Disclaimers
This document has been prepared solely for the purpose of providing U.K. and Dutch
investors with certain information under Article 23 of the European Alternative
Investment Fund Managers Directive (European Directive 2011/61/EU) (the “AIFMD”) as
implemented in their respective jurisdictions. Accordingly, you should not use thisdocument for any other purpose.
Netherlands
The units of Activia Properties Inc. (“API” or the “AIF”) are being marketed in the
Netherlands under Section 1:13b of the Dutch Financial Supervision Act (Wet op het
financieel toezicht, or the “Wft”). In accordance with this provision, TLC REITManagement Inc.(“TRM” or the “AIFM”) has submitted a notification with the Dutch
Authority for the Financial Markets. The units of API will not, directly or indirectly, beoffered, sold, transferred or delivered in the Netherlands, except to or by individuals or
entities that are qualified investors (gekwalificeerde beleggers) within the meaning of
Article 1:1 of the Wft, and as a consequence neither the AIFM nor API is subject to thelicense requirement pursuant to the Wft. Consequently, neither the AIFM nor API is
subject to supervision of the Dutch Central Bank (De Nederlandsche Bank, “DNB”) or the
Netherlands Authority for Financial Markets (Autoriteit Financiële Markten, the “AFM”)
and this Article 23 AIFMD Prospectus is not subject to approval by the AFM. No
approved prospectus is required to be published in the Netherlands pursuant to Article 3 of
the Regulation (EU) 2017/1129 (the “Prospectus Regulation”) as amended and applicablein the Netherlands. The AIFM is therefore solely subject to limited ongoing regulatory
requirements as referred to in Article 42 of the AIFMD.
United Kingdom
Units of API are being marketed in the United Kingdom pursuant to Article 59 of theUnited Kingdom Alternative Investment Fund Managers Regulations 2013. In accordancewith this provision, the AIFM has notified the Financial Conduct Authority (the “FCA”)
of its intention to offer these units in the United Kingdom.
For the purposes of the United Kingdom Financial Services and Markets Act 2000 (asamended, “FSMA”) API is an unregulated collective investment scheme which has notbeen authorized by the FCA.

Accordingly, any communication of an invitation or inducement to invest in API may only
be made to (i) investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or “theOrder”; or (ii) high net worth companies falling within Articles 49(2)(a) to (d) of the Orderand other persons to whom it may lawfully be communicated (all such persons referred tounder (i) and (ii) of this paragraph, together being referred to as “Relevant Persons”).

In the United Kingdom, this document and its contents are directed only at Relevant
Persons and must not be acted on or relied on by persons who are not Relevant Persons.
The transmission of this document and its contents in the United Kingdom to any person
other than a Relevant Person is unauthorized and may contravene the FSMA and other
United Kingdom securities laws and regulations.
Prohibition of Sales to UK Retail Investors
In addition to the restrictions under the AIFMD, as retained by the United Kingdom in its
domestic laws, the Units of API are not intended to be offered, sold or otherwise madeavailable to and should not be offered, sold or otherwise made available to any retailinvestor in the United Kingdom. For these purposes of this provision, a “retail investor”
means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article
2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of theEuropean Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaningof the provisions of the FSMA and any rules or regulations made under the FSMA to
implement Directive (EU) 2016/97, where that customer would not qualify as aprofessional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014
as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as
defined in Article 2 of Regulation (EU) 2017/1129, as it forms part of domestic law byvirtue of the EUWA; and the expression “offer” includes the communication in any formand by any means of sufficient information on the terms of the offer and the international
units to be offered so as to enable an investor to decide to purchase or subscribe theinternational units.
Consequently no key information document required by Regulation (EU) No 1286/2014,as it forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”), foroffering or selling the international units or otherwise making them available to retailinvestors in the United Kingdom has been prepared and therefore offering or selling theinternational units or otherwise making them available to any retail investor in the United
Kingdom may be unlawful under the UK PRIIPs Regulation.

European Economic Area
In addition to the restrictions under the AIFMD, the Units of API are not intended to beoffered, sold or otherwise made available to and should not be offered, sold or otherwise
made available to any retail investor in the European Economic Area (“EEA”). For these
purposes, a retail investor means a person who is one (or more) of: (i) a retail client as
defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”);(ii) a customer within the meaning of Directive (EU) 2016/97, where that customer would
not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or(iii) not a qualified investor as defined in the Prospectus Regulation, as amended.
Consequently no key information document required by Regulation (EU) No 1286/2014(the “PRIIPs Regulation”) for offering or selling the Units of API or otherwise making
them available to retail investors in the EEA has been prepared and therefore offering or
selling the Units of API or otherwise making them available to any retail investor in the
EEA may be unlawful under the PRIIPs Regulation.

Article 23 (1)(a)Objectives of the AIF

API invests primarily in urban retail and Tokyo office properties and also in other retail andoffice properties:

Urban retail properties, which API defines as properties that (i) include not only
ordinary retail properties, such as merchandising and food and drinking
establishments, but also properties with broader social and other purposes, such as
showroom and exhibition centers, hotels, parking and related facilities and landownership in respect of such properties and (ii) are easily recognized and locatedeither near major train stations or in popular areas in Tokyo, Government‐
designated major cities within Japan’s three major metropolitan areas and othermajor cities in Japan; andTokyo office properties within the 23 wards of Tokyo in areas with a highconcentration of offices and located near major train stations.

Investment strategy

API aims to maximize unitholders’ value in the medium to long term by acquisition ofcompetitive properties and well‐managing the portfolio.
Pursuant to TRM’s Sponsor Support Agreement with Tokyu Land Corporation, regarding
acquisition of assets, API utilizes both the AIFM’s unique sourcing channels and variety of
the Tokyu Land Corporation acquisition methods. API entrusts property management toTokyu Land Corporation and other entities in order to leverage the comprehensive
capabilities of their leasing network. The investment strategy is defined in the investment
guidelines determined by the AIFM.

Types of assets the AIF

Real estate, including trust beneficiary interests in real estate, securities backed by real

may invest in

estate, specified assets and other assets.

Techniques it may

API focuses on investing in retail properties in urban areas and office properties in Tokyo,

employ and allwhich API anticipates will contribute to generating stable cash flow and achieving medium‐associated risks

to long‐term growth. Also, API leverages Tokyu Land Group’s comprehensive value‐chain
supporting system to pursue both external and internal growth.
The principal risks with respect to investment in API are as follows:the ongoing COVID‐19 pandemic has had, and is expected to continue to have, anegative effect on API’s and its tenants’ businesses, financial condition, results ofoperations, cash flows, and liquidity;

any adverse conditions in the Japanese and global economy could adversely affectAPI’s properties;API may not close any or all of its anticipated acquisitions or dispositions of properties;API may not complete any expected debt financing, in which case API may not be able
to acquire some or all of the properties API anticipates acquiring, or API may be forced
to accept alternative financing with less advantageous terms;

4API may not be able to acquire properties to execute its growth and investment
strategy in a manner that is accretive to earnings;

Illiquidity in the real estate market may limit API’s ability to grow or adjust its portfolio;the past experience of Tokyu Land Corporation in the Japanese real estate market is
not an indicator or guarantee of API’s future results;API’s reliance on Tokyu Land Corporation and other Tokyu Fudosan Holdings Group
companies could have a material adverse effect on API’s business;

the AIFM manages multiple J‐REITs and there are potential conflicts of interest
between us and other J‐REITs managed by the AIFM;



there are potential conflicts of interest between API and certain Tokyu Fudosan
Holdings Group companies, including the AIFM;



the AIFM has limited experience in operating a J‐REIT;API may face significant and increasing competition in attracting tenants and it may bedifficult to find replacement tenants;

increases in prevailing market interest rates may increase API’s interest expense andmay result in a decline in the market price of API’s units;effects of monetary easing policies by Japan and other major countries may result inincreased market interest rates in Japan and reduced cash distributions;

API may suffer large losses if any of its properties incurs damage from a natural or
man‐made disaster or acts of violence or war;

most of the properties in API’s portfolio are concentrated in the Tokyo metropolitan
area;



the concentration of retail properties in API’s portfolio may entail risks uncommon toother J‐REITs that invest in a broader range of real estate or real estate‐related assets,
including risks related to sales‐linked‐ rent;

the continued shift in retail sales towards e‐commerce may adversely affect API’s
financial condition, cash flows and results of operations;a sustained shift away from in‐person work environments to remote work and a moveof workspaces from city centers to suburban areas could reduce the overall demandfor office space and thus have an adverse effect on API’s business;

any inability to obtain financing for future acquisitions could adversely affect thegrowth of API’s portfolio;API’s failure to satisfy a complex series of requirements
pursuant to Japanese tax regulations would disqualify API from certain taxation
benefits and significantly reduce its cash distributions to its unitholders;

API’s ownership rights in some of its properties may be declared invalid or limited;API is subject to increasing scrutiny from certain investors and regulations with respect
to environmental, social and governance matters, which may adversely affect its ability
to market its units and increase its compliance costs; and5

API may suffer risks including those caused by more varied and complex responsibilities
of TRM as API’s new asset manager managing larger portfolio, insufficient resources of
TRM to be allocated to manage API, and potential conflicts of interest arising among
funds to be managed by TRM and other Tokyu Fudosan Holdings Group companies.

In addition, API is subject to the following risks:risks related to increasing operating costs;

risks related to the restrictive covenants under debt financing arrangement;risks related to entering into forward commitment contracts or contracts to purchaseproperties under development;risks related to third party leasehold interests in the land;

risks related to holding the property in the form of stratified ownership (kubun shoyū)interests or co‐ownership interests (kyōyū‐mochibun);risks related to holding the property through trust beneficiary interests;risks related to the defective title, design, construction or other defects or problems in
the properties including non‐conformity to agreements;risks related to suffering
impairment losses relating to the properties;risks related to properties located on reclaimed land such as a risk of land liquefaction;

risks related to decreasing tenant leasehold deposits and/or security deposits;risks related to lease terminations, decreased lease renewals, the default of a tenant asa result of financial difficulty or insolvency, or careless management of API’s properties
by its tenants;risks related to the insolvency of master lessees;risks related to relying on expert appraisals and engineering, environmental andseismic reports as well as industry and market data;risks related to the presence of
hazardous or toxic substances in the properties, or the failure to properly remediatesuch substances;

risks related to the strict environmental liabilities for the properties;risks related to climate change;risks related to security breaches and other disruptions;risks related to the insider
trading regulations;risks related to the amendment of the applicable administrative laws and local
ordinances;

risks related to investments in properties through preferred shares of special purpose
companies (tokutei mokuteki kaisha);

risks related to investments in anonymous associations (tokumei kumiai);risks related to the tight supervision by the regulatory authorities;6

risks related to the tax authorities’ disagreement with the AIFM’s interpretations of theJapanese tax laws and regulations;risks related to being unable to benefit from reductions in certain real estate taxes
enjoyed by qualified J‐REITs, or to sell properties without incurring significant tax
payments;risks related to changes in Japanese tax laws; andrisks related to availability of retained earnings to stabilize distributions due to changes
in tax or accounting treatment, operation, or guidelines or interpretation of guidelines
related to retained earnings.

Any applicable

API is subject to investment restrictions under Japanese laws and regulations (e.g., the Act

investment restrictions

on Investment Trusts and Investment Corporations (the “ITA”), the Financial Instruments
and Exchange Act (the “FIEA”)) as well as its articles of incorporation.
API must invest primarily in specified assets as defined in the ITA. Specified assets include,
but are not limited to, securities, real estate, leaseholds of real estate, surface rights (chijō‐ken) (i.e., right to use land for the purpose of having a structure on it) or trust beneficiaryinterests for securities or real estate, leaseholds of real estate or surface rights.
Furthermore, a listed J‐REIT must invest substantially all of its assets in real estate, realestate‐related assets and liquid assets as provided by the listing requirements. Real estatein this context includes, but is not limited to, real estate, leaseholds of real estate, surface
rights, and trust beneficiary interests for these assets, and real estate‐related assets in thiscontext include, but not limited to, anonymous association (tokumei kumiai) interests forinvestment in real estate.
Pursuant to the ITA, investment corporations may not independently develop land for
housing or to construct buildings, but may outsource such activities in certain
circumstances.
Investment restrictions API places in its articles of incorporation are as follows:(1) Restrictions relating to monetary claims and securities
API shall not make investments in monetary claims and securities in a proactive
manner. When API makes investments in these assets, API shall consider safeness,
liquidity or the relationship with specified assets.
(2) Restrictions relating to derivatives transactions
API will invest in rights associated with derivatives transactions only for the purposeof hedging against interest risks arising from API’s liabilities, and other related risks.

7

The investment by the AIF must be made in accordance with the basic investment policy as
set out in its articles of incorporation.
Circumstances in which

API may take out loans or issue long‐term or short‐term investment corporation bonds for

the AIF may use

the purpose of investing in properties, facility investment, paying cash distributions, raisingleverageworking capital, repaying obligations (including repayment of tenant leasehold or security
deposits, and obligations related to loans or long‐term or short‐term investment
corporation bonds) and other activities.

The types and sources

Loans or investment corporation bonds: API currently does not have any outstandingof leverage permitted

guarantees and may be subject to restrictive covenants in connection with any future

and associated risks

indebtedness that may restrict the operations and limit the ability to make cash
distributions to unitholders, to dispose of the properties or to acquire additional properties.
Furthermore, API may violate restrictive covenants contained in the loan agreements API
executes, such as the maintenance of debt service coverage or loan‐to‐value, or LTV ratios,
which may entitle the lenders to require API to collateralize the properties or demand thatthe entire outstanding balance be paid. Further, in the event of an increase in interest rates,to the extent that API has any debt with unhedged floating rates of interest or API incurs
new debt, interest payments may increase, which in turn could reduce the amount of cash
available for distributions to unitholders. Higher interest rates may also limit the capacity
for short‐ and long‐term borrowings, which would in turn limit the ability to acquire
properties, and could cause the market price of the units to decline.

Any restrictions on

The maximum amount of each loan and investment corporation bond issuance will be ¥1leveragetrillion, and the aggregate amount of all such debt will not exceed ¥1 trillion.

Any restrictions on

No applicable arrangements.

collateral and asset
reuse arrangements
Maximum level ofAPI has set an upper limit of 60% as a general rule for its LTV ratio in order to operate with aleverage which thestable financial condition. API may, however, temporarily exceed such level as a result of

AIFM is entitled toproperty acquisitions or other events.

employ on behalf of
the AIF
Article 23(1) (b)Procedure by which theAmendment of the articles of incorporation ‐ Amendment requires a quorum of a majority

AIF may change itsof the total issued units and at least a two‐thirds vote of the voting rights represented atinvestment strategy /the meeting. Unitholders should note, however, that under the ITA and API’s articles ofinvestment policy

incorporation, unitholders who do not attend and exercise their voting rights at a general
meeting of unitholders are deemed to be in agreement with proposals submitted at themeeting, except in cases where contrary proposals are also being submitted.

8Additionally, the guidelines of the AIFM, which provide more detailed policies within API’s
overall investment strategy and policy, can be modified without such formal amendment of
the articles of incorporation.
Article 23(1) (c)Description of the main

The AIFM has entered into the Sponsor Support Agreement with Tokyu Land Corporation

legal implications of the and Affiliate Support Agreement with Tokyu Livable, Inc., Tokyu Community Corporation,
contractual relationship

Tokyu Hands, Inc., Tokyu Sports Oasis Inc., and Tokyu resorts & stays Co.,Ltd., respectively.

entered into for the
purpose of investment,

All of the above agreements are governed by Japanese law.

including jurisdiction,
applicable law, and the

API is not involved in or threatened by any legal arbitration, administrative or otherexistence or not of any

proceedings, the results of which might, individually or in the aggregate, be material.

legal instruments
providing for the

API is a corporate‐type investment trust in the form of investment corporation (tōshi hōjin)recognition andprovided for under the ITA. Therefore, the relationship between API and its unitholders is

enforcement ofgoverned by API’s articles of incorporation (as opposed to individual agreements), which

judgments in thecan be amended from time to time upon resolution of a general unitholders’ meeting. API’s

territory where the AIF

articles of incorporation stipulate rules relating to general unitholders meetings, including

is establishedthe convocation, setting of record date, exercise of voting rights, resolutions and election ofAPI’s directors.
The relationship between API and its unitholders is also governed by, and is subject to theprovisions of, Japanese law, including the ITA.
The courts in Japan would recognize as a valid and final judgment any final and conclusive
civil judgment for monetary claims (which, for this purpose, are limited to those of a purely
civil nature and do not include monetary claims of the nature of criminal or administrative
sanction, such as punitive damages, even though they take the form of civil claims) against
API obtained in a foreign court provided that (i) the jurisdiction of such foreign court isadmitted under the laws of Japan, (ii) API has received service of process for thecommencement of the relevant proceedings, otherwise than by a public notice or any
method comparable thereto, or has appeared without any reservation before such foreign
court, (iii) neither such judgment nor the relevant proceeding is repugnant to public policy
as applied in Japan, and (iv) there exists reciprocity as to the recognition by such foreign
court of a final judgment obtained in a Japanese court and (v) there is no conflicting
judgment on the subject matter by any Japanese court.

Article 23(1) (d)The identity of the AIFM (Asset Manager): TLC REIT Management Inc.

AIFM, AIF's depositary,9auditor and any other

The AIFM provides services related to asset management, financing of the AIF, reporting

service providers and ato the AIF, asset management planning for the AIF and other matters delegated by thedescription of their

AIF.

duties and the Auditor: Ernst & Young ShinNihon LLC

investors' rights

The Auditor audits financial statements and reports to the supervisory directors if it finds

theretoany misconduct or any material fact that is in violation of laws and regulations or thearticles of incorporation with regard to execution of the duties of the executive director.
 Custodian, General Administrator and Transfer Agent: Sumitomo Mitsui Trust Bank,
LimitedThe Custodian provides administrative services related to custody of the AIF’s assets. The
General Administrator provides administrative services related to administration of
accounting matters, preparation of accounting books, payment of tax, management ofboard of directors meetings and general meetings of unitholders and administrative
services in connection with the AIF’s investment corporation bonds. The Transfer Agent
provides administrative services related to preparation and maintenance of theunitholder registry, payments of cash distributions to unitholders and acceptance ofrequests for the exercise of voting rights by unitholders or any other applications fromunitholders.
Service providers owe contractual obligations under their respective agreements with
the AIF or the AIFM, as the case may be. In addition, the FIEA provides that the AssetManager owes the AIF a fiduciary duty and must conduct its activities as the AssetManager in good faith. The FIEA also prohibits the Asset Manager from engaging incertain specified conduct, including entering into transactions outside the ordinary
course of business or with related parties of the Asset Manager that are contrary to or
violate the AIF’s interests. Pursuant to the ITA, the unitholders have the right to approvethe execution or termination of the asset management agreement at a general meetingof unitholders.

Article 23(1) (e)Description of how the

Not applicable.

AIFM complies with therequirements to coverprofessional liability
risks (own funds /professional indemnity
insurance)
Article 23(1) (f)10

Description of any

Not applicable. There is no delegation of such functions beyond the AIFM, which isdelegated management

responsible for portfolio and risk management, and the Custodian, which is responsible forfunction such as

safekeeping activities.

portfolio management
or risk management
and of any safekeeping
function delegated by
the depositary, theidentification of thedelegate and any
conflicts of interest
that may arise fromsuch delegations
Article 23(1) (g)Description of the AIF’s

API makes investment decisions based on the valuation of properties, upon consideration ofvaluation procedure

the property appraisal value. API shall evaluate assets in accordance with its Article ofand pricing

Incorporation. The methods and standards that API uses for the evaluation of assets shallmethodology, including

be based on the Regulations Concerning the Calculations of Investment Corporations, as

the methods used inwell as the Regulations Concerning Real Estate Investment Trusts and Real Estatevaluing hard‐to‐value

Investment Corporations and other regulations stipulated by ITA, in addition to Japanese

assetsGAAP. J‐REITs may only use the valuation methods prescribed in the rules of the Investment
Trusts Association, Japan, which emphasize market price valuation.

Article 23(1) (h)Description of the AIF’s

API seeks to manage the capital resources and liquidity sources to provide adequate funds

liquidity risk

for current and future financial obligations and other cash needs and acquisitions.

management, including

API’s liquidity risks are managed through management of liquidity in hand by preparing aredemption rights inmonthly funding plan, efforts to reduce liquidity risk on loans payable and investment

normal and exceptional

corporation bond by diversifying repayment periods, etc., and other means. Also, API has

circumstances andentered into the commitment lines and prepares the monthly fund management plan, andexisting redemption

manages the liquidity risks thereby.

arrangements withinvestors

As API is a closed‐end investment corporation, unitholders are not entitled to request theredemption of their investment.

Article 23(1) (i)Description of all fees,

Compensation: The articles of incorporation provide that the AIF may pay its executive

charges and expenses

officer up to ¥700 thousand per month and each of its supervisory officers up to ¥500

and a maximum

thousand per month. The board of officers is responsible for determining a reasonableamount which iscompensation amount for the executive officer and each of the supervisory officers.

11directly / indirectly
borne by the investors

Asset Manager:

Asset Management Fee: The AIF pays to the AIFM an asset management fee as follows:
1. Type 1 management fee: Asset‐based fee
The AIF pays to the AIFM a type 1 management fee for each fiscal period. This type1 asset management fee of up to 0.3% per year (currently set at 0.25% per year) of
the AIF’s total assets (as stated in the AIF’s balance sheet at the end of theimmediately preceding fiscal period prepared in accordance with Japanese GAAP) is
payable by the AIF within the fiscal period. The fee is paid by the end of the fiscal
period.
2. Type 2 management fee: DPU‐based fee
The AIF pays to the AIFM a type 2 management fee for each fiscal period. This type2 management fee is payable within three months after the financial statements forthe relevant fiscal period are approved by the AIF’s board of directors, and is equalto (i) the distribution per unit (before deduction of type 2 management fee)
multiplied by (ii) net operating profit, which is the total rental and other operating
revenues earned during the fiscal period, less property‐related expenses (notincluding depreciation expenses and loss on retirement of fixed assets), andmultiplied by (iii) up to 0.00021% (currently set at 0.00021%). For purposes ofcalculation of type 2 management fee, the distribution per unit (before deduction oftype 2 management fee) is equal to profit before income taxes, excluding type 2
management fee and certain non‐deductible consumption taxes, for such fiscal
period calculated in accordance with Japanese GAAP, less any loss carried forwardfrom the previous fiscal period, if any, divided by the number of units outstanding
as of the end of such fiscal period. In the event that the AIF acquired its own units,
including but not limited to repurchases, and did not dispose of or cancel the units
acquired by the end of such fiscal period, such units shall not count as units
outstanding. In the event that the AIF’s units were consolidated or split, the numberof units outstanding as of the end of such fiscal period shall be calculated as if suchconsolidation or split did not occur, by dividing the number of units after the
consolidation or split, as the case may be, by the relevant consolidation or split
ratio.
3. Acquisition fees:
For each new property the AIF acquires (including properties acquired in connection
with a merger by the AIF), the AIFM receives an acquisition fee, which is equal to up
to 0.7% (currently set at 0.7%), or up to 0.5% (currently set at 0.5%) in case of atransaction with a related party, of the purchase price (excluding national and local
consumption taxes and expenses) (or of the appraisal value as of the merger date,12

with respect to a new property acquired by the AIF in connection with a merger),payable by the end of the month immediately following the month of suchacquisition (or, in case of a merger, immediately following the month of theeffective date of the merger).
4. Disposition fees:
For each property the AIF disposes of, the AIFM receives a disposition fee to theextent there is any net profit as a result of such disposition, which is equal to up to
0.5% (currently set at 0.5%) of the disposition price (excluding national and local
consumption taxes and expenses) payable by the end of the month immediately
following the month of such disposition. No disposition fee is payable for atransaction with a related party.
Custodian:Custodian Fee:
The AIF pays to the Custodian a monthly custodian fee calculated by the following
formula on the Account Closing Date basis.
The amount of assets as of the end of the preceding month x 0.03% / 12
General Administrators:
General Administrators Fee:
The AIF pays to the General Administrators a monthly general administrators fee
calculated by the following formula on the Account Closing Date basis.
The amount of assets as of the end of each month x 0.09% / 12
Transfer Agent Fee (Standard Fee):
The AIF pays fees for administrative services related to the management of unitholders’list. The monthly fee is one‐sixth of the sum of the fees calculated per unitholder as
provided below based on the total number of unitholders as of the latest notification to
all the unitholders, provided that the minimum monthly amount is set at ¥200,000.
Number of Investors:

Fees per Investor

first 5,000 Investors

480 yenover 5,000 and not more than 10,000

420 yenover 10,000 and not more than 30,000

360 yenover 30,000 and not more than 50,000

300 yenover 50,000 and not more than 100,000

260 yenover 100,001 and over

225 yen13

Administration of Distributions Fee:
The AIF pays fees for the calculation of distributions, creation of distribution records,
preparation of payment receipts, payment arrangement of stamp tax, preparation of
distribution statements, confirmation of unpaid distributions, preparation of unpaid
distribution records, preparation of wire transfer notices and wire transfer tape or
payment voucher of distributions, application of special tax rates and preparation ofstatements related to distributions. The amount for such fees is determined based on
the total number of unitholders and calculated according to the table below, provided
that the minimum amount is set at ¥350,000. With respect to distributions made to a
specified bank account, we incur an additional charge of ¥150 per distribution made.
Number of Investors:

Fees per Investor
receiving distribution

first 5,000 Investors

120 yenover 5,000 and not more than 10,000

110 yenover 10,000 and not more than 30,000

100 yenover 30,000 and not more than 50,000

80 yenover 50,000 and not more than 100,000

60 yenover 100,001 and over

50 yenAuditor:
Auditor Fee:
The AIF pays the Independent Auditor up to ¥15 million per fiscal period. The board of
officers is responsible for determining the compensation amount for the independent
auditor.
Article 23(1) (j)Description of theUnder Article 77 paragraph 4 of the ITA, which applies the requirements of Article 109

AIFM's procedure to

paragraph 1 of the Companies Act to investment corporations, investment corporations are

ensure fair treatment

required to treat unitholders equally depending on the number and content of units held. Inof investors and details

addition, upon liquidation, the allotment of residual assets to unitholders is required to beof any preferential

made equally depending on the number units held under Article 77 paragraph 2 item 2 andtreatment received by

Article 158 of the ITA.

investors, including
detailing the type ofinvestors and theirlegal or economic links
with the AIF or AIFM
Article 23(1) (k)14The latest annual

Additional information may be found in our most recent semi‐annual report prepared inreport referred to inaccordance with Article 22 of the AIFMD, which is available at the Asset Manager’s office

Article 22(1)located at Shibuya Solasta 18F, 21‐1 Dogenzaka 1‐chome, Shibuya‐ku, Tokyo.

Article 23(1) (l)The procedure and

API is authorized under the articles of incorporation to issue up to 4,000,000 units. Its units

conditions for the issue

have been listed on the Tokyo Stock Exchange since June 13, 2012. Secondary market sales

and sale of the units

and transfers of units will be conducted in accordance with the rules of the Tokyo Stock
Exchange. Unit prices on the Tokyo Stock Exchange are determined on a real‐time basis by
the equilibrium between bids and offers. The Tokyo Stock Exchange sets daily price limits,which limit the maximum range of fluctuation within a single trading day. Daily price limits
are set according to the previous day’s closing price or special quote.

Article 23(1) (m)Latest net asset value

API’s unit’s latest market price is publicly available at the Tokyo Stock Exchange or fromof the AIF or latest

financial information venders (including Reuters), which can be viewed atmarket price of the unit

http://www.reuters.com/finance/stocks/overview?symbol=3279.T

or share of the AIF
Article 23(1) (n)Details of the historical

The units of API were listed on the Tokyo Stock Exchange on June 13, 2012.

performance of the AIF,

The performance of the units for the most recent five fiscal periods is as follows.

where available

Fiscal period
16th fiscal period

Total Assets

Total Net Assets

Net Assets per unit

(JPY million)(JPY million)(base value) (JPY)515,480

256,198

332,196525,686

255,700

331,551525,378

255,705

331,558

525,379

255,581

331,397566,257

278,716

338,760(From June 1, 2019 toNovember 30, 2019)17th fiscal period(From December 1, 2019
to May 31, 2020)
18th fiscal period(From June 1, 2020 toNovember 30, 2020)
19th fiscal period(From December 1, 2020
to May 31, 2021)
20th fiscal period(From June 1, 2021 toNovember 30, 2021)
Article 23(1) (o)15

Identity of the prime

No applicable prime broker.

broker, any material
arrangements of the
AIF with its prime
brokers, how conflictsof interest aremanaged with theprime broker and theprovision in thecontract with thedepositary on thepossibility of transfer
and reuse of AIF assets,
and information about
any transfer of liability
to the prime broker
that may exist
Article 23(1) (p)Description of how and

The AIFM will disclose the matters described in Articles 23(4) and 23(5) periodically throughwhen periodic

the AIF Internet website and other public disclosures.

disclosures will bemade in relation toleverage, liquidity andrisk profile of theassets, pursuant to
Articles 23(4) and 23(5)Article 23(2)The AIFM shall inform

Not applicable.

the investors before
they invest in the AIF of
any arrangement madeby the depositary tocontractually discharge
itself of liability inaccordance with Article
21(13)

16

The AIFM shall also

Not applicable.

inform investors of any
changes with respect todepositary liability
without delay
Article 23(4)(a)Percentage of the AIF's assets which are

There are no assets that are subject to special arrangements arising fromsubject to special arrangements arising

their illiquid nature.

from their illiquid nature. The
percentage shall be calculated as the
net value of those assets subject tospecial arrangements divided by the net
asset value of the AIF concerned
Overview of any special arrangements,

There are no such special arrangements.

including whether they relate to side
pockets, gates or other arrangements
Valuation methodology applied to

There are no such special arrangements.

assets which are subject to sucharrangements
How management and performance

There are no such special arrangements.

fees apply to such assets
Article 23(4)(b)Any new arrangements for managing

Any new arrangements or change in applicable arrangements will be

the liquidity of the AIF

disclosed at an appropriate time.

For each AIF that the AIFM manages

Any new arrangements or change in applicable arrangements will bethat is not an unleveraged closed‐end

disclosed at an appropriate time.

AIF, notify to investors whenever they
make changes to its liquidity
management systems (which enable an
AIFM to monitor the liquidity risk of the
AIF and to ensure the liquidity profile ofthe investments of the AIF complies
with its underlying obligations) that arematerial in accordance with Article
106(1) of Regulation (EU) No 231/2013(i.e., there is a substantial likelihoodthat a reasonable investor, becoming

17

aware of such information, would
reconsider its investment in the AIF,
including because such information
could impact an investor’s ability to
exercise its rights in relation to its
investment, or otherwise prejudice theinterests of one or more investors in
the AIF).
Immediately notify investors where

Any new arrangements or change in applicable arrangements will bethey activate gates, side pockets ordisclosed at an appropriate time.

similar special arrangements or where
they decide to suspend redemptions
Overview of changes to liquidity

Any new arrangements or change in applicable arrangements will bearrangements, even if not special

disclosed at an appropriate time.

arrangements
Terms of redemption and

API is a closed‐end investment corporation, and unitholders are notcircumstances where management

entitled to request the redemption of their investment.

discretion applies, where relevant
Also any voting or other restrictions

There are no voting or other restrictions on the rights attaching to units.

exercisable, the length of any lock‐up or
any provision concerning ‘first in line’ or‘pro‐rating’ on gates and suspensions
shall be included
Article 23(4)(c)
The current risk profile of the AIF and

The appropriateness and effectiveness of the risk management structure

the risk management systems

are regularly evaluated and enhanced by the AIFM.

employed by the AIFM to manage thoseFunds from debts and investment corporation bonds are mainly used for

risks

asset acquisition or debt repayment, etc. These are exposed to liquidity risk
at the time of repayment. However, the liquidity risk is controlled throughsuch measures as striving to maintain and strengthen the capacity to
procure funds from the capital market via capital raising, along withsecuring several fund procurement sources and diversifying repayment
deadlines, executing commitment line agreements which provide credit
facilities totaling ¥21 billion (a total of ¥33 billion including credit line (non‐commitment basis) agreement) with the main banks (no amount has beendrawn down as of January 25, 2022), and also preparing monthly fundmanagement plans.

18

Debt with a floating interest rate is exposed to interest rate fluctuation
risks, but the impact that interest rate rises have on the operations islimited by keeping the LTV at low levels, maintaining the proportion of debt
that is long‐term fixed‐rate debt at high levels, and setting a procurement
limit depending on the economic and financial environment, terms of leaseagreements with tenants, asset holding period and other factors.
Furthermore, derivative transactions (interest rate swap transactions) areavailable as hedging instruments to mitigate the risks of rises in floatinginterest rates.
Tenant leasehold and security deposits are deposits from tenants and are
exposed to liquidity risks arising from tenants moving out of properties, but
the liquidity risk is controlled through such measures as preparing monthly
fund management plans.
TRM serves as the asset manager for Comforia Residential REIT, Inc.
(“CRR”), a Tokyo Stock Exchange‐listed J‐REIT, and Broadia Private REIT Inc.
(“BPR”), a private REIT, as well as API. API and BPR invest in retail and officeproperties, and CRR and BPR invest in rental and serviced residential
properties. API’s acquisition is subject to TRM’s Regulations on Priority of
Property Information to Consider, which are internal rules that stipulate
the order in which potential acquisitions are considered among API, CRR
and BPR. TRM also holds acquisition priority review meetings of compliancemanagers to verify that the stipulated order of priority is complied with.
Measures to assess the sensitivity of

No such measures have been implemented.

the AIF’s portfolio to the most relevantrisks to which the AIF is or could be
exposedIf risk limits set by the AIFM have been

No such situation has occurred.

or are likely to be exceeded and wherethese risk limits have been exceeded a
description of the circumstances andthe remedial measures taken
Article 23(5)(a)Any changes to the maximum amountAny new arrangements or change in applicable arrangements will beof leverage which the AIFM may employ disclosed at an appropriate time.
on behalf of the AIF, calculated in19accordance with the gross andcommitment methods. This shall
include the original and revised
maximum level of leverage calculated inaccordance with Articles 7 and 8 ofRegulation (EU) No 231/2013, whereby
the level of leverage shall be calculated
as the relevant exposure divided by the
net asset value of the AIF.
Any right of the reuse of collateral or

No such right or guarantee exists.

any guarantee granted under theleveraging agreement, including thenature of the rights granted for thereuse of collateral and the nature of theguarantees granted
Details of any change in service

Any new arrangements or change in applicable arrangements will be

providers relating to the above.

disclosed at an appropriate time.

Article 23(5)(b)Information on the total amount of

The aggregated amount of debt with interest is JPY 260,350

leverage employed by the AIF

million as of January 25, 2022.

calculated in accordance with the grossand commitment methods

20