Security Code：3481

Fiscal Period Ended February 28, 2019
Asset Management Company:
https://mel-reit.co.jp/en/

April 17, 2019

Table of Contents
1. Growth Strategy
2.

Mitsubishi Estate’s Logistics Facilities
Business

416

3. Financial Results and Forecasts

20

4. Appendix

24

1

Initiatives for
ESG

Internal
growthExternal
growthFinancialresults

Highlights of Financial Results for the Fiscal Period Ended Feb. 2019引き続き安定的な運用により、1口当たり分配金を5,492円にて確定
Achieved stable DPU growth of 5,492 yen＋200+200円(+3.8%)、予想比
yen (+3.8%) from the previous
period, +47 yen (+0.9%) from the forecast (Note) 前期比+47円(+0.8%)

 Acquired 2 new properties from the Sponsor and increased the asset size to 10 properties,
83.2 billion yen
 Expanded pipelines from both Sponsor and Asset Manger Achieved high occupancy and continued rent growth for two consecutive periods
 Achieved increase revenue from Green Lease contract and cost saving property tax by reviewing
asset evaluation

 Introduced asset management fee fully linked to investment unit price Acquired environmental assessment and certifications in three properties(BELS：3 properties , CASBEE：2 properties)

Note： Compared vs the forecast as of Oct. 15, 2018.

2

Financial Results for the Fiscal Period Ended February 2019 and Forecast
FP Ended Feb. 2019
(5th)
ActualFP Ended Aug. 2019
(6th)
Forecast

FP Ended Feb. 2020
(7th)
Forecast

Operating Revenues

2,493 mn yen

2,532 mn yen

2,531 mn yen

NOI2,038 mn yen

2,053 mn yen

2,061 mn yen

Net Income

1,170 mn yen

1,204 mn yen

1,203 mn yen

Distributions
per Unit(Note)

5,492 yen

5,492 yen

5,492 yen

LTV

27.0%

27.0%

27.1%

AverageOccupancy Rate

99.9 %

99.9 %

99.9 %＜ 4th FP→5th FP ＞
・Increase in rent from two newly acquired
properties（+325 mn yen）
・Temporary decrease in rental revenues((32) mn yen)・Received insurance payment for typhoon damages(+30 mn yen)
Expenses: ・Increase in interest expenses from acquisition of
2 properties（＋9 mn yen）
・Repair cost incurred by typhoon damages（+29 mn yen）
・Investment units issuance cost（＋31 mn yen）
Income:Extraordinary Factors＜5th FP→6th FP＞
Income: ・Increase in rent by rent renewal（＋6 mn yen）
・Increase in revenues by receiving green lease fees (＋1.9 mn yen）
・Received insurance payments from typhoon damages（＋11 mn yen）
（Total：41 mn yen）
・Refund of property tax due to review in asset valuation（＋12 mn yen）
Expenses:・Property tax expensed for two new properties （+34 mn yen）
・Repair cost incurred by typhoon damages （＋２ mn yen）
（Total：31 mn yen）
・Decrease in property tax due to review in asset evaluation ((2.2) mn yen)

Note： DPU includes Surplus Cash Distributions

3

1. Growth Strategy

Features of Mitsubishi Estate Logistics REIT Investment Corporation (MEL)
Stable Growth Strategy with a hybrid model “Developer x Real Estate Asset Manager”

Mitsubishi Estate Logistics REIT Investment Corporation
Asset size/
No. of properties

Occupancy rate

Appraisal NOI yield/
Stabilized NOI yield

LTV

Debt cost

83.2 billion yen/10 properties

Credit rating
(JCR)

99.9%

4.8%/5.0%

27.0%

AA- (stable)

0.47%

Sponsor

Development /Facilities Management

Investment /Asset Management

Has dedicated to city development in the Marunouchiarea(Tokyo) for over 120 years

Established in 2001, when the scheme of real estate
securitization was emerging in Japan

Its track record includes structuring and managing various typesof real estate funds, including the largest private REIT in Japan

Overview Contributing to the society through a variety of businessactivities as a comprehensive real estate developerPromoting the logistics facility business as a growth areaProven track records in a variety of asset types in investment
and asset management

Constant supply of pipeline properties as the sponsor throughits business of developing and managing advanced types oflogistics facilities



Unique property sourcing capacity with discerning judgement

Flexible acquisition strategy using a wide range of schemes,
including bridge fundsCompetitive real estate fund management capability backed bya diverse deal track record

Support

Utilization of MEC group’s know-how and corporate customer
relations in the leasing business

Overview

Asset Management Company

Support5Management Plan Designed to Maximize Unitholders’ Value in Medium- and Long-term
New management policy based on “Three pillars”
Measures implemented

Measures for future
consideration

1

Alignment
Align interest
with investors

Introduced asset
management fee
fully linked toinvestment unit
price (Note)

Initiatives for
ESG; promote
green portfolio

 Introduction of
cumulative investment
 Buyback investment
units (Guidelines havealready been organized)

2

Discipline
Disciplined
growth3HybridEnhance MEL’s
unique strategythe hybrid model

Flexible
propertyacquisition
throughutilizingbridgefunds

External growth without
damaging portfolio
yieldsSecuredpipelines
through
MJIA
sourcing

Personnel
exchange
withTokyo
RyutsuCenter Flexible financing
 Property acquisition
utilizing LTV

The entire
Mitsubishi EstateGroup will work
together toimprove investorvalue Increase pipeline
properties from sponsor
 Enhance collaboration
with TRC

Note: To be introduced after a resolution is made at the general meeting of unitholders scheduled on May 17, 2019.

6

1

Introduced Asset Management Fee Fully Linked toInvestment Unit Price

Ｅ

Ｓ

Ｇ

2

Alignment

Discipline

Aligninterests withinvestors

Disciplined
growth3HybridEnhance
MEEL’s uniquestrategy—the
hybrid model

MEL’s asset management fee structure
Asset management fee Ⅰ（AUM-linked）

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

Asset management fee Ⅱ(Real estate profit-linked)

Adjusted NOI x 5.0% (upper limit)

Adjusted net income before tax x net income before tax per unit x 0.001% (upper limit)
Introduction of “investment unit price-linked management fee”
Asset management fee Ⅲ Performance against TSE REIT Index ((a) – (b)) x market capitalization (for fiscal period of each term) x 0.1%
(Unitholder interest-linked) (upper limit)（a）：Fluctuations in MEL’s investment unit price (incl. dividends)（b）：Fluctuations in the TSE REIT Index (incl. dividends)

First J-REIT to introduce asset management fee fully linked to investment unit performance Strengthen the linkage between asset management company andunitholder interest by giving incentives to asset management company
for improving unitholder interest. Align both parties interest by
introducing an asset management fee reflecting above performance.
Investment unit price
TSE REIT Index (incl. dividends)
262,100 yen

X3,851.10pt

YY

262,100 yen
3,851.10pt
Mar. 29, 2019

X
Sep. 30, 2019

If MEL’s growth rateis greater(a)-(b)=positive↓
Increase Fee
If TSE REIT Index
growth rate is greater(a)-(b)=negative↓
Decrease Fee

Calculation
PeriodReference date（Previous period）

Reference date（Present period）

DPU toincludeFP EndingFeb. 2020

Last business dayof Mar. 2019

Last business day
of Sept. 2019

FP EndingAug. 2019

FP EndingAug. 2020

Last business day
of Sept. 2019

Last business dayof Mar. 2020

FP EndingFeb. 2020

For the period ending February 2020
＜Example＞
 Closing price of MEL’s investment unit as of Mar. 29, 2019：262,100 yen TSE REIT Index (incl. dividends) as of Mar. 29, 2019：3,851.10pt
 Closing price of MEL’s investment unit as of Sept. 30, 2019：X
 TSE REIT Index (incl. dividends) as of Sept. 30, 2019：Y(a) =（「X」-262,100 yen＋5,492 yen（Forecast））/ 262,100 yen(b) =（「Y」- 3,851.10pt ）/ 3,851.10pt

71

Flexible Property Acquisition through Utilizing Bridge Funds

2

Alignment

Discipline

Aligninterest withinvestors

Disciplined
growth3HybridEnhance
MEL’s uniquestrategy—the
hybrid model

Comprehensive support by ability of the arrangement of bridge funds and sponsor support
Bridge fundLoan fromfinancial institutions
Finance strategy
based on experience

Sponsor

LOGIPORT Osaka Taisho(121 thousand m2)

Logistics facility(Trust beneficiary right)

Equity fromanonymousunion investors

Asset
Management
Company

Investor relations

Equity from
Mitsubishi Estate
Logicross Narashino(39 thousand m2)

Same-boat investmentby sponsor

Incorporate
properties

Arrange and manage
bridge funds
Note： The allocation image for illustration purpose

Characteristics of bridge fund scheme

Book
value

 Equity investment by Mitsubishi Estate (Same-boat investment by the sponsor)
 PM operation of Mitsubishi Estate Group (Note) Construction and management of Bridge Fund (AM operation) by MJIA

 Reduce the book value and adjust the acquisition timing
Note: Excludes some properties

Acquisition
Price

Inclusion into
bridge fundAcquisitionPrice

Acquisition
Price

Term

8

1

External Growth StrategyCapability to develop logistics facilities independently based on extensive land information
Capability to co-develop facilities backed by MEC’s development ability and credibilityProperties with preferential negotiation right developed by Mitsubishi Estate Group
Mitsubishi Estate Group
Occupancy
Rate
100%

2

Alignment

Discipline

Aligninterest withinvestors

Disciplined
growthHybridEnhance
MEL’s uniquestrategy—the
hybrid model

Capability to assess properties backed by experience in continuously
acquiring properties from 2001
Flexible and diversified property acquisition strategy by leveraging thecapability to manage real estate funds

1,181

213
Properties with a preferential negotiation thousandm2
right through MJIA Sourcing

thousand m2

Bridge FundOccupancy
Rate
Approx.70%

3Occupancy
Rate
100%

Third Party Bridge
Sponsorrelation
Occupancy
Rate
100%

Osaka Nishi-Yodogawa Logistic Facility Center(38 thousand m2)
Completed in FY2018 (Jointly)

Logicross Nagoya Kasadera(80 thousand m2)
Completed in FY2018 (Independently)

LOGIPORT Osaka Taisho(121 thousand m2)
Completed in FY2017 (Jointly)

IHI Group Sakai Factory(site area)(87 thousand m2)

Occupancy
Rate
100%

Pre-leased
Approx.90%

Improved
occupancy rate

Occupancy
Rate
100%

MJ Logipark Tsuchiura 1(tentative name)(15 thousand m2)
Completed in FY2014

Occupancy
Rate
100%

Logicross Yokohama Kohoku(16 thousand m2)
Complete in FY 2019 (Independently)

LOGIPORT Kawasaki Bay(296 thousand m2)
Complete in FY 2019 (Jointly)

Logicross Narashino(39 thousand m2)
Completed in FY2017 (Independently)

MJ Logipark Kasugai 1(58 thousand m2)
Completed in FY2016
Occupancy
Rate
100%

MJ Logipark Nishinomiya 1(tentative name)(17 thousand m2)
Completed in FY1990

OthersMultiple projects

Logicross Atsugi II(34 thousand m2)
Complete in FY2019 (Independently)

Saitomoegi Logistics Facilities Project(tentative name)(32 thousand m2/125 thousand m2)
Complete FY2020/2021 (Jointly)

400 thousand m2
MJ Logipark Sendai 1(36 thousand m2)
Completed in FY2008

Note： As of Apr. 15, 2019.

9

Portfolio Map

Note： As of Apr. 15, 2019. Properties noted “other multiple projects” on P6 are not included in the map because it has not been disclosed by MEC.

10

Internal Growth Strategy (1)Average Rent Growth and Rent Revision (Based on leased area of warehouse)（㎡）

賃貸契約期間満了を迎えた面積
Lease agreements that expired

70,000100%

62,00060,00080%

50,00010,00096%

11,00040%

02018/8

2019/2

+1.8%

+0.2%

Weighted average
Lease expiry

4.9 years

40%

+3.1%
4%

0%

Average rent
growth ofincreased
portion100.0%

57%

2019/820%

Average rent
growthFixed term lease

60%
60%

30,00020,00099% andabove

43%

40,000(Note)

40,000Occupancy ratesince listed

2018/8

+3.2%

+3.4%

+6.8%

2019/2

2019/8Upward revision of rent

Note： Includes 1,000㎡ whose lease agreement was renewed before expiration

Tenant Diversification (Based on leased area)

Rent unchanged

Lease Expiration Schedule
Lease agreements that expired

(m2)

11.0%
8.4%
31.3%
7.9%

2.9%
3.2%
7.5%
3.6%
5.0%
6.6%
5.1%

(%)

100,000

20

Sankyu90,00018

MITAKA SOKO

80,00016

Sun City Building

70,00014

Mitsubishi Estate

60,00012

Fukuoka Logistic System

50,00010

40,000830,000

6

20,0004

10,0002Company A (communications)
Fuji Echo

7.5%

Rent ratio

Company B (wholesale)
Fresh Creator
Company C (warehousing)Company D (E-Commerce)
Others00
2019/82020/82020/22021/82021/22022/82022/22023/82023/22024/82024/22025/82025/22026/82026/22027/82047/82027/2

Note： As of Feb. 28, 2019.

11

Internal Growth Strategy (2)

Ｅ

Ｓ

Ｇ

Efforts to improve Tenants’ Satisfaction（Example）
 Improvement by switching to LED based on Green Lease contract
Overview

 Installed LED lighting at the cost of MEL
 Receipt of a half of the reduction inelectricity bills and maintenance cost to beborne by tenant as Green Lease fee

Effects<Advanced LED with tablet-controlled andtime-controlled dimming systems＞
By
installingLED Income will increase by 1.9 mn yen perterm due to the receipt of green lease fee Tenants’ electricity bills are reduced
substantially The latest dimming functions capable ofadjusting grouping and brightness improved
tenants’ convenience

Electricityuse

By advanced
dimmingsystems

Image of reduced
electricity use

Image of grouping Review of contract with electricity supplier（Logicross Fukuoka Hisayama, MJ Logipark Fukuoka 1) ＜Review of contract with electricity supplier＞
Overview
 Reviewed the contract with electricity
suppliers and changed the supplier for two
properties

 The contract will be reviewed once every
year

Effects

Power company
A

Power company
B

Power company
C

Asset Manager
 Saved tenants’ electricity bills and improved
their satisfaction

Efforts to reduce costs borne by Investment Corporation（Example）

Optimal procurement

Logicross
Fukuoka
Hisayama

MJ Logipark
Fukuoka 1

 Review asset evaluation of the properties (MJ Logipark Funabashi 1, LOGIPORT Sagamihara)
Overview

 Review asset evaluation of the properties
held Negotiation with relevant government officeregarding difference from evaluation, if any

Effects＜Property tax＞
(1.7) mn yen
reduction per term Decreased property tax for two properties((1.7) mn yen)

 Refund of property tax due to review inasset valuation (+12 mn yen)
 Negotiation is underway for other properties

BeforereviewAfter
review

12

Financial Strategy
Financial Highlights

Reduction in Debt Cost

Long-term debt ratio

Fixed interest rate

Average remining debt duration

Average debt cost

100.0 %

83.3 %

5.2 year

0.47 %

Credit rating (JCR)LTV

AA-(Stable)

27.0 %

Average debt
cost at the timeof IPO(Sept. 2017)

Averagespread (Note)

Average borrowing
period0.25%

7.0 year

Average debt
cost for latest
borrowings(Sept. 2018)

Averagespread (Note)

Average borrowing
period0.17%

8.3 year

Debt capacity (up to 40%) Debt capacity (up to 50%)

Approx.

19 bn yen

Approx.

40 bn yen

Note: There are no financing-related costs to be paid to the financial institutions.

Our Lenders

Debt Maturity Schedule(mn yen)

3.3% 2.1%
5.2%

MUFG Bank

9.0%

36.8%

Total
Debt Balance
23,924 mn yen

12.1%

Sumitomo Mitsui Banking

5,000

Mizuho Bank

4,000

Development Bank of
Japan

3,000

The Bank of Fukuoka
Shinkin Central Bank

15.7%

15.7%

6,000

Norin Chukin Bank
Shinsei Bank

2,000
1,000
0
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028 (year)
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028

Note： As of Feb. 28, 2019.

13

1

Initiatives for ESG

Ｅ

Ｓ

Ｇ

2

Alignment

Discipline

Aligninterest withinvestors

Disciplined
growth3HybridEnhance
MEL’s uniquestrategy—the
hybrid model

Formulation of sustainability policy (Feb. 1, 2019)
1. Initiative for achieving energy saving at properties undermanagement and low-carbon society
2. Initiative for improved water resources management andwaste management
3. Improving tenants’ safety/security and satisfaction

4. Initiative towards officers and employees
5. Collaboration with external stakeholders
6. Disclosure of ESG information and use of external evaluation
7. Compliance and risk management

Environmental assessment and certifications
 Properties certified in the past
CASBEE:LOGIPORT Sagamihara,
LOGIPORT Hashimoto

Logicross Atsugi

Logicross Kobe Sanda

MJ Logipark Kazo 1

CASBEE：Evaluation S
BELS：Evaluation ★★★★★

CASBEE: Evaluation A
BELS：Evaluation ★★★★

BELS：Evaluation ★★★★★

Environment initiatives

 Use of renewableenergyInstallation of solar panels

Installation of
motion-detection sensors

DBJ Green Building:
Logicross Fukuoka Hisayama

Supporting local communities

 Energy saving initiatives

Insulated sandwich panels
for exterior walls

BELS:
LOGIPORT Hashimoto

 Proactive participation in CSR activities

Enhanced greenery BCP initiatives

Clean up activity after
Atsugi Ayu Firework Festival
Volunteer work near MJ Logipark Atsugi 1

Free beverage service for tenants
at LOGIPORT Sagamihara

GRESB assessment

Installation of private
power generators

Seismic isolators“Global Real Estate Sustainability Benchmark (GRESB)”
is a benchmark developed by a group of leading European
pension funds. It evaluates the ESG performance of realestate companies and funds, and is becoming a de facto
standard among major institutional investors utilized in theirinvestment decision-making processes. MEL aims to obtain a“Green Star” rating in future GRESB real estate assessments.

14

1

Mid-to-Long Term Growth Strategy

2

Alignment

Discipline

Aligninterests withinvestors

Disciplined
growth3HybridEnhance
MEL’s uniquestrategy—the
hybrid model

Asset size target and DPU
Endof 2018/2
2018年2月期

Endof 2018/8
2018年8月期

Endof 2019/2
2019年2月期

Achieved an external growth through the disciplined
acquisition of properties by utilizing Mitsubishi Estate’s
development capability and MJIA’s capability to selectinvestment projects (discerning ability)

Asset size

Ist Follow-on

Pipeline
1,394
thousand ㎡

83.2bn yen

83.2bn yen

Asset Size

70.8bn yen

Appraisal
NOI

4.9%

70.8bn yen

4.8%

4.8%

LTV

ＬＴＶ

27.5%

FP 2018/2
Initialforecast

DPU

＋3.9%
5,580 yen
5,373 yenEndof 2019/8
2019年8月期

Over
200 bn yen

300
bn yenMid-to-Long
Asset size
target

Maintain the current portfolio yield level asmuch as possible

1,394千㎡
25.0%

FP 2018/8

27.0%

FP 2019/2

Actual

5,292 yen
5,232 yen

FP 2019/8
Property tax expensed forproperties acquired in 2018

Property tax expensed forproperties acquired at IPO＋1.1%

Stabilized LTV
40%~50%＋4.6%
5,492 yen

5,249 yen

＋0.9%

Aim continued
growth of DPU

5,492 yen
5,445 yen（Present forecast）

15

2. Mitsubishi Estate’s Logistics
Facilities BusinessFeatures of MEC Group's Logistics Facility Business
Diversified business portfolio as acomprehensive RE developer

Land Acquisition

Development

Obtain a variety of land information

Manage development cost

1

Unique business activities as acomprehensive RE developer

Consolidate plots of land frommultiple landowners

Corporate customer relations

Collect land information
through relations

Customer network supported bybranches

Operation & Management

Walk around logistics facilities to
identify tenants’ needs

Group-wide leasing

3

Explore tenants’ needs
at various locations

Explore land information on site
2

Joint projectCapture needs of office tenants, etc. for logistics facility development

Strengthening of value chain
through in-house PM

Reflect tenants’ needs in landacquisition

Collaboration with TRC

Capture information from tenants ofmanaged facilities

1 Obtain a variety of land information
Efforts such as acquiring development lands
through land consolidation of multiple owners

Understand tenants’ needs for facility
specifications

2 Understand tenants’ needs for facility specs
Collaborative project making full use of relation
with office tenant in Otemachi, Marunouchi and
Yurakucho area
LOGIPORT Kawasaki Bay

Understand tenants’ usage needs
Utilize relations with tenants ofmanaged facilities

3 Explore tenants’ needs at various locations
Use the regional network mainly in the areas where
MEC’s head office and branches are located toachieve tenant leasing activities
Logicross Kobe Sanda
Needs of logistics bases
Kansai branchInformation

Logistic
Facilities
Management
Department

17

MEC’s Logistics Facilities BusinessAppeal of MEC’s Logistics Facilities Business Holding of a Briefing Session

 Accompanying MEL’s overseas IR
General Manager, MEC’s Logistics Facilities Development Department
accompanied MEL’ overseas IR held in July 2018 (1 day in Hong Kong and 2days in Singapore) and January 2019 (2 days in Hong Kong and 2 days in
Singapore), and explained investors the MEL’s positioning in the Group.

A briefing session of “MEC’s Logistics Facilities Business” was held by
MJIA on July 3, 2018

Mid-term management plan FY2018 - 2020
Key Point No.2：

Key Point No.1：
Realization of profit as a result of reinforced income stream during previous mid-term
Accelerate fee business modelthrough capital recycling

Lifestyle Property Business
Build strong platform for the industrial property business

Completion of landmark projects(with concentration in Marunouchi area)
will contribute to operating cash flow

Fee business modelthrough capital recycling

Sponsorship of asset pipeline to the REIT which istargeting to go public

Operation /property
management

Industrial
propertybusinessplatform

Expansion and advancementof overseas business

Investment Management
Aim for the sustainable growthof business by accommodating cross-borderinvestment demand through the expansion of
investment management platform in Japan, US,
Europe and Asia.

Site acquisition/
development

Utilize client and partner networks together with solution
planning capabilities to develop quality products including“Logicross” branded properties
Full cooperation with
Tokyo Ryutsu Center (TRC), consolidated subsidiary, tomaximize the asset value

Initiate business model innovation by capturing the momentum of changes in businessenvironment as new opportunities in order to achieve further growth in 2020’s

Assetmanagement

18Strengthening of Partnership with Tokyo Ryutsu Center (TRC)
Partnership with TRC
 Outsourcing Operation and Management to TRC

 Personnel Exchange with TRC (As of Apr. 1, 2019)7 seconded

Operation/Management

Approx. 50 years ofexperience

Logicross Nagoya
Kasadera Operation & management of 6 sponsor-developed properties (Note)
are outsourced to TRC
 Promoting in-house operation & management by utilizing TRC’s
know-how

4 accepted Six employees are seconded from MEC to TRC, while three employees
from TRC to MEC.
 One employee is seconded from MJIA to TRC, while one from TRC to
MJIA.
 Promoting the accumulation of know-how through personnel exchange

Overview of Tokyo Ryutsu Center (TRC) Established in 1967 to operate large
distribution facilities that take a criticalrole for streamlining logistics in theTokyo Metropolitan area, and became
a consolidated subsidiary of MEC.
 Rebuilt Logistics Building, B-wing as
the first in-premise re-development
project (completed in June, 2017, withfloor area of 171,300 m2) . MEC
entered “Project Management Supportconsignment contract” associated withrebuilding.

こちらの画像につき、日本語版ございましたら、ご共有頂けますでしょうか。

Note: Logicross Atsugi, Logicross Kobe Sanda, Logicross Narashino, Osaka Nishiyodogawa Logistics Center, Logicross Yokohama Kohoku and Logicross Atsugi II

19

3. Financial Results and Forecasts

Financial Results for the Fiscal Period Ended Feb. 2019
FP Ended Feb.
2019 Forecast(As of Oct. 15,
2019)

FP EndedAug. 2018 Actual(4th)(A)FP Ended Feb.
2019 Actual(5th)(B)

2,186

2,493

+306

2,488

Operating Rental Revenues

2,186

2,493

+306

2,488

Operating Rental Expenses(excluding depreciation)

427

455

+27

457

1,759

2,038

+279

2,030

Depreciation

433

484

+51

485

Operating Income

1,053

1,267

+213

1,261

Ordinary Income

1,003

1,171

+168

1,159

Net Income

1,002

1,170

+168

1,158

Distributions Per Unit (including SCD)

5,292

5,492

+200

5,445

Distributions Per Unit (excluding SCD)

4,685

4,763

+78

4,714

607

729

+122

731

214,000

245,815+31,815

245,815

Operating Results（mn yen）

Operating Revenues

NOI

Difference(B)－(A)

Distributions Per Unit (yen)Surplus Cash Distributions (SCD)
Number of investment units issued andoutstanding (units)
Other Statistics (yen)
AFFO

1,375

1,611

+235

1,562

AFFO payout ratio

82.3%

83.8％

+1.4%

85.7%

LTV（%）

25.0%

27.0%

+2.0%

27.1%

269,217

270,016

+799

-

99.9%

99.9%

±0

99.9%

NAV Per Unit
Average Occupancy Rate (%)

Main Factors of Variance
4th FP vs. 5th FP《Operating revenue》(+306 mn yen)・Increase in rent from acquisition of
2 properties+325 mn yen
・Temporary decrease in rental revenues(32) mn yen《Operating expenses》（+93 mn yen）
・Increase mainly in depreciation fromacquisition of 2 properties＋55 mn yen
・Increase in leasing fees
＋32mn yen・Decrease in property tax due to review
in asset valuation(1.2) mn yen
・Increase in AM fee from acquisition 11 mn yen《Non-operating revenues》 (＋26 mn yen)・Received insurance payments fromtyphoon damages＋30 mn yen《Non-operating expenses》（＋72mn yen）
・Increase in interest expenses fromacquisition of 2 properties＋9mn yen・Investment units issuance cost
＋31mn yen・Repair costs incurred by typhoon ＋2 mn yen

21Forecasts for the Fiscal Periods Ending Aug. 2019 and Feb. 2020
Main Factors of Variance
5th FP Actual vs. 6th FP Forecast
Operating Results（mn yen）
Operating Revenues

FP Ended
Feb. 2019
Actual(A)FP EndedAug. 2019
Forecast(B)Difference(B)－(A)(Reference)
FP Ended Feb.
2020 Forecast

2,493

2,532

+38

2,531

Operating Rental Revenues

2,493

2,532

+38

2,531

Operating Rental Expenses(excluding depreciation)

455

477

+23

467

2,038

2,053

+14

2,061

Depreciation

484

487

+2

488

Operating Income

1,267

1,250

(16)

1,268

Ordinary Income

1,171

1,205

+33

1,204

Net Income

1,170

1,204

+33

1,203

Distributions Per Unit (including SCD)

5,492

5,492

±0

5,492

Distributions Per Unit (excluding SCD)

4,763

4,898

+135

4,897

729

594

(135)

595

245,815

245,815±0.０

245,815

NOI

Distributions Per Unit (yen)Surplus Cash Distributions (SCD)
Number of investment units issued andoutstanding (units)
Other Statistics (yen)
AFFO

1,610

1,611

±0

1,662

AFFO payout ratio

83.8％

83.8％

+0.0％

81.2%

LTV（%）

27.0%

27.0%

±0.0％

27.1％

Average Occupancy Rate (%)

99.9%

99.9%

±0.0％

99.9%

《Operating Revenues》(+38 mn yen)・Increase in rent of existing properties＋6 mn yen・No temporary decrease in rental revenues +32 mn yen
・Increase in revenue by receiving green lease fees
＋1.9 mn yen《Operating expenses》 (+54 mn yen)・Property tax expensed for 2 new properties＋34 mn yen
・Decrease in leasing fees(32) mn yen
・Decrease in property tax due to review inasset valuation(2) mn yen
・Increase in AM fee from acquisition of
2 properties+18 mn yen
・Expense related to general meetings of unitholders+6 mn yen《Non-operating revenues》（＋23 mn yen）
・Received insurance payment from typhoon damages(4th FP 30 mn yen→5th FP 41 mn yen)
＋11mn yen・Refund of property tax due to review inasset valuation＋12 mn yen《Non-operating expenses》((26) mn yen)
・No investment units issuance cost(31) mn yen
・Repair cost incurred by typhoon damage ＋2 mn yen

Main Factors of Variance
6th FP Forecast vs. 7th FP Forecast《Non-operating revenues》((53) mn yen)
・No insurance payment from typhoon damages(41) mn yen
・No refund in property tax due to review inasset valuation(12) mn yen《Non-operating expenses》((35) mn yen)・No repair cost by typhoon damage(31) mn yen

22

MEMO

23

4. Appendix

Portfolio Overview
Portfolio summary
Number of properties

10

properties

Property nameAcquisition
price

Logicross Fukuoka
Hisayama

5,770 mn yen

Occupancy rate

Total acquisition price

99.9

83.2

%

bn yenAppraisal NOI Yield

Stabilized NOI Yield

4.8

5.0

%

%

Property name

Logicross Atsugi

Property name

Logicross Kobe
Sanda

Property nameAcquisition
price8,440 mn yen

Acquisition
price3,900 mn yen

Acquisition
price

LOGIPORT
Sagamihara

21,364 mn yen

Property nameAcquisition
price

LOGIPORT
Hashimoto18,200 mn yen

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

99.7%

Occupancy rate

100.0%

Appraisal NOI
yield

5.2%

Appraisal NOI
yield

4.5%

Appraisal NOI
yield

5.0%

Appraisal NOI
yield

4.7%

Appraisal NOI
yield

4.4%

Property name

MJ Logipark
Funabashi 1

Property name

MJ Logipark
Atsugi 1

Property name

MJ Logipark
Kazo 1

Property name

MJ Logipark
Osaka 1

Property name

MJ Logipark
Fukuoka 1

Acquisition
price5,400 mn yen

Acquisition
price6,653 mn yen

Acquisition
price1,272 mn yen

Acquisition
price6,090 mn yen

Acquisition
price

6,130 mn yen

Occupancy rate

Occupancy rate
Appraisal NOI
yield

100.0%

Occupancy rate

6.5%

Appraisal NOI
yield

100.0%

Occupancy rate

4.6%

Appraisal NOI
yield

100.0%

Occupancy rate

5.7%

Appraisal NOI
yield

100.0%

Occupancy rate

100.0%

5.0%

Appraisal NOI
yield

5.3%

Note： As of Feb. 28, 2019.

25

Portfolio DataArea

Total floor area

Acquisition Source(based on acquisition price）(based on acquisition price)(based on acquisition price)

1.5%

14.3%
■ Tokyo
首都圏 area
metropolitan■ Osaka
近畿圏
metropolitan area
■ Ohersその他

12.0%■3 0 , 0 0 0m 2 or more
■1 0 , 0 0 0m 2 or more,

29.3%

30.7%

■ Developed byMEC

but less than
3 0 , 0 0 0m 2

69.2%

73.7%

■ Sourced by■ Less than 1 0 , 0 0 0m2

69.3%

Convenience in traffic①

Convenience in traffic②(based on acquisition price)(based on acquisition price)

MJIA

100% lying inland fromresidential area

7.4%
40.4%

59.6%

Distance fromnearest station■ Within 1.5km■ 1.5km or more

40.4%

Distance from trunk road
■ Within 1km■ 1km or more,

52.2%

within3km■ 3km or more

Note： As of Feb. 28, 2019.

26

Portfolio List

Acquisition price(mn yen)

Logicross Fukuoka Hisayama

Kasuya, Fukuoka

5,770

36,082

5.2

100.0

4.4

Multi

Logicross Atsugi

Atsugi, Kanagawa

8,440

29,895

4.5

100.0

2.0

Multi

Logicross Kobe Sanda

Kobe, Hyogo

3,900

12,879

5.0

100.0

1.7

BTS

LOGIPORT Sagamihara(Beneficiary interest 49%)

Sagamihara,
Kanagawa

21,364200,252（98,123）

4.7

99.7

5.5

Multi

LOGIPORT Hashimoto(Beneficiary interest 45%)

Sagamihara,
Kanagawa

18,200145,809（65,614）

4.4

100.0

4.1

Multi

MJ Logipark Funabashi 1

Funabashi, Chiba

5,400

18,262

6.5

100.0

29.2

Multi

MJ Logipark Atsugi 1

Atsugi, Kanagawa

6,653

27,836

4.6

100.0

5.6

Multi

MJ Logipark Kazo 1

Kazo, Saitama

1,272

7,602

5.7

100.0

13.0

Multi

MJ Logipark Osaka 1

Osaka, Osaka

6,090

39,157

5.0

100.0

11.4

Multi

MJ Logipark Fukuoka 1

Kasuya, Fukuoka

6,130

39,797

5.3

100.0

11.4

Multi

83,219557,575（375,251）

4.8

99.9

7.1

-

Total / Average

Total floor
space（m2）

Appraisal NOI
yield(%)

Occupancy
rate（%）

Location

Property name

Building age(years)Property
type

Note： As of Feb. 28, 2019.

27

Appraisal Value（unit：mn yen）
5thFP
(Ended Feb. 28, 2019)（Note1）

4th FP(Ended Aug. 31, 2018)（Note2）

Appraisalvalue

Direct cap
rate

Appraisalvalue

Acquisitio
n dateAcquisition
priceBook value
at end of
5th FP

Logicross Fukuoka Hisayama

Sept. 2017

5,770

5,725

6,070

4.8%

Logicross Atsugi

Sept.2018

8,440

8,520

8,740

Logicross Kobe Sanda

Sept.2018

3,900

3,940

LOGIPORT Sagamihara

Sept. 2017

21,364

LOGIPORT Hashimoto

Sept. 2017

MJ Logipark Funabashi 1

Property name

Fluctuation

Unrealized
gain

Direct cap
rate

Appraisalvalue

Direct cap
rate

6,070

4.8%

0

0.0%

344

4.3%

8,740

4.3%

0

0.0%

219

4,050

4.7%

4,050

4.7%

0

0.0%

109

21,29022,8004.3%

22,800

4.3%

0

0.0%

1,509

18,20018,15419,0804.1%

18,7204.2%+360(0.1)%

925

Sept. 2016

5,400

5,331

6,440

5.0%

6,280

5.1%

+160

(0.1)%

1,108

MJ Logipark Atsugi 1

Sept. 2017

6,653

6,640

6,910

4.3%

6,860

4.4%

+50

(0.1)%269

MJ Logipark Kazo 1

Sept. 2017

1,272

1,282

1,370

5.1%

1,370

5.1%

0

0.0%

87

MJ Logipark Osaka 1

Sept. 2017

6,090

6,068

6,520

4.5%

6,500

4.5%

+20

0.0%

451

MJ Logipark Fukuoka 1

Sept. 2017

6,130

6,054

6,390

4.8%

6,380

4.8%

+10

0.0%

335

-

83,21983,00788,370-87,770

-

+600

-

Total
Note1：
Note2：

As of Feb. 28, 2018 for Appraisal value and Direct cap rate at end of 5th FP.
As of Aug. 31, 2018 for Appraisal value and Direct cap rate at end of 4th FP., except for Logicross Atsugi and Logicross Kobe Sanda which are as of May 31, 2018.

28

Statement of Income and Balance Sheet
Statement of Income
Item
Operating revenues
Operating rental revenues
Other rental revenues
Operating expenses（Unit：Thousands of yen）
Actual（Unit：Thousands of yen）
Item

2,493,772
2,358,795
134,976
1,226,428

Expenses related to property rental business

940,015

Asset management fee

190,172

Asset custody fee

Balance Sheet

848

Current assets

Actual
5,393,492

Cash and deposits

1,856,912

Cash and deposits in trust

3,185,098

Other current assets
Non-current assets
Property and equipment

351,480
83,039,635
83,007,836

Intangible assets

7,626

Investments and other assets

24,172Administrative service fee

17,869Director’s compensations

2,400

Deferred assets

Commission paid

49,544

Total assets

88,461,352

Other operating expenses

25,578Current liabilities

4,825,367

Operating income
Non-operating income
Interest income

1,267,344
30,23423

Operating accounts payable
Long-term loans payable due within one year

28,223

140,574
4,000,000

30,211

Accounts payable

277,346

Non-operating expenses

126,007

Advances received

407,446

Interest expenses

48,378Non-current liabilities

21,453,276

Borrowing related expenses

10,516Long-term loans payable

19,924,000

Amortization of organization expenses

6,047

Tenant leasehold and security deposits in trust

1,529,276

Amortization of investment unit issuance expenses

31,263

Total liabilities

26,278,644

Other non-operating expenses

29,801

Total unitholders’ equity

62,182,708

Other non-operating income

Ordinary income

1,171,572

Unitholders’ capital, net

61,011,843

Income before income taxes

1,171,572

Surplus1,170,864

Net income

1,170,729

Total net assets

62,182,708

Unappropriated retained earnings

1,170,864

Total liabilities and net assets

88,461,352

29

Financial Standing

Classification

LenderFloating MUFG Bank
interest
rate
Development Bank of Japan
Mizuho Bank
Development Bank of Japan

MUFG Bank

Longterm

Fixedinterest
rate

Balance(mn yen)
2,600
1,400
720
1,491

430

Sumitomo Mitsui Banking Corporation

2,050

MUFG Bank

1,760

Mizuho Bank

1,330

Borrowing rate

Drawdown date

Maturity date

Base rate(JBA 3-month JPY
TIBOR)+0.1750%

Sept. 29, 2016

Sept. 29, 2019

0.3263%

Sept. 14, 2021

0.3575%

Sept. 14, 2022

0.3913%

Sept. 14, 2023
Sept. 14, 2017

The Bank of Fukuoka

450

The Bank of Fukuoka

900

0.4288%

Sept. 14, 2024

MUFG Bank620

0.4675%

Sept. 14, 2025

MUFG Bank

710

0.5075%

Sept. 14, 2026

MUFG Bank

2,680
0.5500%

Sept. 14, 2027

Sept. 14, 2022

Sumitomo Mitsui Banking Corporation

880

Mizuho Bank
Sumitomo Mitsui Banking Corporation
The Norinchukin Bank

880

830
800

0.24%
0.3950%Shinsei Bank500

0.4538%Mizuho Bank

830

The Bank of Fukuoka

807

Shinkin Central Bank

1,256

Total

23,924

Remarks

Sept. 14, 2018

Unsecured /Unguaranteed

Sept. 14, 2025
Sept. 14, 2026

0.5750%

Sept. 14, 2028

-

-

-

-

Note： As of Feb. 28, 2019.

30

Logistics Market Overview (1)E-commerce market size

３PL market size（100 bn yen）

Sales of E-commerce（100 bn yen）
200

Sales of 3PL

30

150
20
100
10
50
0

0
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017 （year）

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017 （year）

Source: Data created by the Asset Management Company based on Ministry of Economy, Trade and Industry"Establishment of infrastructure for data malignant society in Japan (Heisei 29 Fiscal Year Market survey on
e-commerce)" (April 2018)
Note: “Sales pf E-commerce " in the above figure is an estimate of the transaction amount on the Internet at
B to C (between enterprises and consumers), and the object to be estimated is the sum of transaction
amount through the Internet among all goods and services in personal consumption. It is roughlyclassified into the field of sales merchandising field, service section field and digital field, and market
estimate value is calculated for each and totaled.

Source: Data created by the Asset management company based on "Monthly Logistics Business Sept. 2018“
Note: Each fiscal year refers to a period commencing on April 1 and ending on March 31 of the following year.
It does not coincide with the fiscal term of MEL.

E-Commerce rate

Retail market size

（%）

Japan

U.K.

（100 bn yen）

U.S.A.

10

9.3%
8.9%

8

180

Department store

Supermarket

Internet shopping

Drug store

Convenience store

150
120

6

4.9%

4

4.5%

2

2.8%

90
5.8%

2010

60
30
0

2011

2012

2013

2014

2015

2016

Source: Ministry of Economy, Trade and Industry (Japan), Office for National Statistics（UK）,
U.S. Census Bureau (USA)）2017 （year）

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017 （year）

Source: Data created by the Asset management company based on Ministry of Economy, Trade and Industry"Commercial Vehicle Statistics of Heisei 29 Fiscal Year" (June 2018) and the Ministry of Economy,
Trade and Industry "Heisei 29 Fiscal Year 2009 Factory Improvement on Data Driven Society (Market
Survey on Electronic Commerce)" (April 2018)31

Logistics Market Overview (2)Tokyo metropolitan area

Kansai region（%）（thousand m2）
2,500

10

2,000

8

1,500

6

1,000

4

500

2

0

0

（%）

（thousand m2）
1,500

15

1,000

10

500

5

0

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

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

Forecast

Forecast
New supply

New demand

Vacancyrate

Vacancy rate
（after 1 year of completion）

New supply

Throughout country

New demand

Vacancyrate

Vacancy rate
（after 1 year of completion）

Kyushu region（%）（thousand m2）
3,500

12

3,000

10

2,500

（%）

（thousand m2）
200

20

150

15

100

10

50

5

8

2,000

6

1,500

4

1,000

2

500
0

0
2009

2010

2011

New supply

2012

2013

2014

New demand

2015

2016

2017

2018 (year)

Vacancy rate

0

0
2009

2010

2011

New supply

2012

2013

2014

New demand

2015

2016

2017

2018 (year)

Vacancy rate

Source: CBRE K.K.
Note 1: In the above figure, “Tokyo metropolitan area” refers to Tokyo, Kanagawa, Chiba, and Saitama, Kinki region refers to Osaka and Hyogo and Kyushu region refers to Fukuoka and Saga.
Note 2: New supply refers to “total leasable floor area of newly constructed leasable logistics facilities” and new demand refers to “change in occupied floor area.” Change in occupied floor area is calculated by subtracting tenant withdrawal
floor area from floor area under new agreements.
Note 3: Based on data for leasable logistics facilities with 5,000m2 or more of gross floor area owned by real estate investment company, real estate developer, etc. Excluding leasable logistics facilities owned by logistics company, andtherefore not covering all logistics facilities for lease having a gross floor area of 5,000m 2 or more.

32

Unitholders Composition
Major Unitholders

Breakdown by Unitholders
1.0%

10.1%

22.6%

11.0%
245,815
Units Issued
andOutstanding
55.3%

Number ofunits： 55,527 units： 135,917 units

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

26,732

10.87%

Other domestic
entities
entities
Foreign entities： 27,159 units

Japan Trustee Services Bank, Ltd. (Trust Account)

21,126

8.59%： 24,886 units

Mitsubishi Estate Co., Ltd.

10,000

4.06%

Securities companies：

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

6,992

2.84%

Tokyo Century Corporation

6,654

2.70%

The Chugoku Bank, Limited

5,372

2.18%

The Shinkumi Federation Bank

4,806

1.95%

The Hyakujushi Bank, Ltd

4,324

1.75%

Trust and Custody Services Bank, Ltd.
(Securities Investment Trust Account)

4,107

1.67%

The Iyo Bank, Ltd.

3,652

1.48%

93,76538.14％

2,326 units

Breakdown by Units
1.3%

0.8%

2.6%

12,351
Unitholders

95.2%

0.1%

Ratio

Domestic individuals
and others
and others
Financial institutions

Domestic individuals
and others
and others
Financial institutions： 11,761 unitholders：

157 unitholders

Other domestic
entities
entities
Foreign entities：

318 unitholders：

98 unitholders

Securities companies：

17 unitholders

Total

Same-boat investment in MEL by MEC
Investment in MEL by MEC

Approx.

4.1%

Note： As of Feb. 28, 2019.

33

MEMO

34

Disclaimer
This document is provided solely for informational purpose with regard to Mitsubishi Estate Logistics REIT Investment Corporation (“MEL”) and is not intended to serve as an inducement orsolicitation to trade in any product offered by MEL.

Purchase, sale and such of MEL’s investment units entail the risk of incurring a loss due to fluctuations of the investment unit price.
Please consult with a securities company regarding the purchase of MEL’s investment units or investment corporation bonds. Information presented on this document should not be interpreted,
unless otherwise specified, as constituting disclosure documents or asset management report required under Financial Instruments and Exchange Act or the Act on Investment Trusts andInvestment Corporations.
The information contained in this document is the best available at the time of publication, however, no assurances can be given regarding the accuracy, validity and completeness of thisinformation. Furthermore, MEL and Mitsubishi Jisho Investment Advisors, Inc. (the “Asset Management Company”) assume no responsibility for the accuracy of the data, indices and otherinformation release by third parties (including data based on real estate appraisal reports).

This document includes forward-looking statements that reflect MEL’s plans and expectations. Any information contained in this document except facts about the past and present is referred to as
such forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of MEL or the Asset Management Company in light of the information currently
available to them, and involve known and unknown risks, uncertainties and other factors, and may be affected by such factors. These factors include risks related to MEL’s internal and external
growth and risks related to the profitability per investment unit. Such risks, uncertainties and other factors may cause MEL’s actual results, performance, achievements or financial position expressedor implied by these forward-looking statements. MEL and the Asset Management Company undertake no obligation to publicly update any forward-looking statements after the date of this document.
The content of this document is subject to change or repeal without prior notice.
Duplication or reproduction of any content presented in this document without the prior consent of MEL or Mitsubishi Jisho Investment Advisors, Inc. is strictly prohibited.
The document is prepared solely for use by residents of Japan and is not intended for use by non-residents of Japan.