Summary of Financial Results for the Fiscal Period Ended February 28, 2019 (REIT)
April 15, 2019
Name of Issuer:
Stock Exchange Listing:

Mitsubishi Estate Logistics REIT
Investment Corporation (“MEL”)
Tokyo Stock Exchange

Securities Code:3481

Website:https://mel-reit.co.jp/en/

Representative:

Masaki Sakagawa, Executive Director

Asset Management Company:
Representative:
Inquiries:

Mitsubishi Jisho Investment Advisors, Inc.
Haruhiko Araki, President & CEO
Masaki Sakagawa, Senior Vice President, General Manager, Logistics REITManagement Department
Tel. 81-3-3218-0030

Scheduled Date of Filing of Securities Report:
Scheduled Date of Commencement of Distributions
Payments:

May 30, 2019
May 21, 2019

Supplementary Materials for Financial Results:
Investors and Analysts Meeting:Yes
Yes(Values are rounded to the nearest million yen)

1. Financial Results for the Fiscal Period Ended Feb. 28, 2019 (5th Fiscal Period) (from Sept. 1, 2018 to Feb. 28, 2019)(1) Operating Results(Percentages indicate change from the previous period)
Operating revenues%
Fiscal period ended Millions of yen
Feb. 28, 2019
2,493
14.0
Aug. 31, 2018
2,186
7.1
Net income per unit
Fiscal period ended
Feb. 28, 2019
Aug. 31, 2018

Yen
4,798
4,684

Operating income
Millions of yen
%
1,267
20.2
1,053
(15.3)

Ordinary income
Millions of yen
%
1,171
16.8
1,003
(6.6)

Net income
Millions of yen
1,170
1,002

Return on unitholders’equity%2.0
1.8

Ratio of ordinary income
to total assets
%
1.4
1.3

Ratio of ordinary income
to operating revenues
%
47.0
45.9

%
16.8
(6.6)

(2) Distributions
Distributions Total amount ofDistributions Total amount
Total amount
per unit
per unit of distributions
Ratio ofdistributions Surplus cashof surplus
Payout(excluding(including
distributions(excluding distributions(including
cash
ratio
surplus cash surplus cash
per unit
surplus cash surplus cash
to net assets
distributions
distributions) distributions)distributions) distributions)
Yen Millions of yen
Yen Millions of yen
Yen Millions of yen
Fiscal period ended%%
Feb. 28, 2019
4,763
1,170
729
179
5,492
1,350
100.0
1.9
4,685
1,002
607
129
5,292
1,132
Aug. 31, 2018
100.0
1.8
Notes:
1. Total amount of surplus cash distributions are the refund of investment, which falls under the distributions through reduction inunitholders’ capital under taxation law.
2. The ratio of net asset value attributable to a reduction in unitholders’ paid-in capital for the fiscal periods ended Aug. 31, 2018 andFeb. 28, 2018, is 0.003 and 0.003, respectively. The payment of surplus cash distributions is deemed a return of capital. This
calculation methodology is pursuant to Article 23, Paragraph 1, Item 4 of the Act on Special Measures Concerning Taxation.
3. With the issuance of new investment units conducted in the fiscal period ended Feb. 28, 2019, the payout ratio is calculated using
the following formula.
Payout ratio = Total amount of distributions (excluding surplus cash distributions)/Net income ×100

(3) Financial Position
Total assets

Unitholders’ equity tototal assets

Net assets

Millions of yen
88,46175,453

Millions of yen
62,18254,567

Cash flows fromoperating activities
Millions of yen
1,450
4,118

Cash flows frominvesting activities
Millions of yen(12,242)(80)

Fiscal period ended
Feb. 28, 2019
Aug. 31, 2018

%
70.3
72.3

Net assets per unit
Yen
252,965
254,986(4) Cash Flows

Fiscal period ended
Feb. 28, 2019
Aug. 31, 2018

Cash flows from
Cash and cash equivalents
financing activities
Millions of yen
Millions of yen
5,042
11,437
4,397(3,807)

2. Forecasts for the Fiscal Periods Ending Aug. 31, 2019 (from Mar. 1, 2019 to Aug. 31, 2019) and Feb. 29, 2020 (Sept.
1, 2019 to Feb. 29, 2020)(Percentages indicate change from the previous period)

Operating revenues Operating income Ordinary income

Fiscal period ending Millions ofyenAug. 31, 2019
2,532
Feb. 29, 2020
2,531

% Millions of
yen
1.5
1,250
(0.0)
1,268

% Millions of
%
yen
(1.3)
1,205 2.9
1.4
1,204 (0.0)

Distributions
Distributions
per unit
Net income
per unit(including(excluding
SCD)
SCD)
Millions of %
Yen
Yen
yen
1,204 2.9
5,492
4,898
1,203 (0.0)
5,492
4,897

SCD

(Reference) Forecasted net income per unit for fiscal period ending Aug. 31, 2019: 4,898 yen
Forecasted net income per unit for the fiscal period ending Feb. 29, 2020: 4,897 yen*Other(1) Changes in accounting policies, accounting estimates, or restatements(a) Changes in accounting policies due to revisions to accounting standards and other regulations:None(b) Changes in accounting policies due to other reasons:None(c) Changes in accounting estimates:
None(d) Restatements:
None(2) Total number of investment units issued and outstanding(a) Total number of units issued and outstanding at the end of the fiscal period (including treasury units)
As of Feb. 28, 2019245,815 units
As of Aug. 31, 2018
214,000 units(ii) Number of treasury units at the end of the fiscal period
As of Feb. 28, 2019
0 units
As of Aug. 31, 2018
0 units*Implementation Status of Statutory Audit
At the time of this financial report, the audit procedures for the financial statements pursuant to the Financial
Instruments and Exchange Act have not been completed.
*Explanation on the Appropriate Use of the Forecast of Financial Results and Other Matters of Special Consideration
The forward-looking statements in this material are based on information currently available to us and on certain
assumptions that we believe are reasonable. Actual operating performance may differ substantially due tovarious factors. Furthermore, those statements shall not be deemed a guarantee or any commitment of theamount of future distributions and surplus cash distributions. Please refer to “Forecast Assumptions for the Fiscal
Periods Ending Aug. 31, 2019 and Feb. 29, 2020” on page 6 for assumptions regarding forward-looking
statements.
Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

Yen
594
595

Index
1. Organizational Structure of Investment Corporation ........................................................................................................................... 2
2. Management Policies and Results of Operations(1) Management Policies ...................................................................................................................................................................... 2(2) Results of Operations ...................................................................................................................................................................... 2(A)Overview of the Fifth Fiscal Period ended February 28, 2019 ..................................................................................................... 2(i) Major Operational Results of MEL ........................................................................................................................................... 2(ii) Operational Results of the Fifth Fiscal Period ended February 28, 2019 ................................................................................ 2(iii) Overview of Financing ............................................................................................................................................................ 2(iv) Overview of Financial Results and Distributions ..................................................................................................................... 3(B) Outlook for Next Fiscal Period ................................................................................................ .................................................... 3(i) Future Management Policies ………………................................................................................................................................... 3(ii) Significant Subsequent Events ................................................................................................................................................. 4(iii) Earnings Forecast .................................................................................................................................................................... 5(3) Risk Factors ……..………………………................................................................................................. .................................................... 8
3. Financial Statements(1) Balance Sheet .................................................................................................................................................................................... 9(2) Statement of Income and Retained Earnings .................................................................................................................................. 11(3) Statement of Changes in Net Assets................................................................................................................................................ 12(4) Statement of Cash Distribution ....................................................................................................................................................... 13(5) Statement of Cash Flows ................................................................................................................................................................. 15(6) Notes Concerning Going Concerns Assumption .............................................................................................................................. 16(7) Notes Concerning Significant Accounting Policies .......................................................................................................................... 16(8) Notes Concerning Changes in Presentation or Classification ......................................................................................................... 16(9) Notes Concerning Financial Statements .......................................................................................................................................... 17(10) Change in Number of Investment Units Issued and Outstanding ................................................................................................. 24
4. Change of Directors ............................................................................................................................................................................ 24
5. Reference Information(1) Composition of MEL’s Assets .......................................................................................................................................................... 25(2) Investment Assets …………................................................................................................................................................................ 25(i) Overview of Portfolio ................................................................................................................................................................. 26(ii) Overview of Properties……………………………….…………………………………………………………………………………….. ................................... 27(iii) Overview of Tenant Agreements ………………..…….…………………………………................................................................................. 28(iv) Overview of Appraisal Report ……….......................................................................................................................................... 30(v) Information Regarding Major Real Estate Properties ………................ ...................................................................................... 31(vi) Information Regarding Major Tenants…………………………………………………………………………......................................................... 31(vii) Property Distribution ……………………………………………………………………………………………………....................................................... 32(viii) Details of Collateral ……... ……………………………………………………………………………………………....................................................... 34(ix) Capital Expenditure for Owned Properties………..…………………………………………………………......................................................... 34(x) Overview of Property Leasing and Status of Operating Income …..…………………………………....................................................... 35

-1-

1.

Organizational Structure of Investment Corporation
No significant changes have occurred to the organizational structure of the investment corporation since the mostrecent securities report (filed Nov. 28, 2018); therefore, their descriptions are not stated here.

2. Management Policies and Results of Operations(1) Management Policies
No significant changes have occurred to investment policies, investment targets and distribution policies since themost recent securities report (filed Nov. 28, 2018); therefore, their descriptions are not stated here.
(2) Results of Operations(A)Overview of the Fifth Fiscal Period ended February 28, 2019(i) Major Operational Results of MEL
Mitsubishi Estate Logistics REIT Investment Corporation (“MEL”) was established on July 14, 2016 under the “Acton Investment Trust and Investment Corporation” (“Investment Trust Law”), and was listed on the REIT Securities
Market of the Tokyo Stock Exchange on September 14, 2017 (securities code: 3481).
Mitsubishi Estate Co., Ltd. (“MEC”), one of the largest comprehensive developers in Japan, acting as a sponsor.
MEL focuses on investing in logistics facilities primarily in the Tokyo Metropolitan Area. MEL’s asset managementcompany, Mitsubishi Jisho Investment Advisors, Inc. (“Asset Manager” or “MJIA”) has boasting an extensive trackrecord in real estate fund management since its establishment in 2001. Through “HYBRID” utilization of thestrengths of both companies, MEL aims for maximization of unitholder value by striving for the building of a highquality portfolio and steady and stable asset management as a listed real estate investment corporation investing
mainly in logistics facilities. Focusing on “location,” ”building features” and “stability,” we aim to build a long-termand stable portfolio through selective investments in highly competitive logistics facilities that meet tenant needs.
MEL acquired additional two properties (Logicross Atsugi and Logicross Kobe Sanda) (aggregate acquisition price:
12,340 million yen) during the reporting fiscal period. As a result, MEL owned 10 properties (aggregate acquisition
price: 83,219 million yen), at the end of the reporting fiscal period (Feb. 28, 2019).
(ii) Operational Results of the Fifth Fiscal Period ended February 28, 2019
During this fiscal period (ended in February 2019), the Japanese economy initially saw negative growth in its
real gross domestic product (GDP) for the quarter from July to September 2018 due to the occurrence of natural
disasters such as typhoons, torrential rains and earthquakes. The GDP growth returned to positive for the quarter
from October to December 2018, first in two quarters, partly because of contributions from capital expenditure byprivate companies, and private and government final consumption expenditure. Despite some weakness in export
and production growth, the Japanese economy continues to recover gradually on the back of improvements in
employment and wages.
Investors in the real estate transaction market are still highly motivated to make investments against the
backdrop of the consistently good conditions for fundraising. J-REITs, private funds and overseas investors continue
to actively engage in transactions and the level of transaction yields remains low due to competition among
investors.
In the market of logistics facilities, the volume of new supply remains at a high level. Meanwhile, newly suppliedfacilities have accepted new tenants at a solid pace, supported by the growth in the third party logistics (3PL)
market attributable to an increase in outsourced logistics operations, strong needs for restructuring of logistics
bases mainly in the manufacturing and wholesale sectors, and huge new demand triggered by steady growth in theretail EC market.
As of the end of the reporting fiscal period (Feb. 28, 2019), MEL owned 10 properties (total acquisition price:
83,219 million yen) and the occupancy rate remained high, at 99.9% as of the end of the reporting fiscal period.
(iii) Overview of Financing
a. Issuance of New Investment Units
MEL issued new investment units through its follow-on offering (30,300 units), with a payment date of Sept. 10,
2018, with an aim to procure funds to acquire two new properties. MEL additionally issued units through a thirdparty allotment (1,515 units) with a payment date of Oct. 11, 2018. As a result of these offerings, MEL raised 7,576
million yen equity, and the balance of MEL’s unitholders’ capital was 61,011 million yen and the total number ofunits issued and outstanding was 245,815 as of the end of the reporting fiscal period (Feb. 28, 2019).
b. Issuance of New Investment Units
MEL’s financial strategy is to take consideration of proportion of short and long-term borrowings, the balance
between floating and fixed-interest rate borrowings and maintain a well-diversified maturity profile.
For the purpose of acquiring the two new properties, including ancillary costs and expenses, MEL borrowed-2-

bridge loans of 12,600 million yen on Sept. 3, 2018. These bridge loans were subsequently prepaid with the net
proceeds from the abovementioned offerings along with cash on hand, short-term borrowing of 361 million yen,long-term borrowing of 5,023 million yen on Sept. 14, 2018. Furthermore, MEL prepaid the short-term borrowing of
361 million yen with the net proceeds from the third-party allotment along with cash on hand on Oct. 15, 2018. As aresult, the ending balance of MEL’s interest-bearing debt was 23,924 million yen as of the end of the reporting
fiscal period (Feb. 28, 2019). MEL’s loan-to-value ratio (the ratio of aggregate balance of interest-bearing debt to
MEL’s total assets, hereinafter “LTV”) was 27.0% as of the end of the reporting fiscal period.
c. Credit Rating
MEL’s credit ratings as of the end of the reporting fiscal period (Feb. 28, 2019) were as follows:
Rating Agency

Rating Object

RatingOutlookJapan Credit Rating Agency, Ltd.

Long-term issuer rating

AA-

Stable(iv) Overview of Financial Results and Distributions
As a result of these investment activities and financings, MEL generated operating revenues of 2,493 million yen,operating income of 1,267 million yen, ordinary income of 1,171 million yen, net income of 1,170 million yen anddistributions per unit of 5,492 yen per unit for the reporting fiscal period.
MEL’s distributions for the same period were 4,763 yen per unit, which included MEL’s profit distributions indeductible expenses in accordance with the Section 1 of Article 67-15 of the Act on Special Taxation Measures Law(a customary practice of J-REITs). The distribution amount was determined to distribute all unappropriated retained
earnings for the reporting period, excluding fractions less than one yen. MEL declared the distribution amount of
1,170,816,845 yen which was the amount equivalent to the maximum integral multiples of number of investment
units issued and outstanding (245,815 investment units) as of the reporting fiscal period.
In addition to the above distributions arising from earnings, MEL intends to regularly distribute cash in excess of
the amount of retained earnings (“Regular Surplus Cash Distributions”) in each fiscal period in accordance with
MEL’s distribution policy set forth in its articles of incorporation (Note 1). In addition, to maintain the stability of
MEL’s distributions per unit in the event that it is expected that an amount of distributions per unit temporarily
decreases by a certain degree due to financing actions or incurrence of large repair and maintenance, MEL may
decide to make distributions as one-time surplus cash distributions (“One-time Surplus Cash Distributions,”
collectively with the Regular Surplus Cash Distributions, “SCD”).
Accordingly, MEL made Regular Surplus Cash Distributions of 145,276,665 yen, equivalent to 30 percent of MEL’s
depreciation expense for the reporting fiscal period. In addition, MEL made One-time Surplus Cash Distributions of
33,922,470 yen, equivalent to 7 percent of MEL’s depreciation expense as a result of temporary decrease in rental
revenues. Consequently, the total amount of SCD per unit for the reporting fiscal period was 729 yen.
Notes:
1. However, MEL may decide not to make any surplus cash distributions for a fiscal period based on a consideration offactors such as economic or real estate market conditions and MEL’s, financial condition or the amount of anticipatedprofitability, which includes capital gains arising from property dispositions. In addition, MEL does not plan to pay
surplus cash distributions from the perspective of continuing stable financial management, in case such payment
would cause the Appraisal LTV (Note 2), as defined below, to exceed 60%.
2. Appraisal LTV (%) = A /B (%)
A = Total interest bearing liabilities on the balance sheet for the fiscal period related to the operating period inquestion (excluding tax loan) + Reversal from security deposit reserves (excluding cases where security deposits
are refunded according to leasing agreements with tenants)
B = Total assets on the balance sheet for the fiscal period related to the operating period in question – Book value
after depreciation of real estate held in the fiscal period in question + Total appraisal value of real estate heldin the fiscal period in question – Total cash distributions to be paid in the next operating period – Total surplus
cash distributions to be paid in the next operating period(B) Outlook for the Next Fiscal Period(i) Future Management PoliciesMEL aims to build a high-quality portfolio and manage assets in a stable andsteady manner, and eventually to maximize unitholder value, through selective investments in highly competitive
logistics facilities that meet tenant needs with a focus on “location,” “building features” and “stability,” based on
the accumulated expertise of Mitsubishi Estate Group.
a. External Growth Strategy-3-

MEL takes advantage of the following two unique features in a hybrid manner: pipeline support from Mitsubishi
Estate/MEC based on the sponsor support agreement and Mitsubishi Jisho Investment Advisors/MJIA’s property
sourcing capacity based on its capability to assess investment projects. MEL aims to achieve stable external growthby leveraging strengths of both MEC and MJIA according to market circumstances (hybrid external growth).
b. Internal Growth Strategy
MEL aims to achieve internal growth that maximizes the value of properties and contributes to MEL’s steady
growth by making the most of MEC’s leasing capability based on relationships with a wide variety of corporate
customers fostered as a comprehensive real estate developer and MJIA’s capability to stably manage logistics
facilities backed by its track record of fund management (hybrid internal growth).
c. Financial Strategy
MEL lays the foundation on long-lasting stable financial management leveraging MEC Group’s expertise infinancial strategy and credibility cultivated over the long term, and controls LTV in consideration of growth potential.
In addition, MEL is committed to efficient cash management in order to achieve improvements in unitholder value.
(ii) Significant Subsequent Events
Not applicable-4-

(iii) Earnings Forecast
Forecasts for the fiscal period ending August 31, 2019 (Mar. 1, 2019 to Aug. 31, 2019) are follows.

Operating revenues Operating income Ordinary income

Distributions
Distributions
per unit
Net income
per unit(including(excluding
SCD)
SCD)
Millions of yen
Yen
Yen
1,204
5,492
4,898

Millions of yen
Millions of yen
Millions of yen
Fiscal period ending
Aug. 31, 2019
2,532
1,250
1,205
(Reference)
Fiscal period ending Aug. 31, 2019: Expected number of investment units outstanding at the end of the period: 245,815 units;
Expected Net income per unit: 4,898 yen

SCD
Yen
594

Forecasts for the fiscal period ending February 29, 2020 (Sept. 1, 2019 to Feb. 29, 2020) are follows.

Operating revenues Operating income Ordinary income

Distributions
Distributions
per unit
Net income
per unit(including(excluding
SCD)
SCD)
Millions of yen
Yen
Yen
1,203
5,492
4,897

Millions of yen
Millions of yen
Millions of yen
Fiscal period ending
Feb. 29, 2020
2,531
1,268
1,204
(Reference)
Fiscal period ending Feb. 29, 2020: Expected number of investment units outstanding at the end of the period: 245,815 units;
Expected Net income per unit: 4,897 yen

SCD
Yen
595

The forecast information is calculated based on the assumptions described in “Forecast Assumptions for the Fiscal
Periods Ending Aug. 31, 2019 and Feb. 29, 2020”.
Note: Forecast calculations are based on the assumptions as of the date hereof. Actual operating revenues, operating
income, ordinary income, net income, distributions per unit (excluding surplus cash distributions), and surplus cash
distributions per unit may vary due to changes in MEL’s operational environment and circumstances. Therefore,
these forecasts should not be deemed a commitment or guarantee of the amount of future cash distributions.

-5-Forecast Assumptions for the Fiscal Periods Ending Aug. 31, 2019 and Feb. 29, 2020

Items
Accounting
PeriodAssets Under
Management

Operating
Revenues

OperatingExpensesNon-operating
Revenues

Non-operating
Expenses

Interestbearing Debt

Assumption
 Fiscal period ending Aug. 31, 2019 (6th fiscal period): From Mar. 1, 2019 to Aug. 31, 2019 (184 days)
 Fiscal period ending Feb. 29, 2020 (7th fiscal period): From Sept. 1, 2019 to Feb. 29, 2020 (182 days)
 It is assumed that there will be no material change in the operational status of the 10 properties MEL
owned as of Apr. 15, 2019, up until Feb. 29, 2020.
 The actual results may change due to the acquisition of new properties or the disposition of existing
properties, etc.
 Operating rental revenues take into account factors such as market trends and the competitiveness,
etc. of each property based on operating results for the current properties held by Mitsubishi Jisho
Investment Advisors, Inc., (the “Asset Manager”).
 It is assumed tenants will pay rents without delinquency or withholding.
 Main items regarding operating expenses are as follows:(Millions of yen)
Fiscal Period Ending
Fiscal Period Ending
Aug. 31, 2019Feb. 29, 2020
Total Operating Rental Expenses
965
957
Facility Management Fee
58
61
Property Management Fee
15
15
Utilities Cost
94
97
Repair and Maintenance48
17
Property Taxes
218
218
Depreciation
487
488
Total General and Administrative
315
304
Expenses
Asset Management Fee
208
205
Sponsor Support Fee
41
41 Of operating rental expenses, which is the main operating expense, expenses except depreciation arecalculated by taking into account variable factors based on historical data after acquisition.
 Operating rental income (excluding profit from sale of real estate) after deducting operating rental
expenses (including depreciation) is assumed to be 1,566 million yen and 1,573 million yen for the
fiscal periods ending Aug. 31, 2019 and Feb. 29, 2020 and, respectively.
 With respect to building repair expenses, the amount assumed to be necessary for each property is
calculated based on the repair and maintenance plans of the Asset Manager. However, it may differ
substantially from the anticipated amount due to unexpected factors.
 For the fiscal period ending Aug. 31, 2019, it is assumed that 41 million yen insurance payment will
be received regarding the damage from the typhoon that hit Japan in Sept. 2018. In addition, due tothe review of building evaluation, it is assumed that 12 million yen of property tax refund of priorperiods will be received. As a result, MEL assumes 53 million yen for the fiscal period ending Aug. 31,
2019.
 MEL assumes that there will be no non-operating revenues for the fiscal period ending Feb. 29, 2020.
 For the fiscal period ending Aug. 31, 2019, it is assumed that 99 million yen will be incurred as nonoperating expenses which includes 61 million yen for interest expenses and other debt-related costs
and 6 million yen as amortization of organization expenses. In addition, expenses caused by thetyphoon that hit Japan in Sept. 2018 is assumed that there will be 31 million yen for the fiscal period
ending Aug. 31, 2019.
 For the fiscal period ending Feb. 29, 2020, it is assumed that 63 million yen will be incurred as nonoperating expenses which includes 57 million yen for interest expenses and other debt-related costs
and 6 million yen as amortization of organization expenses.
 The balance of MEL’s interest-bearing debt on an accounting basis as of today is 23,924 million yen
and 23,924 million yen for the fiscal periods ending Aug. 31, 2019 and Feb. 29, 2020, respectively.
 It is assumed that MEL will fully refinance 4,000 million yen long‐term borrowings that is due on
Sept. 29, 2019.
 LTV at the end of the fiscal periods ending Aug. 31, 2019 and Feb. 29, 2020 is estimated to be 27.0%-6-Investment
Units

Distributions
Per Unit(excluding
surplus cash
distributions)Surplus CashDistributions
Per Unit

and 27.1%, respectively. For LTV calculation, please refer to the following formula. The ratios arerounded to the first decimal place:
LTV(%) = interest-bearing debt / total assets×100 (%)
 However, the actual LTV may differ considerably from this assumption, depending on the final
number of investment units to be issued and the final issue amount.
 It is assumed that the number of investment units currently issued and outstanding will not change up
until Feb. 29, 2020. Currently, there are 245,815 units issued and outstanding.
 Distributions per unit (excluding surplus cash distributions) and surplus cash distributions per unit for
the fiscal periods ending Aug. 31, 2019 and Feb. 29, 2020 are calculated on the basis of the expected
number of investment units issued and outstanding at the end of the fiscal periods ending Aug. 31,
2019 and Feb. 29, 2020 of 245,815 units.
 Distributions per unit (excluding surplus cash distributions) are calculated based on the premise of
the distribution policy in the Articles of Incorporation of MEL.
 Distributions per unit (excluding surplus cash distributions) may change due to various factors
including any additional acquisitions or dispositions of properties, changes in rent revenues
attributable to tenant moves, changes in the property management environment including
unexpected repair etc.
 Surplus cash distributions per unit are calculated based on the premises of the fund distribution policyin the Articles of Incorporation of MEL. It is assumed that the surplus cash distributions (surplus cash
distributions on an ongoing basis) in the fiscal periods ending Aug. 31, 2019 and Feb. 29, 2020, will beequal to 30% of depreciation expenses for each fiscal period, which is assumed to be 146 million yen
for the fiscal periods ending Aug. 31, 2019 and Feb. 29, 2020. These are the refunds of investment
categorized as a distribution from in unitholders’ capital for tax purposes and there are no refunds
from a distribution of the allowance for temporary difference adjustments.
 The amount of depreciation expenses may change depending on the amount of total assets undermanagement, ancillary costs, capital expenditure, the allocation method of purchase prices for each
asset and depreciable life, etc. Surplus cash distributions, which will be based on the amount ofdepreciation expenses, may change accordingly.
 There may be cases where MEL implements distribution of cash in surplus of the distributable amountto investors on the basis of financial statements related to cash distribution approved under the Act
on Investment Trusts and Investment Corporations (Act No. 198 of June 4, 1951, as amended) if theboard of directors of MEL deems such distribution to be appropriate (1) in light of the economic
environment, real estate market, lease market or other trends; (2) when the amount of income fails tomeet the amount equivalent to 90% of distributable income; (3) when the distribution amount fails tomeet the requirements for the Special Provisions for Taxation on Investment Corporations; or (4) inother ways to maximize the interest of investors. When MEL implements distribution of cash insurplus of the distributable amount, it limits the amount to the total of the amount of income for theoperating period in question and the amount stipulated under laws and ordinances (inclusive of therules of the Investment Trusts Association, Japan).
 For the time being, MEL intends to target a level of surplus cash distributions on an ongoing basis at
an amount equivalent to approximately 30% of the depreciation expense for the relevant fiscal
period. Furthermore, to maintain the stability of MEL’s distributions per unit in the event that an
amount of distributions per unit temporarily decreases due to a series of financing actions such as
the issuance of new investment units (including investment unit third-party allotment) or large scale
repair and maintenance, which may result in a temporary dilution of investment units or incurrenceof large expenses, MEL may make distributions as one-time surplus cash distributions. However, MEL
may decide not to make any surplus cash distributions for a fiscal period based on a consideration offactors such as economic or real estate market conditions and MEL’s, financial condition or theamount of anticipated profitability, which includes capital gains arising from property dispositions.
 In addition, in the event that MEL needs to allocate its cash to emergency capital expenditures forunexpected damages on MEL’s assets, etc., surplus cash distributions per unit may be reduced. MEL
does not plan to pay surplus cash distributions from the perspective of continuing stable financial
management, in case such payment would cause the Appraisal LTV (Note), as defined below, toexceed 60%.
(Note) Appraisal LTV (%) = A /B (%)
A = Total interest bearing liabilities on the balance sheet for the fiscal period related to the operating
period in question (excluding tax loan) + Reversal from security deposit reserves (excluding cases
where security deposits are refunded according to leasing agreements with tenants)
B = Total assets on the balance sheet for the fiscal period related to the operating period in question-7-

Others– Book value after depreciation of real estate held in the fiscal period in question + Total appraisal
value of real estate held in the fiscal period in question – Total cash distributions to be paid in thenext operating period – Total surplus cash distributions to be paid in the next operating period
 It is assumed that no any revision that will have an impact on the forecast information above will bemade with regard to the laws and regulations, tax system, accounting standards, listing rules of theTokyo Stock Exchange and rules of the Investment Trusts Association, Japan, etc.
 It is assumed that no unexpected material change will arise in overall economic trends and realestate market conditions, etc.

(3) Risk Factors
No significant changes have occurred to the risk factors since the most recent securities report (filed Nov. 28, 2018);
therefore, their descriptions are not stated here.

-8-3. Financial Statements(1) Balance Sheet
Thousands of yen
As ofAug. 31, 2018ASSETS
Current assets:
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other current assets
Total current assets

Feb. 28, 2019

1,869,456
2,527,566
26,751
26,142
3,834

1,856,912
3,185,098
18,674
20,637
312,168-

4,453,750

5,393,492

Fixed assets:
Property and equipment
Buildings in trust
Less: accumulated depreciation

33,073,864(893,213)

37,515,698(1,365,361)

Buildings in trust, net

32,180,650

36,150,337

1,118,406(22,533)

1,288,743(35,273)

1,095,873

1,253,469

144
(12)

689
(28)

Structures in trust
Less: accumulated depreciation
Structures in trust, net
Tools, furniture and fixtures in trust
Less: accumulated depreciation

132

661

Land in trust

Tools, furniture and fixtures in trust, net

37,655,333

45,603,368

Total property and equipment

70,931,988

83,007,836

Intangible assets
Software
Other intangible assets

7,735
891

6,785
841

Total intangible assets

8,626

7,626

12
14,92810,00011
14,161
10,000Investments and other assets
Deferred tax assets
Long-term prepaid expenses
Security deposit
Total investments and other assets
Total fixed assets
Deferred assets:
Organization expenses
Total deferred assets
Total assets-9-24,94024,17270,965,555

83,039,635

34,271
34,271

28,22328,22375,453,578

88,461,352

LIABILITIESCurrent liabilities:
Operating accounts payable
Long-term loans payable due within one year
Accounts payable
Distributions payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities

71,563
12,873
4,439
243,452861
108,215
313,57883
755,068

140,574
4,000,000
7,075
4,984
264,448837
407,446
4,825,367

Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits in trust

18,901,000
1,230,295

19,924,000
1,529,276

20,131,295

21,453,276

20,886,363

26,278,644

53,685,400(120,910)
53,564,490

61,262,651(250,808)
61,011,843

1,002,724

1,170,864

1,002,724

1,170,864

54,567,214

62,182,708

54,567,214

62,182,708

75,453,578

88,461,352

Total non-current liabilities
Total liabilities
NET ASSETS
Unitholders’ equity
Unitholders’ capital
Unitholders’ capital, gross
Deduction from unitholders’ capital
Unitholders’ capital, net
SurplusRetained earnings
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets-10-(2) Statement of Income and Retained Earnings
Thousands of yen
For the fiscal period from
For the fiscal period from
Mar. 1, 2018 to
Sept. 1, 2018 toAug. 31, 2018
Feb. 28, 2019
Operating revenues:
Operating rental revenues
Other rental revenues
Total operating revenues
Operating expenses:
Expenses related to property rental business
Asset management fee
Asset custody fee
Administrative service fee
Directors’ compensation
Commission paid
Other operating expenses
Total operating expenses
Operating income
Non-operating income:Interest income
Interest on refund
Insurance income
Other non-operating income
Total non-operating income
Non-operating expenses:
Interest expenses
Borrowing related expenses
Amortization of organization expenses
Amortization of investment unit issuance
expensesLosses due to disaster
Reduction entry of tangible fixed assets
Total non-operating expenses

2,043,691
143,164
2,186,855

2,358,795
134,976
2,493,772

860,255
178,404730
16,7562,400
46,76827,5801,132,896
1,053,959

940,015
190,172848
17,8692,400
49,54425,5781,226,428
1,267,344

21
3,320
-

23
30,2101

3,342

30,23438,4909,391
6,047

48,37810,516
6,047-

31,263-25,4974,303

53,930126,007

Ordinary income

1,003,371

1,171,572

Income before income taxes

1,003,371

1,171,572

865
(12)

841
1

Income taxes-current
Income taxes-deferred
Total income taxes
Net income

852

842

1,002,518

1,170,729

Retained earnings brought forward

206

134

Unappropriated retained earnings

1,002,724

1,170,864-11-

(3) Statement of Changes in Net Assets
The Reporting Period (from Mar. 1, 2018 to Aug. 31, 2018)
Thousands of yen
Unitholders' equity
Unitholders' capital
Surplus
Deduction of
UnappropriatedUnitholders’
Unitholders’unitholders’retained
Total surplus
capital, grosscapital, net
capitalearnings
Balance as ofMar. 1, 2018
Change during theperiodDistributions inexcess of retained
earnings
Surplus cash
distributions

Total
unitholders'equityTotal net
assets

53,685,400-

53,685,400

1,073,416

1,073,416

54,758,816

54,758,816-(120,910)(120,910)--(120,910)(120,910)---(1,073,210)(1,073,210)(1,073,210)(1,073,210)

Net income

-

-

-

1,002,518

1,002,518

1,002,518

1,002,518

Total change during
the period-(120,910)(120,910)(70,691)(70,691)(191,601)(191,601)*53,685,400(120,910)

53,564,490

1,002,724

1,002,724

54,567,214

54,567,214

Balance as ofAug. 31, 2019

The Reporting Period (from Sept. 1, 2018 to Feb. 28, 2019)
Thousands of yen
Unitholders' equity
Unitholders' capital
Surplus
Deduction of
UnappropriatedUnitholders’
Unitholders’
Totalunitholders’retained
capital, grosscapital, net
surpluscapitalearnings
Balance as of
Sept. 1, 2018
Change during theperiodIssuance of new
investments
Distributions inexcess of retained
earnings
Surplus cash
distributions
Net income
Total change during
the period
Balance as ofFeb. 28, 2019

Total
unitholders'equityTotal net
assets

53,685,400(120,910)

53,564,490

1,002,724

1,002,724

54,567,214

54,567,214

7,577,251-

7,577,251--

7,577,251

7,577,251-(129,898)(129,898)--(129,898)(129,898)---(1,002,590)(1,002,590)(1,002,590)(1,002,590)

-

-

-

1,170,729

1,170,729

1,170,729

1,170,729

7,577,251(129,898)

7,447,353

168,139

168,139

7,615,493

7,615,493

61,262,651(250,808)

61,011,843

1,170,864

1,170,864

62,182,708

62,182,708-12-

(4) Statement of Cash Distribution
Yen
For the fiscal period from
Mar. 1, 2018 toAug. 31, 2018
I. Unappropriated retained earnings
II. Distributions in excess of retained earnings
Deduction from unitholders’ capital
III. Distributions(Distributions per unit)
Of which, distributions of retained earnings(Of which, distributions in retained
earnings per unit)
Of which, distributions in excess ofretained earnings(Of which, distributions in excess ofretained earnings per unit)
IV. Retained earnings carried forward
Calculation method of distribution amountFor the fiscal period from
Sept. 1, 2018 toFeb. 28, 2019

1,002,724,829

1,170,864,727

129,898,000

179,199,135

1,132,488,000(5,292)

1,350,015,980(5,492)

1,002,590,000

1,170,816,845(4,685)(4,763)

129,898,000

179,199,135

(607)

(729)

134,82947,882

Pursuant to the “Policy on theDistribution of Funds” as defined in

Pursuant to the “Policy on theDistribution of Funds” as defined in

Article 35, Paragraph 1 of the Articles ofIncorporation,theamountofArticle 35, Paragraph 1 of the Articles
of Incorporation, the amount of

distributions shall be the amount which
does not exceed the amount of profits

distributions shall be the amount which
does not exceed the amount of profits

but exceeds 90% of the distributableprofit as defined in Article 67-15 of thebut exceeds 90% of the distributableprofit as defined in Article 67-15 of theSpecial Taxation Measures Act. Based on
the policy, MEL declared distribution

Special Taxation Measures Act. Basedon the policy, MEL declaredamount of 1,002,590,000 yen. This
amount was equivalent to the maximum

distribution amount of 1,170,816,845
yen. This amount was equivalent to theintegral multiples of number ofinvestment units issued and outstanding

maximum integral multiples of numberof investment units issued andas of the end of fiscal period. Based on
the distribution policy as defined inoutstanding as of the end of fiscal
period. Based on the distribution policy

Article 35, Paragraph 2 of the Articles ofIncorporation, MEL shall make Surplus

as defined in Article 35, Paragraph 2 of
the Articles of Incorporation, MEL shall

Cash Distributions (SCD), defined as
distributions in excess of retained

make Surplus Cash Distributions (SCD),
defined as distributions in excess ofearnings, as a return of unitholders’capital, each fiscal period on aretained earnings, as a return ofunitholders’ capital, each fiscal period

continuous basis. Accordingly, MEL
declared SCD of 129,898,000 yen as a

on a continuous basis. In addition, due
to temporary decrease in rental

return of unitholders’ capital, which was
the amount equivalent to approximately

revenues for the reporting fiscal period,
MEL made One-time Surplus Cash

30.0% of depreciation expense.

Distributions equivalent to 7 percent of
MEL’s depreciation expense.
Accordingly, MEL declared SCD of
145,276,665 yen as a return ofunitholders’ capital, which was theamount equivalent to approximately
30.0% of depreciation expense andOne-time Surplus Cash Distributions of
33,922,470 yen, equivalent to 7
percent of MEL’s depreciation expense.

-13-Note: MEL is permitted to distribute cash in excess of the amount of retained earnings if the amount of the accounting income issmaller than 90% of its distributable retained earnings on a tax basis to the extent that such distribution amount does not exceed
the amount of MEL’s depreciation for the same fiscal period, and if NPR determines that such excess distribution amount isappropriate.

-14-(5) Statement of Cash Flows
Thousands of yen
For the fiscal period from
For the fiscal period from
Mar. 1, 2018 to
Sept. 1, 2018 toAug. 31, 2018
Feb. 28, 2019
Cash flows from operating activities:
Income before income taxes
Depreciation
Amortization of investment unit issuanceInterest income
Interest expenses
Insurance income
Reduction entry of tangible fixed assets
Losses due to disaster
Decrease (Increase) in operating accounts receivable
Decrease (Increase) in consumption taxes receivable
Decrease (Increase) in prepaid expenses
Decrease (Increase) in long-term prepaid expenses
Increase (Decrease) in operating accounts payable
Increase (Decrease) in accounts payable
Increase (Decrease) in accrued expenses
Increase (Decrease) in consumption taxes payable
Increase (Decrease) in advances received
OthersSubtotalInterest received
Interest paid
Insurance income due to disaster
Payments due to disaster
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of property and equipment in trust
Repayments from tenant leasehold and security deposits
in trust
Net cash provided by investing activities
Cash flows from financing activities:
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Proceeds from issuance of new investment units
Payment of distributions of retained earnings
Payment of distributions in excess of retained earnings
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period

1,003,371
434,019(21)
38,490(7,049)2,517,417
1,367
11,489(546)
3,947
73,873
108,215(29,388)
2,153
4,157,339
21(38,004)(608)
4,118,748

1,171,572
485,904
31,263(23)
48,378(30,210)4,303
25,497
8,076(312,168)
5,504
766
45,918(5,798)19,762(108,215)
93,8689,798
1,494,200
23(47,145)
30,210(25,497)(865)
1,450,925(75,392)(12,541,961)

13,282

300,506(18,135)(80,246)(2,618,000)-(1,525)(12,242,980)
12,961,000(12,961,000)
5,023,000
7,545,987(1,002,300)(129,642)
11,437,044
644,989
4,397,022
5,042,011(1,069,453)(120,226)(3,807,680)
230,821
4,166,201
4,397,022-15-

(6) Notes Concerning Going Concerns Assumption
Not applicable(7) Notes Concerning Significant Accounting Policies
1. Method of depreciation of non-current
assets(1) Property and equipment
Property and equipment are stated at cost. Depreciation of property andequipment, including property and equipment in trust, is calculated by thestraight-line method over the estimated useful lives as follows:
Buildings
Structures

2-60 years
10-58 years

Tools, furniture and fixtures 6-10 years(2) Intangible assets
Intangible assets are stated at cost. Amortization of intangible assets, including
intangible assets in trust, is calculated by the straight-line method over theestimated useful lives.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized by the straight-line method.
2. Accounting method of deferred charges(1) Organization Expenses
All organization expenses are amortized over five years using straight-line
method.
(2) Investment unit issuance expenses
The full amount of investment unit issuance expenses is recorded as expenseat the time of expenditure .

3. Revenue and expense recognition

Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset
taxes, of the tax amount assessed and determined, the amount corresponding
to the relevant fiscal period is accounted for as rental expenses.
Of the amounts paid for the acquisitions of real estate properties orbeneficiary right in trust of real estate, the amount equivalent to property taxes

4. Cash and cash equivalents as stated in theStatement of Cash Flows

5. Other significant matters which constitutethe basis for preparation of financial
statements

is capitalized as part of the acquisition cost of the relevant property instead ofbeing charged as an expense.
Cash and cash equivalents consist of cash on hand and cash in trust, floating
deposits, deposits in trust and short-term investments that are very liquid andrealizable with a maturity of three months or less when purchased and that are
subject to insignificant risks of changes in value.
(1) Accounting treatment of trust beneficiary interests of real estate
As to trust beneficiary interests of real estate, all accounts of assets andliabilities within assets in trust, as well as all income generated and expenses
incurred from assets in trust, are recorded in the relevant balance sheets andincome statement accounts. Of which, the following significant trust assets areshown separately on the balance sheet.
(a) Cash and deposits in trust(b) Buildings in trust, structures in trust, tools in trust, furniture and fixtures andland in trust(c) Tenant leasehold and security deposits in trust(2) Accounting treatment of consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusiveof consumption taxes.

(8) Notes Concerning Changes in Presentation or Classification
As the Investment Corporation started application of “Partial Amendments to Accounting Standard for Tax EffectAccounting” (ASBJ Statement No. 28, Feb. 16, 2018) from the fiscal period under review, changes are made to indicatedeferred tax assets under investments and other assets and deferred tax liabilities under noncurrent liabilities. As a result,
12 thousand yen of deferred tax assets which was under “current assets” in the balance sheets of the previous fiscal
period is under “investments and other assets.”-16-(9) Notes Concerning Financial Statements(Notes Concerning Balance Sheet)*1 Reduction entry of tangible fixed assets
Thousands of yen
As ofAug. 31, 2018

Feb. 28, 2019

Structures in trust

-

4,303

*2 Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations
Thousands of yen
As ofAug. 31, 2018

Feb. 28, 201950,00050,000(Notes Concerning Statement of Income and Retained Earnings)
Thousands of yen
For the fiscal period from
For the fiscal period from
Mar. 1, 2018 to
Sept. 1, 2018 toAug. 31, 2018
Feb. 28, 2019
A. Property-related revenues
Operating rental revenues
Rental revenues
Common area charges
Total
Other rental revenues
Received utilities cost
Others
Total
Total property-related revenues
B. Property-related expenses
Rental expenses
Facility management fee
Property and other taxes
Insurance

1,940,907
102,783
2,043,691

2,254,788
104,0072,358,795

99,06444,099143,164
2,186,855

90,60144,375
134,976
2,493,772

87,649185,803
3,547

123,684
184,581
3,957

Repair and maintenanceUtilities cost

30,163
104,285

29,427
96,523

Depreciation
Custodian fee
Others433,019
1,382
14,404484,904
1,678
15,257860,255

940,015

1,326,599

1,553,757

Total rental expenses
C. Operating income from property leasing(A-B)(Notes Concerning Statement of Unitholders’ Equity)
For the fiscal period from
Mar. 1, 2018 toAug. 31, 2018

For the fiscal period from
Sept. 1, 2018 toFeb. 28, 2019

Number of investment units authorized

10,000,000 units

10,000,000 units

Number of investment units issued andoutstanding

214,000 units

245,815 units-17-

(Notes Concerning Statement of Cash Flow)*1. Relationship between cash and cash equivalents in statement of cash flows and accounts and amounts in theaccompanying balance sheet
Thousands of yen
For the fiscal period from
For the fiscal period from
Mar. 1, 2018 to
Sept. 1, 2018 toAug. 31, 2018
Feb. 28, 2019
Cash and deposits

1,869,456

1,856,912

Cash and deposits in trust

2,527,566

3,185,098

Cash and cash equivalents

4,397,022

5,042,011(Notes Concerning to Lease Contracts)
Operating lease transactions (as lessor)
Unearned rental revenue
Thousands of yen
For the fiscal period from
For the fiscal period from
Mar. 1, 2018 to
Sept. 1, 2018 toAug. 31, 2018
Feb. 28, 2019
Due within one year

3,412,347

4,894,348

Due after one year

9,981,099

20,209,065

13,3993,446

25,103,414

Total(Notes Concerning Financial Instruments)
1. Overview(1) Policy for Financial Instruments
MEL procures funds for the acquisition of assets and repayment of debt mainly through bank loans or theissuance of new investment units.
In borrowing funds, MEL takes consideration in interest rate trend, debt cost, floating or fixed interest rate,borrowing period and repayment date.
In the case of borrowing, the lender shall be limited to qualified institutional investors as stipulated in Article 2,
Paragraph 3, Item of the Financial Instruments and Exchange Act of Japan (limited to institutional investorsprescribed in Article 67-15 of the Taxation Special Measures Law), with in principle no collateral / no guarantee.
However, MEL may provide assets as collateral in consideration of financing environment and economic
conditions. In addition, in order to flexibly procure the necessary funds related to MEL's operation such as
property acquisition and repayment debt financing, MEL may enter into the overdraft agreements, commitmentline agreements or conclude the reserved agreements.
MEL generally invests surplus funds in bank deposits, considering the safety and liquidity of the investment andalso reflecting the market environment and cash positions of MEL itself. MEL enters into derivative transactions
solely for the purposes of reducing risks of rising interest rates related to financings and other types of risks. MEL
does not use derivative transactions for speculative purposes. Not applicable for the reporting period.
(2) Type of Financial Instruments, related Risks and Risk Management System
Bank loans are mainly made to procure funds for acquisition of properties, repayment of bank loans. Although
MEL is exposed to liquidity risks upon repayment, by diversifying the maturities and lending institutions, securingliquidity of cash in hand and managing such liquidity risks by preparing and monitoring cash flows projection, suchrisks are maintained under control. In addition, some loans bear floating interest rates and are exposed topotential risks of rising interest rates. MEL attempts to mitigate such risks on its operations by maintaining a
conservative loan to value ratio and increasing the ratio of long-term fixed interest rate loans.
The security deposits which MEL has received from the tenants are exposed to liquidity risk due to cancelationof lease agreement before the maturity date. In the case of trust beneficiary interest in real estate, MEL securessafety by accumulating a portion in the trust account, and in the case of real estate, leasehold rights of real estate,and superficies, MEL secures safety by accumulating a portion in bank savings account or bank time deposit
account. Moreover, MEL ensures safety by accurately tracking the timing of the tenant move-ins and outs andanticipating the fund demand utilizing historical data.
(3) Supplemental Explanation Regarding the Estimated Fair Values of Financial Instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no-18-

quoted market price available, fair value is based on a price that is reasonably estimated. Since various
assumptions and factors are reflected in estimating the fair value, different assumptions and factors could resultin a different value.

2.

Estimated Fair Value of Financial Instruments
The book value, fair value and differences between the values as of Aug. 31, 2018 are as follows: Financial
instruments for which the fair value is extremely difficult to estimate are excluded from the following table (see Note
2 below).

Thousands of yen
Book value

Fair value

Difference(1) Cash and deposits

1,869,456

1,869,456-(2) Cash and deposits in trust

2,527,566

2,527,566-

4,397,022

4,397,022

-

-

-

-

(4) Long-term loans payable

18,901,000

18,887,140(13,859)

Total liabilities

18,901,000

18,887,140(13,859)

Total assets(3) Long-term loans payable due within
one year

The book value, fair value and differences between the values as of Feb. 28, 2019 are as follows: Financial
instruments for which the fair value is extremely difficult to estimate are excluded from the following table (see Note
2 below).
Thousands of yen
Book value

Fair value

Difference(1) Cash and deposits

1,856,912

1,856,912-(2) Cash and deposits in trust

3,185,098

3,185,098-

5,042,011

5,042,011-

4,000,000

4,000,000-(4) Long-term loans payable

19,924,000

20,064,009

140,009

Total liabilities

23,924,000

20,064,009

140,009

Total assets(3) Long-term loans payable due within
one year(Note 1) Methods to estimate fair values of financial instruments(1) Cash and deposits and (2) Cash and deposits in trust
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of thefair value, and therefore, the book value is used as the fair value.
(3) Long-term loans payable due within one year (4) Long-term loans payable
The fair value of long-term loans payable is determined based on the present value of contractual cash flows
which would be applicable to new loans payable under the same terms. In terms of floating interest rate loans
payable, since it reflects the market interest rate in a short period of time, the fair value is approximately equal tothe book value. Thus, the book value is used.
(Note 2) Financial instruments for which the fair value is extremely difficult to estimate

As tenant leasehold and security deposits in trust has no available quoted market price, and it is impracticable toreasonably estimate their future cash flows, their fair value is not disclosed.
Thousands of yen
As ofAug. 31, 2018
Tenant leasehold and security deposits in trust *1

1,230,295

Feb. 28, 2019
1,529,276*1 Because tenant leasehold and security deposits and tenant leasehold and security deposits in trust have noobservable and available market price and it is impracticable to reasonably estimate their future cash flows, their-19-

fair value is not assessed herein.
(Note 3) Redemption schedule for monetary claims after Aug. 31, 2018
Thousands of yen

Cash and deposits
Cash and deposits in trust
Total

As of Aug. 31, 2018
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
1,869,456
2,527,566
4,397,022-

Redemption schedule for monetary claims after Feb. 28, 2019
Thousands of yen

Cash and deposits
Cash and deposits in trust
Total

As of Feb. 28, 2019
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
1,856,912
3,185,098
5,042,011-(Note 4) Repayment schedule for debt after Aug. 31, 2018
Thousands of yen

Long-term loans payable
Total

As of Aug. 31, 2018
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
4,000,000
2,211,000
2,480,000 10,210,000
4,000,000
2,211,000
2,480,000 10,210,000

Repayment schedule for debt after Feb. 28, 2019
Thousands of yen
As of Feb. 28, 2019
Due after
Due within Due after one Due after two
Due after four Due after five
three to four
one yearto two years to three years
to five years
years
years
Long-term loans payable
due within one year
Long-term loans payable
Total

4,000,000

-

-

-

-

-

4,000,000-02,211,000
2,211,000

3,310,000
3,310,000

3,540,000
3,540,000

10,863,000
10,863,000(Notes Concerning Investment Securities)
For the periods ended Aug. 31, 2018, and Feb. 28, 2019
Not applicable(Notes Concerning Derivative Transactions)
For the periods ended Aug. 31, 2018, and Feb. 28, 2019
Not applicable(Notes Concerning Retirement Payment)
For the periods ended Aug. 31, 2018, and Feb. 28, 2019
Not applicable-20-

(Notes Concerning Deferred Tax Accounting)
1. Primary components of deferred tax assets and deferred tax liabilities
Thousands of yen
As ofAug. 31, 2018
Enterprise tax payable
Total deferred tax assets
Net deferred tax assets

Feb. 28, 2019
12
12
12

11
11
11

2. Reconciliations of major items that caused differences between statutory tax rate and effective tax rate after applying
Deferred tax accounting
For the fiscal period ended
Aug. 31, 2018
Feb. 28, 2019
Statutory tax rate
31.74%
31.51%
Adjustments:
Deductible cash distributions(31.72%)(31.49%)
Other
0.06%
0.05%
Actual effective income tax rate
0.08%
0.07%

(Notes Concerning Equity Earnings of Affiliate Companies)
For the periods ended Aug. 31, 2018, and Feb. 28, 2019
Not applicable(Notes Concerning Related Party Transaction)
1. Transactions with Account Balances with the Parent company and Major Unit Holders
For the periods from Mar. 1, 2018, to Aug. 31, 2018, and Sept. 1, 2018, to Feb. 28, 2019
Not applicable
2.

Transactions and Account Balances with Affiliates
For the periods from Mar. 1, 2018, to Aug. 31, 2018, and Sept. 1, 2018, to Feb. 28, 2019
Not applicable

3.

Transactions and Account Balances with Companies under Common Control
For the periods from Mar. 1, 2018, to Aug. 31, 2018, and Sept. 1, 2018, to Feb. 28, 2019
Not applicable

4.

Transaction and Account Balances with Board of Directors and Individual Unitholders
For the periods from Mar. 1, 2018, to Aug. 31, 2018, and Sept. 1, 2018, to Feb. 28, 2019
Not applicable(Notes Concerning Asset Retirement Obligations)
For the periods ended Aug. 31, 2018, and Feb. 28, 2019
Not applicable-21-

(Notes Concerning Rental Properties)
MEL owns logistics facilities for leasing for the purpose of earning rental income. The book value, changes during thereporting fiscal period and fair value of the properties are as follows:
Thousands of yen
For the fiscal period from
For the fiscal period from
Mar. 1, 2018 to
Sept. 1, 2018 toAug. 31, 2018
Feb. 28, 2019
Book value (Note 1)
Balance at the beginning of the period

71,295,451

70,931,988

Changes during the period (Note 2)(363,463)

12,075,847

Balance at the end of the period

70,931,988

83,007,836

Fair value at the end of the period (Note 3)
74,700,000(Note 1) Book value is calculated by deducting accumulated depreciation from acquisition cost.

88,370,000(Note 2) The increase for the fiscal period ended Aug. 31, 2018 was primarily a result of CAPEX for a total of 69,556 thousand yen. The
decrease was primarily a result of the recognition of depreciation, which amounted to 433,019 thousand yen. The increase
for the fiscal period ended Feb. 28, 2019 was primarily a result of acquiring two new properties for a total of 12,510,301
thousand yen. The decrease was primarily a result of the recognition of depreciation, which amounted to 484,904 thousandyen.
(Note 3) The fair value at the end of the period is determined based on appraised value provided by independent real estateappraisers.
Income and loss in connection with investment and rental properties are disclosed in “Notes Concerning Statements of Income
and Retained Earnings.”(Notes Concerning Segment and Related Information)
1. Segment Information
Disclosure is omitted because the real estate leasing business is MEL’s sole business and it has no reportablesegment subject to disclosure.
2. Related Information
For the period from Mar. 1, 2018, to Aug. 31, 2018(1) Information by Products and Services
Description of this information is not stated herein as operating revenues generated from external customers for asingle product and service have exceeded 90 percent of total operating revenues on the statement of income andretained earnings.
(2) Information by Geographic Region(a) Operating Revenues
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating
revenues on the statement of income and retained earnings.
(b) Property and Equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounts for over 90% of
the amount of property and equipment on the balance sheet.
(3) Information by Each Major Customer
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating
revenues on the statement of income and retained earnings.
For the period from Sept. 1, 2018, to Feb. 28, 2019(1) Information by Products and Services
Description of this information is not stated herein as operating revenues generated from external customers for asingle product and service have exceeded 90 percent of total operating revenues on the statement of income andretained earnings.
(2) Information by Geographic Region(a) Operating Revenues
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating-22-

revenues on the statement of income and retained earnings.
(b) Property and Equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounts for over 90% of
the amount of property and equipment on the balance sheet.
(3) Information by Each Major Customer
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating
revenues on the statement of income and retained earnings.
(Notes Concerning Per Unit Information)
Yen
For the fiscal period from
Mar. 1, 2018 toAug. 31, 2018
Net assets per unit

For the fiscal period from
Sept. 1, 2018 toFeb. 28, 2019

254,986

252,965

Net income per unit
4,684
4,798
(Note 1) Net income per unit is calculated by dividing net income for the period by the weighted average number of investment
units issued and outstanding based on the number of days during the applicable reporting periods. Diluted net income
per unit is not stated as there is no dilutive equity issued and outstanding.
(Note 2) The basis for calculation of the profit per unit is as follows:
For the fiscal period from
For the fiscal period from
Mar. 1, 2018 to
Sept. 1, 2018 toAug. 31, 2018
Feb. 28, 2019
Net income (Thousands of yen)

1,002,518

1,170,729

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

Net income attributable to common unitholders(Thousands of yen)

1,002,518

1,170,729

Average number of investment units during theperiod (Unit)

214,000

243,973(Notes Concerning Significant Subsequent Events)
Not applicable-23-(10) Change in Number of Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ capital from the date ofestablishment to the end of Feb. 28, 2019 are as follows:
Unitholders’ Capital(Thousands of yen)(Note 1)
Increase /Total
Decrease

Number of Investment Units
Issued and Outstanding (Units)
Increase /Total
Decrease

Date

Type of Issue

Note

July 14, 2016

Private placement
for incorporation

200,000

200,000

2,000

2,000

(Note 2)

Sept. 28, 2016

Private offering

1,800,000

2,000,000

18,00020,000(Note 3)June 15, 2017

Reverse split ofinvestment units-

2,000,000(12,000)

8,000(Note 4)

Sept. 13, 2017

Public offering

49,678,200

51,678,200

198,000

206,000(Note 5)Oct. 10, 2017

Public offering

2,007,200

53,685,400

8,000

214,000(Note 6)

May 21, 2018

Surplus cash
distribution(return on capital)(120,910)

53,564,490-

214,000(Note 7)

Sept. 10, 2018

Public offering

7,216,429

60,780,919

30,300244,300(Note 8)Oct. 11, 2018

Public offering

360,821

61,141,741

1,515

245,815(Note 9)Nov. 19, 2018

Surplus cash
distribution(return on capital)(129,898)

61,011,843

-

1,515

(Note 10)Notes:
1. “Unitholders’ capital” is the amount after deducting the “Deduction from unitholders’ capital.”
2. Investment units were issued at an issue price of 100,000 yen per unit upon the incorporation of MEL.
3. Investment units were issued at an issue price of 100,000 yen per unit.
4. A 0.4-for-1 reverse split of investment units was conducted, with June 15, 2017 as the effective date.
5. New investment units were issued through public offering at an issue price of 260,000 yen (paid-in amount of 250,900yen) per unit.
6. New investment units were issued through third-party allotment at a paid-in amount of 250,900 yen per unit.
7. Cash distributions for the fiscal period ended Feb. 2018 in the amount of 565 yen per unit as return of capital. It was
decided on Apr. 13, 2018 and started payment on May 21, 2018.
8. New investment units were issued through public offering at an issue price of 246,772 yen (paid-in amount of 238,166
yen) per unit.
9. New investment units were issued through third-party allotment at a paid-in amount of 238,166 yen per unit.
10. Cash distributions for the fiscal period ended Aug. 2018 in the amount of 607 yen per unit as return of capital. It was
decided on Oct. 15, 2018 and started payment on Nov. 19, 2018

4.

Change of Directors(1) Change in directors of MEL during the reporting fiscal period
Not applicable(2) Change in directors of the Asset Management Company during the reporting fiscal period
Katsunori Tanaka resigned a part-time director, effective date Sept. 30, 2018.

-24-

5. Reference Information(1) Composition of MEL’s Assets
Type of assets

Category

Beneficiary right intrust

Logistic facility

RegionTokyo metropolitan area (Note 2)
Kansai area (Note 3)
Others
Total
Deposit and other assets
Total assets (Note 4)

Fifth fiscal period(As of Feb. 28, 2019)
Retained amount
Ratio of total assets(Millions of yen)(%)
(Note 1)
61,21969.2
10,008
11.3
11,78013.3
83,007
93.8
5,453
6.2
88,641
100.0
Fifth fiscal period(As of Feb. 28, 2019)

Amount(Millions of yen)

Ratio of total asset)(%)

Total liabilities (Note 4)(Note 5)
26,278
29.7
Total net assets (Note 4)
62,182
70.3
Total assets (Note 4)
88,461100.0
Notes:
1.
The retained amount is the amount allocated in the balance sheet (the book value after depreciation) at the end of the reporting
fiscal period (as of Feb. 28, 2019).
2.
Tokyo metropolitan area refers to Tokyo, Kanagawa, Chiba and Saitama prefectures.
3.
Kansai area refers to Osaka, Hyogo, Kyoto, Nara and Shiga prefectures.
4.
Total liabilities, total net assets and total assets is the amount allocated in the balance sheet at the end of the reporting fiscal
period (as of Feb. 28, 2019).
5.
Total liabilities include the tenant leasehold and security deposits.

(2) Investment Assets(A) Major Components of Investment Securities
Not applicable(B) Investment Properties
Not applicable(C) Other Major Investment Assets
The real estate trust beneficiary interests held by MEL as of the end of Feb. 28, 2019 are as follows.

-25-

(i) Overview of Portfolio
The following summarizes (location, acquisition price, investment ratio, book value, appraisal value, acquisition date) thereal estate or the real estate properties in trust owned by MEL at the end of the reporting fiscal period:
Category

Property name
Logicross Fukuoka Hisayama

Logistic
facility

Location

Acquisition Investment Book value Appraisal value Acquisition
price (Millions ratio (%) (Millions of(Millions ofdateof yen) (Note 1) (Note 2)yen)yen)(Note 3)(Note 4)

Hisayama-machi
Kasuya-gun, Fukuoka

5,770

6.9

5,725

6,070

Sept. 14,2017

Logicross Atsugi

Atsugi-shi, Kanagawa

8,440

10.1

8,520

8,740

Sept. 3,2018

Logicross Kobe Sanda

Kobe, Hyogo

3,900

4.7

3,940

4,050

Sept. 3,
2018

LOGIPORT Sagamihara(Note 5)

Sagamihara-shi,

21,364

25.7

21,29022,800

Sept. 14,2017

LOGIPORT Hashimoto(Note 6)

Sagamihara-shi,

18,20021.9

18,15419,080

Sept. 14,2017

MJ Logi Park Funabashi 1

Funabashi-shi, Chiba

5,400

6.5

5,331

6,440

MJ Logi Park Atsugi 1

Atsugi-shi, Kanagawa

6,653

8.0

6,640

6,910

MJ Logi Park Kazo 1

Kazo-shi, Saitama

1,272

1.5

1,282

1,370

MJ Logi Park Osaka 1

Osaka-shi, Osaka

6,090

7.3

6,068

6,520

6,130

7.4

6,054

6,390

Sept. 14,2017

83,219100.0

83,00788,370-

MJ Logi Park Fukuoka 1

Kanagawa
Kanagawa

Umi-machi,
Kasuya-gun, Fukuoka

Total

Sept. 29,2016
Sept. 14,2017
Sept. 14,2017
Sept. 14,2017

Notes:
1.
“Acquisition price” represents the purchase price of each property or beneficiary right in trust as set forth on the relevantpurchase agreement and does not include expenses such as consumption taxes, and is rounded down to nearest million yen.
2.
“Investment ratio” is calculated by dividing the acquisition price for each property by the total acquisition price and is rounded tosecond decimal place. Thus the sum of the figures in total may not add up to the figure in the total column.
3.
"Appraisal value as of the end of the reporting fiscal period” represents the appraisal value as set forth on the relevant study
reports by real estate appraisers as of Feb. 28, 2019. Please refer to the below-mentioned ”(iv) Overview of Appraisal Reports”.
4.
“Acquisition date” represents the acquisition date in the relevant sale and purchase agreement.
5.
“Acquisition price” and “Appraisal value” of LOGIPORT Sagamihara is shown with the values corresponding to the quasi coownership interests ratios (49%).
6.
“Acquisition price” and “Appraisal value” of LOGIPORT Hashimoto is shown with the values corresponding to the quasi coownership interests ratios (45%).

-26-

(ii) Overview of Properties
The following summarizes (land area, total floor area, total leasable area, total leased area, year built) the real estate or
the real estate properties in trust owned by MEL at the end of the reporting fiscal period:
Category

Logistic
Facility

Property nameLand area(㎡)(Note 1)

Total floor area
Total leasable
Total leased area(㎡) (Note 1) area(㎡) (Note 2)(㎡) (Note 3)

Year built(Note 4)

Logicross Fukuoka Hisayama

18,136.89

36,082.08

34,878.55

34,878.55

Oct. 2014

Logicross Atsugi

14,782.03

29,895.80

29,895.80

29,895.80

Mar. 2017

Logicross Kobe Sanda

20,000.93

12,879.33

12,844.35

12,844.35

Jun. 2017

LOGIPORT Sagamihara (Note 5)

94,197.27

200,252.53(98,123.73)

88,609.64

88,376.62

Aug. 2013

LOGIPORT Hashimoto (Note 6)

67,746.26

145,809.59(65,614.31)

58,537.69

58,537.69

Jan. 2015

MJ Logi Park Funabashi 1

7,481.00

18,262.08

18,232.07

18,232.07

Nov. 1989

MJ Logi Park Atsugi 1

19,780.93

27,836.15

28,002.44

28,002.44

Jul. 2013

MJ Logi Park Kazo 1

7,621.09

7,602.06

7,678.10

7,678.10

Mar. 2006

MJ Logi Park Osaka 1

13,028.81

39,157.61

39,082.95

39,082.95

Sept. 2007

MJ Logi Park Fukuoka 1

20,297.84

39,797.96

38,143.21

38,143.21

Sept. 2007

Total

283,073.05

557,575.19(375,251.11)

355,904.80

355,671.78-

Notes:
1. “Land area” and “Total floor area” are the lot area recorded in the register. “Total floor area” is the total floor area of the mainbuilding and annex. If there is more than one main building, the total floor area is the sum of the total floor area for each mainbuilding.
2. “Total leasable area” equals to the gross leasable space in each property or property in trust as of Feb. 28, 2019, based on leaseagreements and floor plans included in lease agreements, plus available space based on floor plans, rounded down to the nearest
square meter. It does not include the leased area indicated in the lease agreements concerning shops, vending machines,
photovoltaic power generation facilities and parking lots.
3. “Total leased area” equals to the gross floor area of leased space in each property or property in trust as of Feb. 28, 2019, based on
the lease agreements and floor plans included in the lease agreements. It does not include the leased area indicated in the leaseagreements concerning shops, vending machines, photovoltaic power generation facilities and parking lots.
4. “Year built” is the date of construction of the building in the register. If there is more than one main building, the oldest dateshown in the register.
5. “Total leasable area” and “Total leased area” of LOGIPORT Sagamihara is shown with the values corresponding to the quasi coownership interests ratios (49%).
6. 6. “Total leasable area” and “Total leased area” of LOGIPORT Hashimoto is shown with the values corresponding to the quasi coownership interests ratios (45%).

-27-

(iii) Overview of Tenant Agreements
The following summarizes (total leasable area, total leased area, occupancy, number of tenants, name of major tenant,annual rent, security deposit, average lease term and average remaining lease term) the real estate or the real estate
properties in trust owned by MEL at the end of the reporting fiscal period:
Category

Logistic
Facility

Property nameSecurity
Average lease
Annual rent
deposit term / Average
Name of major(Millions of (Millions of remaining leasetenant (Note 5)yen) (Note 6)
yen)term (Years)(Note 7)(Note 8, 9)Not
Not
Mitsubishi Estate
3.6
2
disclosed
disclosed
Co., Ltd.
(1.9)(Note 12)(Note 12)
Not
Not
MITAKA SOKO
10.0
1
disclosed
disclosed
Co., Ltd.
(8.1)(Note 12)(Note 12)
Not
Not
Fresh Creator
30.0
1
disclosed
disclosed
Co., Ltd.
(28.3)(Note 12)(Note 12)

NumberTotal leasable Total leased Occupancyofarea (㎡)area (㎡)(%)
tenants(Note 3)(Note 1)
(Note 2)
(Note 4)

Logicross Fukuoka
Hisayama

34,878.55

34,878.55

100.0

Logicross Atsugi

29,895.80

29,895.80

100.0

Logicross Kobe Sanda

12,844.35

12,844.35

100.0

LOGIPORT Sagamihara(Note 10)88,609.64

88,376.62

99.7

17 S･V･D Co., Ltd.

1,260

297

7.4
(3.4)

LOGIPORT Hashimoto(Note 11)58,537.69

58,537.69

100.0

13

KDDI
Corporation

923

225

6.2
(3.4)

MJ Logi Park Funabashi 1

18,232.07

18,232.07

100.0

1 Fuji Echo Co., Ltd.

MJ Logi Park Atsugi 1

28,002.44

28,002.44

100.0

1

Sun Toshi
Tatemono K.K.

MJ Logi Park Kazo 1

7,678.10

7,678.10

100.0

1Kanda Holdings
Co., Ltd.

MJ Logi Park Osaka 1

39,082.95

39,082.95

100.0

1 Sankyu Inc.

Not
disclosed(Note 12)
Not
disclosed(Note 12)
Not
disclosed(Note 12)
Not
disclosed(Note 12)

Not
disclosed(Note 12)
Not
disclosed(Note 12)
Not
disclosed(Note 12)
Not
disclosed(Note 12)

Not
disclosed(Note 12)
Not
disclosed(Note 12)
Not
disclosed(Note 12)
Not
disclosed(Note 12)

MJ Logi Park Fukuoka 1

38,143.21

38,143.21

100.0

5

Fukuoka Logistics
Systems Corp.

392

178

3.0
(1.0)

Total (Average)

355.904.80

355,671.78

99.9

43

-

4,787

1,495

8.1
(4.9)

Notes:
1. “Total leasable area” equals to the gross leasable space in each property or property in trust as of Feb. 28, 2019, based on leaseagreements and floor plans included in lease agreements, plus available space based on floor plans, rounded down to thenearest square meter. It does not include the leased area indicated in the lease agreements concerning shops, vending
machines, photovoltaic power generation facilities and parking lots.
2. “Total leased area” equals to the gross floor area of leased space in each property or property in trust as of Feb. 28, 2019, basedon the lease agreements and floor plans included in the lease agreements. It does not include the leased area indicated in thelease agreements concerning shops, vending machines, photovoltaic power generation facilities and parking lots.
3. “Occupancy” is as of Feb. 28, 2019, calculated by dividing total leased area for each property by the total leasable area. The
total occupancy rate is calculated by dividing the aggregate total leased area for the relevant properties by the aggregate total
leasable area for the relevant properties. Figures are rounded to the first decimal place.
4. “Number of tenants” is based on the lease agreements with tenants for each property or property in trust as of Feb. 28, 2019.
However, if one lessee enters into a multiple number of lease agreements for the same property, the total number of tenants
will be calculated on the assumption that such lessee is one party.
5. “Name of major tenant” is the name of the tenant with the largest leased floor area in the relevant lease agreement for each
property or property in trust as of Feb. 28, 2019.
6. “Annual rent” represents the annualized amount of rent (the sum of annualized amounts of rent if a multiple number of leaseagreements have been executed), which is 12 times monthly rent (including common area expenses), rounded down to thenearest million yen, indicated in the relevant lease agreement for each property or property in trust as of Feb. 28, 2019.
However, if there are different provisions for monthly rent (including common area expenses) depending on the time period ineach lease agreement for each property or property in trust as of Feb. 28, 2019, the annualized amount of rent will becalculated based on the monthly rent (including common area expenses) for Feb. 2019 shown in said lease agreement. The
rent-free periods and annual rent holiday periods (meaning that the payment of rents for specific months is exempted) as ofFeb. 28, 2019 shall not be included.

-28-

7.

“Security deposits” represent the sum of the outstanding amounts of leasehold/security deposits (the sum of the outstanding
amounts of leasehold/security deposits if a multiple number of lease agreements have been executed), rounded down to thenearest million yen, indicated in the subject lease agreement as of Feb. 28, 2019. However, if there are different provisions forthe sum of outstanding leasehold/security deposits depending on the time period in each lease agreement for each property or
property in trust, the amount of tenant leasehold/security deposits for Feb. 2019 shown in said lease agreement is indicated.
8. “Average lease term” is calculated as the weighted average lease term indicated in the relevant lease agreements for each
property or property in trust as of Feb. 28, 2019, by the rent and figures are rounded to the first decimal place.
9. “Average remaining lease term” is calculated as the weighted average remaining lease term indicated in the relevant leaseagreements for each property or property in trust as of Feb. 28, 2019, by the rent and figures are rounded to the first decimal
place.
10. “Total leasable area”, “Total leased area”, “Annual rent” and “Security deposits” of LOGIPORT Sagamihara is shown with thevalues corresponding to the quasi co-ownership interests ratios (49%).
11. “Total leasable area”, “Total leased area”, “Annual rent” and “Security deposits” of LOGIPORT Hashimoto is shown with thevalues corresponding to the quasi co-ownership interests ratios (45%).
12. We have not obtained permission from the tenant of the properties to disclose the information unstated in this table.

-29-

(iv) Overview of Appraisal Report (as of Feb. 28, 2019)

Category

Property nameAppraiser

Logicross Fukuoka
Hisayama

Tanizawa Sogo
Appraisal Co., Ltd.

Logicross Atsugi

Tanizawa Sogo
Appraisal Co., Ltd.

Logicross Kobe
Sanda

Tanizawa Sogo
Appraisal Co., Ltd.

LOGIPORTDAIWA REAL ESTATE
Sagamihara (Note 6) APPRAISAL Corporation
LOGIPORT
Japan Real Estate
Logistic Hashimoto (Note 7) Institute
Facility MJ Logi Park
Japan Real Estate
Institute
Funabashi 1
MJ Logi Park
Japan Real Estate
Institute
Atsugi 1
MJ Logi Park
Japan Real Estate
Institute
Kazo 1
MJ Logi Park
Tanizawa Sogo
Appraisal Co., Ltd.
Osaka 1
MJ Logi Park
Japan Real Estate
InstituteFukuoka 1
Total

Return priceIntegrated
Direct capitalization
DCF methodvaluemethodAppraisal
Appraisal
based on Value based
Appraisalvalue
NOI Yield
Value basedcostNOIon direct(Millions of(%)
Directon DCF
Terminal
method capitalization(Note 1)
Discountyen)(Note 2)
capitalization method
capitalization(Millions
methodrate (%)
rate (%)(Millions ofrate (%)
of yen) (Millions of
yen)
yen)
4.7, 4.9
6,070
6,050
6,080
4.8
6,070
5.0
298
5.2
(Note 3)
4.3, 4.4
8,740
9,410
8,820
4.3
8,700
4.5
380
4.5
(Note 4)4.7, 4.8
4,050
3,840
4,100
4.7
4,030
4.9
195
5.0
(Note 5)22,80016,30022,7004.3

22,800

4.1

4.5

993

4.7

19,08015,345

19,3504.1

18,810

3.9

4.3

795

4.4

6,440

2,930

6,470

5.0

6,410

4.2

5.4

352

6.5

6,910

6,460

7,010

4.3

6,810

4.1

4.5

304

4.6

1,370

1,270

1,390

5.1

1,340

4.9

5.4

72

5.7

6,520

5,960

6,540

4.5

6,510

4.4, 4.6(Note 8)

4.7

305

5.0

6,390

4,410

6,440

4.8

6,330

4.6

5.0

323

5.3

88,37071,97588,900-87,810

-

-

4,021

4.8

Notes:
1. “Appraisal NOI” is the net operating income by the direct capitalization method stated in the appraisal report, rounded to thenearest million yen.
2. “Appraisal NOI Yield” is the ratio of appraisal NOI using the direct capitalization method to the acquisition price of each
property in each real estate appraisal report, rounded to the first decimal place.
3. The discount rate for Logicross Fukuoka Hisayama is assessed first to second year as 4.7% and third and thereafter as 4.9%.
4. The discount rate for Logicross Atsugi is assessed first to eighth year as 4.3% and ninth and thereafter as 4.4%.
5. The discount rate for Logicross Kobe Sanda is assessed first to eighth year as 4.7% and ninth and thereafter as 4.8%.
6. “Appraisal value”, “Integrated value based on cost method”, “Value based on direct capitalization method” and “Value based on
DCF method” of LOGIPORT Sagamihara is shown with the values corresponding to the quasi co-ownership interests ratios (49%).
7. “Appraisal value”, “Integrated value based on cost method”, “Value based on direct capitalization method” and “Value based on
DCF method” of LOGIPORT Hashimoto is shown with the values corresponding to the quasi co-ownership interests ratios (45%).
8. The discount rate for MJ Logi Park Osaka 1 is assessed first year as 4.4% and second and thereafter as 4.6%.

-30-

(v) Information Regarding Major Real Estate Properties
The following summarizes the properties where “annual rent” represents 10% or more of the total portfolio annual
rent as of Feb. 28, 2019.
Annual rent (Millions of yen)
(Note 1)
1,260
923
2,183

Property name
LOGIPORT Sagamihara (Note 3)
LOGIPORT Hashimoto (Note 4)
Total

Percentage of rent(%) (Note 2)
26.3
19.3
45.6

Notes:
1. “Annual rent” represents the annualized amount of rent (the sum of annualized amounts of rent if a multiple number of leaseagreements have been executed), which is 12 times monthly rent (including common area expenses), rounded down to thenearest million yen, indicated in the relevant lease agreement for each property or property in trust as of Feb. 28, 2019.
However, if there are different provisions for monthly rent (including common area expenses) depending on the time period ineach lease agreement for each property or property in trust as of Feb. 28, 2019, the annualized amount of rent will becalculated based on the monthly rent (including common area expenses) for Feb. 2019 shown in said lease agreement. The
rent-free periods and annual rent holiday periods (meaning that the payment of rents for specific months is exempted) as ofFeb. 28, 2019 shall not be included.
2. “Percentage of rent” is the ratio of that property’s total annual rent to the total portfolio annual rent, rounded to the firstdecimal place.
3. “Annual rent” of LOGIPORT Sagamihara is shown with the values corresponding to the quasi co-ownership interests ratios (49%).
4. “Annual rent” of LOGIPORT Hashimoto is shown with the values corresponding to the quasi co-ownership interests ratios (45%).

(vi) Information Regarding Major Tenants
The following summarizes the major tenant where “leased area” represents 10% or more of the total portfolio leased
area as of Feb. 28, 2019.

Tenant Name

Type of industry(Note 1)

Property nameSankyu Inc.

Deliverytransportationindustry

MJ Logi Park Osaka 1

Total

Annual rent
Percentage(Millions ofof rent (%)
yen)
Not
Not
disclosed
disclosed(Note 4)(Note 4)Not
Not
disclosed
disclosed(Note 4)(Note 4)

Leased Percentage
Lease
area (㎡) of area (%) expiration(Note 2)
(Note 3)date
Not
39,082.95
11.0 disclosed(Note 4)39,082.95

11.0－

Notes:
1. ”Type of industry” refers to either the report from the TOKYO SHOKO RESEARCH, LTD. or the industry based on Ministry ofInternal Affairs and Communications Japan Standard Industry Classification.
2. “Total leased area” equals to the gross floor area of leased space in each property or property in trust as of Feb. 28, 2019, basedon the lease agreements and floor plans included in the lease agreements. It does not include the leased area indicated in thelease agreements concerning shops, vending machines, photovoltaic power generation facilities and parking lots.
3. Percentage of area refers to the floor area leased to end tenant as a proportion of total leased area. Figures are rounded to thefirst decimal place.
4. We have not obtained permission from the tenant of the properties to disclose the information unstated in this table.

-31-

(vii) Property Distribution
a. Distribution by category
Number ofproperties

Category
Logistic facility
Others
Total

Acquisition price (Millions of yen)
(Note 1)10
0
10

Ratio (%)
(Note 2)
83,219083,219

100.0
0
100.0

Notes:
1. “Acquisition price” represents the purchase price of each property or beneficiary right in trust as set forth on the relevantpurchase agreement and does not include expenses such as consumption taxes, and is rounded down to nearest million yen.
2. “Investment ratio” is calculated by dividing the acquisition price for each property by the total acquisition price and is rounded
to second decimal place. Thus the sum of the figures in total may not add up to the figure in the total column.

b. Distribution by region

RegionTokyo metropolitan area (Note 4)
Kansai area (Note 5)
Others
Total

Number ofproperties

Total floor area(㎡)
(Note 1)6
2
2
10429,658,21
52,036.94
75,880.04
557,575.19

Acquisition
Investment
price
Ratio (%)
ratio (%)
(Millions of(Note 3)yen) (Note 2)
77.1
61,329
73.7
9.3
9,990
12.0
13.6
11,90014.3
100.0
83,219100.0

Notes:
1. “Total floor area” are the lot area recorded in the register. “Total floor area” is the total floor area of the main building andannex. If there is more than one main building, the total floor area is the sum of the total floor area for each main building.
2. “Acquisition price” represents the purchase price of each property or beneficiary right in trust as set forth on the relevantpurchase agreement and does not include expenses such as consumption taxes, and is rounded down to nearest million yen.
3. “Investment ratio” is calculated by dividing the acquisition price for each property by the total acquisition price and is rounded
to second decimal place. Thus the sum of the figures in total may not add up to the figure in the total column.
4. Tokyo metropolitan area refers to Tokyo, Kanagawa, Chiba and Saitama prefectures.
5. Kansai area refers to Osaka, Hyogo, Kyoto, Nara and Shiga prefectures.

c. Distribution by property age
Property age(Note 1)
5 years or lessMore than 5 years and 10
years or lessOver 10 years
Total

4

Total floor area(㎡)
(Note 2)
224,666.80

2
4
10

Number ofproperties

40.3

Acquisition priceInvestment(Millions of yen)ratio (%)
(Note 3)(Note 4)36,31043.6

228,088.68

40.9

28,01733.7

104,819.71
557,575.19

18.8
100.0

18,892
83,21922.7
100.0

Ratio (%)

Notes:
1. “Property age” is calculated based on the date recorded in the register up to Feb. 28, 2019.
2. “Total floor area” are the lot area recorded in the register. “Total floor area” is the total floor area of the main building andannex. If there is more than one main building, the total floor area is the sum of the total floor area for each main building.
3. “Acquisition price” represents the purchase price of each property or beneficiary right in trust as set forth on the relevantpurchase agreement and does not include expenses such as consumption taxes, and is rounded down to nearest million yen.
4. “Investment ratio” is calculated by dividing the acquisition price for each property by the total acquisition price and is rounded
to second decimal place. Thus the sum of the figures in total may not add up to the figure in the total column.

-32-

d. Distribution by total floor area
Total floor area
Less than 10,000㎡
10,000㎡or more and less than30,000㎡
30,000㎡ or more
Total

Number ofproperties
1
4
5
10

Total floor area
Acquisition price Investment(㎡)
Ratio (%) (Millions of yen)ratio (%)
(Note 2)
(Note 3)(Note 1)
7,602.06
1.4
1,272
1.5
88,873.36
15.9
24,39329.3
461,099.77
82.7
57,554
69.2
557,575.19
100.0
83,219100.0

Notes:
1. “Total floor area” are the lot area recorded in the register. “Total floor area” is the total floor area of the main building andannex. If there is more than one main building, the total floor area is the sum of the total floor area for each main building.
2. “Acquisition price” represents the purchase price of each property or beneficiary right in trust as set forth on the relevantpurchase agreement and does not include expenses such as consumption taxes, and is rounded down to nearest million yen.
3. “Investment ratio” is calculated by dividing the acquisition price for each property by the total acquisition price and is rounded
to second decimal place. Thus the sum of the figures in total may not add up to the figure in the total column.

e. Distribution by lease term
Lease term
(Note 1)
10 years or more
7 years or more and less than 10 years
5 years or more and less than 7 years
Less than 5 years
Total

Annual rent
(Millions of yen) (Note 2)
2,403
40
720
1,623
4,787

Ratio (%)
50.2
0.8
15.0
33.9
100.0

Notes:
1. “Lease term” is calculated as the weighted average lease term indicated in the relevant lease agreements for each property or
property in trust as of Feb. 28, 2019, by the rent and figures are rounded to the first decimal place. It does not include theleased area indicated in the lease agreements concerning shops, vending machines, photovoltaic power generation facilities
and parking lots.
2. “Annual rent” represents the annualized amount of rent (the sum of annualized amounts of rent if a multiple number of leaseagreements have been executed), which is 12 times monthly rent (including common area expenses), rounded down to thenearest million yen, indicated in the relevant lease agreement for each property or property in trust as of Feb. 28, 2019.
However, if there are different provisions for monthly rent (including common area expenses) depending on the time period ineach lease agreement for each property or property in trust as of Feb. 28, 2019, the annualized amount of rent will becalculated based on the monthly rent (including common area expenses) for Feb. 2019 shown in said lease agreement. The
rent-free periods and annual rent holiday periods (meaning that the payment of rents for specific months is exempted) as ofFeb. 28, 2019 shall not be included.
3. LOGIPORT Sagamihara is shown with the values corresponding to the quasi co-ownership interests ratios (49%), and LOGIPORT
Hashimoto is shown with the values corresponding to the quasi co-ownership interests ratios (45%).

-33-

f. Distribution by remaining lease term
Remaining lease term
(Note 1)
7 years or more
5 years or more and less than 7 years
3 years or more and less than 5 years
1 year or more and less than 3 years
Less than 1 year
Total

Annual rent
(Millions of yen) (Note 2)
739
583
1,230
1,590
642
4,787

Ratio (%)
15.5
12.2
25.7
33.2
13.4
100.0

Notes:
1. “Remaining lease term” is calculated as the weighted average remaining lease term indicated in the relevant lease agreements
for each property or property in trust as of Feb. 28, 2019, by the rent and figures are rounded to the first decimal place. It does
not include the leased area indicated in the lease agreements concerning shops, vending machines, photovoltaic power
generation facilities and parking lots.
2. “Annual rent” represents the annualized amount of rent (the sum of annualized amounts of rent if a multiple number of leaseagreements have been executed), which is 12 times monthly rent (including common area expenses), rounded down to thenearest million yen, indicated in the relevant lease agreement for each property or property in trust as of Feb. 28, 2019.
However, if there are different provisions for monthly rent (including common area expenses) depending on the time period ineach lease agreement for each property or property in trust as of Feb. 28, 2019, the annualized amount of rent will becalculated based on the monthly rent (including common area expenses) for Feb. 2019 shown in said lease agreement. The
rent-free periods and annual rent holiday periods (meaning that the payment of rents for specific months is exempted) as ofFeb. 28, 2019 shall not be included.
3. LOGIPORT Sagamihara is shown with the values corresponding to the quasi co-ownership interests ratios (49%), and LOGIPORT
Hashimoto is shown with the values corresponding to the quasi co-ownership interests ratios (45%).

(viii) Details of Collateral
Not applicable(ix) Capital Expenditure for Owned Properties
a. Future plans for capital expenditure
Not applicableb. Capital expenditure incurred for the reporting fiscal period
MEL conducted construction work worth 84 million yen in the reporting fiscal period which is a sum of capital
expenditures of 54 million yen and repair and maintenance expenses of 29 million yen.
Amount of Capital
Property namePurposePlanned period
Expenditure(Loacation)(Millions of yen)
MJ Logi Park Kazo 1
From Nov. 2018
Renewal work of LED lighting
15(Kazo-shi, Saitama)
to Jan. 2019
Note: Figures are rounded down to the nearest million yen.

c. Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
First fiscal
periodSecond fiscal
periodJuly 14, 2016 to Mar. 1, 2017 toFeb. 28, 2017
Aug. 31, 2017
Reserved balance at the
beginning of the period
Reserved amount during
the period
Reversal of reserved
amount during the period
Reserved balance at theend of the period

Third fiscal
periodFourth fiscal
period(Thousands of yen)Fifth fiscal
periodSept. 1, 2017 toFeb. 28, 2018

Mar. 1, 2018 toAug. 31, 2018

Sept. 1, 2018 toFeb. 28, 2019-

31,581

52,635

123,369

177,543

31,58121,05470,73454,174

61,344

-

-

-

-

-

-

52,635

123,369

177,543

238,887-34-

(x) Overview of Property Leasing and Status of Operating Income
Fifth fiscal period from Sept. 1, 2018, to Feb. 28, 2019
(Units: Thousands of yen)
Property name

Logicross
Fukuoka
Hisayama

Operating days

181 days

LogicrossAtsugi

Logicross
Kobe Sanda

LOGIPORT
Sagamihara

LOGIPORT
Hashimoto

MJ Logi Park
Funabashi 1

179 days

179 days

181 days

181 days

181 days(A) Property related revenues

690,202497,647

Property revenues

630,653

461,793

Other property related
revenues

59,54935,853(B) Property related expenses

275,347

187,977

40,943

26,29158,433

43,832965

701

Repair and maintenance

6,963

1,847

Utilities cost

42,317

24,491

Custodian fee

61

56

Other expenses

9,514

677

Facility management fee
Property taxes
Non-life insurance
premium

Not disclosed(Note)

Not disclosed(Note)

Not disclosed(Note)

Not disclosed(Note)(C) Depreciation

43,69534,28416,018116,148

90,07945,167(D) Property related income(A-B)

113,296

176,572

93,582414,854309,669

100,802(E) NOI (D+C)

156,992

210,857

109,600

531,003399,748

145,969

MJ Logi Park

MJ Logi Park

MJ Logi Park

MJ Logi Park

Atsugi 1

Kazo 1

Osaka 1

Fukuoka 1

181 days

181 days

181 days

181 days

Property nameOperating days(A) Property related revenues

Total

211,6932,493,772

Property revenues

196,456

2,358,795

Other property related
revenues

15,237

134,976(B) Property related expenses

117,700

940,015

Facility management fee

21,199123,684

14,180184,581

415

3,957

Repair and maintenance

7,451

29,427

Utilities cost

14,89496,523Custodian fee

240

1,678

Other expenses

366

15,257

Property taxes
Non-life insurance
premium

Not disclosed

Not disclosed

Not disclosed(Note)(Note)(Note)(C) NOI(=A-B)

33,28910,09337,17558,951

484,904(D) Depreciation

117,440

26,919106,626

93,993

1,553,757(E) Operating income from150,730
37,012
143,801
152,945
2,038,661
property leasing (=C-D)
Note: We have not obtained permission from the tenants of the properties to disclose the information and therefore it has been omitted
from this table.

-35-