January 17, 2019

Financial Report for the Fiscal Period Ended November 30, 2018
(June 1, 2018 – November 30, 2018)

Activia Properties Inc.
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange3279
https://www.activia-reit.co.jp/en/
Kazuyuki Murayama, Executive Director

Investment management company:
TLC REIT Management Inc.
Representative: Hiroyuki Tohmata, President & CEO
Contact:
Kazuyuki Murayama, General Manager of Strategy Department,
Activia Management Division
TEL: +81-3-6804-5671
Scheduled date to file Securities Report:
Scheduled date to start distribution payments:
Supplementary material on financial report:
Financial report presentation meeting:February 26, 2019
February 12, 2019
Yes
Yes (for institutional investors and analysts)(Amounts truncated to the nearest million yen)1.

Summary of financial results for the fiscal period ended November 30, 2018
(June 1, 2018 – November 30, 2018)(1) Operating results(Percentages show changes from the corresponding amounts for the previous period.)
Operating revenue

Fiscal period ended
November 30, 2018
Fiscal period ended
May 31, 2018

Operating profit

Ordinary profit

ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

13,815

3.7

7,546

1.0

6,697

1.3

6,696

1.3

13,327

4.8

7,471

5.6

6,611

6.3

6,610

6.3

Basic earnings per unit

Return on unitholders’equity (ROE)%

Ordinary profit tototal assets

Ordinary profit tooperating revenue

Yen%%
Fiscal period ended
9,584
3.0
1.5
48.5
November 30, 2018
Fiscal period ended
9,493
3.1
1.5
49.6
May 31, 2018
(Note) Basic earnings per unit is calculated by dividing profit by the day-weighted average number of investment units for theperiod (696,324 units and 698,704 units for the fiscal period ended May 31, 2018, and the fiscal period ended
November 30, 2018, respectively).

-1-(2) Cash distributions
Cash
distributions
per unit

Total
distributions(excluding excessof earnings)(excluding excessof earnings)

Cashdistributions
in excess ofearnings
per unit

Total
distributions
in excess ofearnings

Payout ratio

Distribution
ratio tounitholders’equityYen Millions of yen
Yen Millions of yen%%
Fiscal period ended
9,584
6,696
0
0
100.0
3.0
November 30, 2018
Fiscal period ended
9,462
6,611
0
0
100.0
3.0
May 31, 2018
(Note) Because new investment units were issued during the fiscal period ended May 31, 2018, the payout ratio for that
period is obtained by the following formula with figures rounded to the first decimal place: Payout ratio = total
distributions (excluding excess of earnings) / profit × 100(3) Financial position

As of November 30, 2018

Total assets

Net assets

Millions of yen
445,464

Millions of yen
223,842445,941

223,777

As of May 31, 2018
(Reference) Unitholders’ equity
As of November 30, 2018:
As of May 31, 2018:

Unitholders’ equity tototal assets%
50.2

Net assets per unit
Yen
320,368

50.2

320,275¥223,842 million¥223,777 million(4) Cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
periodMillions of yen

Millions of yen

Millions of yen

Millions of yen

8,708(1,471)(6,762)

13,0907,223(24,040)

11,542

12,615

Fiscal period ended
November 30, 2018
Fiscal period ended
May 31, 20182.

Forecasts of results for the fiscal period from December 1, 2018 to May 31, 2019
(Percentages show changes from the corresponding amounts for the previous period.)
Operatingrevenue

Fiscal period ending
May 31, 2019

OperatingprofitOrdinary
profit(excluding excessof earnings)

Cashdistributions
in excess ofearnings
per unitCashdistributions
per unit

ProfitMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen

%

Yen

Yen

14,771

6.9

8,582

13.7

7,619

13.8

7,618

13.8

9,878

0

(Reference) Forecasted profit per unit (forecasted profit / total projected number of investment units issued at end of period)
for the fiscal period ending May 31, 2019:¥9,878-2-

* Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of priorperiod financial statements
a.
b.
c.
d.

Changes in accounting policies due to revisions to accounting standards and other regulations: None
Changes in accounting policies due to other reasons: None
Changes in accounting estimates: None
Restatement of prior period financial statements: None

(2) Total number of units issueda.

b.

Total number of units issued at end of period (including treasury units)
As of November 30, 2018698,704 units

As of May 31, 2018698,704 units

Number of treasury units at end of period
As of November 30, 2018

– units

As of May 31, 2018

– units(Note) Please refer to “Per Unit Information” on page 34 for the number of investment units used as the basis
for calculating basic earnings per unit.

* Status of audit procedures
As of the time of this financial report, audit procedures for the financial statements pursuant to the
Financial Instruments and Exchange Act of Japan are incomplete.
* Appropriate use of forecasts of results and other special items
Forward-looking statements presented in this financial report including forecasts of results are based on
information currently available to us and on certain assumptions we deem to be reasonable. As such, actual
operating and other results may differ materially due to a number of factors. Furthermore, these forecasts arein no way a guarantee of any distribution amount. Please refer to “Assumptions for Forecasts of Investment
Performance for the 15th Fiscal Period from December 1, 2018 to May 31, 2019 and the 16th Fiscal Period
from June 1, 2019 to November 30, 2019” on pages 15 through 17 for information on assumptions for theforecasts.

This English version is a translation of the original Japanese document and is only for reference purposes. In
the case where any differences occur between the English version and the original Japanese version, theJapanese version will prevail.

-3-

Index
1. The Investment Corporation and Related Corporations ................................................................................. 5
2. Asset Management Policies and Status .......................................................................................................... 5(1) Asset Management Policies ................................................................................................................... 5(2) Asset Management Status ...................................................................................................................... 5
3. Financial Statements .................................................................................................................................... 18(1) Balance Sheet ....................................................................................................................................... 18(2) Statement of Income ............................................................................................................................ 20(3) Statement of Unitholders’ Equity......................................................................................................... 21(4) Statement of Cash Distributions .......................................................................................................... 22(5) Statement of Cash Flows...................................................................................................................... 23(6) Notes on Assumption of Going Concern ............................................................................................. 24(7) Notes on Important Accounting Policies ............................................................................................. 24(8) Notes on Change in Presentation Method ............................................................................................ 25(9) Notes to Financial Statements .............................................................................................................. 25(10) Changes in Total Number of Investment Units Issued and Outstanding ............................................. 36
4. Changes in Directors and Corporate Auditors ............................................................................................. 38
5. Reference Information ................................................................................................................................. 38(1) Composition of Invested Assets ........................................................................................................... 38(2) Investment Assets ................................................................................................................................ 39-4-

1. The Investment Corporation and Related Corporations
As there have been no significant changes in “Management structure of the Investment Corporation” in thelatest Securities Report (filed on August 30, 2018; prepared in Japanese only), the disclosure is omitted.

2. Asset Management Policies and Status(1) Asset Management Policies
As there have been no significant changes in policies described in “Investment Policy,” “Investment
Properties” and “Distribution Policy” in the latest Securities Report (filed on August 30, 2018; prepared inJapanese only), the disclosure is omitted.
(2) Asset Management Statusi) Summary of Results for the Current Fiscal Period(A) Transition of Investment Corporation
Activia Properties Inc. (hereinafter referred to as the “Investment Corporation”) was established on
September 7, 2011, with unitholders’ capital of ¥200 million (400 units) and TLC Township Inc. (onApril 1, 2017, an absorption-type merger took place with current TLC REIT Management Inc.
(hereinafter referred to as the “Asset Manager”) as a surviving company and TLC Activia Investment
Management Inc. (its trade name was changed from TLC Township Inc. on April 1, 2012) as anabsorbed company) as the organizer under the Act on Investment Trusts and Investment Corporations(Act No. 198 of 1951, including subsequent revisions), and completed its registration in the Kanto
Local Finance Bureau on September 20, 2011 (Director-General of the Kanto Local Finance Bureau
No. 73).
After that, the Investment Corporation was listed on the real estate investment trust securities marketof Tokyo Stock Exchange, Inc. (Securities code 3279) on June 13, 2012. On December 13, 2017, theInvestment Corporation carried out a publicly offered capital increase for the fifth consecutive year,
and on December 26, 2017, it carried out a third-party allotment.
“Activia” of “Activia Properties,” the name of the Investment Corporation, has been coined from thewords “activate” and “ia,” a suffix meaning “place.” By investing in and managing real estate
appropriate to its name, the Investment Corporation seeks to become an entity capable of broadlyenergizing society. The Investment Corporation will also select real estate capable of sustaining
customer demand as a location for both corporate activities and urban recreation in popular areas,
with the aim of maximizing the medium- and long-term value of unitholders, supported by its
proactive management (management to improve the circumstances by taking initiatives and acting forthe future).
Moreover, the Investment Corporation has continued to carefully select investment assets with a focus
on location and quality since having concluded its IPO, and consequently held 42 properties (with thetotal acquisition price of ¥431,485 million) at the end of the fiscal period under review.
(B) Investment Environment in the Fiscal Period under Review
In the fiscal period under review, the Japanese economy remained generally robust amid an ongoing
trend of gradual recovery in the global economy overall against a backdrop of a continued trajectoryof recovery in corporate earnings as well as the employment and income environments, and despite
concerns particularly regarding effects from a string of natural disasters.
With respect to the environment surrounding retail properties, developments involving consumer
sentiment have been weak according to the Monthly Consumer Confidence Survey released by the
Economic and Social Research Institute, Cabinet Office, Government of Japan, yet sales of retailers
are gradually picking up steam according to the Current Survey of Commerce released by the
Ministry of Economy, Trade and Industry. Moreover, according to the Consumption Trend Survey for
Foreigners Visiting Japan released by the Japan Tourism Agency, the Ministry of Land,
Infrastructure, Transport and Tourism, the number of foreign overseas visitors to Japan had decreased
briefly due to effects from the string of natural disasters in the quarter spanning July to September
2018, but currently as of December 2018 the number exceeds 30 million people annually for the firsttime ever. As such, demand related to inbound tourism has been holding firm.

-5-

In the rental office market, a favorable environment of supply relative to demand has been persisting.
In that regard, according to data published by Miki Shoji Co., Ltd., the average vacancy rate of thefive central wards of Tokyo (Chiyoda-ku, Minato-ku, Chuo-ku, Shibuya-ku and Shinjuku-ku) had
been hovering just above the 2% range since March 2018 until it fell below 2% to 1.98% in
November 2018. With respect to rent levels as well, the average rent has been increasing for 59
consecutive months. The market environment continues to be favorable also in major cities outside
Tokyo amid declining vacancy rates and an increasingly upward trend in rent levels.
The J-REIT market has held firm overall amid further improvement in business performance
underpinned largely by a favorable rental office market, as well as relatively high yields, and despite
the Bank of Japan having announced that it will allow long-term interest rates to fluctuate to a greater
extent. Financing activities through publicly offered capital increase and property acquisition havebeen continuously and actively conducted, and this has led to an ongoing expansion in J-REIT asset
sizes.
(C) Investment Performance
The Investment Corporation has continued to maintain and improve its portfolio in accordance withthe basic asset management policy set forth in the Articles of Incorporation. Consequently, total assets
held by the Investment Corporation at the end of the fiscal period under review were 42 properties(with the total acquisition price of ¥431,485 million) with the total leasable area of 395,967 m2(119,764 tsubo).
The trend of monthly average occupancy rate (Note) during the fiscal period under review is asfollows:
June 30,
2018

July 31,2018

August 31,
2018

September
30, 2018

October 31,
2018

November30, 2018

Urban Retail
Properties

99.7%

99.7%

100.0%

100.0%

100.0%

100.0%

Tokyo Office
Properties

100.0%

100.0%

100.0%

100.0%

99.9%

99.9%

Activia
Account
Properties

99.5%

99.3%

99.8%

99.8%

99.8%

99.8%

Total

99.7%

99.6%

99.9%

99.9%

99.9%

99.9%

(Note)

Figures for occupancy rates are rounded to the nearest tenth.

(D) Initiatives Regarding Sustainability
In aiming to build a portfolio consisting of “real estate capable of sustaining customer demand,” theInvestment Corporation deems that efforts to achieve “lower environmental loads” while acting to“contribute to our nearby surroundings and local communities” also constitute an important portfolio
consideration. This involves daily effort to achieve our basic objective of cutting unit energy
consumption by an annual average of 1% over the medium to long term. Initiatives carried out in thefiscal period under review include upgrading to LED lighting at some private areas at A-PLACE
Gotanda Ekimae, timed in conjunction with change of tenants at the facility, and some common areasof A-PLACE Ebisu Higashi and Commercial Mall Hakata. In addition, in new lease agreements andmemorandums of renewal, we have added “green lease clauses” and are working with each tenant tobuild a system of cooperation with respect to environmental awareness. Moreover, we continue toengage in annual initiatives geared to acquiring green building certifications. During the fiscal period
under review, we have acquired the CASBEE (Comprehensive Assessment System for Built
Environment Efficiency) for Real Estate certification, for four properties including A-PLACE
Shinagawa Higashi (S class), TLC Ebisu Building (A class), A-PLACE Ebisu Higashi (A class), and
A-PLACE Shibuya Konnoh (A class). As such, a total of 24 of our properties have acquired green
building certification, which amounted to 58.8% of our holdings calculated on the basis of gross floorarea (as of November 30, 2018).
Furthermore, at Tokyu Plaza Omotesando Harajuku, we held the first harvest of the “Yasai-no-mori(garden of vegetables) Project,” which entails the property growing vegetables in cooperation with
NPOs, sponsor companies, and neighboring nursery schools. We also cooperated in community-6-

activities to coexist with nearby businesses, residents and cities as part of initiatives for local society,which included our participation in clean-up campaigns and summer festivals in various areas where
our properties are located.
The Investment Corporation will contribute to achieving a sustainable society by engaging in suchinitiatives geared to the environment and society.
(E) Overview of Financing
In the fiscal period under review, the Investment Corporation refinanced borrowings amounting to¥17,000 million in June 2018, in order to cover repayment of loans payable that had come due, andworked to otherwise maintain a stable financial base through ongoing moves that have included
reducing interest costs and diversifying repayment dates on interest-bearing debt. As of the end of the
fiscal period under review, the balance of interest-bearing debt was ¥199,350 million (borrowings of¥181,350 million and investment corporation bonds of ¥18,000 million). The ratio of interest-bearing
debt to total assets (LTV = Balance of interest-bearing debt / Total assets x 100) was 44.8% as of theend of the fiscal period under review. The long-term debt ratio and the ratio of fixed-interest debt tototal interest-bearing debt were both 95.4%.
The credit rating the Investment Corporation has obtained as of the end of the fiscal period underreview is as follows. This investment unit does not have a credit rating provided or made available forinspection by a credit rating agency or one scheduled to be provided or made available for inspection
by a credit rating agency at the Investment Corporation’s request.
Credit Rating Agency

Rating

Forecast

Japan Credit Rating Agency (JCR)

Long-term issuer rating: AA

Stable(F) Overview of Financial Results and Distributions in the Fiscal Period under Review
As a result of the above-mentioned investments, operating revenue, operating profit, and ordinary
profit were ¥13,815 million, ¥7,546 million, and ¥6,697 million, respectively, for the fiscal period
under review, and profit was ¥6,696 million.
In accordance with the distribution policy set forth by the Investment Corporation (Article 35 of the
Articles of Incorporation), it was decided that the all amount of unappropriated retained earnings
would be distributed except a fraction of less than ¥1 of distributions per investment unit, with the aimthat as greatest as possible distributions of profits would be included in tax deductible expenses under
Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957, including
subsequent revisions; hereinafter referred to as the “Special Taxation Measures Act”). Consequently,
distributions per investment unit resulted in ¥9,584.

-7-ii) Outlook for the Next Fiscal Period(A) Investment Environment for the Next Fiscal Period
In the Japanese economy going forward, we expect the trend of modest recovery to persist on thewhole, driven in part by firm domestic demand particularly in terms of capital investment andpersonal consumption and also by continued robust employment and income environments, against a
backdrop of factors that include the Bank of Japan’s sustained monetary easing policy as well as
support from government expenditure. On the other hand, risk factors include potential effects on the
global economy as well as financial and capital markets stemming from developments with respect totrade policies particularly of the U.S. as well as monetary policy in Europe and the U.S., along withpotential effects of outcomes in negotiations ahead of the U.K.’s withdrawal from the European
Union and Japan’s hike in its consumption tax rate.
In the rental office market, conditions are likely to remain favorable amid a scenario of ongoingrobust demand particularly in terms of corporate expansion as well as improving and relocating
business sites, along with continued tightening of supply relative to demand. With respect to theenvironment surrounding retail properties, trends that include robust employment and income
environments along with the increasing number of foreign overseas visitors to Japan were ongoing,
and temporary effects of the consumption tax hike aside, we anticipate robust performance with some
contribution to this expected from fiscal stimulus. The J-REIT market, is likely to gain support fromthe robust real estate market and long-term interest rates remaining at low levels in Japan, despite theneed to closely monitor the overseas economic situation particularly with respect to uncertainties
brought about by developments involving policy in Europe and the U.S.
Amid this environment, the Investment Corporation will promote both external growth throughmaking careful investment decisions, in part by continuing to leverage its sponsor support, and alsointernal growth by leveraging the competitiveness of its assets under management, with the aim of
improving unitholder value.
(B) Investment Policy and Developments to Be Addressed in the Next Fiscal Perioda. Basic Policy
The Investment Corporation’s basic policies are to invest in assets, with targeted investments in
Urban Retail and Tokyo Office properties; utilize the Tokyu Fudosan Holdings Group’s value chain
based on the comprehensive support system; and a governance structure that maximizes unitholder
value.
b. External Growth Strategy
The Investment Corporation will invest in Urban Retail and Tokyo Office properties as a main
target. It will make its investment decisions carefully, concentrating on selecting properties in
excellent locations, including surrounding areas, and thoroughly considering individual factors suchas use, size, specifications and other qualities of properties, and credibility and name recognition oftenants, in order to construct a competitive portfolio in the medium to long term.
To acquire these competitive assets on an ongoing basis, the Investment Corporation will work tomaintain and improve the quality of its portfolio and will seek to expand the size of its assets bycarefully selecting investment assets based on the information it receives under its sponsor support
agreement with Tokyu Land Corporation regarding the Investment Corporation and its support
agreement with five group companies in the Tokyu Fudosan Holdings Group. It will also acquire
properties through the exclusive know-how and information-gathering network of the AssetManager.
c. Internal Growth Strategy
The Investment Corporation will operate, manage, and refurbish its portfolio to maintain andimprove the competitiveness of its facilities through a comprehensive understanding of the featuresof its overall portfolio and its individual assets under management, based on the unique expertise of
its Asset Manager. The Investment Corporation will also seek to manage its portfolio in a stablemanner and strengthen its earnings by establishing appropriate operational and management
systems tailored to the specific characteristics of the assets it has invested in, and through regularand non-regular inspections by the property management company that has considerable experiencein the operation and management of real estate.
The Investment Corporation will also maintain and improve the value of its assets through its
expertise in internal growth through operating and managing properties. It will maximize the-8-competitiveness of its assets through the ongoing assistance of Tokyu Land Corporation and othersupport companies, which, through their face-to-face business with consumers, have richinformation regarding consumer needs and developments in industries such as retail and services.
With respect to the property management business for the assets under management, leasing support
has been provided from Tokyu Land Corporation, Tokyu Land SC Management Corporation or
Tokyu Community Corp.
d. Financial Strategy
Having the sound financial strategy in an effort to conservatively control LTV as well as makestable long-term loans and diversify maturities (diversifying repayment dates), the Investment
Corporation will endeavor to build stable financial base with solid bank formation. In addition, withthe aim of diversifying means of raising funds, the Investment Corporation will issue investment
corporation bonds while paying close attention to trends in financial markets. The Investment
Corporation will also continue to flexibly issue new investment units while paying appropriate
attention to dilution of investment units with the aim of achieving long-term and stable growth.
(C) Significant Subsequent Events
a. Issuance of New Investment Units
At meetings of the board of directors held on November 30, 2018 and December 12, 2018, we
resolved to issue new investment units as described below, and issued these per the terms below
once payment was completed on December 19, 2018 and January 7, 2019. As a result, unitholders’capital amounted to ¥248,370,846,700, and the total number of investment units issued came to771,224 units.
(i) Issuance of new investment units through the public offering (Public placement)
Number of new investment units issued
67,320 units
Offering price¥445,410 per unit

Total offering price¥29,985,001,200

Paid-in amount¥431,320 per unit

Total paid-in amount¥29,036,462,400

Payment date

December 19, 2018(ii) Issuance of new investment units through third-party allotment
Number of new investment units issued
5,200 units
Paid-in amount¥431,320 per unit

Total paid-in amount¥2,242,864,000

Payment date

January 7, 2019

Allottee

Nomura Securities Co., Ltd.

-9-

b. Borrowing of Funds
In order to cover a part of the acquisition costs for beneficiary interests of real estate in trust
described in the below section “c. Acquisition of Properties” and related costs, the Investment
Corporation borrowed funds as follows.
Totalamountborrowed

Interest
rate

Drawdown
date

Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.

¥5,000
millionBase rate+ 0.13%January 10,
2019

May 31,
2019

MUFG Bank, Ltd.
Short- Sumitomo Mitsui Trust Bank,
term Limited
Mizuho Bank, Ltd.

¥5,000
millionBase rate+ 0.13%

Base rate January 10,+ 0.145%
2019

July 12,
2021

Category

Lender

MUFG Bank, Ltd.
Total
Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan
Inc.
Long- Sumitomo Mitsui Trust Bank,
term Limited
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan
Inc.
Total
Total

Due date(Note 1)

Borrowing andrepayment methods,
security, andguarantee

Borrowing based ona borrowing
agreement with thelender shown at left
as the creditor,
lump-sum
January 10, January 10,
repayment,
2019
2020
unsecured, andunguaranteed¥10,000
million¥11,780
million¥1,970
million¥9,640
million¥1,610
million¥25,000
million¥35,000
millionBorrowing based ona borrowing
agreement with theJanuary 10, July 12, lender shown at left
0.36607%2019
2021
as the creditor,
lump-sum
repayment,
unsecured, and
0.55800% January 10, January 11,
unguaranteed(Note 2)20192028

0.65264%January 10, January 11,
2019
2028

(Note 1) If the due date is a non-business day, the due date shall be the following business day. Ifsuch day comes in the following month, the due date shall be the immediately precedingbusiness day.
(Note 2) The Investment Corporation conducts interest rate swaps to hedge interest rate fluctuation
risk, and, accordingly, the indicated interest rate reflects the effect of the interest rate swaps.

- 10 -

c. Acquisition of Properties
The Investment Corporation acquired properties listed below with proceeds from the issuance of
new investment units through the public offering (public placement) and third-party allotment andborrowings, etc. in accordance with the basic asset management policy set forth in the Articles ofIncorporation.
(UR-16) Tokyu Plaza Ginza (Land) (acquisition of 30% co-ownership interest)
Type of assets

Trust beneficiary interest

Acquisition price¥37,500 million

Acquisition date

January 10, 2019

Location

2-1, Ginza 5-chome, Chuo-ku, Tokyo

Use–

Land area

3,766.80 m2

Gross floor area–

Structure–

Month and year ofcompletion
Ownership–
Land:

Owned (30% co-ownership interest)(UR-17) Q plaza HARAJUKU (acquisition of 60% co-ownership interest)
Type of assets

Trust beneficiary interest

Acquisition price¥13,200 million

Acquisition date

January 10, 2019

Location

28-6, Jingumae 6-chome, Shibuya-ku, Tokyo

Use(Building A) Retail, (Building B) Hall

Land area

2,165.54 m2

Gross floor area

7,667.27 m2

Structure(Building A) SRC, Steel framed / 11 floors above and 2 floors
underground,(Building B) SRC, Steel framed / 2 floors above and 1 floor
underground
March 2015

Month and year ofcompletion
OwnershipLand:
Building:

Owned (60% co-ownership interest)
Owned (60% co-ownership interest)- 11 -

(AA-13) EDGE Shinsaibashi
Type of assets

Trust beneficiary interest

Acquisition price¥19,800 million

Acquisition date

January 10, 2019

Location

2-3, Nishishinsaibashi 2-chome, Chuo-ku, Osaka City, Osaka

Use

Office, retail, parking

Land area

2,217.78 m2

Gross floor area

23,483.28 m2

Structure

SRC, Reinforced concrete, Steel framed / 14 floors above and 2
floors underground
April 1986

Month and year ofcompletion
OwnershipLand:
Building:

Owned
Owned

- 12 -

< Reference Information >The Investment Corporation plans to transfer property listed below in accordance with the basic
asset management policy set forth in the Articles of Incorporation.
(UR-6) A-FLAG AKASAKA
Type of assets

Trust beneficiary interest

Scheduled transfer
price
Scheduled delivery
date (Note)
Location

Total ¥3,750 million(i) ¥1,875 million (50% co-ownership interest)(ii) ¥1,875 million (50% co-ownership interest)(i) March 1, 2019 (50% co-ownership interest)(ii) June 3, 2019 (50% co-ownership interest)
3-6, Akasaka 4-chome, Minato-ku, Tokyo

Use

RetailLand area

514.86 m2

Gross floor area

2,429.01 m2

Structure

SRC, Steel framed / 7 floors above and 1 floor undergroundMonth and year ofcompletion
Ownership

February 2008

Land:
Owned
Building: Owned(Note) The contract for the sale of trust beneficiary interests falls under a forward
commitment, etc. as provided in the “Comprehensive Guidelines for Supervision of
Financial Instruments Business Operators, etc.” by Financial Services Agency(forward commitment etc. refers to a postdated sales contract under which payment
and delivery shall be made at least one month after the conclusion of the contract, or
any other contract similar thereto).

- 13 -

(D) Outlook of Investment Performance
For the fiscal period ending May 31, 2019 (15th fiscal period: December 1, 2018 to May 31, 2019),
investment performance is estimated as follows. For the assumptions used for the estimation of
investment performance, please refer to “Assumptions for Forecasts of Investment Performance forthe 15th Fiscal Period from December 1, 2018 to May 31, 2019 and the 16th Fiscal Period from June
1, 2019 to November 30, 2019” on pages 15 through 17.
Operating revenue¥14,771 million

Operating profit¥8,582 million

Ordinary profit¥7,619 million

Profit¥7,618 million

Cash distributions per unit

¥9,878Cash distributions in excess of earnings per unit

¥0

If it is assumed that there are no changes in “Assumptions for Forecasts of Investment Performancefor the 15th Fiscal Period from December 1, 2018 to May 31, 2019 and the 16th Fiscal Period from
June 1, 2019 to November 30, 2019” on pages 15 through 17, the outlook of investment performancefor the fiscal period ending November 30, 2019 (16th fiscal period: June 1, 2019 to November 30,2019) is estimated as follows.
Operating revenue¥15,383 million

Operating profit¥8,672 million

Ordinary profit¥7,640 million

Profit¥7,639 million

Cash distributions per unit

¥9,905

Cash distributions in excess of earnings per unit

¥0

(Note) The above estimation is determined based on certain assumptions at the time of preparing
the financial statements. Due to changes in the circumstances surrounding the Investment
Corporation including acquisition or disposition of properties, the trend of real estatemarket, etc. in the future, actual operating revenue, operating profit, ordinary profit, profit
and cash distributions per unit may change. Furthermore, this estimation does notguarantee the amount of distributions.

- 14 -

Assumptions for Forecasts of Investment Performance for the 15th Fiscal Period from December 1,
2018 to May 31, 2019 and the 16th Fiscal Period from June 1, 2019 to November 30, 2019
Item
PeriodAssumptions
・ 15th fiscal period (December 1, 2018 to May 31, 2019) (182 days)
・ 16th fiscal period (June 1, 2019 to November 30, 2019) (183 days)

Investment
portfolio

・ Our forecasts of investment performance take into account the following property
dispositions associated with the 45 properties (the “Assets Currently Held”) for
which we hold the trust beneficiary interests as of today.
・ 15th fiscal period (December 1, 2018 to May 31, 2019)
We plan to transfer partial holdings of A-FLAG AKASAKA (50% co-ownershipinterest) on March 1, 2019 (15th fiscal period), but we assume the total number ofproperties to be 45 (we will retain 50% co-ownership interest in A-FLAG
AKASAKA subsequent to the aforementioned scheduled date of transfer).
・ 16th fiscal period (June 1, 2019 to November 30, 2019)
We plan to transfer A-FLAG AKASAKA (remaining 50% co-ownership interest) on
June 3, 2019 (16th fiscal period), and, accordingly, we assume the total number ofproperties will be 44 subsequent to the aforementioned scheduled date of transfer.
・ We assume that there will be no material changes to the composition of ourinvestment portfolio, including acquisition of properties or disposition of properties,
other than the above, before the end of the 16th fiscal period (November 30, 2019).
・ Our forecasts, however, may change due to any changes to the composition of ourinvestment portfolio.

Operatingrevenue・ We have calculated our real estate leasing business revenues from the Assets
Currently Held taking into account the relevant lease agreements effective as oftoday, market trends, etc.
・ Operating revenue is based on our assumption that there will be no delinquencies or
non-payment of rents by tenants.
・ We expect to record gains on sales amounting to ¥338 million and ¥341 million in
the fiscal period ending May 31, 2019 (15th fiscal period) and in the fiscal period
ending November 30, 2019 (16th fiscal period), respectively, in association with thetransfers of A-FLAG AKASAKA. This may change, however, depending on
outcomes of the sales, transfer prices, transfer dates and other conditions.

- 15 -

Item

OperatingexpensesNon-operating
expensesAssumptions
・ Expenses related to rent business (other than depreciation), which are our principal
operating expenses, were calculated based on the historical information and upon
considering variable factors, for the Assets Currently Held (the “Assets Held as ofthe end of the 14th Fiscal Period”), excluding Tokyu Plaza Ginza (Land)(acquisition of 30% co-ownership interest), Q plaza HARAJUKU (acquisition of
60% co-ownership interest) and EDGE Shinsaibashi acquired on January 10, 2019
(collectively, the “Acquired Assets”). Expenses for the Acquired Assets arecalculated based on the information provided by the former owner (seller) and upon
considering variable factors and others.
・ In general, property tax and city planning tax of properties acquired are settled at thetime of acquisition between the former owner (seller) and the purchaser based on
their respective periods of ownership in relation to the relevant tax year. However,any of these taxes allocated to the purchaser are not expensed at the time ofacquisition because they are treated as a part of the acquisition cost for accounting
purposes. The total amount of property tax and city planning tax on the Acquired
Assets that are treated as a part of the acquisition cost is assumed to be ¥354 million.
For property tax and city planning tax, ¥988 million and ¥1,087 million for the
Assets Currently Held will be expensed in the fiscal period ending May 31, 2019(15th fiscal period) and in the fiscal period ending November 30, 2019 (16th fiscal
period), respectively. With regard to the Acquired Assets, for fiscal 2020, property
tax and city planning tax will be expensed from the fiscal period ending November
30, 2020 (18th fiscal period).
・ Repair and maintenance expenses of buildings are estimated at the amount required
for each of the fiscal periods based on the medium- and long-term repair andmaintenance plans formed by the Asset Manager. However, the actual repair andmaintenance expenses for the fiscal periods may significantly differ from theestimates since (i) an unforeseeable event may cause serious damage to a building
requiring emergent repair expenditure, (ii) in general, amounts vary according to thefiscal period, and (iii) certain types of repair and maintenance expenses are notrequired in every fiscal period.
・ We calculate depreciation expenses (including incidental expenses) by the straightline method, assuming ¥1,300 million and ¥1,309 million for the 15th fiscal period
ending May 31, 2019 and the 16th fiscal period ending November 30, 2019,respectively.
・ We expect interest and other borrowing-related expenses of ¥927 million and ¥1,023
million for the 15th fiscal period ending May 31, 2019 and the 16th fiscal period
ending November 30, 2019, respectively.
・ We assume the temporary expense of ¥26 million for the 15th fiscal period ending
May 31, 2019, relating to the issuance of investment units, etc.

・ As of today, we have a balance of ¥234,350 million in interest-bearing debt
(borrowings of ¥216,350 million and investment corporation bonds of ¥18,000
million). We assume that there will be no change to the balance of interest-bearing
debt before the end of the 16th fiscal period (November 30, 2019).
・ We assume that there will be refinancing of interest-bearing debt coming due before
the end of the 15th fiscal period (May 31, 2019) and the 16th fiscal period
Interest-bearing(November 30, 2019) (15th fiscal period: short-term loans payable of ¥9,100
million, long-term loans payable of ¥4,000 million and investment corporation
debt
bonds of ¥4,000 million, 16th fiscal period: short-term loans payable of ¥5,000
million and long-term loans payable of ¥13,100 million).
・ We assume the LTV ratios as of May 31, 2019 and November 30, 2019 are both tobe approximately mid-45%.
・ The LTV ratio is obtained by the following formula:
LTV = Balance of interest-bearing debt / Total assets × 100- 16 -

Item

Assumptions

Units

・ The number is based on our assumption of total of 771,224 units issued as of today.
We assume that there will be no additional issuance of new investment units before
the end of the 16th fiscal period (November 30, 2019).
・ The cash distributions per unit for the 15th fiscal period ending May 31, 2019 andthe 16th fiscal period ending November 30, 2019 have been calculated inaccordance with the total projected number of investment units issued as of the endof each of the fiscal periods which are 771,224 units.

・ Cash distributions (cash distributions per unit) are calculated based on the cash
distribution policy stipulated in our Articles of Incorporation.
Cash distributions
・ The cash distributions per unit may change due to various factors, including changes
per unit
to the composition of our investment portfolio, changes in rental revenues
accompanying changes in tenants, and unexpected maintenance and repairs.
Cash distributions ・ We do not currently anticipate cash distributions in excess of our distributable profit
in excess of(cash distributions in excess of earnings per unit).
earnings per unit
・ We assume that there will be no amendments in legislation, taxation, accounting
standards, listing regulations or regulations of the Investment Trusts Association of
Other
Japan that affect the above forecasts.
・ We assume that there will be no material changes in general economic conditions orreal estate markets.

- 17 -

3. Financial Statements(1) Balance Sheet(Unit: Thousands of yen)
As of May 31, 2018
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold rights in trust
Other
Total intangible assets
Investments and other assets
Long-term prepaid expenses
Derivatives
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets- 18 -

As of November 30, 2018

9,498,104
3,116,967
645,833
455,470
47,6996,514
13,770,589

10,023,157
3,067,204
848,825
294,817–
3,066
14,237,072

83,050,493(9,675,982)
73,374,511
689,748(150,438)
539,310
1,364,809(300,583)
1,064,225
183,401(82,287)
101,113346,689,270–
421,768,431

83,354,620(10,879,394)
72,475,226
696,585(168,417)
528,167
1,390,538(330,343)
1,060,195
193,307(98,107)
95,200346,689,270
6,708
420,854,767

9,130,097
2,575
9,132,673

9,130,097
2,118
9,132,216

1,078,965
74,904
5
38,742
1,192,618
432,093,723

1,080,595
54,24518
38,322
1,173,181
431,160,166

77,584
77,584445,941,897

67,64567,645445,464,883

(Unit: Thousands of yen)
As of May 31, 2018
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of investment corporation bonds
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits in trust
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed
loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets*2- 19 -

As of November 30, 2018846,139
9,100,000
4,000,000
18,500,000
234,813809,070708–
314,273
4,755
33,809,761

913,616
9,100,000
4,000,000
19,600,000
73,949902,125976
457,386
428,888566
35,477,509

14,000,000
153,750,000
20,604,450
6
188,354,456
222,164,217

14,000,000
152,650,000
19,494,916
2
186,144,918
221,622,427

217,091,520

217,091,520

6,611,254

6,696,690

6,611,254
223,702,774

6,696,690
223,788,210

74,90474,904
223,777,679
445,941,897

54,24554,245
223,842,455
445,464,883*2

(2) Statement of Income(Unit: Thousands of yen)Previous fiscal period(From December 1, 2017
to May 31, 2018)
Operating revenue
Lease business revenue
Other lease business revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Interest income
Reversal of distribution payable
Interest on refund
Insurance income
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
Investment unit issuance expenses
Borrowing related expenses
Other
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings (undisposed loss)- 20 -

Current fiscal period(From June 1, 2018
to November 30, 2018)*1*1

12,409,430
917,584
13,327,014*1*1

12,673,479
1,141,921
13,815,400*1

4,706,236
1,034,028
12,42732,131
3,300
67,522
5,855,645
7,471,369*1

5,076,357
1,077,918
12,63832,2483,300
66,403
6,268,867
7,546,533

81
908
–
–
990

55
830
409
149
1,443

615,51235,235595,52237,928

9,546

9,938

46,468
153,550500
860,813
6,611,545
6,611,545
721
12
734
6,610,811
442
6,611,254

54,545
151,997500
850,432
6,697,544
6,697,544
984
(12)
971
6,696,573
117
6,696,690

(3) Statement of Unitholders’ Equity
Previous fiscal period (From December 1, 2017 to May 31, 2018)(Unit: Thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning ofcurrent period

202,233,447

Unappropriatedretained earnings(undisposed loss)

Total surplus

Totalunitholders’equity6,217,532

6,217,532

208,450,980

Deferred
gains orlosses onhedgesTotalvaluationandtranslation
adjustments

72,117

72,117

Total net
assets

208,523,097

Changes of items during
periodIssuance of new
investment units

14,858,072

Dividends ofsurplusProfit

14,858,072

14,858,072(6,217,090)(6,217,090)(6,217,090)(6,217,090)

6,610,811

6,610,811

6,610,811

6,610,811

Net changes of
items other than

2,787

2,787

2,787

unitholders’ equity
Total changes of
items during period
Balance at endof current period

14,858,072*1
217,091,520

393,721393,721

15,251,794

2,787

2,787

15,254,581

6,611,254

6,611,254

223,702,774

74,90474,904

223,777,679

Current fiscal period (From June 1, 2018 to November 30, 2018)(Unit: Thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning ofcurrent period

217,091,520

Deferred
gains orlosses onhedgesTotalvaluationandtranslation
adjustments

74,90474,904

Total net
assetsUnappropriatedretained earnings(undisposed loss)

Total surplus

Totalunitholders’equity6,611,254

6,611,254

223,702,774(6,611,137)(6,611,137)(6,611,137)(6,611,137)

6,696,573

6,696,573

6,696,573

6,696,573

223,777,679

Changes of items during
periodDividends ofsurplusProfitNet changes of
items other than

(20,659)(20,659)(20,659)

unitholders’ equity
Total changes of
items during period
Balance at endof current period–*1217,091,520

85,43585,43585,435(20,659)(20,659)

64,776

6,696,690

6,696,690

223,788,210

54,24554,245

223,842,455- 21 -

(4) Statement of Cash Distributions
Previous fiscal period(From December 1, 2017
to May 31, 2018)

Current fiscal period(From June 1, 2018
to November 30, 2018)

AmountAmountI

Unappropriated retained
earnings¥6,611,254,555¥6,696,690,398

II

Distributions¥6,611,137,248¥6,696,379,136[¥9,462][¥9,584]¥117,307¥311,262[Cash Distributions per unit]
III Earnings carried forward

Calculation method for
distributions

Based on the distribution policy
Based on the distribution policy
set forth in Article 35, Paragraph set forth in Article 35, Paragraph
1 of the Articles of Incorporation 1 of the Articles of Incorporationof the Investment Corporation,of the Investment Corporation,
distributions shall be limited to
distributions shall be limited tothe amount of net profit in excess the amount of net profit in excess
of an amount equivalent to ninety of an amount equivalent to ninety
hundredths (90/100) of
hundredths (90/100) of
distributable profits, as stipulated distributable profits, as stipulated
in Article 67-15, Paragraph 1 ofin Article 67-15, Paragraph 1 of
the Act on Special Measures
the Act on Special Measures
Concerning Taxation. In
Concerning Taxation. In
consideration of this policy, we
consideration of this policy, we
will pay distributions at the total will pay distributions at the total
amount of ¥6,611,137,248, which amount of ¥6,696,379,136, whichis the amount that does notis the amount that does notexceed the unappropriatedexceed the unappropriatedretained earnings and is theretained earnings and is thegreatest value among integral
greatest value among integral
multiples of 698,704, which is the multiples of 698,704, which is thetotal number of investment units total number of investment units
issued; provided, however, thatissued; provided, however, that
we will not pay the portion of
we will not pay the portion ofamount that exceeds the net profit amount that exceeds the net profit
defined in Article 35, Paragraph 2 defined in Article 35, Paragraph 2of the Articles of Incorporation of of the Articles of Incorporation of
the Investment Corporation.
the Investment Corporation.

- 22 -

(5) Statement of Cash Flows(Unit: Thousands of yen)Previous fiscal period(From December 1, 2017
to May 31, 2018)

Current fiscal period(From June 1, 2018
to November 30, 2018)

6,611,545
1,234,776
284

6,697,544
1,267,428
–

9,546

9,938

(81)
650,748
46,468
153,550(159,576)(55)
633,450
54,545
151,997(202,992)(47,699)

47,699(494,431)(158,518)
22,38978,334
24,647(119,943)
11,258(715)
7,862,582
81(638,416)(984)
7,223,263

457,386
166,083
11,232(78,334)
9,346
114,615(12,281)(18,142)
9,309,462
55(600,021)(717)
8,708,779(25,062,465)(354,286)(523,524)(1,879,200)

1,544,178

786,882

1,354(24,040,457)(24,459)(1,471,063)

4,098,155(5,000,000)
14,940,999(13,000,000)

4,997,750(5,000,000)
11,878,013(12,000,000)

1,979,812–

14,756,418(6,216,193)(16,310)
11,542,882(5,274,310)
17,889,382
12,615,072–(6,609,955)(28,233)(6,762,426)
475,289
12,615,072
13,090,361

Cash flows from operating activities
Profit before income taxes
Depreciation
Loss on retirement of non-current assets
Amortization of investment corporation bondissuance costs
Interest income and interest on securities
Interest expenses
Investment unit issuance expenses
Borrowing related expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Repayments of tenant leasehold and security
deposits in trust
Proceeds from tenant leasehold and security deposits
in trust
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Decrease in long-term loans payable
Proceeds from issuance of investment corporation
bonds
Proceeds from issuance of investment units
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period*1- 23 -*1

(6) Notes on Assumption of Going Concern
Not applicable.
(7) Notes on Important Accounting Policies
1. Method ofdepreciation of noncurrent assets(1) Property, plant and equipment (including trust assets)
The straight-line method is used.
The useful lives of major property, plant and equipment are listed below.
Buildings
2 to 70 years
Structures
2 to 60 years
Machinery and equipment
2 to 33 years
Tools, furniture and fixtures
2 to 15 years(2) Intangible assets
Internal use software is amortized by the straight-line method over the
expected useful life (5 years).
(3) Long-term prepaid expenses
The straight-line method is used.

2. Accounting methodfor deferred assets(1) Investment unit issuance expenses
The full amount is recorded as expenses when incurred.
(2) Investment corporation bond issuance costs
Amortized by the straight-line method over the period until maturity.

Property-related taxes
3. Accounting forincome and expenses
For property tax, city planning tax, depreciable asset tax for real properties
held, the amount of tax levied corresponding to the calculation period isrecorded as expenses related to rent business.
The settlement money for property tax that is paid to the transferor for
acquisition of real properties (so-called “amount equivalent to propertytax”) is not recorded as expenses related to rent business but included in
the acquisition costs for the related properties. There is no amountequivalent to property tax included in acquisition cost for properties for thecurrent fiscal period.
4. Method of hedge
accounting(1) Method of hedge accounting
Deferred hedge accounting is applied. For interest rate swaps that satisfy
the requirements for special treatment, special treatment is applied.
(2) Hedging instruments and hedged items
Hedging instruments: Interest rate swaps transactions
Hedged items: Long-term loans payable(3) Hedging policy
Based on the management policy of financial market risks, the Investment
Corporation makes interest rate swaps for the purpose to hedge risks set
forth in the Articles of Incorporation of the Investment Corporation.
(4) Method of assessing hedge effectiveness
The Investment Corporation assesses hedge effectiveness by comparing
the cumulative total changes in the cash flows of the hedged items withthose of the hedging instruments, and then verifying the ratio of thechanges in both amounts. However, hedge effectiveness is deemed tohave been ensured with respect to interest rate swaps that satisfy therequirements for special treatment.

5. Scope of cash (cash Cash and cash equivalents include cash on hand, cash in trust, demandand cash equivalents) deposits, deposits in trust, and highly liquid short-term investments that arein the statement ofreadily convertible, bear little risk in price fluctuations, and mature withincash flows
three months of the date of acquisition.
- 24 -

6. Other important(1) Accounting method for trust beneficiary interest with real estate, etc. as
matters related to thetrust asset
preparation ofWith regard to trust beneficiary interest with real estate, etc. in holding as
financial statements
trust asset, all assets and liabilities as well as all revenue and expense items
associated with all trust assets are accounted for under the respective
account items of the balance sheet and statement of income.
Of the trust assets accounted for under the respective account items, thefollowing items with significance are separately indicated on the balance
sheet.
i) Cash and deposits in trustii) Buildings in trust; structures in trust; machinery and equipment intrust; tools, furniture and fixtures in trust; land in trust; construction inprogress in trust; and leasehold rights in trustiii) Tenant leasehold and security deposits in trust(2) Accounting method for consumption tax and local consumption tax
Consumption tax and local consumption tax are accounted for by the taxexclusion method. Consumption taxes unqualified for deduction for tax
purposes for non-current assets, etc. are included in acquisition cost foreach asset.
(8) Notes on Change in Presentation Method
Changes Resulting from Application of “Partial Amendments to Accounting Standard for Tax EffectAccounting”
The Investment Corporation has applied the “Partial Amendments to Accounting Standard for Tax EffectAccounting” (ASBJ Statement No. 28, February 16, 2018) effective from the beginning of the current fiscal
period. Accordingly, the presentation method has been changed, whereby deferred tax assets were presented
under “Investments and other assets” and deferred tax liabilities were presented under “Non-current
liabilities.” Consequently, deferred tax assets of ¥5 thousand that had been presented under “Current assets”
in the balance sheet of the previous fiscal period were presented as being included in deferred tax assets of¥5 thousand under “Investments and other assets.”(9) Notes to Financial Statements
Notes to Balance Sheet
1. Commitment Line Contracts
The Investment Corporation has the commitment line contracts with three of the banks with which it does
business.
As of May 31, 2018
Total amount specified in the commitmentline contracts¥20,000,000 thousand¥21,000,000 thousand––¥20,000,000 thousand¥21,000,000 thousand

Loan balance
Net balance

As of November 30, 2018

*2. Minimum Net Assets Stipulated in Article 67, Paragraph 4 of the Act on Investment Trusts andInvestment Corporations
As of May 31, 2018
¥50,000 thousand- 25 -

As of November 30, 2018
¥50,000 thousand

Notes to Statement of Income*1. Breakdown of Profit (Loss) from Real Estate Leasing Business
Previous fiscal period(From December 1, 2017
to May 31, 2018)(Unit: Thousands of yen)
Current fiscal period(From June 1, 2018
to November 30, 2018)11,196,642

11,463,285

Common service fees

851,982

810,382

Parking lot fees

267,359

285,449

Other rent revenue

93,445

A. Real estate leasing businessrevenues
Lease business revenue
Rent

B.

12,409,430

114,361

12,673,479

Other lease business revenue

917,584

1,141,921

Total real estate leasing businessrevenues

13,327,014

13,815,400

Real estate leasing business
expenses
Expenses related to rent
business
Management operation
expenses

1,225,076

1,236,276

Utilities expenses

836,857

1,001,848

Tax and public dues

895,539988,148

8,795

8,875

235,857

281,326

1,234,521

1,267,174

284–

Insurance
Repair and maintenanceexpenses
Depreciation
Loss on retirement of noncurrent assets
Other expenses related to rent
businessC.

269,3034,706,236

292,7075,076,357

Total real estate leasing business
expenses

4,706,236

5,076,357

Profit (loss) from real estateleasing business (A – B)

8,620,778

8,739,043

Notes to Statement of Unitholders’ Equity
Previous fiscal period(From December 1, 2017
to May 31, 2018)

Current fiscal period(From June 1, 2018
to November 30, 2018)*1. Total number of authorized investment units
and total number of investment units issued
Total number of authorized investment units
Total number of investment units issued- 26 -

4,000,000 units

4,000,000 units

698,704 units

698,704 units

Notes to Statement of Cash Flows*1. Reconciliation between Cash and Cash Equivalents at End of Period and the Amount on the Balance
Sheet
Previous fiscal period(From December 1, 2017
to May 31, 2018)

Current fiscal period(From June 1, 2018
to November 30, 2018)

Cash and deposits¥9,498,104 thousand¥10,023,157 thousand

Cash and deposits in trust¥3,116,967 thousand¥3,067,204 thousand

Cash and cash equivalents¥12,615,072 thousand¥13,090,361 thousand- 27 -

Notes on Financial Instruments
1. Matters Regarding Financial Instruments(1) Policy for Financial Instruments
The Investment Corporation raises funds by borrowing, issuing investment corporation bonds, or issuinginvestment units for the purpose of acquiring real estate-related assets and repaying interest-bearing debt.
When raising funds, the Investment Corporation aims to sustain stable financing capability for a long time
at low cost by enhancing its capital adequacy and maintaining conservative interest-bearing debt, looking
for attributes such as extended borrowing periods for interest-bearing debt, fixed interest rates, anddiversified due dates to ensure financial stability and avoid the risk of interest-rate hikes.
We also invest temporary excess funds in deposits in general, taking safety and liquidity, etc. into accountand carefully considering the interest-rate environment and our cash management.
We may carry out derivatives transactions for the purpose of hedging the interest-rate risk of borrowings
and other risks, but do not engage in speculative transactions.
(2) Content and Risks of Financial Instruments and Risk Management System
As the excess funds of the Investment Corporation are invested in deposits, they are exposed to credit
risks such as the insolvency of the financial institutions in which the excess funds are deposited. However,
we deposit excess funds carefully by limiting the period of deposits to the short term, taking safety andliquidity, etc. into account and carefully considering the financial environment and our cash management.
Borrowings and investment corporation bonds are mainly for the purpose of acquiring real estate andrefinancing of existing borrowings. Tenant leasehold and security deposits are deposits provided bytenants. Borrowings, investment corporation bonds, tenant leasehold and security deposits are exposed toliquidity risks at the time of repayment or redemption. However, these risks are managed throughmanagement of liquidity in hand by preparing a monthly funding plan, efforts to reduce liquidity risk onloans payable and investment corporation bonds by diversifying repayment periods, etc., and other means.
Floating-rate loans payable are also exposed to the risk of fluctuations in interest-rates. However, theserisks are managed through derivative transactions (interest rate swaps) as hedging instruments in certain
floating-rate loans payable.
(3) Supplemental Remarks on the Fair Value of Financial Instruments
The fair value of financial instruments is based on market prices or reasonably calculated value if it has nomarket price. As certain assumptions are made in calculating these values, if different assumptions, etc.
are used, these values could vary.
2. Matters Regarding Fair Values of Financial Instruments
Carrying amounts, fair values, and the differences between the two values as of May 31, 2018, are as shown
below. Financial instruments whose fair value is considered to be extremely difficult to determine are notincluded in this table (please refer to (Note 2)).
(Unit: Thousands of yen)
Carrying amount
Fair value
Difference(1) Cash and deposits

9,498,104

9,498,104–(2) Cash and deposits in trust

3,116,967

3,116,967–

12,615,072

12,615,072–(1) Short-term loans payable

9,100,000

9,100,000–(2) Current portion of investment
corporation bonds

4,000,000

4,011,819

11,819(3) Current portion of long-term loans
payable18,500,000

18,535,570

35,570(4) Investment corporation bonds

14,000,000

14,225,517

225,517(5) Long-term loans payable

153,750,000

155,002,178

1,252,178

Total liabilities

199,350,000

200,875,086

1,525,086

74,90474,904–

Total assets

Derivative transactions- 28 -

Carrying amounts, fair values, and the differences between the two values as of November 30, 2018, are asshown below. Financial instruments whose fair value is considered to be extremely difficult to determine
are not included in this table (please refer to (Note 2)).
Carrying amount

Fair value(Unit: Thousands of yen)
Difference(1) Cash and deposits

10,023,157

10,023,157–(2) Cash and deposits in trust

3,067,204

3,067,204–

13,090,361

13,090,361–(1) Short-term loans payable

9,100,000

9,100,000–(2) Current portion of investment
corporation bonds

4,000,000

4,006,417

6,417(3) Current portion of long-term loans
payable19,600,000

19,663,090

63,090(4) Investment corporation bonds

14,000,000

14,199,701

199,701(5) Long-term loans payable

152,650,000

154,031,795

1,381,795

Total liabilities

199,350,000

201,001,005

1,651,005

54,24554,245–

Total assets

Derivative transactions(Note 1) Measurement Methods for Fair Values of Financial Instruments
Assets(1) Cash and deposits, (2) Cash and deposits in trust
The book value is used as the fair value of these assets, given that the fair value is almost the same as
the book value, as it is settled in a short time.
Liabilities(1) Short-term loans payable
The book value is used as the fair value of these liabilities, given that the fair value is almost the sameas the book value, as it is settled in a short time.
(2) Current portion of investment corporation bonds, (4) Investment corporation bonds
These fair values are determined by discounting the total of principal and interest at a rate taking into
account the remaining period and credit risk of the said investment corporation bonds.
(3) Current portion of long-term loans payable, (5) Long-term loans payable
These fair values are determined by discounting the total of principal and interest at the rate assumed
when a new loan is made corresponding to the remaining period. The book value is used as the fairvalue of those loans payable with floating interest rate, given that the fair value is almost the same as
the book value, as their interest rates are reviewed on a short-term interval to reflect market interest
rates (however, for long-term loans payable with floating interest rate to which special treatment forinterest rate swaps is applied, the fair value is the value calculated by discounting the sum of principal
and interest, which are treated in combination with the said interest rate swap, at a reasonable rateestimated for a similar new loan).
Derivative transactions
Please refer to “Notes on Derivative Transactions” on pages 31 and 32.

- 29 -

(Note 2) Carrying Amounts of Financial Instruments Whose Fair Value Is Considered to Be Extremely
Difficult to Determine
Category

As of May 31, 2018

Tenant leasehold andsecurity deposits in trust **(Unit: Thousands of yen)
As of November 30, 2018

20,604,450

19,494,916

As there are no market prices for tenant leasehold and security deposits in trust from tenants forleasehold properties and the actual period of deposit from move-in of the tenant to move-out isdifficult to determine, it is extremely difficult to reasonably estimate the cash flow. Therefore, the fairvalue for tenant leasehold and security deposits in trust is not subject to the disclosure of fair value.

(Note 3) Expected Amounts of Redemption of Monetary Claims after the Account Closing Date
(May 31, 2018)
Within1 year

1–2 years

2–3 years(Unit: Thousands of yen)Over
3–4 years 4–5 years
5 years

Deposits

9,498,104

–

–

–

–

–

Deposits in trust

3,116,967

–

–

–

–

–

Total

12,615,072

–

–

–

–

–

Expected Amounts of Redemption of Monetary Claims after the Account Closing Date
(November 30, 2018)
Within1 year

1–2 years

2–3 years(Unit: Thousands of yen)Over
3–4 years 4–5 years
5 years

Deposits

10,023,157

–

–

–

–

–

Deposits in trust

3,067,204

–

–

–

–

–

Total

13,090,361

–

–

–

–

–

(Note 4) Expected Amounts of Repayment of Loans Payable and Investment Corporation Bonds after the
Account Closing Date (May 31, 2018)
Within1 year

1–2 years

2–3 years(Unit: Thousands of yen)Over
3–4 years 4–5 years
5 years

Short-term loans payable

9,100,000

–

–

–

–

–

Investment corporation
bonds

4,000,000

6,000,000––

1,000,000

7,000,000

Long-term loans payable

18,500,000 20,400,000 12,500,000

9,100,000 19,000,000 92,750,000

Total

31,600,000 26,400,000 12,500,000

9,100,000 20,000,000 99,750,000- 30 -

Expected Amounts of Repayment of Loans Payable and Investment Corporation Bonds after the
Account Closing Date (November 30, 2018)
Within1 year

1–2 years

2–3 years(Unit: Thousands of yen)Over
3–4 years 4–5 years
5 years

Short-term loans payable

9,100,000

–

–

–

–

–

Investment corporation
bonds

4,000,000

6,000,000–

1,000,000–

7,000,000

Long-term loans payable

19,600,000

7,300,000 12,500,000 21,100,000 25,250,000 86,500,000

Total

32,700,000 13,300,000 12,500,000 22,100,000 25,250,000 93,500,000

Notes on Derivative Transactions
1. Derivative Transaction to Which Hedge Accounting Is Not Applied(As of May 31, 2018)
Not applicable.
(As of November 30, 2018)
Not applicable.
2. Derivative Transaction to Which Hedge Accounting Is Applied(As of May 31, 2018)
The following table shows contract amount or principal amount, etc. set forth in the contract as of theaccount closing date by method of hedge accounting.
(Unit: Thousands of yen)Type of
Major
Calculation
Hedge
derivative
hedgedAmount of contract
Fair value
method foraccounting
transactions
items
fair value
Portion due
after 1 year
Based onInterest rate
prices, etc.
Long-term
Deferred hedge
swaps
indicated byloans
14,400,000 14,400,000
74,904accounting
Receive floating
partnerpayablePay fixed
financial
institutions
Interest rate
Special treatment
Long-term
swaps
for interest rate
loans
5,000,000 5,000,000*–
Receive floating
swaps
payablePay fixed- 31 -

(As of November 30, 2018)
The following table shows contract amount or principal amount, etc. set forth in the contract as of theaccount closing date by method of hedge accounting.
(Unit: Thousands of yen)Type of
Major
Calculation
Hedge
derivative
hedgedAmount of contract
Fair value
method foraccounting
transactions
items
fair value
Portion due
after 1 year
Based onInterest rate
prices, etc.
Long-term
Deferred hedge
swaps
indicated byloans
14,400,000 12,000,000
54,245accounting
Receive floating
partnerpayablePay fixed
financial
institutions
Interest rate
Special treatment
Long-term
swaps
for interest rate
loans
5,000,000 5,000,000*–
Receive floating
swaps
payablePay fixed* Interest rate swap transactions to which special treatment is applied are accounted for as an integral
part of long-term loans payable, a hedged item. Thus, their fair values are included in the fair value of
long-term loans payable. (Please refer to the preceding “Notes on Financial Instruments, 2. Matters
Regarding Fair Values of Financial Instruments, (Note 1) Liabilities (5)” on page 29.)
Notes on Tax Effect Accounting
1. Components of Deferred Tax Assets and Deferred Tax Liabilities
As of May 31, 2018

As of November 30, 2018

Deferred tax assets
Non-deductible amount for tax purposesof enterprise tax payable¥5 thousand¥18 thousand

Total deferred tax assets¥5 thousand¥18 thousand¥5 thousand¥18 thousand

Net deferred tax assets

2. Reconciliation of Significant Difference between Effective Statutory Tax Rate and Effective Income Tax
Rate after Application of Tax Effect Accounting
As of May 31, 2018
Effective statutory tax rate

As of November 30, 201831.74%

31.51%(31.74)%(31.50)%

0.01%

0.00%

0.01%

0.01%

Adjustments
Distributions paid included indeductibles
Other
Effective income tax rate after applicationof tax effect accounting- 32 -

Notes on Transactions with Related Parties
Previous fiscal period (From December 1, 2017 to May 31, 2018)
Not applicable.
Current fiscal period (From June 1, 2018 to November 30, 2018)
Not applicable.
Notes on Investment and Rental Properties
The Investment Corporation holds Urban Retail and Tokyo Office properties, etc. in Tokyo and other regions
for rental revenue. The carrying amounts on the balance sheet, changes during the fiscal period, and fairvalues of investment and rental properties are as follows.
(Unit: Thousands of yen)Previous fiscal period
Current fiscal period(From December 1, 2017 (From June 1, 2018 toto May 31, 2018)
November 30, 2018)

Use
Carrying amount on the balance sheet
Urban Retail
Properties

Balance at beginning of period

153,842,632

172,148,067

Changes during period

18,305,434(21,103,355)

Balance at end of period

172,148,067

151,044,711

205,947,000

189,637,000

175,846,419

175,402,564

Changes during period(443,854)

20,498,333

Balance at end of period

175,402,564

195,900,898

201,240,000

223,770,000

Balance at beginning of period

77,256,285

83,348,268

Changes during period

6,091,983(309,624)

Balance at end of period

83,348,268

83,038,644

97,800,000

98,280,000

Balance at beginning of period

406,945,337

430,898,900

Changes during period

23,953,563(914,646)

Balance at end of period

430,898,900

429,984,254

504,987,000

511,687,000

Fair value at end of period
Carrying amount on the balance sheet
Balance at beginning of periodTokyo Office
Properties

Fair value at end of period
Carrying amount on the balance sheet
Activia
Account
Properties

Fair value at end of period
Carrying amount on the balance sheet
Total

Fair value at end of period(Note 1) The carrying amount on the balance sheet is the acquisition cost less accumulated depreciation.
(Note 2) The main reason for the decrease in the current fiscal period is the provision of depreciation worth¥1,267,174 thousand.
(Note 3) The fair value at end of period is the appraisal value provided by an outside real estate appraiser.
The profit/loss concerning investment and rental properties for the current fiscal period is indicated under“Notes to Statement of Income.”- 33 -

Per Unit Information
Previous fiscal period(From December 1, 2017
to May 31, 2018)
Net assets per unit
Basic earnings per unit

Current fiscal period(From June 1, 2018
to November 30, 2018)¥320,275¥320,368¥9,493¥9,584(Note 1) Basic earnings per unit is calculated by dividing profit by the day-weighted average number ofinvestment units for the period (previous fiscal period 696,324 units; current fiscal period 698,704
units). Diluted earnings per unit is not stated, as there is no potential investment unit.
(Note 2) The basis for calculating basic earnings per unit is as follows:
Previous fiscal period(From December 1, 2017
to May 31, 2018)

Current fiscal period(From June 1, 2018
to November 30, 2018)

6,610,811

6,696,573––

Profit attributable to common investment units(Thousands of yen)

6,610,811

6,696,573

Average number of investment units for theperiod (Units)696,324

698,704

Profit (Thousands of yen)Amount not attributable to common
unitholders (Thousands of yen)

Significant Subsequent Events
1. Issuance of New Investment Units
At meetings of the board of directors held on November 30, 2018 and December 12, 2018, we resolved toissue new investment units as described below, and issued these per the terms below once payment wascompleted on December 19, 2018 and January 7, 2019. As a result, unitholders’ capital amounted to¥248,370,846,700, and the total number of investment units issued came to 771,224 units.
(i) Issuance of new investment units through the public offering (Public placement)i) Number of new investment units issued

67,320 unitsii) Offering price¥445,410 per unitiii) Total offering price¥29,985,001,200iv) Paid-in amount¥431,320 per unitv) Total paid-in amount¥29,036,462,400vi) Payment date

December 19, 2018vii) Initial date of reckoning distributions

December 1, 2018(ii) Issuance of new investment units through third-party allotmenti) Number of new investment units issued

5,200 unitsii) Paid-in amount¥431,320 per unitiii) Total paid-in amount¥2,242,864,000iv) Payment date

January 7, 2019v) Initial date of reckoning distributions

December 1, 2018vi) Allottee

Nomura Securities Co., Ltd.

- 34 -

2. Borrowing of Funds
In order to cover a part of the acquisition costs for beneficiary interests of real estate in trust described in
the below section “3. Acquisition of Properties” and related costs, the Investment Corporation borrowed
funds of ¥35,000 million on January 10, 2019. For the details, please refer to the preceding “2. AssetManagement Policies and Status, (2) Asset Management Status, ii) Outlook for the Next Fiscal Period,(C) Significant Subsequent Events, b. Borrowing of Funds” on page 10.
3. Acquisition of Properties
The Investment Corporation acquired beneficiary interests of real estate in trust to three properties for¥70,500 million on January 10, 2019, with proceeds from the issuance of new investment units throughpublic offering (public placement) and third-party allotment and from borrowings, etc. in accordancewith the basic asset management policy set forth in the Articles of Incorporation. For the details, pleaserefer to the preceding “2. Asset Management Policies and Status, (2) Asset Management Status, ii)
Outlook for the Next Fiscal Period, (C) Significant Subsequent Events, c. Acquisition of Properties” onpages 11 and 12.
Omission of Disclosure
As the need for disclosing notes on lease transactions, securities, retirement benefits, equity in earnings ofaffiliates, asset retirement obligations, and segment information in this financial report is not considered to be
substantial, the disclosure of these items is omitted.

- 35 -

(10) Changes in Total Number of Investment Units Issued and Outstanding
There is no capital increases, etc. for the current fiscal period. The overview of capital increases, etc. in andbefore the previous fiscal period is as follows:

Date

Summary

Total investments(Thousands of yen)
ChangeBalance

Total number ofinvestment units
issued(Units)ChangeRemarks

Balance

September 7, 2011

Establishment
through private
placement

200,000

200,000400

400 (Note 1)

June 12, 2012

Capital increase
through public
offering

90,834,705

91,034,705

204,100

204,500 (Note 2)

July 10, 2012

Capital increase
through thirdparty allotment

339,128

91,373,833

762

205,262 (Note 3)

December 16,
2013

Capital increase
through public
offering

32,636,569 124,010,403

43,100248,362 (Note 4)

January 15, 2014

Capital increase
through thirdparty allotment

2,044,518 126,054,921

2,700

251,062 (Note 5)

December 17,
2014

Capital increase
through public
offering

22,800,626 148,855,547

24,050275,112 (Note 6)

January 8, 2015

Capital increase
through thirdparty allotment

1,915,063 150,770,610

2,020

277,132 (Note 7)

October 1, 2015

Investment unit
split

– 150,770,610

277,132554,264 (Note 8)

December 15,
2015

Capital increase
through public
offering

19,152,091 169,922,702

41,870596,134 (Note 9)

January 6, 2016

Capital increase
through thirdparty allotment

1,610,111 171,532,813

3,520

599,654 (Note 10)

December 1,
2016

Capital increase
through public
offering

28,583,994 200,116,808

61,040660,694 (Note 11)

December 15,
2016

Capital increase
through thirdparty allotment

2,116,639 202,233,447

4,520

665,214 (Note 12)

December 13,
2017

Capital increase
through public
offering

13,793,296 216,026,743

31,090696,304 (Note 13)

December 26,
2017

Capital increase
through thirdparty allotment

1,064,776 217,091,520

2,400

698,704 (Note 14)- 36 -

(Note 1) The Investment Corporation was established with an offering price per unit of ¥500,000.
(Note 2) New investment units were issued by public offering with an offering price per unit of ¥460,000(paid-in amount of ¥445,050 per unit) in order to raise funds for the acquisition of new
properties, etc., and then investment operations were commenced.
(Note 3) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥445,050 per unit.
(Note 4) New investment units were issued by public offering with an offering price per unit of ¥782,925(paid-in amount of ¥757,229 per unit) in order to raise funds for the acquisition of new
properties, etc.
(Note 5) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥757,229 per unit.
(Note 6) New investment units were issued by public offering with an offering price per unit of ¥979,020(paid-in amount of ¥948,051 per unit) in order to raise funds for the acquisition of new
properties.
(Note 7) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥948,051 per unit.
(Note 8) A two-for-one split of the investment units has been implemented, with September 30, 2015 as
the record date and October 1, 2015 as the effective date.
(Note 9) New investment units were issued by public offering with an offering price per unit of ¥472,360(paid-in amount of ¥457,418 per unit) in order to raise funds for the acquisition of new
properties, etc.
(Note 10) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥457,418 per unit.
(Note 11) New investment units were issued by public offering with an offering price per unit of ¥483,326(paid-in amount of ¥468,283 per unit) in order to raise funds for the acquisition of new
properties.
(Note 12) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥468,283 per unit.
(Note 13) New investment units were issued by public offering with an offering price per unit of ¥458,150(paid-in amount of ¥443,657 per unit) in order to raise funds for the acquisition of new
properties.
(Note 14) New investment units were issued through a private placement to Nomura Securities Co., Ltd.
with a paid-in amount of ¥443,657 per unit.

- 37 -

4. Changes in Directors and Corporate Auditors
There have been no changes of directors and corporate auditors described in “Directors and Corporate
Auditors” in the latest Securities Report (filed on August 30, 2018; prepared in Japanese only).

5. Reference Information(1) Composition of Invested Assets

Type ofassetsPrevious fiscal period

Current fiscal period(As of May 31, 2018)(As of November 30, 2018)

Total amount
held(Millions ofyen)(Note 1)

Percentage tototal assets

Total amount
held(Millions ofyen)(Note 1)

Percentage tototal assets

Urban Retail Properties

–

–

–

–

Tokyo Office Properties

–

–

–

–

Activia Account Properties

–

–

–

–

The five central wards ofTokyo (Note 3)

–

–

–

–

Wards of Tokyo other than
the five central wards

–

–

–

–

Three major metropolitan
areas (Note 4)

–

–

–

–

Other locations

–

–

–

–

Subtotal

–

–

–

–

Urban Retail Properties(Note 5)

172,14838.6

151,044

33.9

Tokyo Office Properties(Note 5)

175,40239.3

195,900

44.0

Activia Account Properties

83,34818.7

83,03818.6

267,35460.0

266,900

59.9

Wards of Tokyo other than
the five central wards

33,333

7.5

33,220

7.5

Three major metropolitan
areas (Note 4)

119,215

26.7

118,802

26.7

Other locations

10,995

2.5

11,0602.5

Subtotal

430,898

96.6

429,984

96.5

Total real estate assets

430,898

96.6

429,984

96.5

Deposits and other assets

15,042

3.4

15,480

3.5

Total assets (Note 6)

445,941100.0

445,464

100.0

Category(%)(Note 2)(%)
(Note 2)

By property type

By locationRealestateBy property type

By locationRealestate in
The five central wards oftrust
Tokyo (Note 3)- 38 -

Amount(Millions ofyen)

Percentage tototal assets(%)(Note 2)

Amount(Millions ofyen)

Percentage tototal assets(%)(Note 2)

Total liabilities (Note 6, 7)

222,16449.8

221,622

49.8

Total net assets (Note 6)

223,77750.2

223,84250.2(Note 1) The total amount held is based on the carrying amounts on the balance sheet as of the end ofeach fiscal period (for real estate and real estate in trust, book value less depreciation expenses),in accordance with the asset valuation method set forth in the Articles of Incorporation of theInvestment Corporation.
(Note 2) Figures are rounded to the nearest tenth.
(Note 3) “The five central wards of Tokyo” refers to Chiyoda ward (Chiyoda-ku), Chuo ward (Chuo-ku),
Minato ward (Minato-ku), Shinjuku ward (Shinjuku-ku) and Shibuya ward (Shibuya-ku) inTokyo.
(Note 4) “Three major metropolitan areas” refers to the Tokyo area (Tokyo, Kanagawa Prefecture,
Saitama Prefecture and Chiba Prefecture), the Chukyo area (Aichi Prefecture) and the Kinki
area (Osaka Prefecture, Kyoto Prefecture and Hyogo Prefecture); the same shall apply
hereinafter.
(Note 5) Concerning A-PLACE Shinbashi Ekimae, which is categorized as “Tokyo Office Properties”
for the current fiscal period, as of June 1, 2018, its asset category was changed from “Urban
Retail Properties” to “Tokyo Office Properties”; its property number was changed from “UR-4”
to “TO-17”; and its name was changed from “Shinbashi Place” to “A-PLACE Shinbashi
Ekimae.” The same shall apply hereinafter.
(Note 6) Total assets, total liabilities and total net assets represent the amounts reported in the balance
sheet as of the end of each fiscal period.
(Note 7) Total liabilities include the obligation to refund tenant leasehold and security deposits.
(2) Investment Assetsi) Major investment securities
Not applicable.
ii) Investment properties
Properties in trust held by the Investment Corporation are included in the below section “iii) Other
investment assets.”- 39 -

iii) Other investment assets(A) Overview of real estate and beneficiary interests of real estate in trust
The following table shows property name, acquisition price, book value at the end of the fiscal period,
assessed value at the end of the fiscal period, return price and investment ratio related to the assets
held by the Investment Corporation as of the end of the 14th fiscal period. Figures shown in the table
are as of November 30, 2018 unless otherwise provided.
a. Overview of assets held (1)(As of November 30, 2018)

Urban Retail Properties

Category

Return price (Note 4)
Property
number(Note 1)

Property name(Millionsof yen)(Note 2)

(Millionsof yen)(Note 3)

(Millionsof yen)(Note 4)

(Millionsof yen)UR-1

Tokyu Plaza Omotesando
Harajuku (Note 6)

45,00044,757

61,20061,9502.7

60,375

2.4

2.8

10.4

UR-2

Tokyu Plaza Akasaka(Note 6)

11,45011,744

15,50015,7004.0

15,400

4.1

4.2

2.7

UR-3

Q plaza EBISU (Note 7)

8,430

8,251

11,90012,0003.2

11,8003.4/3.3

3.4

2.0

UR-5

Kyoto Karasuma Parking
Building

8,860

8,736

11,000

11,1004.9

11,000

4.9

5.1

2.1

UR-6

A-FLAG AKASAKA(Note 8)

3,000

3,070

3,750

3,810

3.5

3,680

3.3

3.7

0.7

UR-7

Kobe Kyu Kyoryuchi
25Bankan

21,33020,753

26,90027,3004.0

26,500

3.8

4.2

4.9

UR-8

A-FLAG SAPPORO

4,410

4,723

7,090

7,090

5.5

7,090

5.3

5.7

1.0

UR-9

A-FLAG SHIBUYA(%)(Millionsof yen)

(%)

(%)

(%)
(Note 5)

6,370

6,358

7,930

7,940

4.0

7,930

3.8

4.2

1.5

UR-10 Q plaza SHINSAIBASHI

13,35013,437

14,60014,5003.6

14,600

3.4

3.8

3.1

UR-11 A-FLAG KOTTO DORI

4,370

4,401

4,880

4,940

3.5

4,850

3.2

3.6

1.0

A-FLAG BIJUTSUKAN
DORI

UR-12

4,700

4,722

4,920

5,000

3.6

4,830

3.4

3.8

1.1

A-FLAG DAIKANYAMA
UR-13
WEST

2,280

2,345

2,340

2,390

3.9

2,290

3.7

4.1

0.5

A-FLAG KITA
UR-14
SHINSAIBASHI

4,725

4,847

4,740

4,920

3.9

4,680

3.6

4.0

1.1

12,74012,892

12,887

13,0834.0

12,642

3.8

4.2

3.0

UR-15

DECKS Tokyo Beach(Note 6)
Subtotal

Tokyo Office Properties

Direct capitalization
DCF method
methodBook value Assessed
Acquisition
Investment
at end ofvalue at Price based
price
ratio
on
directDirectPrice
based
Terminal
periodend ofDiscount
capitaliza- capitaliza- on DCF
capitalizaperiod
rate
tion
tion rate
methodtion rate
method151,015

151,044

189,637

191,723–

187,667

–

–

35.0

TO-1

TLC Ebisu Building

7,400

7,289

10,800

11,1003.6

10,700

3.7

3.8

1.7

TO-2

A-PLACE Ebisu Minami

9,640

9,411

14,60014,7003.5

14,600

3.6

3.7

2.2

TO-3

A-PLACE Yoyogi

4,070

3,907

4,710

4,790

3.9

4,630

3.7

4.1

0.9

TO-4

A-PLACE Aoyama

8,790

8,615

10,10010,1004.0

10,100

3.8

4.2

2.0

TO-5

Luogo Shiodome

4,540

4,256

6,220

6,280

3.6

6,190

3.4

3.8

1.1

TO-6

TAMACHI SQUARE(Land)

2,338

2,362

2,830

2,960

3.6

2,780

4.0

3.8

0.5

TO-7

A-PLACE Ikebukuro

3,990

3,757

5,120

5,200

4.1

5,030

3.9

4.3

0.9

TO-8

A-PLACE Shinbashi

5,650

5,701

7,080

7,220

3.8

6,930

3.6

4.0

1.3

TO-9

A-PLACE Gotanda

5,730

5,529

6,970

7,060

3.7

6,870

3.5

3.9

1.3

TO-10 A-PLACE Shinagawa

3,800

3,787

4,400

4,480

3.6

4,320

3.4

3.8

0.9

TO-11 OSAKI WIZTOWER

10,69010,713

14,60014,6003.5

14,600

3.1

3.5

2.5

Shiodome Building(Note 6)

71,60071,14175,60079,4503.4

73,850

3.2

3.6

16.6

TO-13 A-PLACE Ebisu Higashi

7,072

7,112

7,700

7,870

3.7

7,530

3.5

3.9

1.6

4,810

4,970

5,350

5,420

3.6

5,270

3.3

3.7

1.1

7,280

7,546

7,690

7,810

3.8

7,570

3.5

3.9

1.7

18,80018,876

19,50019,7003.9

19,200

3.7

4.1

4.4

20,50020,921

20,50021,1003.6

20,300

3.3

3.7

4.8

196,700

195,900

223,770

229,840–

220,470

–

–

45.6

TO-12

TO-14
TO-15
TO-16
TO-17

A-PLACE Shibuya
KonnohA-PLACE Gotanda
EkimaeA-PLACE Shinagawa
HigashiA-PLACE Shinbashi
EkimaeSubtotal- 40 -

Activia Account Properties

Category

Return price (Note 4)
Property
number(Note 1)

Direct capitalization
methodProperty name

DCF method
Book value Assessed
Acquisition
Investment
at end ofvalue at Price based
price
ratio
Direct Price based
Terminal
on direct
periodend ofDiscount
capitalizaon
DCF
capitalizacapitalizaperiod
ratetion rate
methodtion ratetion
method(Millionsof yen)(Note 2)

(Millionsof yen)(Note 3)

(Millionsof yen)(Note 4)

(Millionsof yen)AA-1

Amagasaki Q’s MALL
(Land)

12,00012,113

13,90014,0004.3

13,700

4.0

4.5

2.8

AA-2

icot Nakamozu (Note 9)

8,500

8,137

10,50010,7005.0

10,400

4.9
/5.0
/5.1

5.2

2.0

AA-4

icot Mizonokuchi

2,710

2,629

3,170

3,240

5.5

3,100

5.3

5.9

0.6

AA-5

icot Tama Center

2,840

2,645

3,880

3,890

5.1

3,870

4.7

5.3

0.7

AA-6

A-PLACE Kanayama

6,980

6,377

8,550

8,690

5.1

8,400

4.9

5.3

1.6

AA-7

Osaka Nakanoshima
Building

11,10010,97014,30014,5004.0

14,100

3.8

4.2

2.6

AA-8

icot Omori

5,790

5,674

6,870

6,940

4.4

6,790

4.2

4.6

1.3

AA-9

Market Square Sagamihara

4,820

4,709

5,020

5,040

5.3

4,990

5.1

5.5

1.1

AA-10 Umeda Gate Tower

19,00019,431

21,30021,9003.7

21,100

3.4

3.8

4.4

AA-11 A-PLACE Bashamichi

3,930

4,012

4,500

4,600

4.9

4,400

4.6

5.1

0.9

AA-12 Commercial Mall Hakata

6,100

6,336

6,290

6,310

4.8

6,270

4.5

4.9

1.4

(Note 1)

(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(%)(Millionsof yen)

(%)

(%)

(%)
(Note 5)

Subtotal

83,77083,03898,28099,810–97,120

–

–

19.4

Total

431,485429,984

511,687

521,373–505,257

–

–

100.0

A property number is assigned to each of assets held by the Investment Corporation, which are divided into the three
categories: UR (meaning Urban Retail Properties), TO (meaning Tokyo Office Properties) and AA (meaning Activia
Account Properties).
Acquisition price represents trading value of beneficiary interests in trust stipulated in each beneficiary interest sales
agreement in relation to the assets held (excluding consumption tax and local consumption tax, and expenses such as
trading commissions, rounding down to the nearest million yen).
Book value at end of period represents book value for each property less depreciation expenses as of November 30,
2018, rounding down to the nearest million yen.
The appraisal of properties is commissioned to Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd.,The Tanizawa Sōgō Appraisal Co., Ltd., Japan Valuers Co., Ltd. or JLL Morii Valuation & Advisory K.K. Assessedvalue at end of period and return price show value described in each real estate appraisal report with the date of value
estimate of November 30, 2018.
Investment ratio is calculated by dividing the acquisition price for each property by the total acquisition price(excluding consumption tax and other acquisition-related expenses). Figures are rounded to the nearest tenth.
As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, DECKS Tokyo Beach, and Shiodome Building,the figures are in proportion to the pro rata share of our trust beneficiary co-ownership interests (jun kyōyū-mochibun)(75%, 50%, 49% and 35%, respectively).
The discount rates of Q plaza EBISU represent 3.4% from the first year to the fifth year and 3.3% in and after thesixth year.
Regarding the trust beneficiary co-ownership interests in A-FLAG AKASAKA, the Investment Corporation and
ORB Limited Liability Company concluded sales contracts with the effective dates of March 1, 2019 (50% coownership interest) and June 3, 2019 (50% co-ownership interest). The Investment Corporation also concluded anagreement on trust beneficiary co-ownership interest with ORB Limited Liability Company; the same shall apply
hereinafter.
The discount rates of icot Nakamozu represent 4.9% from the first year to the fourth year, 5.0% from the fifth year to
the ninth year and 5.1% in and after the tenth year.

- 41 -

Categoryb. Overview of assets held (2)Property
number

Property nameLocation

Date ofconstruction

Urban Retail Properties(Note 1)

Number Contractedof
rent
tenants(Annual)(Note 2)(As of November 30, 2018)
Tenantleasehold
Total
Total leased Occupancy
and security leasable area
area
rate
deposit(Millions of (Millions of
yen)
yen)
(Note 3)(Note 4)(m2)
(Note 5)(m2)
(Note 6)(%)(Note 7)

UR-1

Tokyu Plaza
Omotesando
Shibuya, Tokyo
Harajuku (Note 8)

March 14, 2012

30

2,027

1,690

4,999.87

4,999.87

100.0

UR-2

Tokyu Plaza
Akasaka (Note 8)

Chiyoda, Tokyo

September 10,
1969

98

961

403

16,609.75

16,609.75

100.0

UR-3

Q plaza EBISU

Shibuya, Tokyo

August 20, 2008

4

485

475

4,024.88

4,024.88

100.0

UR-5

Kyoto Karasuma
Parking Building

Kyoto, Kyoto

July 24, 2006

2

(Note 9)(Note 9)21,616.04

21,616.04

100.0

UR-6

A-FLAGAKASAKA

Minato, Tokyo

February 18, 2008

8

173

142

2,280.22

2,280.22

100.0

Kobe, Hyogo

January 31, 2010

7

1,254

1,431

19,653.90

19,653.90

100.0

Kobe Kyu
UR-7 Kyoryuchi
25Bankan
UR-8

A-FLAGSAPPORO

Sapporo,Hokkaido

May 23, 1980

17

623

132

21,229.16

21,229.16

100.0

UR-9

A-FLAGSHIBUYA

Shibuya, Tokyo

June 29, 1988

2

420

179

3,417.70

3,417.70

100.0

UR-10

Q plaza
SHINSAIBASHI

Osaka, Osaka

November 16,
2007

6

671

433

2,820.23

2,820.23

100.0

UR-11

A-FLAG KOTTO
DORI

Minato, Tokyo

January 22, 1992

7

230

176

2,656.53

2,656.53

100.0

A-FLAG
UR-12 BIJUTSUKAN
DORI

Minato, Tokyo

December 1, 1998

4

239

241

1,994.65

1,994.65

100.0

A-FLAG
UR-13 DAIKANYAMA
WEST

Shibuya, Tokyo

April 21, 1992

1

(Note 9)(Note 9)2,579.08

2,579.08

100.0

UR-14

A-FLAG KITASHINSAIBASHI

Osaka, Osaka

March 25, 2008

5

199

125

2,536.75

2,536.75

100.0

UR-15

DECKS Tokyo
Beach (Note 8)

Minato, Tokyo

June 20, 1996

85

658

503

16,112.00

16,056.19

99.7

276

–

–

122,530.76

122,474.95

100.0

Subtotal–- 42 -

CategoryTokyo Office Properties

Property
number

Property nameLocation

Number Contractedof
rent
tenants(Annual)(Note 1)

(Note 2)Tenantleasehold
Total
Total leased
and security leasable area
area
deposit(Millions of (Millions of
yen)
yen)
(Note 3)(Note 4)

Occupancy
rate

(m2)
(Note 5)(m2)
(Note 6)(%)(Note 7)

TO-1

TLC Ebisu
Building

Shibuya, Tokyo

March 5, 1993

12

585

482

7,342.60

7,342.60

100.0

TO-2

A-PLACE Ebisu
MinamiShibuya, Tokyo

January 31, 1995

11

710

586

7,950.49

7,950.49

100.0

TO-3

A-PLACE Yoyogi Shibuya, Tokyo

February 22, 2007

3

239

219

3,106.17

3,106.17

100.0

TO-4

A-PLACE Aoyama Minato, Tokyo

September 6,
1966

8

549

515

7,303.69

7,303.69

100.0

TO-5

Luogo Shiodome

Minato, Tokyo

July 30, 2004

7

330

291

4,476.35

4,476.35

100.0

TO-6

TAMACHISQUARE(Land)

Minato, Tokyo

–

1

125

–

1,287.96

1,287.96

100.0

TO-7

A-PLACE
Ikebukuro

Toshima, Tokyo

October 13, 20111

(Note 9)(Note 9)3,409.73

3,409.73

100.0

TO-8

A-PLACE
Shinbashi

Minato, Tokyo

March 4, 1999

9

361

307

5,052.14

4,987.58

98.7

TO-9

A-PLACE Gotanda

Shinagawa,Tokyo

February 27, 2012

11

340

305

4,028.69

4,028.69

100.0

TO-10

A-PLACE
ShinagawaMinato, Tokyo

September 20,
1991

7

211

193

2,986.36

2,986.36

100.0

TO-11

OSAKI
WIZTOWER

Shinagawa,Tokyo

January 10, 2014

5

648

648

7,193.28

7,193.28

100.0

TO-12

Shiodome Building
Minato, Tokyo(Note 8)December 14,
2007

39

3,228

2,652

28,136.05

28,136.05

100.0

TO-13

A-PLACE Ebisu
Higashi

Shibuya, Tokyo

January 10, 1992

8

325

228

4,010.69

4,010.69

100.0

TO-14

A-PLACE Shibuya
Shibuya, Tokyo
KonnohMarch 18, 1992

4

215

149

2,995.72

2,995.72

100.0

TO-15

A-PLACE Gotanda Shinagawa,EkimaeTokyo

November 30,
1993

10

336

290

4,316.89

4,316.89

100.0

TO-16

A-PLACE
Minato, Tokyo
Shinagawa Higashi

August 31, 1985
(main building)
September 13,
1999 (annex)

9

914

820

14,658.98

14,658.98

100.0

TO-17

A-PLACE
Shinbashi Ekimae

April 25, 2008

6

781

600

6,484.57

6,484.57

100.0

–

151

–

–

114,740.36

114,675.80

99.9

AA-1

Amagasaki Q’s
MALL (Land)

Amagasaki,
Hyogo

–

1

714

341

27,465.44

27,465.44

100.0

AA-2

icot Nakamozu

Sakai, Osaka

June 27, 2007

2

619

430

28,098.02

28,098.02

100.0

AA-4

icot Mizonokuchi

Kawasaki,Kanagawa

July 15, 1998

1

(Note 9)100

14,032.05

14,032.05

100.0

AA-5

icot Tama Center

Tama, Tokyo

March 7, 2006

9

240

237

5,181.58

5,181.58

100.0

AA-6

A-PLACE
Kanayama

Nagoya, Aichi

February 10, 2009

20

508

404

9,314.90

9,314.90

100.0

AA-7

Osaka
Nakanoshima
Building

Osaka, Osaka

March 5, 1984

41

955

689

20,229.25

20,229.25

100.0

Ota, Tokyo

March 6, 2007

8

388

359

6,209.79(Note 10)

6,209.79(Note 10)

100.0

Sagamihara,
Kanagawa

June 13, 2014

3

(Note 9)(Note 9)15,152.42

15,152.42

100.0

AA-10 Umeda Gate Tower Osaka, Osaka

January 15, 2010

14

843

577

13,624.49

13,624.49

100.0

A-PLACE
AA-11
Bashamichi

Yokohama,
Kanagawa

May 31, 1975

33

321

201

9,775.50

9,775.50

100.0

Fukuoka,
Fukuoka

November 3, 2005

18

342

159

9,612.88

9,327.53

97.0

Minato, Tokyo

Subtotal

Activia Account Properties

Date ofconstruction

AA-8 icot Omori
AA-9

AA-12

Market Square
Sagamihara

Commercial Mall
HakataSubtotal

–

150

–

–

158,696.32

158,410.97

99.8

Total

–

577

–

–

395,967.44

395,561.72

99.9- 43 -

(Note 1)

Date of construction of the main building, as described in the property registry. For properties with several mainbuildings, the construction date of the oldest building is listed. The construction date is omitted in case of acquisitionof land only (Land represents the part of site on which the building is established under a land lease right; the same
shall apply hereinafter). However, for A-PLACE Shinbashi and A-FLAG SHIBUYA, the date of inspection
confirming completion of construction written on the certificate of inspection is provided.
(Note 2) At each property, the number of tenants is equal to the aggregate number of tenants as of November 30, 2018
described in the lease agreements in relation to buildings, except that for properties with master lease agreements, thetotal number of end-tenants is listed. For properties for which we acquire only land, the total number of tenants of theland is listed.
(Note 3) The contracted rent (annual) for each property other than properties for which we acquire only land is calculated bymultiplying the aggregate anticipated monthly rent (limited to rent for rooms which were occupied by tenants as ofNovember 30, 2018), including common service fee and excluding usage fee for warehouses, signboards and parking
lots, and also excluding revenue-based rents, regardless of free rents and rent holidays as of November 30, 2018, as
indicated in the lease agreements in relation to buildings as of November 30, 2018 by 12 (for where multiple leaseagreements are concluded in relation to buildings, the aggregate anticipated monthly rent for all lease agreements)(excluding consumption tax) and rounding to the nearest million yen. For properties for which we acquire only land,
it is calculated as the annual contracted rent (excluding consumption tax) as indicated in the lease agreement for suchland as of November 30, 2018, rounding to the nearest million yen. For properties with master lease agreements, theannual contracted rent is calculated by multiplying the aggregate anticipated monthly rent (limited to rent for rooms;
including common service fees and excluding usage fees for warehouses, signboards and parking lots, and also
excluding revenue-based rents, regardless of free rents and rent holidays as of November 30, 2018), as indicated in
the relevant sublease agreement with end-tenants by 12.
(Note 4) The tenant leasehold and security deposit is calculated as the total amount on the lease agreement for each property asof November 30, 2018 (limited to tenant leasehold and security deposit based on the lease agreement for leased
property that was occupied by the tenant as of November 30, 2018), rounding to the nearest million yen. For
properties with master lease agreements, the tenant leasehold and security deposit is calculated as the total amountrequired based on the sublease agreements with end-tenants, rounding to the nearest million yen.
(Note 5) The total leasable area represents the total of gross floor area considered to be leasable based on the lease agreements
for building or floor plans as of November 30, 2018 of each property other than properties of which we acquire only
land, and gross land area considered to be leasable based on the lease agreement for land or land plans as ofNovember 30, 2018 of each property of which we acquire only land.
(Note 6) The total leased area is equal to the total of leased area presented in each lease agreement for properties held as ofNovember 30, 2018. For properties with master lease agreements, counted is the total of the area of properties forwhich sublease agreements are concluded with end-tenants and that are actually subleased.
(Note 7) The occupancy rate is calculated by dividing total leased area for each property by the total leasable area as ofNovember 30, 2018, rounding to the nearest tenth. The subtotal and total are calculated by dividing aggregate leased
area by aggregate leasable area, rounding to the nearest tenth.
(Note 8) As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, DECKS Tokyo Beach, and Shiodome Building,the figures are in proportion to the pro rata share of our trust beneficiary co-ownership interests (jun kyōyū-mochibun)(75%, 50%, 49% and 35%, respectively). However, the numbers of tenants provided are the numbers for each wholebuilding.
(Note 9) Since we have not obtained permission from the tenant of this property to release the information, the information is
not disclosed.
(Note 10) The calculation of total leasable area and total leased area for icot Omori includes part of an external bicycle parking
lot (approximately 21 m2) and part of a common area on the second floor (approximately 28 m2).
(Note 11) For lease agreements with end-tenants that have been asked to be terminated or cancelled, or for which the rent has
not been paid, number of tenants, contracted rent (annual), tenant leasehold and security deposit, total leased area andoccupancy rate are shown in the above table if these agreements continued as of November 30, 2018, assuming thatthe lease agreements with the end-tenants remained effective; the same shall apply hereinafter.

- 44 -

(B) Capital expenditure for assets under managementa. Scheduled capital expenditure
The following table shows major estimated capital expenditure for renovation work, etc. that theInvestment Corporation plans to conduct for assets held in the 14th fiscal period as of November 30,
2018. The estimated construction cost below includes the portion expensed for accounting purposes.
Name of real
property(Location)

Estimated construction cost
(Millions of yen)
PurposeScheduled period

TotalamountPayment
for theperiodTotalamountpaid

A-PLACE Shinbashi
Large-scale repairs(Minato, Tokyo)

From November 2018
to April 2019

139

–

–

A-FLAG SAPPORO Renewal of hot water(Sapporo, Hokkaido) main pipe

From January 2019
to April 2019

59

–

–

Tokyu Plaza
Omotesando
Harajuku(Shibuya, Tokyo)

From February 2019
to May 201948
(Note)––

Renewal works (First
period)Renewal of power
A-FLAG SAPPORO
control board (First(Sapporo, Hokkaido)
period)From June 2018
to May 2019

29

–

–

A-FLAG SAPPORO Work to replace card
(Sapporo, Hokkaido) locks

From January 2019
to March 2019

21

–

–

14

–

–

A-PLACE
Shinagawa Higashi(Minato, Tokyo)

Renewal of air
conditioning
equipment on the
fourth floor

From December 2018
to January 2019

DECKS Tokyo
Beach(Minato, Tokyo)

Work to reinforce
ceiling meeting
specific engineering
specifications

From January 2019
to February 201911(Note)––

Shiodome Building(Minato, Tokyo)

Renewal of ITV
camera surveillancesystemFrom January 2019
to February 201910(Note)––

Tokyu Plaza
Omotesando
Harajuku(Shibuya, Tokyo)

Construction ofnursing room

From February 2019
to February 201910(Note)––

Kobe Kyu
Kyoryuchi
25Bankan(Kobe, Hyogo)

Renovation ofmultilevel car parksystemFrom April 2019
to May 2019

10

–

–

(Note)The shown estimated construction cost with regard to Tokyu Plaza Omotesando Harajuku, DECKS Tokyo
Beach and Shiodome Building is the amount equivalent to the ratio of the Investment Corporation’s coownership interests of real estate trust beneficiary (75%, 49% and 35%, respectively).

- 45 -

b. Capital expenditure during the fiscal period
For assets held by the Investment Corporation in the 14th fiscal period, construction work
conducted by the Investment Corporation during the fiscal period ended November 30, 2018 that
falls into capital expenditure is as follows. The capital expenditure for the fiscal period ended
November 30, 2018 amounted to ¥352 million, and repair and maintenance expenses that were
accounted for as expense in the fiscal period ended November 30, 2018 came to ¥281 million. On
aggregate, construction work of ¥633 million was carried out during the fiscal period.
Name of real property(Location)

Purpose

PeriodConstruction cost
(Millions of yen)

A-FLAG SAPPORO(Sapporo, Hokkaido)

Conversion of air
conditioning units of large
banquet hall systems into gas- From September 2018
to November 2018
heat-pump (GHP) airconditioning systems

Tokyu Plaza Akasaka(Chiyoda, Tokyo)

Construction to upgrade
plumbing

From July 2018
to November 2018

Kobe Kyu Kyoryuchi
25Bankan(Kobe, Hyogo)

Renovation of multilevel car
park system

From September 2018
to November 2018

17

A-FLAG SAPPORO(Sapporo, Hokkaido)

Replacement of halon fire
extinguishing system control
panel

From October 2018
to November 2018

16

A-FLAG SAPPORO(Sapporo, Hokkaido)

Replacement of heater units

From November 2018
to November 2018

14

A-FLAG SAPPORO(Sapporo, Hokkaido)

Replacement of air
conditioning units andfan coil units

From September 2018
to November 2018

14

A-FLAG SAPPORO(Sapporo, Hokkaido)

Extension of chilled water
coil

From May 2018
to June 201811

TLC Ebisu Building(Shibuya, Tokyo)

Replacement works forreceivers and sensors ofautomatic fire alarms

From August 2018
to November 201811

Tokyu Plaza
Omotesando Harajuku(Shibuya, Tokyo)

Renovation of women’s
restroom

From November 2018
to November 201810
(Note)A-FLAG SHIBUYA(Shibuya, Tokyo)

Maintenance of total heatexchangers

From November 2018
to November 2018

10

Other

17
(Note)

167
Total(Note)

60

352

The shown construction cost with regard to Tokyu Plaza Omotesando Harajuku and Tokyu Plaza Akasaka
is the amount equivalent to the ratio of the Investment Corporation’s co-ownership interests of real estate
trust beneficiary (75% and 50%, respectively).

- 46 -

(C) Information concerning major tenants
a. Summary of major tenants
For assets held in the 14th fiscal period, the table below shows tenants whose leased area accounts
for 10% or more of the total leased area in the entire portfolio (major tenants) based on the data asof November 30, 2018. The forms of agreements with the tenants in the table are ordinary leaseagreements.
As for certain assets held, the Investment Corporation has entered into lease agreements (master
lease agreements) with Tokyu Community Corp. and Tokyu Land SC Management Corporation
with the objective of allowing them to be master lease companies and sublease the leased assets to
end-tenants. The table below shows information on the major tenants with master lease agreements
based on the data as of November 30, 2018. Rents received by the Investment Corporation from themaster lease companies are equal to the rents received by these companies from sublessees (endtenants) (pass-through master lease), and such rents are not guaranteed.

TenantTokyu Community
Corp.

Business

Property nameLeased area (m2)(Note 1)

TenantContracted rent
leasehold and(Annual)security deposit(Millions of(Millions of
yen)
yen)
(Note 2)
(Note 3)

Expiration date
(Note 4)

A-FLAG KOTTO DORI

2,656.53

230

176

December 31, 2026

TLC Ebisu Building

7,342.60

585

482

May 31, 2025

A-PLACE Ebisu Minami

7,950.49710

586

May 31, 2025

A-PLACE Yoyogi

3,106.17

239

219

May 31, 2025

A-PLACE Aoyama

7,303.69

549

515

May 31, 2025

Luogo Shiodome

4,476.35330

291

May 31, 2025

A-PLACE Ikebukuro

3,409.73(Note 5)(Note 5)

May 31, 2025

A-PLACE Shinbashi

4,987.58

361

307

May 31, 2025

A-PLACE Gotanda

4,028.69

340

305

May 31, 2025

A-PLACE Shinagawa

2,986.36

211

193

May 31, 2025

OSAKI WIZTOWER

7,193.28

648

648

May 31, 2025

4,010.69

325

228

May 31, 2025

A-PLACE Shibuya Konnoh

2,995.72

215

149

September 30, 2025

A-PLACE Gotanda Ekimae

4,316.89

336

290

June 30, 2026

A-PLACE Shinagawa
Higashi

14,658.98

914

820

March 31, 2027

A-PLACE Shinbashi Ekimae

6,484.57781

600

May 31, 2028

A-PLACE Kanayama

9,314.90

508

404

May 31, 2025

Osaka Nakanoshima Building

20,229.25

955

689

November 30, 2024

Umeda Gate Tower

13,624.49

843

577

April 30, 2028

A-PLACE Bashamichi

9,775.50

321

201

October 31, 2026

Commercial Mall Hakata

9,327.53

342

159

March 31, 2027

150,179.99

–

–

–

Real EstateManagement A-PLACE Ebisu Higashi

Total- 47 -

Tenant

Tokyu Land SC
Management
Corporation(Note 1)

(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)

Business

Property nameLeased area (m2)(Note 1)

TenantContracted rent
leasehold and(Annual)security deposit(Millions of(Millions of
yen)
yen)
(Note 2)
(Note 3)

Expiration date
(Note 4)Q plaza EBISU

4,024.88

485

475

Kyoto Karasuma Parking
Building

21,616.04(Note 5)(Note 5)

November 30, 2024

A-FLAG AKASAKA

2,280.22

173

142

August 31, 2023

Kobe Kyu Kyoryuchi
25Bankan

19,653.90

1,254

1,431

August 31, 2023

A-FLAG SAPPORO

21,229.16

623

132

December 31, 2023

A-FLAG SHIBUYA

3,417.70

420

179

December 31, 2023

Q plaza SHINSAIBASHI

2,820.23

671

433

December 31, 2025

A-FLAG BIJUTSUKAN
DORI

1,994.65

239

241

December 31, 2026

2,579.08(Note 5)(Note 5)

December 31, 2026

A-FLAG KITASHINSAIBASHI

2,536.75

199

125

June 30, 2027

DECKS Tokyo Beach (Note6)

16,056.19

658

503

January 31, 2028

icot Nakamozu

28,098.02

619

430

June 30, 2022

icot Mizonokuchi

14,032.05(Note 5)100

June 30, 2022

icot Tama Center

5,181.58

240

237

November 30, 2024

icot Omori

6,209.79

388

359

December 31, 2023

Market Square Sagamihara

15,152.42(Note 5)(Note 5)January 31, 2025

Total

166,882.66––

Real Estate
A-FLAG DAIKANYAMA
Management
WEST

June 30, 2022–

The leased area is the leased area to end-tenants in respect to the leased area provided in the master lease agreement
as of November 30, 2018 where the tenant is the master lease company and sublessor, rounding to the nearest
hundredth.
Under master lease contracts concluded with tenants, for properties of which the master lease rent payable by thetenant equals to the rent payable by the end-tenant to the tenant, the contracted rent (annual) for each property is
calculated by multiplying the monthly rent (limited to rooms which were occupied by tenants as of November 30,2018), including common service fee and excluding usage fee for warehouses, signboards and parking lots, and also
excluding revenue-based rents, regardless of free rents and rent holidays as of November 30, 2018, as indicated in thesublease agreement concluded with the end-tenant as of November 30, 2018 by 12, rounding to the nearest million
yen.
The tenant leasehold and security deposit is calculated as the total amount on the sublease agreement with the endtenant as of November 30, 2018 (limited to tenant leasehold and security deposit based on the lease agreement forleased property that was occupied by the tenant as of November 30, 2018), rounding to the nearest million yen, where
the tenant is the master lease company and sublessor.
The expiration date is the date provided in the lease agreement where the tenant is the lessee, including where thetenant is a sublessor and master lease company under a sublease agreement. Concerning the method of renewing themaster lease agreement entered into with the above-mentioned major tenant who is the master lease company,
assuming that the lessor or lessee has not expressed in writing their intention to refuse renewal at a time that is at least
three full months before the expiry of the lease agreement, the agreement shall be renewed for a further two years
under the same conditions, and the same will apply thereafter.
Since we have not obtained permission from the tenant of this property to release the information, the information is
not disclosed.
As for DECKS Tokyo Beach, the figures are in proportion to the pro rata share of our trust beneficiary co-ownershipinterests (jun kyōyū-mochibun) (49%).

- 48 -

b. End-tenants in the top 10 in terms of total leased area
For assets held by the Investment Corporation, the following table shows end-tenants ranked in the
top 10 in terms of total leased area in the entire portfolio as of November 30, 2018.
End-tenants

Property name

Total leased area (m2)(Note 1)

Lease expiration dateTokyu Hotels Co., Ltd.

Tokyu Plaza Akasaka
A-FLAG SAPPORO

30,182.69

October 31, 2021

Sumitomo Mitsui Trust
Bank, Limited (Note 3)

TAMACHI SQUARE (Land)
Amagasaki Q’s MALL (Land)

28,753.40(Note 4)

May 31, 2074
January 31, 2042

Kohnan Shoji Co., Ltd.

icot Nakamozu

26,529.03

July 11, 2027

Times24 Co., Ltd.

Kyoto Karasuma Parking Building

21,224.14–

Plan∙Do∙See Inc.

Kobe Kyu Kyoryuchi 25Bankan

14,195.42–

Form of agreement(Note 2)
Fixed-term building leaseagreement
Ordinary leasehold land
agreement
Fixed-term business-use
lease agreement
Fixed-term building leaseagreement
Fixed-term building leaseagreement–
Fixed-term building leaseagreement
Fixed-term building leaseagreement

Room’s-Taishodo

icot Mizonokuchi

14,032.05

July 24, 2023

K’S HOLDINGSCORPORATION

Market Square Sagamihara

11,863.92

June 30, 2034

NTT Communications
Corporation

Shiodome Building

10,336.62–

YANMAR Co., Ltd.

Umeda Gate Tower

7,870.86––

April 30, 2020

Ordinary building leaseagreement

Swing Corporation(Note 1)

(Note 2)
(Note 3)(Note 4)(Note 5)

A-PLACE Shinagawa Higashi

6,100.88–

The total leased area is equal to the total leased area in each property under the lease agreement with the end-tenant asof November 30, 2018. As for Tokyu Plaza Akasaka and Shiodome Building, the figure is based on the amount inproportion to the pro rata share of our trust beneficiary co-ownership interests (jun kyōyū-mochibun) as of November
30, 2018 (50% and 35%, respectively).
The form of agreement is equal to the form of agreement described in the lease agreement with the end-tenants as ofNovember 30, 2018.
Tenant is the trustee of the building on the land; Tokyu Land Corporation is the trust beneficiary under such trust.
Total leased area for TAMACHI SQUARE (Land) and Amagasaki Q’s MALL (Land) is in respect of the land.
Since we have not obtained permission from the tenant of the properties to release the information, the information
missing from this table is not disclosed.

- 49 -

(D) Overview of lease and profit and loss
14th fiscal period (From June 1, 2018 to November 30, 2018)
Property number

UR-1

UR-2

UR-3

UR-5

(Unit: Thousands of yen)
UR-6

Property name

Tokyu Plaza
Omotesando
Harajuku(Note 1)Tokyu Plaza
Akasaka(Note 1)

Q plaza EBISU

Kyoto Karasuma
Parking Building

A-FLAGAKASAKA

183

183

183

Number of business days in the 14th
fiscal period
a. Real estate leasing business revenues

183

183
107,851

1,101,047

656,253

275,165(Note 2)

1,042,366

555,117240,238(Note 2)82,542Other lease business revenue

58,680101,136

34,926(Note 2)25,309b. Expenses related to rent business

245,679

261,684

64,77239,39636,348

Management operation expenses

88,301

82,621

17,143

3,737

11,277

Utilities expenses

33,06977,98828,909–13,679Tax and public dues

59,08068,897

8,671

33,643

7,643

191

412

75

159

36

6,579

23,385

131

814

2,109

Lease business revenue

Insurance
Repair and maintenance expenses
Other expenses related to rent
business

58,457

8,377

9,841

1,040

1,603

c. NOI (a – b)855,367

394,569

210,392(Note 2)

71,503d. Depreciation, etc.

51,01438,99818,264

15,8108,066

Profit (loss) from rent business(c – d)804,352

355,571

192,127(Note 2)63,436

Property number

UR-7

UR-8

UR-9

UR-10

(Unit: Thousands of yen)
UR-11

Property name

Kobe Kyu
Kyoryuchi
25Bankan

Q plaza
SHINSAIBASHI

A-FLAG KOTTO
DORI

Number of business days in the 14th
fiscal period
a. Real estate leasing business revenues

183

A-FLAG SAPPORO A-FLAG SHIBUYA
183

183

183

183

744,420

677,651

212,075

345,331

121,961

Lease business revenue

661,670

598,387

203,514

327,406

115,831

Other lease business revenue

82,75079,2638,560

17,9246,129

b. Expenses related to rent business

208,941

256,345

86,63949,11937,848

Management operation expenses

77,767

121,267

40,48810,025

13,294

Utilities expenses

65,09071,542

6,238

14,867

6,789

Tax and public dues

46,63424,363

11,057

14,347

13,088Insurance

619

476

53

64

73

Repair and maintenance expenses

13,74025,35723,468

3,787

2,588

Other expenses related to rent
business

5,089

13,338

5,333

6,027

2,015

c. NOI (a – b)535,478

421,305

125,435

296,211

84,112d. Depreciation, etc.

120,626

64,841

7,838

15,794

4,909

Profit (loss) from rent business(c – d)414,852

356,463

117,596

280,417

79,203- 50 -

(Unit: Thousands of yen)
TO-1

Property number

UR-12

UR-13

UR-14

UR-15

Property name

A-FLAG
BIJUTSUKAN
DORI

A-FLAGDAIKANYAMA
WEST

A-FLAG KITASHINSAIBASHIDECKS Tokyo
Beach (Note 1)

Number of business days in the 14th
fiscal period
a. Real estate leasing business revenues

183

TLC Ebisu Building

183

183

183

183

138,673(Note 2)110,223

634,257

324,751

Lease business revenue

111,075(Note 2)

99,584

496,049

299,450

Other lease business revenue

27,597(Note 2)

10,639138,208

25,301b. Expenses related to rent business

57,24229,54825,565

270,485

84,779Management operation expenses

16,37912,101

5,639

106,462

25,888

Utilities expenses

8,975

300

10,350116,524

22,504

Tax and public dues

2,190

12,8425,969

15

16,872

36

58

70

607

193

Repair and maintenance expenses

10,912

1,525

2,121

5,165

10,260

Other expenses related to rent
business

18,748

2,719

1,413

41,7099,060

c. NOI (a – b)81,430(Note 2)84,658363,772

239,971

d. Depreciation, etc.

6,574

2,684

4,628

21,78941,594

Profit (loss) from rent business(c – d)74,856(Note 2)80,030341,982

198,377

Insurance(Unit: Thousands of yen)
TO-6

Property number

TO-2

TO-3

TO-4

TO-5

Property name

A-PLACE
Ebisu Minami

A-PLACE
YoyogiA-PLACE
AoyamaLuogo Shiodome

183

183

183

Number of business days in the 14th
fiscal period
a. Real estate leasing business revenues

TAMACHISQUARE (Land)

183

183

373,973

129,208

303,637

181,904

62,502

Lease business revenue

355,826

120,835

283,251

167,916

62,502Other lease business revenue

18,147

8,372

20,385

13,988–b. Expenses related to rent business

88,64638,32769,50952,983

8,968Management operation expenses

27,471

12,554

19,156

12,411–

Utilities expenses

23,816

9,442

20,996

14,338–Tax and public dues

31,058

10,253

21,795

18,296

8,700

247

83

181

158

–

Repair and maintenance expenses

2,034

1,037

3,276

5,284

–

Other expenses related to rent
business

4,018

4,955

4,102

2,494

267

c. NOI (a – b)285,327

90,880234,127

128,92153,533d. Depreciation, etc.

33,332

15,42923,751

27,176–

Profit (loss) from rent business(c – d)251,994

75,451

210,376

101,745

53,533

Insurance

Property number

TO-7

TO-8

TO-9

TO-10

(Unit: Thousands of yen)
TO-11

Property name

A-PLACE
Ikebukuro

A-PLACE
Shinbashi

A-PLACE
GotandaA-PLACE
Shinagawa

OSAKI
WIZTOWER

183

183

183

183

183

Number of business days in the 14th
fiscal period
a. Real estate leasing business revenues(Note 2)

199,410

180,660

116,430

349,446

Lease business revenue(Note 2)

184,740

167,660

109,035

325,455

Other lease business revenue(Note 2)

14,67012,9997,395

23,990b. Expenses related to rent business

33,943

53,102

41,67633,89898,867

Management operation expenses

10,308

16,524

12,8909,292

57,640Utilities expenses

10,43814,076

11,6706,802

17,477

Tax and public dues

10,494

15,31014,107

10,813

21,821

Insurance

84

132

106

71

304

Repair and maintenance expenses

818

1,947

1,251

4,462

–

1,799

5,110

1,649

2,456

1,623

c. NOI (a – b)(Note 2)

146,308

138,984

82,532

250,579

d. Depreciation, etc.

20,685

21,10026,844

8,697

48,275

Profit (loss) from rent business(c – d)(Note 2)

125,207

112,13973,834

202,303

Other expenses related to rent
business- 51 -

(Unit: Thousands of yen)
TO-16

Property number

TO-12

TO-13

TO-14

TO-15

Property nameShiodome Building(Note 1)

A-PLACE Ebisu
HigashiA-PLACE Shibuya
KonnohA-PLACE Gotanda
EkimaeNumber of business days in the 14th
fiscal period
a. Real estate leasing business revenues

183

183

A-PLACE
Shinagawa Higashi

183

183

183

1,534,740

175,164

115,557

179,102509,697

1,447,964

165,077

109,595

168,117464,032

Other lease business revenue

86,775

10,087

5,962

10,98545,664b. Expenses related to rent business

380,446

43,97430,461

59,707

137,867

Management operation expenses

105,630

12,643

11,67817,65345,873

Utilities expenses

98,613

9,563

6,598

12,65638,941

Tax and public dues

115,146

13,831

9,469

18,07647,079

916

100

76

116

463

Repair and maintenance expenses

34,504

5,949

345

4,453

2,206

Other expenses related to rent
business

25,633

1,887

2,293

6,750

3,303

1,154,293

131,189

85,096

119,394

371,830

148,280

23,60912,906

12,29230,245

1,006,013

107,579

72,189107,101

341,585

Property number

TO-17

AA-1

AA-2

AA-4

(Unit: Thousands of yen)
AA-5

Property name

A-PLACE Shinbashi
EkimaeAmagasaki Q’s
MALL (Land)

icot Nakamozu

icot Mizonokuchi

icot Tama Center

183

183

183

183

Lease business revenue

Insurancec. NOI (a – b)d. Depreciation, etc.
Profit (loss) from rent business(c – d)Number of business days in the 14th
fiscal period
a. Real estate leasing business revenues

183
381,874

356,759

311,402(Note 2)147,018

Lease business revenue

371,823

356,759

310,545(Note 2)

135,589

Other lease business revenue

10,050–856(Note 2)

11,428b. Expenses related to rent business

82,181

56,402

41,663

14,21945,971

Management operation expenses

19,024

–

5,682

3,261

18,524

Utilities expenses

14,793–30–

13,891

Tax and public dues

34,311

56,13430,423

10,074

11,753

155

–

235

100

145

Repair and maintenance expenses

6,403

–

2,801

–

452

Other expenses related to rent
business

7,492

267

2,491

783

1,205

c. NOI (a – b)299,692

300,356

269,738(Note 2)

101,046

d. Depreciation, etc.

52,170–34,6258,440

18,944

Profit (loss) from rent business(c – d)247,521300,356

235,113(Note 2)

82,102

Property number

AA-6

AA-7

AA-8

AA-9

Property name

A-PLACE
Kanayama

Osaka Nakanoshima
Building

icot Omori

Market Square
Sagamihara

183

183

183

Insurance

Number of business days in the 14th
fiscal period
a. Real estate leasing business revenues

183

183

(Unit: Thousands of yen)
AA-10
Umeda Gate Tower

292,745535,622239,961(Note 2)444,714

Lease business revenue

264,023

502,820

202,377(Note 2)407,845

Other lease business revenue

28,72132,80237,584(Note 2)36,868b. Expenses related to rent business

90,294

195,076

65,86336,437

107,696

Management operation expenses

25,25756,636

11,24816,05936,554

Utilities expenses

25,61348,27532,425

5,551

31,457

Tax and public dues

25,80250,76812,515

13,841

34,135

252

749

94

132

365

Repair and maintenance expenses

10,53029,589

8,370

–

2,208

Other expenses related to rent
business

2,838

9,058

1,209

851

2,974

c. NOI (a – b)202,450

340,545

174,098(Note 2)

337,018

d. Depreciation, etc.

51,74971,04517,50023,941

68,924

Profit (loss) from rent business(c – d)150,701

269,500

156,598(Note 2)

268,094

Insurance- 52 -

(Unit: Thousands of yen)
Property number

AA-11

AA-12

Property name

A-PLACE
Bashamichi

Commercial Mall
HakataNumber of business days in the 14th
fiscal period
a. Real estate leasing business revenues

183

183

191,089

222,272

Lease business revenue

169,053

174,895

Other lease business revenue

22,03647,377b. Expenses related to rent business

81,69864,898

Management operation expenses

19,085

20,814

Utilities expenses

24,18633,362

Tax and public dues

16,814

–

293

174

Repair and maintenance expenses

18,420

3,034

Other expenses related to rent
business

2,896

7,513

c. NOI (a – b)109,391

157,373

d. Depreciation, etc.

29,031

14,734

Profit (loss) from rent business(c – d)80,359142,638

Insurance(Note 1)

(Note 2)

As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, DECKS Tokyo Beach and Shiodome Building, thefigures are in proportion to the pro rata share of our trust beneficiary co-ownership interests (jun kyōyū-mochibun)(75%, 50%, 49% and 35%, respectively).
Since we have not obtained permission from the tenant of this property to release the information, the information is
not disclosed.

- 53 -