Security Code：3481

Investor Presentation Material
Asset Management Company:
https://mel-reit.co.jp/en/

October 17, 2018

Table of Contents
1. Financial Results for the Fiscal Period
Ended Aug. 2018 (Mar. 1, 2018 to Aug. 31, 2018)
2.

First Follow-on Offering and
Newly Acquired Properties

36

3. Growth Strategy

10

4. Appendix

19

1

Financial
strategyInternal growthstrategy

External growthstrategy

Financialresults

Executive Summary

Achieved stable DPU growth
4 th period actual: 5,292 yen vs forecasted +43 yen (+0.8%)

Acquired two new properties from the sponsor through first Follow-on Offering
Increased AUM to 10 properties totaling 83.2 billion yen

Maintained high occupancy rate and achieved rent growth
Average occupancy rate at the end of the period: 99.9%
Weighted average rent growth of +1.8%
Made new borrowings from diversified lenders under favorable conditions
Shinkin Central Bank, The Norinchukin Bank and Shinsei Bank joined the
syndicate2１.Financial Results for the Fiscal Period
Ended Aug. 2018
(Mar. 1, 2018 to Aug. 31, 2018)3

Financial Results for the Fiscal Period Ended Aug. 2018
FP Ended
Feb. 2018 Actual(A)

Ended Aug. 2018
Actual
（B）

2,042

2,186

+144

2,171

Operating Rental Revenues

2,042

2,186

+144

2,171

Operating Rental Expenses(excluding depreciation)

219

427

+208

417

1,822

1,759

(64)

1,754

Depreciation

403

433

+29

432

Operating Income

1,243

1,053

(189)

1,052

1,074

1,003

(70)

994

1,073

1,002

(70)

993

5,580

5,292

(288)

5,249

5,015

4,685

(330)

4,643

565

607

+42

606

214,000 units

214,000 units±0

214,000 units

Operating Results（mn yen）
Operating Revenues

NOI

Ordinary Income
Net Income

FP Ended Aug. 2018
Forecast(As of Apr 13, 2018 )Difference（B）－（A）

Distributions Per Unit (yen)Distributions Per Unit (including SCD)
Distributions Per Unit (excluding SCD)
Surplus Cash Distributions (SCD)
Number of investment units issued andoutstanding (units)

27.5％

25.0%

(2.5)%

25.1%

266,775

269,217--

Investment Unit Price(As of Aug. 31, 2018)-

254,100

-

-

P/NAV

-

0.94

-

-

99.5%

99.9%

＋0.4%

99.9%

NAV Per Unit

Period-end Occupancy Rate (%)

《Operating Revenue》（＋144 mn yen）
・7 properties acquired in 2017 fully contributed
to P&L＋120 mn yen《Operating Expenses》（＋334 mn yen）
・Property tax fully expensed on the 7 properties
acquired in 2017 ＋179 mn yen
・Increase in G&A ＋70 mn yen《Non-operating expenses》（ (115) mn yen)・Absence of cost related to IPO (118) mn yen

Main Factors of Variance in 4th FP
Forecast vs. Actual《Non-operating revenues》（+3 mn yen）
・Consumption tax refund

Other Statistics (yen)LTV（%）FP Main Factors of Variance3rd FP vs. 4th FP+3 mn yen《Non-operating expenses》（ (4)mn yen）
・Decrease in interest expenses (3) mn yen

4Financial Forecasts for the Fiscal Period Ending Feb. 2019 and Aug. 2019
Operating Results（mn yen）

FP EndedAug. 2018 Actual（A）

FP Ended
Feb. 2019
Forecast（B）

Difference（B）－（A）(Reference)
FP Ended Aug. 2019
Forecast

2,186

2,488

+301

2,529

Operating Rental Revenues

2,186

2,488

+301

2,529

Operating Rental Expenses(excluding depreciation)

427

457

+30

462

1,759

2,030

+271

2,067

Depreciation

433

485

+52

488

Operating Income

1,053

1,261

+207

1,264

Ordinary Income

1,003

1,159

+156

1,193

Net Income

1,002

1,158

+156

1,192

5,292

5,445

+153

5,445

《Operating Expenses》 （＋94 mn yen）

4,685

4,714

+29

4,850

607

731

+124

595

・Increase mainly in depreciation due to acquisitionof 2 newly acquired properties＋76 mn yen
・Increase in leasing fees
＋29 mn yen

214,000 units

245,815 units+31,815 units

245,815 units

Operating Revenues

NOI

FP Main Factors of Variance
4th FP Actual vs. 5th FP Forecast《Operating Revenues》 （＋301 mn yen）
・Revenues from the 2 newly acquired properties＋325 mn yen
・Increase in rent of existing portfolio ＋17 mn yen
・Temporary decrease in operating rental
revenues((32) mn yen)

Distributions Per Unit (yen)Distributions Per Unit (including SCD)
Distributions Per Unit (excluding SCD)
Surplus Cash Distributions (SCD)
Number of investment units issued andoutstanding (units)《Non-operating expenses》 （＋47 mn yen）
Other Statistics (yen)LTV（%）

25.0%

27.1%

+2.1%

27.1%

Period-end Occupancy Rate (%)

99.9%

99.9%

±0%

99.9%

・Increase in interest expenses
・Incur investment unit expenses＋17 mn yen＋29 mn yen

52. First Follow-on Offering and
Newly Acquired Properties

6

Delivering Mitsubishi Estate Group's Commitment within One Year after Listing
Key Points of the Offering

Offering Overview
Type of Offering

Domestic public offering

Launch dateAugust 23, 2018

Pricing date

September 3, 2018

Offer price

246,772 yen

Offering size

Achieved steady growth by acquiring advanced logistics facilities“Logicross” developed by Mitsubishi Estate
Increased unitholder value through DPU growth

Total Units Offered：

31,815 units (7.85 bn yen)Domestic Total Units Offered：-Strategic Buyer (Mitsubishi Estate)

30,300 units (7.47 bn yen)
2,000 units (0.49 bn yen)

Third-party Allotment：

1,515 units (0.37 bn yen)

Asset Size

Improved earnings stability by diversifying the portfolio

DPU(bn yen)

(yen)

900

5,500

(%)
30.0
5,445 yen

LTV (Right axis)

850

83.2832
bn yen28.0+ 17.4%

800

5,300

750
70.8708bn yen

5,100
0
取得済資産
Acquiredproperties
(As
of
end
of
Aug. 2018)（2018年5月末日現在）

5,249 yen

27.0
27.1%

5,200

700
650
0

29.0

+3.7%

5,400

新規取得資産取得後
As of Sept. 3, 2018

26.0
25.0

25.0

0.0
24.0

2018年8月期末予定（第4期）
Pre-Offering

2019年8月期末（第6期）
Post-Offering(FP2018/8)
PO前巡航ベース(FP 2019/8)
PO後巡航ベース

7

Overview of Acquisition
Overview of Acquisition

2

Number of properties /Total acquisition priceAppraisal NOI yield

Acquisition price vsAppraisal value ratio

12,3404.7

96.5

properties/

million yen%

Logicross Atsugi（Atsugi, Kanagawa）

Acquisition price

8,440million yen

Appraisal value

8,740million yen

Appraisal NOI Yield

4.5%

%

Average property age

1.2

Average occupancy rate

100.0

years

%

Average lease term/
Average remaining
Lease term

16.9

years

/15.8

years

Logicross Kobe Sanda（Kobe, Hyogo）

Acquisition price

3,900million yen

Appraisal value

4,050million yen

Appraisal NOI Yield

5.0%

Completion date

March 2017

Completion Date

June 2017

Total floor area

29,895.80m2

Total floor area

12,879.33m2

Number of tenant

1

Number of tenant

1

Tenant nameMITAKA SOKO Co., Ltd.

Tenant nameFresh Creator Co., Ltd.

Lease term

Fixed-term lease agreement /10.0 years

Lease term

Fixed-term lease agreement /30.0 years

Note: Data at the time of the Offering (As of end of May 2018).

8

Public Offering Review
Market Response
Issuance of new investment units by MEL: Stability
attracted investors’ demand in spite of weakened demand(Excerpted from DealWatch by Thomson Reuters Japan KK.
Japanese only: translated by MJIA)
It was the first public offering for MEL since the listing in September
2017. Investors, such as shinkin banks and regional banks, wereconcerned that only small number of investment units were traded in
the market, and thus this offering was a great opportunity for them tobe able to purchase investment units finally. The allocation between
retail and institutional investors was 50:50 at the bookbuilding.
Eventually, the demand multiple was more than 30 times for retailinvestors and approx. 9 times for institutional investors, resulting in
more than 20 times overall.
MEL steadily acquires properties and grows distributions, which was
highly evaluated by investors. “MEL has an extensive pipeline, such as
properties developed by MEC group, which provides comfort toinvestors” (an asset manager of a shinkin bank). The ordinary level ofthe distributions per unit was 5,445 yen, up 3.7％.
While MEL increased distributions, some investors pointed out about thebalance between equity and debt. The ratio of interest-bearing debt tototal assets, or LTV (Loan to Value) was as low as around 27％ evenafter the offering. “MEL could have achieved higher yield not by issuing
new investment units but by increasing leverage” (an institutional
investor).
In response, MJIA commented, “MEL has properties in its pipeline andaims to increase AUM to 200 billion yen in four to five years. We plan tocontrol LTV to 40％ by the time when we reach the goal.” It plans tokeep the leverage low for the time being in preparation for acquisition ofproperties in the future. Furthermore, he mentioned, “If MEL had
acquired properties this time only with borrowings, LTV would rise to36％. We aim to expand AUM by utilizing the capacity to acquire
properties.”

MEL’s View
Achieved steady growth shortly after IPO
Achieved DPU growth
Further growth potential by taking advantage oflow leverage

MEL’s growth strategy enjoys wide support
Logistic specialized J-REIT market is experiencing
a unit price adjustment phase due tosupply-demand imbalance.

Exploring Future Measures
Further discussions with the sponsors
Acquire properties by utilizing LTV
Consider timing of offering
Utilize bridge fund scheme
Introduce Employee Investment Unit
Ownership Program
Acquire own investment units93． Growth Strategy

10Portfolio Overview
Portfolio Summary (As of Sept. 3, 2018)
Number of properties

10

Property name

Logicross Fukuoka
Hisayama

Acquisition
price

5,770 million yen

Occupancy rate
Appraisal NOI
yield

100.0%
5.2%

Occupancy rate

Total acquisition price%bn yen99.9

Appraisal NOI yield

Forecasted NOI yield (FP 6th)

4.8

5.0

83.2

Property name

Logicross Atsugi

Property nameAcquisition price

8,440 million yen

Occupancy rate

100.0%

Acquisition
priceAppraisal NOI
yield

4.5%

Occupancy rate
Appraisal NOI
yield

%

%

Logicross Kobe
Sanda

Property name

LOGIPORT
Sagamihara

Property name

LOGIPORT
Hashimoto3,900 million yen

Acquisition price

21,364 million yen

Acquisition price

18,200 million yen

100.0%

Occupancy rate

99.7%

Occupancy rate

100.0%

5.0%

Appraisal NOI
yield

4.7%

Appraisal NOI
yield

4.4%

Property name

MJ Logipark
Funabashi 1

Property name

MJ Logipark
Atsugi 1

Property name

MJ Logipark
Kazo 1

Property name

MJ Logipark
Osaka 1

Property name

MJ Logipark
Fukuoka 1

Acquisition price5,400 million yen

Acquisition price

6,653 million yen

Acquisition price

1,272 million yen

Acquisition price

6,090 million yen

Acquisition price

6,130 million yen

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

Occupancy rate

100.0%

6.5%

Appraisal NOI
yield

4.7%

Appraisal NOI
yield

5.7%

Appraisal NOI
yield

5.0%

Appraisal NOI
yield

5.3%

Appraisal NOI
yield

Note: As of Aug. 31, 2018. Except for 2 properties acquired on Sept. 3, 2018, which are as of May 31, 2018.

11

Portfolio Map (As of Sept. 3, 2018)12

Mid-to-Long Term Growth Strategy
Aim to maintain the current portfolio NOI yield
Asset size (based on acquisition price) and changes in portfolio NOI yield
As of Aug. 31,
2018

After acquisitionof new properties

Appraisal
NOI Yield

4.9%

4.8%

ActualNOI Yield

5.0%

Future Pipeline(Total floor area basis)

5.0%(6th FP Forecasted)

22 properties
1,519,000 m2

Asset size:

12 properties
962,000 m2

200 billion yen

3～4 years after
10 properties
557,000 m2

12.3 billion yen 83.2 billion yen
70.8 billion yen

IPO(Sept. 14, 2017)

Newly acquired
properties

Current portfolio(Sept. 3, 2018)

Mid-term goal

Current portfolio Future pipeline

Total

13

External Growth Strategy - Pipeline Capability to develop logistics facilities independently based on extensive land information
 Capability to co-develop facilities backed by MEC’s development ability and credibility

Properties with Preferential Negotiation Right (Note 1)
Fiscal Year (Planned)of Completion
2017

2018

2019

2020/ 2021

Property Name

Location

Total Floor Area

Development

LOGIPORT Osaka Taisho

Osaka, Osaka

121 thousand ㎡

Joint

Logicross Narashino

Narashino, Chiba

39 thousand ㎡

Independently

Osaka Nishi-Yodogawa Logistic Facility Center

Osaka, Osaka

38 thousand ㎡

Joint

Logicross Nagoya Kasadera

Nagoya, Aichi

80 thousand ㎡

Independently

Logicross Yokohama Kohoku

Yokohama, Kanagawa

16 thousand ㎡

Independently

LOGIPORT Kawasaki Bay

Kawasaki, Kanagawa

296 thousand ㎡

Joint

Logicross Atsugi Ⅱ

Atsugi, Kanagawa

34 thousand ㎡

Independently

Tentative name: Plan of Moegi Logistic Facility

Ibaraki, Osaka

31 thousand ㎡ /125 thousand ㎡

Joint

Total

781 thousand ㎡

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

Properties with the preferential negotiation right through bridge fund scheme (Note 2)
Acquisition Year of
the Bridge Funds
2016
2017

Property NameType

Total Floor Area

IHI Group Sakai Factory (Land)

Land of Factory

87

thousand ㎡ (Note 3)

MJ Logipark Kasugai 1

Logistics facility

58

thousand ㎡

MJ Logipark Sendai 1

Logistics facility

36

thousand ㎡

Total

181

thousand ㎡

Notes:
1.

There may be cases where MEL is not granted the preferential negotiation right based on the sponsor support agreement, such as cases where consent for the grant of the preferential negotiation right or the sale has not

2.

Fund Scheme means a method to acquire properties from development funds to which MJIA provides investment advisory services, a flexible method to acquire properties, etc. by utilizing bridge funds depending on the

been obtained from co-owners, quasi-co-owners or joint business partners, if there are any such parties.
capital market environment and the timing of property acquisition.
3.

The data for IHI Group Sakai Factory (Land) shows that of “site area”.

14Internal Growth Strategy
Leasing Activities(Based on leased area of warehouse)

Tenant Diversification(Note1) (Note2))(Based on leased area)

All lease agreements are signed about 11,000㎡ leased area (3.8% of Total
leasable area) expired contract during 4th FP.
Leases Renewed

New Leases

11.0%

76%

24%

Upward Revision of Rent

8.4%
57.7%

Rent Unchanged

57%

山九
Sankyu

7.9%
7.5%

43%

7.5%

サン都市建物MITAKA SOKO
三菱地所
Sun City Building
福岡ロジテムMitsubishi
Estate
A社
Fukuoka Logistic Systems
その他
Others

Weighted average rent growth +1.8%

Maintaining High Average Occupancy(%)
100.0%

Lease Expiration Schedule(Note1)
Leased Area
Rent ratio(Note)
Leases Signed / Expected to be Signed which leases expired or to be expired during the
fiscal period ending Feb. and Aug. 2019(㎡)
70,000
99.9%

99.5%
99.5%

99.0%

99.5%

99.5%

99.5%

99.9%

99.4%

(%)
20
18

60,00016

50,00014
1240,00098.5%

1030,00098.0%

8
6

20,00097.5%

410,00097.0%

End of 2018
2
Feb.

Mar.
3

Apr.
4

May
5

June
6

July
7

Aug.
8

0

2
2019/2
2020/22021/22022/22023/22024/22025/22026/22027/2
2019/82020/82021/82022/82023/82024/82025/82026/82027/82047/80Notes:
1.

Including Logicross Atsugi and Logicross Kobe Sanda which were acquired on Sept. 3, 2018 .

2.

Based on leased area as of the end of Aug. 31, 2018 for the 10 properties owned as of Oct. 17, 2018.

15

Features of MEC Group's Logistics Facility Business
Diversified business portfolio as acomprehensive RE developer

Land Acquisition

Development

Obtain a variety of land information

Manage development cost1

Operation & Management

Tenant solicitation approach unique tocomprehensive RE developer

Consolidate plots of land frommultiple landowners

Walk around logistics facilities to identify
tenants’ needs

Corporate customer relations

Collect land information
through relations

Group-wide leasing

Customer network supported bybranches

Explore land information on site

3

Explore tenants’ needs
at various locations

2

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

Strengthening of value chain throughin-house PM

Reflect tenants’ needs in land acquisition

Collaboration with TRC

Capture information from tenants ofmanaged facilities

Understand tenants’ needs for facility
specifications

1 Obtain a variety of land information

2 Understand tenants’ needs for facility specs

 Efforts such as acquiring development lands through landconsolidation of multiple owners

 Collaborative project making full use of relation with officetenant in Daimaruyu area

Example of LOGIPORT Kawasaki Bay

Understand tenants’ usage needs
Utilize relations with tenants of managed
facilities

3 Explore tenants’ needs at various locations
 Use the regional network mainly in the areas where MEC’s
head office and branches are located to achieve tenantleasing activities

Example of Logicross Kobe Sanda＜Capture the needs of logistics bases in the
Kansai area＞
Kansai branch

Needs of logistics bases

Information

Facilities
Management
Department

16

Financial Strategy
Financial Highlights

Borrowing Spread
（%）

0.30

Long-term debt ratio

Fixed interest rate

Average remining debt duration

Average debt cost

100.0 %

83.3 %

5.6 years

0.47 %IPO
First Follow-on Offering

0.25
0.20

Credtit rating

LTV (5th FP Forecasted)

JCR: AA-(Stable)

27.1 %

Debt capacity (up to 40%)

Approx.

18.5 billion yen

Debt capacity (up to 50%)

Approx.

40 billion yen

0.15
0.10
4

Our Lenders

MUFG Bank
36.8%

8

9

10（year）

5000

Mizuho Bank

4000

Shinkin Central
Bank
15.7%

6000

Sumitomo Mitsui
Banking

Development Bankof Japan
The Bank ofFukuoka
New Lenders

12.1%

Norinchukin Bank
Shinsei Bank

Note:

7

(mn yen)

5.2%

15.7%

6

Debt Maturity Schedule

3.3% 2.1%

9.0%

5

3000
2000
1000
0
2018
2018

2019
20242024
2025 2025
2026 2026
2027
2019 2020
2020 2021
2021 2022
202220232023

2028
2028

As of Oct. 15, 201817

Initiatives for ESG
Environment initiatives

Supporting local communities Use of renewable energy
Mitsubishi Estate (MEC) Group is committed to develop environmentfriendly facilities. As part of this initiative, MEL is promoting the use ofrenewable energy and working on the installation of photovoltaic power
generation systems on the rooftop of "Logicross" facilities developed by
MEC.
Logicross Atsugi

Logicross Fukuoka Hisayama
Clean up activity after
Atsugi Ayu Firework Festival
Volunteer work near MJ Logi Park Atsugi 1

Free beverage service for tenants
at LOGIPORT Sagamihara

Proactive information disclosure

MEL’s website now has the “ESG Initiatives” section. Please visit thefollowing link to find its proactive initiatives.

 Energy saving initiatives

https://mel-reit.co.jp/en/features/esg_environment.html

Insulated sandwich
panels for exterior walls

Installed motiondetecting sensors

Enhanced greenery BCP initiatives

Installed private power generators

Environmental assessment and certifications

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

18

４．Appendix

19Income Statement and Balance Sheet
Income Statement
Item
Operating revenues
Operating rental revenues
Other rental revenues
Operating expenses（Unit：Thousands of yen）
Actual2,186,855
2,043,691
143,164
1,132,896
860,255

Asset management fee

178,404
730

Administrative service fee

16,756

Director’s compensations

2,400

Commission fee

46,768Other operating expenses

27,580Operating income
Non-operating income
Interest income（Unit：Thousands of yen）
Item

Expenses related to rent business

Asset custody fee

Balance Sheet

1,053,959
3,342
21

Current assets

Actual
4,453,762

Cash and deposits

1,869,456

Cash and deposits in trust

2,527,566

Other current assets
Non-current assets
Property and equipment

56,73970,965,543
70,931,988

Intangible assets

8,626

Investments and other assets

24,928Deferred assets
Total assets

Current liabilities

34,27175,453,578

755,068

Operating accounts payable

71,563

Accounts payable

12,873

Advances received

313,578

Other current liabilities

357,050

Interest on refund

3,320

Non-operating expenses

53,930Interest expenses

38,490Long-term borrowings

18,901,000

Borrowing related expenses

9,391

Tenant leasehold and security deposits in trust

1,230,295

Amortization of organization expenses

6,047

Non-current liabilities

20,131,295

Total liabilities

20,886,363

Ordinary income

1,003,371

Total unitholders’ equity

54,567,214

Profit before income taxes

1,003,371

Unitholders’ capital

53,564,490

Profit (Net income)

1,002,518

Surplus1,002,724

Unappropriated retained earnings

1,002,724

Total net assets

54,567,214

Total liabilities and net assets

75,453,578

20

Portfolio list
Location

Acquisition
price(million yen)

Total floor area（㎡）

Appraisal
NOI
yield(%)

Occupancyrate（%）

Propertyage(years)

Logicross Fukuoka Hisayama

Hisayama, Kasuya,
Fukuoka

5,770

36,082

5.2

100.0

3.9

Multi

Logicross Atsugi

Atsugi, Kanagawa

8,440

29,895

4.5

100.0

1.5

Multi

Logicross Kobe Sanda

Kobe, Hyogo

3,900

12,879

5.0

100.0

1.2

BTS

LOGIPORT Sagamihara(Beneficiary interest 49%)

Sagamihara, Kanagawa

21,364200,252（98,123）

4.7

99.7

5.0

Multi

LOGIPORT Hashimoto(Beneficiary interest 45%)

Sagamihara, Kanagawa

18,200145,809（65,614）

4.4

100.0

3.6

Multi

MJ Logipark Funabashi 1

Funabashi, Chiba

5,400

18,262

6.5

100.0

28.8

Multi

MJ Logipark Atsugi 1

Atsugi, Kanagawa

6,653

27,836

4.7

100.0

5.1

Multi

MJ Logipark Kazo 1

Kazo, Saitama

1,272

7,602

5.7

100.0

12.5

Multi

MJ Logipark Osaka 1

Osaka, Osaka

6,090

39,157

5.0

100.0

10.9

Multi

MJ Logipark Fukuoka 1

Umi, Kasuya, Fukuoka

6,130

39,797

5.3

100.0

10.9

Multi

83,219557,575（375,251）

4.8

99.9

6.6

−

Property name

Total / Average

Property
type

Notes:
1.
As of Aug. 31, 2018. Including Logicross Atsugi and Logicross Kobe Sanda which were acquired on Sept. 3, 2018.
2.
Figures in parentheses of “LOGIPORT Sagamihara” and “LOGIPORT Hashimoto” are calculated in proportion to the co-ownership interest of trust beneficiary rights in each property owned by the Investment Corporation (49% and45%, respectively). Figures in parentheses in “Total / Average” are the sum of total floor area of each property owned taking into account the co-ownership interest of trust beneficiary rights of each property. Each figure is rounded to
the first decimal place.

21

Appraisal Value（unit：mn yen）

Property nameAcquisitiondate

Acquisition
priceBook value
at end of
4th FP

4th FP(Ended Aug. 31, 2018)
Appraisalvalue

3rd FP(Ended Feb. 28, 2018)

Direct cap rate

Appraisal
value

Fluctuation

Unrealized
gain

Direct cap rate

Appraisal value

Direct cap rate

Logicross Fukuoka
Hisayama

Sept. 2017

5,770

5,769

6,070

4.8%

6,070

4.8%

0

0.0%

+300

LOGIPORT Sagamihara

Sept. 2017

21,364

21,40322,8004.3%

22,700

4.3%

+100

0.0%

+1,396

LOGIPORT Hashimoto

Sept. 201718,20018,244

18,7204.2%

18,720

4.2%

0

0.0%

+475

MJ Logipark Funabashi 1

Sept. 2016

5,400

5,365

6,280

5.1%

6,270

5.1%

+10

0.0%

+914

MJ Logipark Atsugi 1

Sept. 2017

6,653

6,673

6,860

4.4%

6,860

4.4%

0

0.0%

+186

MJ Logipark Kazo 1

Sept. 2017

1,272

1,279

1,370

5.1%

1,360

5.1%

+10

0.0%

+90

MJ Logipark Osaka 1

Sept. 2017

6,090

6,102

6,500

4.5%

6,360

4.6%

+140

(0.1)%+397

MJ Logipark Fukuoka 1

Sept. 2017

6,130

6,094

6,380

4.8%

6,360

4.8%

+20

0.0%

+285

Logicross Atsugi

Sept. 2018

8,440

-

8,740

4.3%

(Note)(Note)

-

-

-

-

-

Logicross Kobe
Sanda

Sept. 2018

3,900

-

4,050

4.7%

(Note)(Note)

-

-

-

-

-

－

83,21970,93187,770-74,700-+280-+4,048Total

Note: As of May 31, 2018 for Logicross Atsugi and Logicross Kobe Sanda.

22

Portfolio Data
Area (based on acquisition price）

Convenience in traffic (based on acquisition price)
100% lying inland fromresidential area

14.3%

7.4%

40.4%

首都圏
Tokyo metropolitan area

12.0%

近畿圏
Osaka metropolitan area
その他
Others

59.6%

40.4%

52.2%

Distance fromDistancefrom trunk
trunkroadroad■ Within 1km■ 1km or more,
within3km■ More than 3km

73.7%

Total floor area (based on acquisition price)

Distance fromnearest station■ Within 1.5km■ More than 1.5km

Property type (based on acquisition price)

1.5%

29.3%

■ 30,000㎡ or more

30.7%
スポンサー開発
Developed by MEC■ 10,000㎡ or more,
but less than 30,000㎡

MJIAソーシング
Sourced by MJIA

■ Less than 10,000㎡

69.2%

69.3%

23

Financial Standing
Classification

LenderFloating
rate

Balance (million yen)

Borrowing rate

Drawdown date

Maturity date

MUFG Bank

2,600

Development Bank of
Japan

1,400

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

Sept. 29, 2016

Sept. 29, 2019

Mizuho Bank
Development Bank ofJapan
MUFG Bank

720
1,491
430

Sumitomo Mitsui
Banking Corporation

2,050

MUFG Bank

1,760

Mizuho Bank

1,330

0.3263%

Sept. 14, 2021

0.3575%

Sept. 14, 2022

0.3913%

Sept. 14, 2023
Sept. 14, 2017

The Bank of Fukuoka

450

The Bank of Fukuoka

900

0.4288%

Sept. 14, 2024

MUFG Bank620

0.4675%

Sept. 14, 2025

Fixed rate MUFG Bank

710

0.5075%

Sept. 14, 2026

MUFG Bank

2,680
0.5500%

Sept. 14, 2027

Longterm

Sumitomo Mitsui
Baking Corporation

880

Mizuho Bank

880

Sumitomo Mitsui
Baking Corporation

830

0.24%

Sept. 14, 2022

The Norinchukin Bank

800

0.3950%

Sept. 14, 2025

Shinsei Bank500

0.4538%Mizuho Bank

830

The Bank of Fukuoka

807

Shinkin Central Bank

1,256

Total

23,924

Remarks

Sept. 14, 2018

0.5750%-Unsecured /Unguaranteed

Sept. 14, 2026

Sept. 14, 2028---

Note： As of Oct. 15, 201824

Logistics Market Overview (1)E-commerce market size(100 bn yen)200

３PL market size(100 bn yen)

Eコマース売上高
Salesof E-commerce30

3PL売上高Sales of 3PL

Retail market size(100 bn yen)

（千億円）

百貨店
Department store

Supermarket
スーパー

コンビニ
Convinience store

インターネット通販
E-commerce

180

160
25

160

140

120

20
120

100
15
80

80

60

10

40

40
5

20
0

0

（Year）

Source: Data created by the Asset management company based on Ministryof Economy, Trade and Industry "Establishment of infrastructure fordata malignant society in Japan (Heisei 29 Fiscal Year Market survey on
e-commerce)" (April 2018)
Note:“Sales pf E-commerce " in the above figure is an estimate of thetransaction amount on the Internet at B to C (between enterprises
and consumers), and the object to be estimated is the sum oftransaction amount through the Internet among all goods andservices in personal consumption. It is roughly classified into the fieldof sales merchandising field, service section field and digital field, andmarket estimate value is calculated for each and total（FY）

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

（Year）

0
2001

2003

2005

2007

2009

2011

2013

2015

2017

Source: Data created by the Asset management company based on
Ministry of Economy, Trade and Industry "Commercial Vehicle
Statistics of Heisei 29 Fiscal Year" (June 2018) and the Ministry of
Economy, Trade and Industry "Heisei 29 Fiscal Year 2009
Factory Improvement on Data Driven Society (Market Survey on
Electronic Commerce)" (April 2018)25

Logistics Market Overview (2)Supply-demand balance and vacancy rate in Tokyo metropolitan area
（1,000㎡）
2,500

Forecast

10%
9%

2,000

8%
7%

1,500

6%
5%

1,000

4%
3%

500

2%
1%

0

0%
2005

2006

2007

新規供給
New supply

2008

2009

2010

2011

新規需要
New demand

Notes:
1.
2.

2012

2013

2014

空室率
Vacancy rate(right axis)

2015

2016

2017

2018

2019

空室率（竣工1年以上）
Vacancy rate (1 year after built)(right axis)

In the above figure, “Tokyo metropolitan area” refers to Tokyo, Kanagawa, Chiba, and Saitama.
New supply refers to “total leasable floor area of newly constructed leasable logistics facilities” and new demand refers to “change in occupied floor area.” Change in occupied floor area is calculated by subtracting tenant withdrawal floorarea from floor area under new agreements.

3.

Based on data for leasable logistics facilities with 5,000m2 or more of gross floor area owned by real estate investment company, real estate developer, etc. Excluding leasable logistics facilities owned by logistics company, and therefore
not covering all logistics facilities for lease having a gross floor area of 5,000m2 or more.

Source: CBRE K.K.

26

Logistics Market Overview (3)Supply-demand balance and vacancy rate in Kansai region（1,000㎡）
1,400

Forecast

(%)
16%

14%

1,200

12%

1,000

10%
800
8%
600
6%
400

4%

200

2%

0%

0
2005

2006

2007

2008

新規供給
New supply

2009

2010
新規需要
New demand

Notes:

2011

2012

2013

2014

2015

空室率
Vacancy
Vacancyrate
rate (right(right axis)
axi

2016

2017

2018

2019

空室率（竣工1年以上）
Vacancy rate (1 year after built)(right axis)

1.

In the above figure, “Kinki region” refers to Osaka and Hyogo.

2.

New supply refers to “total leasable floor area of newly constructed leasable logistics facilities” and new demand refers to “change in occupied floor area.” Change in occupied floor area is calculated by subtracting tenant withdrawal floorarea from floor area under new agreements.

3.

Based on data for leasable logistics facilities with 5,000m2 or more of gross floor area owned by real estate investment company, real estate developer, etc. Excluding leasable logistics facilities owned by logistics company, and therefore
not covering all logistics facilities for lease having a gross floor area of 5,000m2 or more.

Source: CBRE K.K.

27

Features of Mitsubishi Estate Logistics REIT
Stable growth strategy using the strengths of “Developer × Real Estate Asset Management Company” in“HYBRID” styleDepending on the changes in market environment and the phases of business cycle, blending each strengths andspecial expertise of both companies will be creatively used while also having the capability to combine the strengths,
in order to steadily expand the asset size and to realize stable management, for the ultimate purpose of maximizing
the unitholder value.

Sponsor

Asset Management Company

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

Overview Contributing to the society through a variety of businessactivities as a comprehensive real estate developerPromoting the logistics facility business as a growth areaConstant supply of pipeline properties as the sponsor
through its business of developing and managing advanced
types of logistics facilities

Support

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

Property type (based on acquisition price)
Investment
policyNote:

Overview

Support

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

Its track record includes structuring and managing various typesof real estate funds, including the largest private REIT in JapanProven track records in a variety of asset types in investment andasset management

Unique property sourcing capacity with discerning judgement

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

Investment area (based on acquisition price)

Logistics facilities

Other(Note)

Tokyo metropolitan area

Other area

80% or more

20% or less

50% or more

50% or less

Other means industrial facilities such as plants, R&D facilities and data centers28

Governance Structure
Same-boat investment in MEL by MEC
Investment in MEL by MEC(As of Oct. 11, 2018)

Approx.

4.1%

Rules concerning the preferential negotiation right on acquisition
In addition to MEL, MJIA manages a private REIT and private funds, investing in offices, residences, commercial
facilities, etc. MEL has the preferential negotiation right on acquisition of its target logistics properties andindustrial properties.

Asset management fee structure consistent with the interests of unitholders
Assetmanagement
fee I

Total assets × 0.2% (maximum)

Asset
management
fee II

Adjusted NOI × 5.0% (maximum)

Asset
management
fee III

Adjusted pre-tax income × Pre-tax EPU × 0.001% (maximum)29

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

 Accompanying MEL’s overseas IR
Hong kong : 1 day
Singapore : 2 days

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

Mid-term Management Plan FY2018 - 2020

Key Point No.2：

Key Point No.1：
Realization of profit as a result of reinforced income stream during previous mid-term

Accelerate fee business modelthrough capital recycling
Lifestyle Property Business
Build strong platform for the industrial property business
Utilize client and partner networks together with solution
planning capabilities to develop quality products including“Logicross” branded properties
Full cooperation with
Tokyo Ryutsu Center (TRC), consolidated subsidiary, tomaximize the asset value
Sponsorship of asset pipeline to the REIT which istargeting to go public

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

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

Fee business modelthrough capital recycling

Site acquisition/
development

Operation /property
management

Industrial
propertybusinessplatform

Expansion and advancementof overseas business

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

Asset
management

30

Unit Price Performance and Unitholders Summary
Unit Price Performance（yen）
290,000

Trading
volume
出来高（右軸）(right axis)

280,000

33,000

Unit Price
投資口価格

27,500270,000

22,000260,000

16,500250,000

254,100 yen
As of Aug.31, 2018

240,000

11,0005,500

230,0000

220,000
2017/9/14
Source:2017/11/11

2018/1/9

2018/3/8

2018/5/6

2018/7/3

2018/8/31

Bloomberg

Unitholder Composition

Major Unitholders
Number ofunits

Fiscal period ended Aug. 31, 2018
Number ofinvestors

Ratio

Number of units

Ratio

Domestic individuals
and others

10,471

95.1％

48,383

22.6％

Financial institutions

133

1.2％

121,235

56.7％

Domestic entities

301

2.7％

21,501

10.0％

Foreign entities

93

0.8％

20,288

9.5％

Securities Companies

17

0.2％

2,593

1.2％

11,015100.0％

214,000

100.0％

Total

Numberof total

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

27,23612.72％

Japan Trustee Services Bank, Ltd. (Trust Account)

21,035

9.82％

Mitsubishi Estate Co., Ltd.

8,000

3.73％

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

6,508

3.04％

NORTHERN TRUST CO. (AVFC) RE COLONIAL FIRSTSTATE INVESTMENTＳ LIMITED

5,008

2.34％

The Hyakujushi Bank, Ltd

4,324

2.02％

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

4,243

1.98％

The Chugoku Bank, Limited

3,826

1.78％

THE IYO BANK, Ltd.

3,652

1.70％

JA-Bank SAGA

3,424

1.60％

87,25640.77％

Total

31

Structure
Organization

Custodian,
Unitholder Register Administrator,and Administrative Agent (generaladministration)❶

Investment Corporation

Mitsubishi Estate Logistics REIT
Investment Corporation

Mitsubishi UFJ Trust and Banking
Corporation❷

Asset Management Company
Mitsubishi Jisho Investment
Advisors, Inc.

General Meeting of Unitholders❹

Board of Directors

Executive Director: Masaki Sakagawa
Supervisory Director: So Saito
Supervisory Director: Akira Fukano

Administrative Agent(accounting, etc.)

Heiseikaikeisha Tax Corporation❸

SponsorIndependent Auditor
Ernst & Young ShinNihon LLC❶ Asset custody agreement, transfer agency service agreement,
and general administrative agency service agreement❸ Accounting agreement

Mitsubishi Estate Co., Ltd.

❷ Asset management agreement❹ Sponsor support agreement,
trademark license agreement, etc.

32

Asset Management Company
Company overview（As of October 17, 2018)
Trade name

Mitsubishi Jisho Investment Advisors, Inc.

Establishment

July 2001

Capitalization

150 million yen

Shareholders

Mitsubishi Estate Co., Ltd. (MEC) 100%

Main lines ofbusiness

Investment management businessType II financial instruments business
Investment advisory and agency businessCorporate officers

Directors: 5
Auditors: 2
Financial product transactions:
Director-General of the Kanto Local Finance
Bureau Registration (FIBO) No. 1086

Registration andlicenses

Real estate transactions:
Governor of Tokyo License (4) No. 79933
Discretionary transaction agent, etc.:
Minister of Land, Infrastructure, Transport andTourism License No. 64

Organization
Meeting of Shareholders
Independent Auditors

Statutory Auditors
Board of Directors

Chairman
Valuation Committee*Chaired by the Chairman
Compliance & Risk
Management Committee*Chaired by the Chairman

President*Chaired by the PresidentInternal Audit Department

Executive Committee*Chaired by the President

Fund Investment Council
for Internal Reporting

Fund Management Council
for Internal Reporting*Chaired by the President

Transaction
Advisory
Department

Note:

Private REITManagement
Department*Chaired by the president

Private FundManagement
Department

Logistics REITManagement
Department

Corporate
Planning
Department

ComplianceDepartment

Due to the lack of chairman, president also chairs “Board of Directors” and “Compliance & Risk Management Committee.”

33

MEMO

34

Disclaimer
This document is provided solely for informational purpose with regard to Mitsubishi Estate Logistics REIT Investment Corporation (“MEL”) and is not intended to serve as an inducement or solicitation to trade in any
product offered by MEL.
Purchase, sale and such of MEL’s investment units entail the risk of incurring a loss due to fluctuations of the investment unit price.
Please consult with a securities company regarding the purchase of MEL’s investment units or investment corporation bonds. Information presented on this document should not be interpreted, unless otherwise specified,
as constituting disclosure documents or asset management report required under Financial Instruments and Exchange Act or the Act on Investment Trusts and Investment Corporations.
The information contained in this document is the best available at the time of publication, however, no assurances can be given regarding the accuracy, validity and completeness of this information. Furthermore, MEL and
Mitsubishi Jisho Investment Advisors, Inc. (the “Asset Management Company”) assume no responsibility for the accuracy of the data, indices and other information release by third parties (including data based on realestate appraisal reports).
This document includes forward-looking statements that reflect MEL’s plans and expectations. Any information contained in this document except facts about the past and present is referred to as such forward-looking
statements. These forward-looking statements are based on the current assumptions and beliefs of MEL or the Asset Management Company in light of the information currently available to them, and involve known andunknown risks, uncertainties and other factors, and may be affected by such factors. These factors include risks related to MEL’s internal and external growth and risks related to the profitability per investment unit. Suchrisks, uncertainties and other factors may cause MEL’s actual results, performance, achievements or financial position expressed or implied by these forward-looking statements. MEL and the Asset Management Company
undertake no obligation to publicly update any forward-looking statements after the date of this document.
The content of this document is subject to change or repeal without prior notice.
Duplication or reproduction of any content presented in this document without the prior consent of MEL or Mitsubishi Jisho Investment Advisors, Inc. is strictly prohibited.
The document is prepared solely for use by residents of Japan and is not intended for use by non-residents of Japan.