th FP, respectively

13Internal Growth Strategy ①
Rent Revision

Achieved rent growth for 6 consecutive periods and upward trend is expected to continue for 10th FP
Upward rent revision
FP 2018/8(4th FP)FP 2019/2(5th FP)

43%

57%

Average Rent Growth

Average Rent Growthof Increased Portion

+1.8%

+3.0%

+0.2%

+3.4%

+3.1%

+6.8%

19,000㎡

+2.2%

+2.5%

7%

+9.5%

+10.4%

+8.5%

+9.7%

+13.4%+15.0%(Based on leased area of thewarehouse portion)

Undecided

Rent unchanged

11,000㎡
96%

4%

FP 2019/8(6th FP)40%

FP 2020/2(7th FP)88%

62,000㎡

60%
12%

FP 2020/8(8th FP)93%

FP 2021/2(9th FP) (Note)88%

40,000㎡

21,000㎡

6%

6%

FP 2021/8
92%(10th FP)(Forecast)(Note)
0㎡ 97% contracted 15,000㎡

24,000㎡
5%3% 33,000㎡
40,000㎡

Unique Initiatives by Asset Management Company

Upward Rent Revision Examples
 Achieved rent increase upon rent renewal by leveraging tenant relationshipby our Sponsor in Fukuoka where demand is increasing
Logicross Fukuoka Hisayama

26,000m
Rent Growth：+17.2%
Leased Area：Approx.

 Upon rent renewal, MEL installed LED lighting at MEL’s cost which
reduced tenant’s electricity bills significantly
 As a result, MEL achieved rent growth
LOGIPORT Sagamihara

Leased Area：Approx.
Rent Growth：+

9,000m6.1%

2

Improved profitability through installation of LED lighting


■

2

■

Received green lease fee based on Green lease contract(MJ Logipark Fukuoka 1)
Achieved rent increase as a result of reduction of electricity charges borne by tenants(LOGIPORT Sagamihara, LOGIPORT Hashimoto)Achieved income increase by execution of lease contract for installation
solar panels on the roof top(MJ Logipark Fukuoka 1)

Improved tenant satisfaction and profitability by increasing parking space(LOGIPORT Osaka Taisho)Reduced property tax due to review in asset valuation(Logicross Atsugi)

Note: As of Apr. 5, 2021. Lease contracts that are not yet contracted are assumed to be unchanged for the calculation

14

Internal Growth Strategy ②
Tenant Data
Tenant Diversification(Based on leased area)

Cargo for EC
株式会社IHIインフラシステム
IHI Infrastructure Systems
株式会社日本リアリスト
Nihon Realest

10.9%
4.9%
4.9%
4.0%
54.0%

3.9%
3.7%
3.5%
3.4%
3.4%
3.3%

23.0%

Type of Cargo(Based on leased area)
1.5%

オリックス自動車株式会社
ORIX Auto
キムラユニティー株式会社
Kimura Unity
株式会社三鷹倉庫
MITAKA SOKO

57.5%

BtoC

83.0%

ホンダロジコム株式会社
Honda Logicom
三菱地所株式会社
Mitsubishi Estate

29.4%

Food and Beverage
食品・飲料

その他
Others81.2%

卸売Wholesale
小売
Retail9.5%

カジュアル衣料
Casual Clothing

18.2%

3PL
3PL

5.6%

PC/Communications, Home
パソコン・通信機器・家電
Appliance etc

66.7%

原材料・部材
Raw / Component Materials
23.2%

4.9%

3PL

66.7%

5.2%

Pharmaceuticals and医薬品・医療用機器
Medical Devices

5.4%

Cargo with
Strong Demand

福岡ロジテム株式会社
Fukuoka Logistics System

13.0%

日用品
Household Goods

8.5%

サン都市建物株式会社
Sun City Building

Average Occupancy Rate andLease Agreements

家具・雑貨
Furniture and Home Goods

製造
Manufacture
その他
OthersElectronic devices and
業務用電子機器・部品

Components for Business use

その他
OthersLease Agreement Expiration Schedule (Note 2)（㎡）

AverageOccupancy Rate

Daily Necessities

3.0%
5.8%

山九株式会社
SankyuDelivery Destination(Based on leased area)

99.8%

契約満了予定面積
Leaseagreements that expired(left axis)

120,000

契約済み面積 lease agreements
Contracted(left axis)

賃料比（右軸）Rent
ratio(right axis)

（%）

20

100,000

15

80,000

Fixed-term
Lease

100.0%

60,00010

40,0005

20,000Weighted Average
Remaining Expiry

7.4years

002021/82022/82022/22023/82023/22024/82024/22025/82025/22026/82026/22027/82027/22028/82028/22029/82029/22038/82047/82030/2

Note 1: As of Feb. 28, 2021. However, the properties acquired during 10th FP are included
Note 2: Excludes land

15

Financial Strategy
Financial HighlightLong-term Debt Ratio(all / excluding short-term)

95.5%

95.5%

Credit Rating (JCR)

Forecasted LTVAA-（Stable）

32.4%

三菱UFJ銀行
MUFG Bank, Ltd.

0.8%
0.8%

みずほ銀行
Mizuho Bank, Ltd.

三井住友銀行
Sumitomo Mitsui Banking Corporation

0.5%
3.3%

農林中央金庫The Norinchukin Bank

信金中央金庫The Shinkumi Federation Bank
全信組連
Shinkin Central Bank

25.1%

2.9%
4.5%
7.0%

(LTV up to 40%)

22 bn yen

Approx.

0.40%/0.41%
Debt Capacity(LTV up to 50%)

63 bn yen

Approx.

新生銀行
Shinsei Bank, Limited
日本政策投資銀行
Development Bank of Japan
七十七銀行
The 77 Bank, Ltd.

60,5747.1%
15.3%

10,000

Short-term borrowing

短期借入金Long-term borrowing

Investment Corporation Bonds
長期借入金
投資法人債
Green Finance

8,000

6,000

山口銀行
The Yamaguchi Bank, Ltd.

Total Debt
Balancemn yen（mn yen）

福岡銀行
The Bank of Fukuoka, Ltd.

2.5%

4.8%

Debt Capacity

Average Debt Cost

(all / excluding short-term)

Debt Maturity Schedule

0.8%

2.5%

5.6 years/5.9 years(FP 2022/2)

Lenders
1.3%
2.3%

Average Remaining
Debt Duration

Fixed Interest Rate Ratio

New

18.4%

千葉銀行
The Chiba Bank, Ltd.
三井住友信託銀行
Sumitomo Mitsui Trust Bank, Limited
山梨中央銀行The Yamanashi Chuo Bank, Ltd.

New

4,000

2,000

西日本シティ銀行
The Nishi-Nippon City Bank, Ltd.
富山銀行
The Bank of Toyama, Ltd.
投資法人債
Investment Corporation Bonds
Green Financeグリーンファイナンス

02021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036（year）

Note: As of Apr. 15, 2021

16

Green FinanceInitiatives for Financing utilizing ESG Assessments evaluated by External Organizations
Green BondMEL issued Green Bonds on Apr. 14, 2021 with the terms described below in order to promote efforts to improve sustainability and to further strengthen our financial base
Name

Investment Corporation 1st Series Unsecured
Bonds (Green Bonds)

Green Eligible Assets for Investment（Note 1）

Total Amount
2,000 mn yen ／15 years
Issued / Term
Interest Rate

0.700% per annum

Credit Rating
（JCR）

AA-

Evaluation“Green 1(F)” (highest for JCR Green Financeby Third-Party
Evaluation) rating in Green Finance Framework
Entities

Green Loan
■ MEL borrowed 1,350 mn yen through the SDGs Green
Loan financed by Sumitomo Mitsui Banking Corporation
on Mar. 9, 2021, based on the above third-party
evaluation institution’s “Green Finance Framework”■ First case in J-REIT
financed by MUFG Bank
with “ESG Loan for J
REIT” and SMBC with“Funding to promote
SDG’s”LOGIPORT Osaka Taisho

BELS: ★★★★★（ZEB Ready）
CASBEE: S Rank for Real Estate

Logicross Osaka

Logicross Nagoya Kasadera

Funds(mn yen)Procurement
Date

Repayment /Redemption
Date

Allocation
Status

BELS: ★★★★★
CASBEE: S Rank for Real Estate

BELS: ★★★★★
CASBEE: S Rank for Real Estate

Upper Limit of Green FinanceGreen Loans

1,350

Mar. 9,2021

Mar. 9,2025

Allocated

Green Bonds

2,000

Apr. 14,2021

Apr. 14,2036

Allocated

Total Green Finance

3,350

―

―

―

Upper limit of Green Finance（Note 2）

33,682―――

Note 1: The proceeds from the Green Bonds issuance have been allocated to the prepayment of a portion of the short-term loans which were borrowed for the acquisition of three properties described above
Note 2: The Upper Limit of Green Finance = Total Acquisition Price of Green Eligible Assets × Total Asset. LTV is calculated based on Feb. 28, 2021

17

Mid-to Long-Term Growth Strategy
Asset size target and transition of key financial figures
Sponsor-Developed

Asset Management Company-Sourced

Asset Size
Target
300 bn yen

1,704億円
170.4
bn yen142.1
bn yen1,421億円

Asset Size

1,137億円
1,137億円
bn yen113.7
bn yen 113.7
708億円
70.8
bn yen83.2
bn yen
832億円

83.2
bn yen832億円
2nd
Follow-on
Offering

1st Follow-on
Offering

LTV

DPU PerUnit

NAV Per
Unit

Note: As of Apr. 15, 2021

Aim forFurther
Growth in
Asset Size

25.0%

5,292円
5,292
yen

27.0%

27.0%

5,492円
5,492
yen

5,524円
5,524 yen

270,016円
269,217円
269,217 yen 270,016 yen

275,236円
275,236 yen

FP 2018/8(4th FP)FP 2019/8(6th FP)FP 2019/2(5th FP)

30.0%

29.4%

5,907円
5,907 yen

6,003円
6,003 yen

298,032円
293,133円
293,133 yen 298,032 yen

FP 2020/2(7th FP)FP 2020/8(8th FP) Aim for further
inclusion in major
indices

3rd
Follow-on
Offering

4th
Follow-on
Offering

31.4%

32.7%

32.4%

6,520円
6,619 yen

6,685 yen
6,685円

7,099円
7,099 yen

316,918円
323,737 yen

FP 2021/2(9th FP)

Stabilized LTV
40～50%

Aim for continued
growth329,887円

 Continue to carefully
monitor the market
and acquire properties
through equity
offerings and flexible
use of LTV, which is
the lowest level among
all J-REITs
 Aim to increase DPU
through disciplined
growth Aim to steadily grow
NAV per unit andmaximize unitholder
value

331,057円
Aim for continued
growthFP 2021/8(10th FP)FP 2022/2(11th FP)

18

Overview of Logistics Market

Logistics Market Fundamentals ①
Expansion of E-commerce Market（100 bn yen）

３PL Market Size（100 bn yen）

Sales of E-commerce

200

3PL market size

40

150

30

100

20

50

10
0

0
Note：

2009

2010

2011

2012

2013

2014

2015

2016

2017

2019 （year）

2018“Sales of E-commerce" in the chart above is an estimate of the value of transactions on the Internet between companies andconsumers (BtoC). The figures are for all goods and services consumed by individuals and are divided into three main categories: goods
sales, services, and digital. Market estimates are calculated and totaled for each of these sectors
Source： Data compiled by the Asset Management Company based on data from "FY2019 International Economic Research Project for
Establishing a Domestic and Foreign Economic Growth Strategy" (July 2020) by the Ministry of Economy, Trade and Industry

E-commerce Penetration Rate
（%）

Japan

34

U.S.

2009

27.9

200
150

18

100

2

14.0
6.2
4.0
2.1
2009

6.8

2013

2014

2015

2016

2017

2019 （FY）

2018

Department store

Super market

Drug Store

Online shop

Convenience store

50
0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Growth Rate of Small-lot Cargo Amount Handled by 3 Major Shipping
Companies
小口貨物量（前年同月比）
Small-lot cargo (YoY)

（%）
20

2009

2020 （year）

Source： Data compiled by the Asset Management Company based on data from “FY2019 International Economic Research Project for
Establishing a Domestic and Foreign Economic Growth Strategy” (July 2020) by the Ministry of Economy, Trade and Industry (Japan),
Office for National Statistics (UK) and U.S. Census Bureau (USA). Refer to press release disclosed information until 2020 for U.S. andUK, while until 2019 for Japan

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020 （year）

Source： Data compiled by the Asset Management Company based on data from “Monthly Report on the Current Survey of Commerce Jan.l2021” (March 2021) by the Ministry of Economy, Trade and Industry and "FY2019 International Economic Research Project for
Establishing a Domestic and Foreign Economic Growth Strategy" (July 2020) by the Ministry of Economy, Trade and Industry

Monthly Trends in Cargo delivery (Ministry of Land, Infrastructure,
Transport and Tourism)（Items, mn）

Cargo delivery (left axis)

600

YoY (right axis)

25

500

15

20

400

15

300

10

10

200

5
0

2012

Retail Market Size

26

10

2011

Note： Each fiscal year is the period beginning on April 1 and ending on March 31 of the following year. It does not coincide with the fiscal
period of MEL
Source：Data compiled by the Asset Management Company based on "Monthly Logistics Business Sept. 2020“（100 bn yen）

UK

2010

5

100
Jan.
2020

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2021

Source： Data compiled by the Asset Management Company based on data from the amount of small-lot announced by each of three major
shipping companies

0

Jan.
2020

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2021

0

Source： Data compiled by the Asset Management Company based on data from “Transportation by truck" (January 2021) by the Ministry ofLand, Infrastructure, Transport and Tourism

20

Logistics Market Fundamentals ②
Tokyo Metropolitan Area
New supply (left axis)
Forecast new supply (left axis)

New demand (left axis)（Thousand m2）
3,000
2,500

Osaka Metropolitan Area
Vacancy rate (right axis)
Vacancy rate of one year
after completion (right axis)
（％）
10
8

2,000

6

Vacancy rate (right axis)
Vacancy rate of one year
after completion (right axis)

New demand (left axis)（Thousand m2）

（％）
15

1,500
1,250

10

1,000
750

1,500
4

1,000

2

500
0

New supply (left axis)
Forecast new supply (left axis)

250
0

0
（year）
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Forecast

Nagoya Metropolitan Area
New supply (left axis)
Forecast new supply (left axis)（Thousand m2）
450

New demand (left axis)

250
150

Vacancy rate (right axis)
Vacancy rate of one year
after completion (right axis)
（％）
50

(50)

Forecast

New supply (left axis)

20

150
15

125

20

75

0

（％）

175

100

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 （year）
Forecast

Vacancy rate (right axis)

New demand (left axis)（Thousand m2）

30

10

50

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
（year）

Kyushu Area

40

350

5

500

10

50

5

25
0

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020 （year）

Source: CBRE

21

ESG Initiatives

ESG Initiatives
GRESB Assessment
For 2020 GRESB Real Estate Assessment, MEL ｗas awarded theprestigious “5 Stars” for the first time based on a relativeevaluation by overall score, and “Green Star” for 2 consecutive
years. Furthermore, MEL ranked 1st among 22 companies inindustrial-listed sector in global, and was selected as “Global Listed
Industrial Sector Leader”. In addition, in the “GRESB Public
Disclosure” (5-level rating) that measures the level of ESG
information disclosure, MEL’s effort to disclose ESG information was
highly evaluated, and for the first time, was awarded the highest
rank “A Level”.

Participate in United Nations Global Compact(UNGC)UNGC is a voluntary, global initiative supporting a
global framework for sustainable growth through thedemonstration of creative, responsible leadership by
the respective corporations and organizations as
principled members of society.
Mitsubishi Estate became a signatory of the UNGC
and Mitsubishi Estate Group was registered as
participants in April 2018. Along with this, the AssetManagement Company has participated in thisinitiative as a member of Mitsubishi Estate Group.

Mitsubishi Estate Group’s Initiatives for ESG

Mitsubishi Estate Group’s Sustainable Development
Goals 2030 (Long-term Business Plan)

Signing of PRI

Asset Management Company
became a signatory of PRI, thePrinciples for Reasonable
Investment in March 2020.
PRI encourages the incorporationof Environment, Social andGovernance issues into investment
decision-making processes, withthe aim to help companies
enhance long-term investment
performance and better fulfill theirfiduciary duty.

1.Environment
Sustainable urban developmentthat proactively addresses climatechange and environmental issues
2.Diversity & Inclusion
Urban development that responds tolifestyle and human resources trends andfacilitates active participation for all
3.Innovation
Innovative urban development that
continuously renews society
4.Resilience
Dynamic, flexible urban development thatbuilds disaster-resilient communities andprioritizes safety and security

23

ESG Initiatives (Environment)
Environment
Promotion of Green Portfolio

Ratio of Green Properties in Portfolio（Total Floor Area basis）

Certification System# of properties

75.3

%

Property Name

Logicross Fukuoka Hisayama

Building-Housing Energy-Efficiency
Labeling System (BELS)

8MJ Logipark Kasugai 1
MJ Logipark Kazo１

BELS：★★★★★（2019/2/20）

Logicross Atsugi
Logicross Kobe Sanda
Logicross Osaka

Comprehensive Assessment System for
Built Environment Efficiency (CASBEE)

8

Logicross Nagoya Kasadera
LOGIPORT Sagamihara
LOGIPORT Hashimoto

DBJ Green Building Certification

1

Evaluation

DBJ Green Building Certification：★★★★（2018/3/30）
BELS：★★★★★（2019/2/20）
CASBEE S Rank for Real Estate（2019/3/29）
BELS：★★★★（2019/2/20）
CASBEE A Rank for Real Estate（2019/3/29）
BELS：★★★★★（2021/1/27）
CASBEE S Rank for Real Estate（2021/2/26）
BELS：★★★★★（2021/1/27）
CASBEE S Rank for Real Estate（2021/2/26）
BELS：★★★★（2020/12/22）
CASBEE S Rank for Real Estate（2019/8/21）
BELS：★★（2018/2/15）
CASBEE S Rank for Real Estate（2019/8/21）
BELS：★★★★★/ZEB Ready（2020/12/22）
CASBEE S Rank for Real Estate（2020/7/10）
CASBEE A Rank for New Construction Aichi（2015/9/1）

LOGIPORT Osaka Taisho

Examples of Initiatives
Energy Saving
Initiatives
Insulated sandwich panels
for exterior walls

Installation of
motion-detection sensors

Reuse of OA floor panels of
office buildings in Marunouchi

Renovation with LED installation
based on Green Lease contract

Use of Renewable
Energy/BCP Initiatives
Installation of solar panels

Seismic isolators

Installation of emergency Measures against infectious diseases
power generators（acrylic plate, hand sanitizer）

24

ESG Initiatives (Social & Governance)
SocialProactive Participation in CSR activities
Participation in flower bed
Maintenance activities ofcommunity near Logicross Atsugi

Register for Disaster Cooperation Building(LOGIPORT Sagamihara, LOGIPORT
Hashimoto)Offering Comfortable Working Environment
Examplesin the Asset Management Company●Introduction of flexible working hour●Installation of community spaces within office area
●Invitation of personnel from group companies andoutside professionals●Specialized training for skill improvement●Employee satisfaction survey

These initiatives are intended to maximize
asset management performance by improving productivity, skills and motivation of employees

GovernanceLawn-mowing at greenery areas in
MJ Logipark Atsugi 1

Secure reserves in case of emergency(Food, beverage & portable toilet)
As a heatstroke measure, free salt candyService for tenants in properties(for all properties held as of Aug. 2020)
Donated 1,900 unused surge masks stored to
the Chiyoda Ward Health Center
As a substitute for notebooks
Donated unused calendars to elementary
schools in developing countries through a
supporting organization

Collaboration with Local Educational Institute andImprovement in Tenant Satisfaction
Conducted a survey to employees and reflected result on the renovation of
employee lounge. Also, A wall design contest involving local universities andvocational schools was done, and the design of the winner is used at lounge’s
wall design of MJ Logipark Fukuoka 1

BeforeAfter

Cumulative Investment for Employees Introduced cumulative investment for employees of Sponsor andthe Asset Management Company to align interest with unitholders

Asset Management Fee Structure MEL introduced an asset management fee structure reflecting theperformance of investment unit price for the purpose of aligninginterest with unitholders.
Asset management fee Ⅰ(AUM-linked)

Total assets as of the end of previous period × 0.2%
(upper limit)

Asset management fee Ⅱ(Real estate profit-linked)

Adjusted NOI × 5.0% (upper limit)

Asset management fee Ⅲ(Unitholder interestlinked)

Adjusted net income before tax × net income before tax
per unit × 0.001% (upper limit)
1st in J-REIT“Fee linked to Investment Unit Price”
Performance against TSE REIT Index ((a)-(b)) ×
market capitalization (for fiscal period of each term) ×
0.1% (upper limit)(a): Fluctuations in MEL’s investment unit price(incl. dividends)
25(b): Fluctuations in the TSE REIT Index (incl. dividends)

Same-boat investment by
Mitsubishi Estate(as of Apr. 15, 2021)

c. 4.1%25

Appendix

Properties Acquired during the 10th Fiscal Period ①
Logicross NarashinoMulti

SponsorDeveloped■High-spec multi-tenant facility located in Chiba Bay area near central Tokyo■Advantage in securing labor with 5-minute walk to the nearest station

Convenient Location
close to Shin-Narashino Station

Residential Area

Shin-Narashino
StationLogicross Narashino Located proximity toresidential areas,
which is advantageous
in securing labor force
 The latest hub for thetenant, Nihon Realest
Co. Ltd., a 3PL
company Expect stable cash
flow with 4 tenants
including major
logistics company

Industrial / Logistics Area
AnticipatedAcquisition Price

11,851 mn yen

Appraisal Value

12,400 mn yen

Appraisal NOI
Yield

4.3%

Location

Narashino, Chiba

Year Built

Mar. 2018

Total Floor Area

36,437.92m2

Land Area

19,386.40m2

No. of Tenants

1

Main Tenant

Nihon Realest Co., Ltd.

Property Characteristics■4-story box-type with 2 entrances, and truck berths on both north and south sides of the 1st floor. Equipped with both luggage andvertical conveyor (4 of each in total)■Floor weight capacity of 1.5t/m2, effective ceiling height of 5.5m, pillar span of 10.45m x 10.4m, making it a highly versatile, easy-touse logistics facility

Main Highway■Approx. 2km from “Yatsu Funabashi IC” on Higashi-Kanto Expressway■Approx. 3km from “Hanawa IC” on Keiyo Expressway■Approx. 400m from National Route 357

Location Characteristics■Located in Akanehama, Narashino in Chiba Bay area. Surrounding area is concentrated with factories, logistics facilities, retails anduniversities. Also, there are many logistics facilities in the neighboring Shibazono area, and Keiyo Food Industrial Complex in Takase,
Funabashi, where food-related factories are concentrated■Relatively good access to ports and airports (approx. 30km from Port of Tokyo, approx. 40km from Narita and Haneda Airport)

Note： Data at the time of 4th follow-on offering

27

Properties Acquired during the 10th Fiscal Period ②
Logicross Osaka (40％ additional co-beneficiary interest)■High-performance multi-tenant facility with accessible to major consumption areas (Osaka and Kobe)■Advantage in securing labor with walking distance from two train stations

Multi

SponsorDeveloped

CASBEE

BELS

Capturing Strong E-commerce Demand
A 3PL company specialized in E-commerce Leased to e-LogiT Co., Ltd., a company which provides comprehensive
mail-order services
 e-LogiT Co., Ltd. uses the facility as the first fulfillment center in Kansai region,and plans to expand its business in the near future The tenant values its high potential location with good access to major
consumption areas in Osaka and Kobe

AnticipatedAcquisition Price

3,868 mn yen

Appraisal Value

4,000 mn yen

Appraisal NOI
Yield

4.3%

Location

Osaka, Osaka

Year Built

Sept. 2018

Total Floor Area

36,619.48m2

Land Area

18,176.07m2

No. of Tenants

2

Main Tenante-LogiT Co., Ltd., other

Property Characteristics■4 story box-type with 2 truck berths, equipped with luggage elevators and vertical conveyors (4 in each section), making it easy torent the facility in sections■Each floor has an effective ceiling height of 5.5m and a floor weight capacity of 1.5t/m2, making it a highly versatile, easy-to-use
logistics facility

Main Highway■Approx. 1.5km from “Amagasaki Higashi IC” on Hanshin Expressway No.3 Kobe Line,and approx. 4km from “Nakajima IC” on Hanshin Expressway No. 5 Wangan Line
■Approx. 200m from National Route 43

Location Characteristics■Located 7.5km from the center of Osaka (Umeda Station) and 24km from Kobe City (Sannomiya Station). Easy access to Port ofHanshin (Port of Osaka and Kobe) and to a wide area via Hanshin Expressway No.3 Kobe Line and No.5 Wangan Line, and proximity
to National Route 43 leads to high potential location■It is possible to operate 24 hours a day, 365 days a year

Note： Data at the time of 4th follow-on offering

28

Properties Acquired during the 10th Fiscal Period ③
Logicross Nagoya Kasadera (40％ additional co-beneficiary interest)■Proximity to central Nagoya and can cover a wide area in Chubu■Advantage in securing labor with walking distance from a station serving 2 train lines

Multi

SponsorDeveloped

CASBEE

BELS

Acquired Land Information as a Comprehensive Developer
The Sponsor has collected a wide range of land information as a comprehensive
developer and developed the facility for the most effective use
Collection of a wide range of land information
Group
Offices

Retails

Residences

Logistics

Hotel /
AirportConsideration of Environment / Society
Reuse of Material
Reuse of OA floor panels usedin Marunouchi area office space

AnticipatedAcquisition Price

5,719 mn yen

Appraisal Value

6,400 mn yen

Appraisal NOI
Yield

5.0%

Tsunami Evacuation Facility Designation
Facility can be used as a temporary shelter for
local residents in the event of major tsunami
warning. Equipped withemergency generatorsand emergency storagefor employees

Property Characteristics■Direct access to each floor with spiral rampway, floor weight capacity of 1.5t/m2, an effective ceiling height of at least 5.5m, a pillar
span of at least 10m and equipped with LED lighting■Installed emergency generators and storage for employees to support tenants’ BCP

Main Highway

Location

Nagoya, Aichi

Year Built

Jan. 2019■Located approx. 1.2km from “Kasadera IC” on Nagoya Expressway No.3 Odaka Line, approx. 3.0km from “Kiba IC” on Nagoya
Expressway No.4 Tokai Line, and approx. 6km from “Tokai IC” on Isewangan Expressway■Located approx. 0.5km from National Route 23, approx. 1.5km from National Route 247 and approx. 0.5km from National Route 1

Total Floor Area

72,376.03m2

Location Characteristics

Land Area

33,224.00m2

No. of Tenants

10

Main Tenant

YAGAMI Co., Ltd., others■Located near “Kasadera IC”, allows easy access to Nagoya Highway No.4 Tokai Line and Isewangan Expressway. Proximity to National
Route 23, which crosses the Nagoya Port area, and National Route 247, which crosses from Nagoya City to Tokai City, making it aconvenient transportation■Easy access to Nagoya Port, Japan's largest port in terms of total cargo handled, and Chubu Centrair International Airport can bereached in 35 minutes, making it possible to use the major logistics infrastructure of Aichi Prefecture

Note： Data at the time of 4th follow-on offering

29

Properties Acquired during the 10th Fiscal Period ④
MJ Industrial Park Kobe (Land)

CRE■CRE project in Hanshin bay area capturing
seller’s business restructuring needs

Asset Management
Company-Sourced

MJ Industrial Park Chiba-Kita (Land)■CRE project proximity to National Route 16
capturing tenant’s off-balance sheet needs

Property Characteristics■Production base with headquarters functionsof an automotive parts manufacturer

Main Highway

Main Highway■Approx. 1.4km from “Sumiyoshihama
IC” on Hanshin Expressway No.5
Wangan Line
■Approx. 2.4km from “Uozaki IC” on
Hanshin Expressway No.3 Kobe Line
4,970 mn yen

Appraisal Value

5,670 mn yen

Appraisal NOI
Yield

5.1%

Location

Kobe, Hyogo

Land Area

40,050.71m2

Main Tenant

ORIX Auto Corporation

Location Characteristics■Proximity to IC which gives excellent
access to central Osaka and Kobe.
Advantage in securing labor withwalking distance from nearest train
station■High potential for redevelopment tologistics facilities■Expected further improvements intransportation convenience following theconstruction of Hanshin Expressway
Osaka Wangan Line (Rokko Island North
to Komasakae) commenced in 2016

Asset Management
Company-Sourced

Property Characteristics■Newly developed base for tenant (major
car leasing company), covering the Kinki,
Chugoku and Shikoku areas

AnticipatedAcquisition Price

CRE■Approx. 2.1km from “Chiba-Kita IC” on
Higashi-Kanto Expressway■Approx. 300m from National Route 16

Location Characteristics

AnticipatedAcquisition Price

1,800 mn yen

Appraisal Value

1,950 mn yen

Appraisal NOI
Yield

4.4%

Location

Chiba, Chiba

Land Area

14,986.64m2

Main Tenant

Kinugawa Rubber
Industrial Co., Ltd.

■Easy access to “Chiba-Kita IC” andNational Route 16. Competitive businesssite due to advantage of securing labor as
surrounded by residential area
■High potential to be a highly versatilelocation that can be converted to logistics
facility with excellent access to HigashiKanto Expressway, Keiyo Expressway,
National Route 14, National Route 16,
National Route 126, providing connection
to central Tokyo, access to Narita Airport
and Tokyo Bay area

Ensuring long-term stable income through CRE proposal

Property acquisition through CRE strategy

Capturing seller’s selling needs and securing stable income through long-term lease

Acquisition that captures the seller’s demand for sale-and-leaseback

SellerSale of land

Building owner & Tenant

Building owner & Tenant
Ownership

Construction/Ownership

Land

Building

Land lease
Land owner

Land

Sale of land
Building
Land ownerLand lease

Note： Data at the time of 4th follow-on offering

30

Features of Mitsubishi Estate Group’s Logistic Facilities Business ①
History of Logistics Facility Business in Mitsubishi Estate Group MEC Group has developed safe and secure logistics facilities proactively and consistently, since the commencement of the business in 1967, and strengthened capacity with the establishment of
Logistics Facilities Development Office within Urban Project Development Department in 2012
 MEC Group aims to enhance social infrastructure and quality of life through this high-growth business, leveraging expertise and relations cultivated as a comprehensive real estate developer
Completed LOGIPORT
Sagamihara

Investment inTokyo Ryutsu
Center (TRC)

Completed Tatsumi
Logistics Center(Formerly Nakano Shokai
Tatsumi Center)

1967

2012

Established Tokyo Ryutsu Center Inc.
in 1967～ Built track record as a pioneer in theJapanese logistics facilities sector ～ Has received investment from MEC since
its establishment
 Has built a track record in operating
logistics facilities in prime locations inTokyo

Completed LogicrossFukuoka Hisayama

Completed
Logicross Narashino

Completed 4 properties incl.
Logicross Nagoya Kasadera

2018

2019

Completed (planned)
5 properties incl.
Logicross Hasuda

Scheduledcompletion of
Logicross series andother properties

MEC made TRC a
consolidated
subsidiary

2013

2014

2015

2016

2017

2020

2022 and

2021

after

Strengthened Efforts in Logistics Facilities Development at MEC
 Restructured Facilities Development Department in 2013 to enhance efforts to
the relevant business Achieved further growth through not only joint development but also its own
brand Logicross series launched on a stand-alone basis in 2014
 Made TRC a consolidated subsidiary in 2016
 Newly set up Logistics Tenant Relationship Office by consolidating property
management and leasing team to provide the best solution for a wide range oftenant needs in 2021

Taken from “Mitsubishi Estate Group
Medium-term Management Planfrom 2018/3 to 2020/3”

Value Chain of “Capital Recycling Investment”
Land acquisition
and Development

Platform ofLogistics Facilities
Business
Facility
Management

Completed
Logicross Atsugi

Completed LOGIPORT
HashimotoCompleted LOGIPORT
Kawasaki Bay

Announced
Long-termManagement
Plan

Established
Logistic Tenant
Relation room

Taken from “Mitsubishi Estate Group Long-Term Management Plan 2030”
Domestic AssetBusiness
International
Asset Business

AssetManagement

Announced
Medium-termManagement
Plan

Completed Logicross
Kobe Sanda

Non-asset
Business

 Advance and commercialize redevelopment PJ,
including Marunouchi Promote capital recycling business in response toreal estate market conditions

 Increase AUM to 5 trillion yen by the mid-2020s
 Utilization of the latest technologies such as AI andRobotics

31

Features of MEC Group‘s Logistic Facilities Business ②
Strengths of MEC group
Diversified business portfolio
Advanced development
capabilities

Strengths4
as acomprehensive Corporate customer relations
developer

5

Customer network
supported by branches

Numerous joint projectexperiences
Strengths of
the Logistics
Facilities
Business

612Land Acquisition

Development

Obtain a variety ofland information

Manage development cost

Consolidate plots of land frommultiple landowners

Experiences of joint projects requiring coordination between stakeholders with different interests

Collaboration with TRC

Capture information from tenants ofmanaged facilities

Logicross
Nagoya Kasadera

2 Consolidate plots of land from multiple landowners
Efforts such as acquiring development lands
through land consolidation of multiple owners
Logicross KasukabeGroup-wide leasing
Explore tenants’ needs
at various locations

Explore land information on site

Reflect tenants’ needs in landacquisition

Obtaining a variety of land information throughgroup-wide information sharing

Coordination among stakeholders
and the administration

Land information and development utilizing relations

Strengthening of value chain
through in-house PM

1 Obtain a variety of land information

3

Operation & Management

among stakeholders and3 Coordination
the administration
MEL’s ability to respond to complex
schemes for ownership interest
swaps were highly rated
Logicross Hasuda

Understand tenants’ needs for facility
specifications

Understand tenants’ usage needs
Utilize relations with tenants ofmanaged facilities

4 Corporate customer relations
Collaborative project making fulluse of relation with office tenant in
Otemachi, Marunouchi and
Yurakucho area
LOGIPORT Kawasaki Bay

network supported by
5 Customer
branches
Use the regional network mainly inthe areas where MEC’s head officeand branches are located toachieve tenant-leasing activities
Logicross Kobe Sanda
Needs of logistics bases
Kansai Branch
Provision ofInformation

Provide BTS
Logistic
Facilities
Logicross Kobe Sanda

Logistics Facility Business32

Features of MEC Group‘s Logistic Facilities Business ③⑥ Cooperation with Tokyo Ryutsu Center (TRC)●Established in 1967 to operate large distribution facilities thattake a critical role for streamlining logistics in the Tokyo
Metropolitan area, and became a consolidated subsidiary of
MEC since 2016
●Rebuilt Logistics Building, B-wing as the first in-premise redevelopment project (completed in June, 2017, with floorarea of 171,300m2) . MEC entered “Project Management
Support consignment contract” associated with rebuilding

Launch of a co-working showroom that aims to solve problems
through logistics tech
●Launched the "TRC LODGE", a permanent
exhibition space where visitors can learn the latest
logistics tech to help solve problems of all sizes
faced by logistics companies●A “Seminar and Co-working Space” is available for
exhibiting companies to hold seminars, etc.
●The "Time Share Warehouse" is an experimental
space where companies can rent the entire latest
warehouse for an hour or more to test anddemonstrate new products. It can be used not
only for the display of existing products, but also
for new product development and demonstration"TRC LODGE", a permanent exhibition space"Time Share Warehouse"“Seminar and Co-working Space”●Supporting the tenants of logistics facilities
developed and operated by the MEC Groupthrough this facility to enhance the efficiency andsophistication of logistics operations, both in termsof software and hardware

Personnel Exchange with TRC(Since Apr. 1, 2016)

Operation management by TRC

Approx.

50 years ofexperience

Logicross Nagoya Kasadera

Logicross Atsugi Ⅱ●Operation & management of 13 properties held by MEL
and pipeline assets are outsourced to TRC●Promoting in-house operation & management by
utilizing TRC’s know-how

Development of Facility Management Service
Utilizing Drones

10 seconded●Started the joint development of an advanced
and efficient operation/management method,
utilizing TRC’s operational/management knowhow

3 accepted●The MEC Group promotes digital transformation
unbound by the traditional Real Estate business,through the fusion of Real Estate Assets anddigital technology●Nine employees are seconded from MEC
to TRC, while two employees from TRC to
MEC●One employee is seconded from AssetManagement Company to TRC, while one
from TRC to Asset Management Company●Promoting the accumulation of know-how
through personnel exchange

33

Portfolio Overview
No. of Properties/ Total
Acquisition Price

22
/
170.4
properties

bn yenAverageOccupancy Rate

Average Appraisal
NOI Yield

Sponsor-Developed/ AssetManagement CompanySourced

99.8

4.8

61.1％/ 38.9％

％

％

7.3

years

Asset Management Company-Sourced Properties

Sponsor-Developed Properties
Logicross Fukuoka Hisayama

Average Property Age

Logicross Narashino

MJ Logipark Funabashi 1

MJ Logipark Fukuoka 1

MJ Logipark Kazo 2

Logicross Atsugi

LOGIPORT Sagamihara(49% co-beneficiary interest)

MJ Logipark Atsugi 1

MJ Logipark Tsuchiura 1

MJ Logipark Sendai 1

Logicross Kobe Sanda

LOGIPORT Hashimoto(45% co-beneficiary interest)

MJ Logipark Kazo 1

MJ Logipark Nishinomiya 1

MJ Industrial Park Sakai (Land)

Logicross Osaka

LOGIPORT Osaka Taisho(37.5% co-beneficiary interest)

MJ Logipark Osaka 1

MJ Logipark Kasugai 1

MJ Industrial Park Kobe (Land)

Logicross Nagoya Kasadera

MJ Industrial Park Chiba-Kita (Land)

Note: As of Feb. 28, 2021. However, the properties acquired during 10th FP are included

34

Overview of Portfolio
Property Name

Properties
held as of
9th Fiscal
PeriodLocation

AppraisalValue(mn yen)Appraisal
NOI Yield
(%)

Total
Leasable
Area (㎡)

Ratio
(%)

Occupancy
Rate（%）

Property
Age(years)Property
Type

Logicross Fukuoka Hisayama

Kasuya, Fukuoka

5,770

6,870

5.6

34,878

3.4

100.0

6.4

Multi

Logicross Atsugi

Atsugi, Kanagawa

8,440

9,190

4.5

29,895

5.0

100.0

4.0

Multi

Logicross Kobe Sanda

Kobe, Hyogo

3,900

4,220

5.1

12,844

2.3

100.0

3.7

BTS

Logicross Osaka(initial 60% co-beneficiary interest)
Logicross Nagoya Kasadera(initial 60% co-beneficiary interest)
LOGIPORT Sagamihara(49% co-beneficiary interest)

Osaka, Osaka

5,874

6,000

4.3

21,369

3.4

100.0

2.4

Multi

Nagoya, Aichi

8,705

9,780

4.9

37,373

5.1

100.0

2.1

Multi

Sagamihara, Kanagawa

21,36424,0004.7

88,609

12.5

99.7

7.5

Multi

LOGIPORT Hashimoto(45% co-beneficiary interest)

Sagamihara, Kanagawa

18,20020,430

4.6

58,487

10.7

99.9

6.1

Multi

LOGIPORT Osaka Taisho(37.5% co-beneficiary interest)

Osaka, Osaka

10,484

11,5504.6

40,081

6.2

96.0

3.0

Multi

MJ Logipark Funabashi 1

Funabashi, Chiba

5,400

6,580

6.5

18,232

3.2

100.0

31.2

Multi

MJ Logipark Atsugi 1

Atsugi, Kanagawa

6,653

7,010

4.5

28,002

3.9

100.0

7.6

Multi

MJ Logipark Kazo 1

Kazo, Saitama

1,272

1,460

5.7

7,678

0.7

100.0

15.0

Multi

MJ Logipark Osaka 1

Osaka, Osaka

6,090

6,960

5.1

39,082

3.6

100.0

13.4

Multi

MJ Logipark Fukuoka 1

Kasuya, Fukuoka

6,130

6,460

5.3

38,143

3.6

100.0

13.4

Multi

MJ Logipark Tsuchiura 1

Tsuchiura, Ibaraki

3,133

3,420

5.3

15,485

1.8

100.0

6.3

BTS

MJ Logipark Nishinomiya 1

Nishinomiya, Hyogo

2,483

2,660

5.7

13,777

1.5

100.0

30.0

BTS

MJ Logipark Kasugai 1

Kasugai, Aichi

13,67014,3004.8

57,866

8.0

100.0

4.1

Multi

MJ Logipark Kazo 2

Kazo, Saitama

1,637

1,720

5.0

7,349

1.0

100.0

22.2

BTS

MJ Logipark Sendai 1

Sendai, Miyagi

7,388

7,510

5.2

39,098

4.3

100.0

11.9

Multi

MJ Industrial Park Sakai（Land）

Sakai, Osaka

Sub-total / Average

Properties
Acquired
during 10th
Fiscal Period

AcquisitionPrice(mn yen)

5,600

5,780

3.8

87,476

3.3

100.0

-

Land

142,194

155,900

4.9

675,733

83.5

99.7

8.1

-

4.3

39,132

7.0

100.0

3.0

Multi

Logicross Narashino

Narashino, Chiba

11,851

12,400

Logicross Osaka(additional 40% beneficiary interest)

Osaka, Osaka

3,868

4,000

4.3

14,216

2.3

100.0

2.4

Multi

Logicross Nagoya Kasadera(additional 40% beneficiary interest)

Nagoya, Aichi

5,719

6,400

5.0

24,915

3.4

100.0

2.1

Multi

MJ Industrial Park Kobe（Land）

Kobe, Kobe

4,970

5,670

5.1

31,743

2.9

100.0

-

Land

MJ Industrial Park Chiba-Kita（Land）

Chiba, Chiba

1,800

1,950

4.4

14,986

1.1

100.0

-

Land

Sub-total / Average

28,20930,4204.6

125,024

16.6

100.0

2.7

-

Total / Average

170,404

186,3204.8

800,758

100.0

99.8

7.3

-

Note: The date are as of Feb. 28, 2021. However, for the properties acquired during the 10th fiscal period, the appraisal value and appraisal NOI yield NOI is as of Dec. 1, 2020.

35

Summary of Latest Appraisals
Property Name

Properties
held as of
9th Fiscal
PeriodAcquisition Date

Appraisalvalue

Direct cap rate(%)

Appraisal
value

Difference

Direct cap rate(%)

Appraisal value

Direct cap rate(%)

Unrealized
gain

Logicross Fukuoka Hisayama

Sept. 2017

5,770

5,552

6,870

4.7

6,150

4.8

+720

-0.1

1,317

Logicross Atsugi

Sept. 2018

8,440

8,382

9,190

4.1

9,200

4.1

-10

±0.0

807

Logicross Kobe Sanda

Sept. 2018

3,900

3,875

4,220

4.6

4,230

4.6

-10

±0.0

344

Sept. 2020

5,874

5,930

6,000

4.1

6,000

4.1

±0

±0.0

69

8,705

8,803

4.3

9,540

4.4

+240

-0.1

976

4.1

23,500

4.2

+500

-0.1

3,144

4.0

Logicross Osaka(initial 60% co-beneficiary interest)
Logicross Nagoya Kasadera(initial 60% co-beneficiary interest)
LOGIPORT Sagamihara(49% co-beneficiary interest)
LOGIPORT Hashimoto(45% co-beneficiary interest)
LOGIPORT Osaka Taisho(37.5% co-beneficiary interest)

Sept. 2020

9,780

21,36420,855

Sept. 201718,20017,813

20,4304.0

20,295

+135

±0.0

2,616

Oct. 201910,484

10,52011,550

4.1

11,287

4.2

+263

-0.1

1,029

MJ Logipark Funabashi 1

Sept. 2016

5,400

5,259

6,580

4.9

6,560

4.9

+20

±0.0

1,320

Sept. 2017

24,000

MJ Logipark Atsugi 1

Sept. 2017

6,653

6,507

7,010

4.2

7,020

4.2

-10

±0.0

502

MJ Logipark Kazo 1

Sept. 2017

1,272

1,242

1,460

4.8

1,430

4.9

+30

-0.1

217

MJ Logipark Osaka 1

Sept. 2017

6,090

5,953

6,960

4.3

6,830

4.3

+130

±0.0

1,006

MJ Logipark Fukuoka 1

Sept. 2017

6,130

5,846

6,460

4.8

6,440

4.8

+20

±0.0

613

MJ Logipark Tsuchiura 1

Sept. 2019

3,133

3,134

3,420

4.8

3,420

4.8

±0

±0.0

285

MJ Logipark Nishinomiya 1

Oct. 2019

2,483

2,559

2,660

4.8

2,640

4.8

+20

±0.0

100

MJ Logipark Kasugai 1

Oct. 201913,67013,645

14,3004.4

14,100

4.5

+200

-0.1

654

MJ Logipark Kazo 2

Sept. 2020

1,637

1,706

1,720

4.3

1,710

4.3

+10

±0.0

13

MJ Logipark Sendai 1

Sept. 2020

7,388

7,421

7,510

4.8

7,410

4.9

+100

-0.1

88

MJ Industrial Park Sakai（Land）

Oct. 2019

5,600

5,666

5,780

3.7

5,780

3.7

±0

±0.0

113

153,542-Sub-total

Properties
Acquired
during 10th
Fiscal Period

Acquisition
Price(Unit: Millions of yen)
9th FP (Ended Feb. 28, 2021) 8th FP (Ended Aug.31, 2021)(Note 2)
(Note 1)

Book
Value atend of
9th FP

142,194

140,675

155,900-+2,358-15,224

Logicross Narashino

Mar. 2021

11,851-

12,400

4.0

-

-

-

-

-

Logicross Osaka(additional 40% beneficiary interest)
Logicross Nagoya Kasadera(additional 40% beneficiary interest)

Mar. 2021

3,868

-

4,000

4.1

-

-

-

-

-

Mar. 2021

6,400

4.4

-

-

-

-

-

-

-

-

-

5,719

-

MJ Industrial Park Kobe（Land）

Mar. 2021

4,970

-

5,670

4.0

-

MJ Industrial Park Chiba-Kita（Land）

Mar. 2021

1,800

-

1,950

4.3

-

-

-

-

-

Sub-total

28,209-30,420

-

-

-

-

-

-

Total

170,404-

186,320

-

-

-

-

-

-

Note 1: As of Feb. 28, 2021. As of Dec. 1, 2020 for the properties acquired during the fiscal period during 10th fiscal period
Note 2: As of Aug. 31, 2020. As of June 30, 2020 for the properties acquired during the 9th fiscal period

36Statement of Income and Balance Sheet
Statement of Income
Item

Operating revenues
Operating rental revenues
Other rental revenues
Operating expenses
Expenses related to property rental business
Asset management fee(Unit：Thousands of yen)

Actual4,203,412
4,002,266
201,145
1,998,671
1,497,479
352,247

Asset custody fee

1,390

Administrative service fee

19,156

Director’s compensations

2,400

Commission paid

94,815

Other operating expenses

31,182

Operating income

2,204,740

Non-operating income

770

Interest income

44Interest on refund

726

Balance Sheet(Unit：Thousands of yen)

Item

Current assets

Actual10,731,829

Cash and deposits

3,787,095

Cash and deposits in trust

5,685,115

Other current assets

1,259,618

Total fixed assets
Property and equipment

140,731,780
140,675,424

Intangible assets

3,626

Investments and other assets

52,730

Deferred assets
Total assets

Current liabilities

4,032
151,467,642

5,702,299

Operating accounts payable

257,699

Short-term loans payable

2,000,000

Long-term loans payable due within one year

2,211,000

Advances received

488,817

Consumption taxes payable

715,556

Other current liabilities

29,225Non-operating expenses

131,455

Interest expenses

87,433Long-term loans payable

43,363,000

Borrowing related expenses

3,290

Tenant leasehold and security deposits in trust

2,816,129

Amortization of organization expenses

6,047

Amortization of investment unit issuance expenses

34,682

Non-current liabilities

46,179,129

Total liabilities

51,881,429

Total unitholders’ equity

99,586,213

Unitholders’ capital, net

97,512,964

Ordinary income

2,074,055

Net income

Surplus2,073,136

2,073,248

Total net assets

99,586,213

Unappropriated retained earnings

2,073,248

Total liabilities and net assets

151,467,642

37

Debt ① (As of Apr. 15, 2021)
Category

Lenders

Short-term

Repayment Date

Sept. 1, 2020

Sept. 1, 2021

Sumitomo Mitsui Trust Bank

500

Base rate(JBA 1-month JPY
TIBOR)+0.09000%

Mizuho Bank

900

Base rate(JBA 1-month JPY
TIBOR)+0.07000%

Mar. 9, 2021

Mar. 9, 2022

2,700

-

-

-

Sub-total
Development Bank of Japan
MUFG Bank
Sumitomo Mitsui Banking Corporation

720
1,491
430
2,050

MUFG Bank

1,760

Mizuho Bank

1,330

The Bank of Fukuoka

Fixed rate

Borrowing Date

Base rate(JBA 1-month JPY
TIBOR)+0.07000%

Mizuho Bank

Long-term

Interest Rate

1,300

Mizuho Bank
Floating
rate

Balance(mn yen)

0.32630%

Sept. 14, 2021

0.35750%

Sept. 14, 2022

0.39130%

Sept. 14, 2023
Sept. 14, 2017450

The Bank of Fukuoka

900

0.42880%

Sept. 14, 2024

MUFG Bank620

0.46750%

Sept. 14, 2025

MUFG Bank

710

0.50750%

Sept. 14, 2026

MUFG Bank

2,680
0.55000%

Sept. 14, 2027

Sumitomo Mitsui Banking Corporation

880

Mizuho Bank

880

Sumitomo Mitsui Banking Corporation

830

0.24000%

Sept. 14, 2022

The Norinchukin Bank

800

0.39500%

Sept. 14, 2025

Shinsei Bank500

0.45380%

Mizuho Bank

830

Sept. 14, 2018807

Shinkin Central Bank

1,256

Sumitomo Mitsui Banking Corporation

3,000

0.25000%

Sept. 2, 2019

Sept. 2, 2023

MUFG Bank

4,000

0.49000%

Sept. 30, 2019

Sept. 30, 2029

1,250

The Shinkumi Federation Bank

1,250

0.57500%

Sept. 14, 2028

0.18000%

Oct. 9, 2024

MUFG Bank

200

Mizuho Bank

2,400

The 77 Bank400

Shinsei Bank

1,250

0.24000%

Oct. 9, 2027

750

0.42000％

Oct. 10, 2028

The Bank of Fukuoka

0.21600%
0.26000%

Unsecured
Unguaranteed

Sept. 14, 2026

The Bank of Fukuoka

The Norinchukin Bank

CollateralOct. 9, 2025
Oct. 9, 2019

Oct. 9, 2026

38

Debt ② (As of Apr. 15, 2021)
Category

Long-term

Fixed-rate

Lenders

1,150

The Shinkumi Federation Bank

1,500

Borrowing Date

0.20000％

300

The Norinchukin Bank

800

0.26630%

The Norinchukin Bank500

0.31250%

The Bank of Fukuoka

900

The 77 Bank

500

Mizuho Bank

1,750

0.41822%

MUFG Bank

2,000

0.46832%

0.42380%

Repayment Date

Sept. 1, 2025

Sept. 1, 2026
Sept. 1, 2020

Sept. 1, 2028
Sept. 1, 2029

The Yamanashi Chuo Bank

500

The Yamaguchi Bank

500

Shinkin Central Bank

750

0.24130％

1,350

0.21000%

Mar. 9, 2025

Mizuho Bank

900

0.36630%

Mar. 9, 2027

The Norinchukin Bank900

0.43130%

The Chiba Bank800

0.36130%

The Bank of Fukuoka

500

The 77 Bank

500

THE NISHI-NIPPON CITY BANK

500

0.36130%Mizuho Bank

1,050

0.55487%

Mar. 9, 2030

MUFG Bank

1,000

0.61761%

Mar. 9, 2031

The Yamaguchi Bank

1,000

0.65000%

Mar. 9, 2033

800

0.39630%

Sumitomo Mitsui Banking Corporation

Sept. 1, 2030

0.50000%

0.50130%

Oct. 9, 2020

Oct. 9, 2025
Unsecured
Unguaranteed

Mar. 9, 2028

Mar. 9, 2021

Mar. 19, 2021

Mar. 9, 2029

Mar. 19, 2028

1,000

0.46630%

Sub-total

55,874---

1st Series Unsecured Bonds

2,000

0.70000％

Apr. 14, 2021

Apr. 14, 2036

60,574

-

-

-

Total

Collateral

Sept. 1, 2024

0.20000%

The Bank of Toyama

MUFG Bank

Fixed-rate

Interest Rate

Sumitomo Mitsui Banking Corporation

MUFG Bank

Investment
Corporation
Bond

Balance(mn yen)Mar. 19, 2029-

39

Unitholders Composition
Major Unitholders

Breakdown by Units

Number of
Units

4.3%
9.6%
20.3％

348,237
units

7.5%

58.3%

Domestic individuals
and others：33,372 units

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

53,10515.24%

Financial institutions：203,105 units

Custody Bank of Japan, Ltd. (Trust Account)

46,55913.36%

Domestic entities：25,997 units

Mitsubishi Estate Co., Ltd.

14,2004.07%

Foreign entities：70,650 units

Custody Bank of Japan, Ltd.
(Securities Investment Trust Account)

13,755

3.94%

Securities Companies：15,113 units

The Nomura Trust and Banking Company, Ltd.
(Trust Account)

10,859

3.11%

SMBC Nikko Securities Inc.

9,270

2.66%

The Chugoku Bank, Limited

6,194

1.77%

The Shinkumi Federation Bank

5,748

1.65%

Breakdown by Unitholders
2.8%

1.9%

0.2%

1.7%

9,585

unitholders

93.4%

Ratio

Domestic individuals
and others：8,956 unitholders

Mitsubishi UFJ Trust and Banking Corporation

5,413

1.55%

Financial institutions：160 unitholders

STATE STREET BANK WEST CLIENT–TREATY
505234

4,632

1.33%

Domestic entities：266 unitholders

169,73548.74%

Foreign entities：185 unitholders

Securities Companies：18 unitholders

Total

Same-boat Investment by MEC (as of Apr. 15, 2021)
Investment in
MEL by MEC

4.1%

Note: As of Feb. 28, 2021

40