Summary of Financial Results for the Fiscal Period Ended January 31, 2019 (REIT)
REIT Securities Issuer
Securities Code
Representative

Mitsui Fudosan Logistics Park Inc.
3471
Masayuki Isobe, Executive Director

Asset Management Company
Representative
Inquiries

Mitsui Fudosan Logistics REIT Management Co., Ltd.
Chishu Zushi, President and Chief Executive Officer
Tatsu Makino, Director & General Manager of Finance Division
Tel. +81-3-6327-5160

March 15, 2019
Tokyo Stock Exchange
http://www.mflp-r.co.jp/en/

Stock Exchange Listing
WebsiteScheduled date of submission of securities report:
Scheduled date of commencement of distribution payout:

April 26, 2019
April 23, 2019

Supplementary materials for financial results:
Holding investor presentation for financial results:

Yes
Yes (for analysts and institutional investors)(Amounts less than ¥1 million have been rounded down)

1. Financial Results for the Fiscal Period Ended January 31, 2019 (August 1, 2018 to January 31, 2019)(1) Results of Operations(% figures denote rate of period-on-period change)
Operating revenues

Operating income

Millions of yen

Fiscal period ended
January 31, 2019
Fiscal period ended
July 31, 2018%

Ordinary income

Millions of yen%

Net income

Millions of yen%

Millions of yen

%

3,280

4.2

1,560

4.1

1,520

5.2

1,519

5.2

3,148

19.7

1,498

20.9

1,445

21.9

1,444

21.9

Net income per unit

Return on unitholders’equityYen

Fiscal period ended
January 31, 2019
Fiscal period ended
July 31, 2018

Ratio of ordinary income Ratio of ordinary income
to total assets
to operating revenues

%

%

%

5,783

2.1

1.5

46.3

5,499

2.2

1.6

45.9

(2) Distributions
Total amount of
Total amount ofDistributions perDistributions per
distributions
Total amount of
distributions
unit (excluding
Distributions inunit (including(excluding
distributions in(including
distributions inexcess of
distributions in
distributions inexcess of
distributions inexcess ofretainedexcess ofexcess ofretainedexcess ofretainedearnings per unit
retainedretainedearnings
retainedearnings)
earnings)
earnings)
earnings)
Yen

Millions of yen

Yen

Millions of yen

Yen

Millions of yen

Payoutratio

Ratio ofdistributions
to net assets%%

Fiscal period ended
5,783
1,519
322
84
6,105
1,604 100.0
2.1January 31, 2019
Fiscal period ended
5,497
1,444
335
88
5,832
1,532 100.0
2.0
July 31, 2018
Notes:
1. The total amount of distributions in excess of retained earnings for the fiscal period ended January 31, 2019 and the fiscal period
ended July 31, 2018 is entirely return of capital applicable to distribution reducing unitholders’ capital for tax purposes.
2. The ratio of decreasing surplus attributable to distributions in excess of retained earnings (return of capital applicable to distribution
reducing unitholders’ capital for tax purposes) for the fiscal period ended January 31, 2019 and the fiscal period ended July 31,
2018 are 0.001 and 0.002, respectively. This calculation is based on Article 23, Paragraph 1, Item 4 of the Order for Enforcementof the Corporation Tax Act.
(3) Financial Position
Total assets
Fiscal period ended
January 31, 2019
Fiscal period ended
July 31, 2018

Net assets

Ratio of unitholders’equity to total assets

Net assets per unit

Millions of yen

Millions of yen

104,591

73,39070.2

279,292

100,250

73,403

73.2

279,340

-1-

%

Yen

(4) Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents

Millions of yen

Millions of yen

Millions of yen

Millions of yen

3,119(5,372)

2,468

2,971

1,630

(19,413)

18,524

2,757

Fiscal period ended
January 31, 2019
Fiscal period ended
July 31, 2018

2. Forecast for the Fiscal Period Ending July 31, 2019 (February 1, 2019 to July 31, 2019)(% figures denote rate of period-on-period change)

Operating revenues

Operating income

Ordinary income

Millions ofyenMillions ofyenMillions of
yen

%

%

%

Distributions
Distributions
per unit
Distributions
per unit(excluding
in excess of(including
distributions
retained
distributions
in excess of earnings per in excess ofretained
unit
retainedearnings)
earnings)

Net income

Millions of
yen

%

Yen

Yen

Yen

Fiscal period ending
4,958
51.1
2,267
45.4
2,154
41.7
2,153
41.7
5,683
732
6,415
July 31, 2019
(Reference) Expected net income per unit (Expected net income/Expected number of investment units at the end of the fiscal period)
for the fiscal period ending July 31, 2019: ¥5,682
 Other(1) Changes in accounting policies, changes in accounting estimates, or retrospective restatements(i) Changes in accounting policies due to revisions to accounting standards, etc.:
None(ii) Changes in accounting policies other than (i) above:None(iii) Changes in accounting estimates:None(iv) Retrospective restatements:
None(2) Total number of investment units issued and outstanding(i) Total number of investment units issued and outstanding at the end of the fiscal period (including treasury units)
Fiscal period ended January 31, 2019262,774 units
Fiscal period ended July 31, 2018262,774 units(ii) Number of treasury units at the end of the fiscal period
0 units
Fiscal period ended July 31, 2018
0 units
Fiscal period ended January 31, 2019
(Note)
Please refer to “Notes to Per Unit Information” on page 27 for the number of investment units used as the basis forcalculating net income per unit.
 The implementation status of statutory audit
At the time of disclosure of this financial report, the audit procedures for the financial statements pursuant to the Financial
Instruments and Exchange Act have not been completed.
 Appropriate use of the forecast of financial results; other special items
Forecasts of financial results and other forward-looking statements contained in this material are based on information currently
available to and certain assumptions deemed reasonable by Mitsui Fudosan Logistics Park Inc. (“MFLP-REIT”). Actual operating
performance, etc. may differ significantly from these forecasts due to a variety of factors. Furthermore, these forecasts do notguarantee the above distribution amounts.
For details of assumptions for the above forecast figures, please refer to “Forecast Assumptions for the Fiscal Period Ending July 31,
2019 (February 1, 2019 to July 31, 2019) and the Fiscal Period Ending January 31, 2020 (August 1, 2019 to January 31, 2020)”
described on page 9.

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Table of contents
1. Related Corporations of the Investment Corporation .............................................................................. 4
2. Management Policies and Status of Asset Management ........................................................................... 4(1) Management Policies ............................................................................................................................. 4(2) Status of Asset Management .................................................................................................................. 4(Summary of results for the reporting period) ....................................................................................... 4(Outlook for the fiscal period ending July 31, 2019) ............................................................................. 5(Reference) ............................................................................................................................................. 8
3. Financial Statements .................................................................................................................................. 11(1) Balance Sheets ..................................................................................................................................... 11(2) Statements of Income ........................................................................................................................... 13(3) Statements of Changes in Net Assets ................................................................................................... 14(4) Statements of Cash Distributions ......................................................................................................... 15(5) Statements of Cash Flows .................................................................................................................... 16(6) Notes to Going Concern Assumption ................................................................................................... 17(7) Notes to Significant Accounting Policies ............................................................................................. 17(8) Notes to Financial Statements .............................................................................................................. 18(9) Changes in Total Number of Investment Units Issued and Outstanding.............................................. 30
4. Changes in Directors .................................................................................................................................. 31(1) Changes in Directors of MFLP-REIT .................................................................................................. 31(2) Changes in Officers of Asset Management Company ......................................................................... 31
5. Reference Information ............................................................................................................................... 32(1) Status of Investment ............................................................................................................................. 32(2) Investment Assets................................................................................................................................. 32i)

Major investment securities ......................................................................................................... 32

ii)

Investment properties .................................................................................................................. 32iii) Other major investment assets ..................................................................................................... 33
(A)
(B)
(C)
(D)

Summary of the assets held ................................................................................................. 33
Summary of lease ................................................................................................................ 38
Capital expenditures of real estate held............................................................................... 41
Status of individual asset earnings ...................................................................................... 42

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1.

Related Corporations of the Investment Corporation
As there have been no significant changes from the “Management Structure of the Investment Corporation” described in the
Securities Report (prepared in Japanese only) submitted on October 25, 2018, the disclosure is omitted.

2.

Management Policies and Status of Asset Management(1)

Management Policies
As there have been no significant changes from policies described in “Investment Policy,” “Investment Targets” and“Distribution Policy” in the latest Securities Report (prepared in Japanese only) submitted on October 25, 2018, thedisclosure is omitted.

(2)

Status of Asset Management(Summary of results for the reporting period)i) Brief history of the investment corporation
Mitsui Fudosan Logistics Park Inc. (“MFLP-REIT”), a Japanese real estate investment corporation, was established on March
4, 2016 under the Act on Investment Trusts and Investment Corporations of Japan (Act No. 198 of 1951, including
subsequent amendments; the “Investment Trust Act”), by Mitsui Fudosan Logistics REIT Management Co., Ltd. (the “AssetManagement Company”) as the organizer, and listed on the Real Estate Investment Trust Securities Market (J-REIT section)of Tokyo Stock Exchange, Inc. (“Tokyo Stock Exchange”) on August 2, 2016 (Securities Code: 3471). MFLP-REIT held
assets totaling 13 properties amounting to a total acquisition price of ¥103.5 billion as at the end of the fiscal period underreview.

ii) Investment environment and management performance
The Japanese economy has been on an expansionary trend against the backdrop of accommodative financial conditions andsupport from government cash injection, as overseas economies continue with steady growth rates. In addition, capital
investment has increased with corporate profits and business sentiment both maintaining excellent levels and private
consumption has also been gradually increasing backed by improvement in the employment and income situation. In thelogistics market, with the 3PL business (Note) specializing in outsourced logistics services expanding in market size and theneeds of 3PL providers for rental of multifunctional and highly-convenient logistics facilities on the rise, the demand forleading-edge logistics facilities is expected to continue to increase.
Under such circumstances, MFLP-REIT upholds a basic policy of pursuing maximization of unitholder value by achieving
sustainable growth through formation of a strategic partnership in the logistics facilities business with Mitsui Fudosan Co.,
Ltd. (“Mitsui Fudosan”). During the fiscal period under review (fiscal period ended January 31, 2019), MFLP-REIT acquired
MFLP Tsukuba (acquisition of 60% quasi co-ownership interest; acquisition price of ¥5,268 million) in December 2018, in
accordance with the aforementioned policy.
Furthermore, MFLP-REIT has conducted steady management of 13 properties held (total acquisition price of ¥103.5 billion)
to maintain an excellent occupancy rate of 100.0% for the entire portfolio as at the end of the fiscal period under review(Note)“3PL business” refers to the third-party logistics business (business of providing logistics services to client companies outsourcing part or all of their
supply chain management functions).

iii) Overview of financing
In the fiscal period under review, MFLP-REIT executed debt financing of ¥4,700 million (short-term loans payable of ¥1,700
million, long-term loans payable of ¥3,000 million) in December 2018 to fund the acquisition of MFLP Tsukuba; and ¥700
million (short-term loans payable) in September 2018 and ¥700 million (short-term loans payable) in October 2018 to repay
loans, and executed repayments of a total of ¥2,100 million (short-term loans payable) using funds from part of loans
procured in the period under review and internal reserve arising from depreciation, etc. As a result, at the end of the fiscal
period under review, the balance of interest-bearing debt was ¥28,000 million (short-term loans payable of ¥1,700 million,
long-term loans payable of ¥26,300 million) and the ratio of interest-bearing debt to total assets (LTV ratio) was 26.8%.
The following is the rating obtained by MFLP-REIT as at the end of the fiscal period under review.
Credit rating agency

Rating details

OutlookJapan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating: AA-

Stableiv) Summary of business performance and distributions
Through the management described above, business performance for the fiscal period under review resulted in operating
revenues of ¥3,280 million, operating income of ¥1,560 million, ordinary income of ¥1,520 million, and net income of¥1,519 million.
In accordance with the distribution policy as defined in the Articles of Incorporation of MFLP-REIT, distributions for the
fiscal period under review shall be subject to application of special provisions for taxation of investment corporations (Article
67(15) of the Act on Special Measures Concerning Taxation). Based on this, MFLP-REIT declared the distribution of¥1,519,622,042, which is the integral multiple of the total number of investment units issued and outstanding (262,774 units)of unappropriated retained earnings. Accordingly, MFLP-REIT declared distribution of earnings per unit of ¥5,783.
-4-

In addition, in accordance with the distribution policy as defined in the Articles of Incorporation, MFLP-REIT shall execute
distributions of cash in excess of retained earnings each fiscal period on a continuous basis in principle (Note 1). Based on
this, MFLP-REIT declared the distribution of ¥84 million, which is the amount almost equivalent to the remaining amountafter subtracting the distribution of earnings of ¥1,519 million from ¥1,604 million or 70% of FFO (Note 2), as return ofcapital applicable to distribution reducing unitholders’ capital for tax purposes. Accordingly, MFLP-REIT declared
distribution in excess of retained earnings per unit of ¥322.
Notes:
1.

In addition to the continuous distributions in excess of retained earnings, in cases where the distribution amount for distribution per unit isexpected to temporarily decline by a certain degree due to such factors as the procurement of funds through the issuance of new investment units,etc., a temporary distribution in excess of retained earnings may be executed in order to standardize the amount of the distribution per unit.
However, from the perspective of continuing to maintain owned assets for a long period of time, in cases where the above distribution of cash is
executed, and where the amount equal to the equivalent of depreciation and amortization for the applicable operating period minus the amount of
the distribution in excess of retained earnings for the applicable operating period falls below the standard amount of capital for building
maintenance (Note 3), the distribution in excess of retained earnings will be decreased by a maximum amount that the distribution amount does
not fall below the total equivalent of the distribution of earnings, and this may lead to cases where distribution in excess of retained earnings will
not be executed. In addition, from the perspective of continuing stable financial management, distributions in excess of retained earnings will not
be executed in cases where the appraisal LTV ratio (Note 4) exceeds 60% in the event that the above distribution of cash is executed.

2.

“FFO” is an acronym for funds from operations and refers to the figure calculated by adding depreciation and amortization of rental properties forthe applicable operating period and loss on retirement of non-current assets to net income (excluding gain (loss) on sales of real estate properties,etc.).

3.

“Standard amount of capital for building maintenance” refers to the “amount equivalent to the capital expenditure amount noted in the Building
Condition Evaluation Report averaged over 12 years,” from which an amount representing six months of capital expenditure is determined andthen multiplied by two.

4.

Appraisal LTV ratio (%) = A/B × 100 (%)
A = Total interest-bearing debt on the applicable accounts settlement date
B = Total assets on the balance sheet on the applicable accounts settlement date – Amount of book value after depreciation of owned real estateon the applicable accounts settlement date + Appraisal value of owned real estate on the applicable accounts settlement date

(Outlook for the fiscal period ending July 31, 2019)i) Future management policy
MFLP-REIT has established a strategic and collaborative partnership in the logistics facilities business with Mitsui Fudosan,
under which it seeks to maximize unitholder value by focusing investments primarily in logistics facilities as a basic policy.
Based on this policy, in addition to expansion of asset size for the purpose of further stabilizing the revenues base continuing
into future periods, MFLP-REIT will perform stable and efficient financial management by addressing changes in theexternal and internal environment to maximize unitholder value.
(A)

External growth strategy“External growth based on the growth potential and extensive pipeline of Mitsui Fudosan’s logistics facilities business”
MFLP-REIT aims for continuous growth by focusing investments on MFLP facilities (leading-edge logistics facilities
with Mitsui Fudosan quality (Note 1)), utilizing the right of first look and preferential negotiation based on “Right offirst look and preferential negotiation agreement” that was concluded with Mitsui Fudosan, which boasts high growthin the logistics facilities business, and the Asset Management Company.
Notes:(B)

1.

Based on the principles of “harmonious coexistence” and “linking diverse values” set by the Mitsui Fudosan Group (Note 2), Mitsui
Fudosan’s logistics facilities business keeps up efforts aimed at not only providing logistics facilities space but also creating value beyond
conventional boundaries. In order to achieve this, MFLP-REIT incorporates the highly-specialized and advanced management andoperational know-how, etc. accumulated in the office building business, retail properties business, etc. and the know-how, etc.
accumulated through urban development as a comprehensive real estate company. It also captures the diverse needs that change with thetimes of the various stakeholders associated with logistics facilities (tenants, people working at the logistics facilities, and local
community). MFLP-REIT refers to the quality of logistics facilities realized through these efforts by the name “Mitsui Fudosan quality.”2.

“Mitsui Fudosan Group” refers to a corporate group comprising Mitsui Fudosan, Mitsui Fudosan’s consolidated subsidiaries, and Mitsui
Fudosan’s associates accounted for using the equity method. The same shall apply hereinafter.

Internal growth strategy“Stable management using the Platform (business foundation) and client network of the Mitsui Fudosan Group”
MFLP-REIT aims for stable management by utilizing the Platform (business foundation) and client network that the
Mitsui Fudosan Group has developed over years as a comprehensive real estate company.

(C)

Financial strategy“Financial and cash management with an emphasis on stability and efficiency”
MFLP-REIT will manage its finances stably, including funds raised through the issuance of new investment units andborrowings, and at the same time it will aim to secure both stable distribution levels and efficient cash management for
distributions through continuous distributions in excess of retained earnings (return of capital) based on cash flow(FFO).

-5-ii) Significant subsequent events(A)

Issuance of new investment units
Regarding the issuance of new investment units decided in the meetings of the Board of Directors of MFLP-REIT heldon January 9, 2019 and January 23, 2019, as stated below, payment for the issuance of said units was completed
through public offering on February 1, 2019 and through a third-party allotment on February 27, 2019.
As a result, the total investment amount (net) is ¥107,166,453,976, and there are 379,000 units of total number ofinvestment units issued and outstanding.
a.

Issuance of new investment units through public offering (primary offering)
110,700 units(Domestic: 75,900 units, Overseas: 34,800 units)
Issue price:¥313,986 per unit
Total amount of issue price:¥34,758,250,200
Amount to be paid in (paid-in amount):¥303,680 per unit
Total amount to be paid in (total paid in amount): ¥33,617,376,000
Payment date:February 1, 2019

Number of new investment units to be issued:b.

Issuance of new investment units through a third-party allotment (third-party allotment)
Number of new investment units to be issued:
Amount to be paid in (paid-in amount):
Total amount to be paid in (total paid in amount):
Payment date:
Allottee:(B)

5,526 units¥303,680 per unit
¥1,678,135,680
February 27, 2019
Daiwa Securities Co. Ltd.

Acquisitions of properties
MFLP-REIT acquired the trust beneficiary interests for the following assets on February 4, 2019 and March 1, 2019. It
also plans to acquire MFLP Fukuoka I (remaining 19% quasi co-ownership interest) on April 5, 2019 (6 properties
inclusive of additional acquisition; total amount of acquisition price is ¥53,128 million).

Category

Property no.

Property nameLocation

Acquisition price(Note 1)(millions of yen)

Acquisition date

L-10

MFLP Hino(Note 2)Hino-shi, Tokyo

5,013(Additional 10%
quasi co-ownershipinterest)

February 4, 2019

L-12

MFLP Tsukuba(Note 3, 6)

Tsukubamirai-shi,
Ibaraki

3,512(Additional 40%
quasi co-ownershipinterest)

March 1, 2019

L-13

MFLP Inazawa

Inazawa-shi, Aichi

16,200February 4, 2019

L-14

MFLP Atsugi II

Isehara-shi,
Kanagawa

13,100February 4, 2019

L-15

MFLP Fukuoka I(Note 4, 6)

Sue-machi, Kasuyagun, Fukuokai) 4,263ii) 1,000
Total 5,263

i) February 4, 2019ii) April 5, 2019

I-1

MFIP Inzai(Note 5)

Inzai-shi, Chiba

10,040(Additional 80%
quasi co-ownershipinterest)

February 4, 2019

Logistics facilities

Industrial real estate

Notes:
1.

“Acquisition price” is the purchase price of each trust beneficiary interest as set forth in the agreement for sale and purchase of trust beneficiary interest for
the acquired asset, rounded down to the nearest million yen. The transaction price does not include consumption tax and local consumption tax or thevarious costs required in the acquisition.

2.

For “MFLP Hino,” “Acquisition price” is the prorated figure equivalent to the quasi co-ownership interest in this property that MFLP-REIT additionallyacquired (10%).

3.

For “MFLP Tsukuba,” “Acquisition price” is the prorated figure equivalent to the quasi co-ownership interest in this property that MFLP-REIT
additionally acquired (40%).

4.

For “MFLP Fukuoka I,” “Acquisition price” noted in the upper section is the prorated figure equivalent to the quasi co-ownership interest in this property
that MFLP-REIT acquired (81%), and the price noted in the lower section is the prorated figure equivalent to the quasi co-ownership interest of the same tobe acquired on April 5, 2019 (19%).

-6-

5.

For “MFIP Inzai,” “Acquisition price” is the prorated figure equivalent to the quasi co-ownership interest in this property that MFLP-REIT additionallyacquired (80%).

6.

The sale and purchase agreements relating to “MFLP Tsukuba” and “MFLP Fukuoka I” (19% quasi co-ownership interest) fall under the definition of“forward commitments, etc.” (as defined as “a postdated sales contract under which payment and delivery shall be made at least one month after theconclusion of the contract, or any other contract similar thereto” stated in the “Comprehensive Guidelines for Supervision of Financial Instruments
Business Operators, etc.” established by the Financial Services Agency).

(C)

Borrowing of funds
MFLP-REIT has borrowed the following funds to apply to part of the acquisition funds and related expenses for thereal estate trust beneficiary interests in the above (B) Acquisitions of properties, as well as to the repayment of loans.

LenderBorrowing amount(millions of yen)Interest rate

Drawdown date

Repayment date

Repayment method

Collateral

Mizuho Bank, Ltd.

2,900

0.08387%

February 4, 2019

April 5, 2019

Bullet repayment

UnsecuredNon-guaranteed

The Bank ofFukuoka, Ltd.

1,100

0.08318%

March 1, 2019

May 7, 2019

Bullet repayment

UnsecuredNon-guaranteed

Sumitomo Mitsui
Banking Corporation

1,000

0.25%

February 4, 2019

February 6, 2023

Bullet repayment

UnsecuredNon-guaranteed

Sumitomo Mitsui
Banking Corporation

1,000

0.1475%February 4, 2019

February 5, 2024

Bullet repayment

UnsecuredNon-guaranteed

Sumitomo Mitsui
Trust Bank, Limited

1,500

0.1475%February 4, 2019

February 5, 2024

Bullet repayment

UnsecuredNon-guaranteed

Mizuho Bank, Ltd.

2,000

0.36869%

February 4, 2019

August 4, 2028

Bullet repayment

UnsecuredNon-guaranteed

MUFG Bank, Ltd.

1,000

0.25%

February 4, 2019

February 6, 2023

Bullet repayment

UnsecuredNon-guaranteed

MUFG Bank, Ltd.

500

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

The Bank ofFukuoka, Ltd.

2,000

0.3988%February 4, 2019

February 5, 2029

Bullet repayment

UnsecuredNon-guaranteed

Shinkin Central Bank

1,800

0.1863%February 4, 2019

February 4, 2025

Bullet repayment

UnsecuredNon-guaranteed

The Norinchukin
Bank

1,000

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

Mizuho Trust &Banking Co., Ltd.

500

0.1163%February 4, 2019

February 6, 2023

Bullet repayment

UnsecuredNon-guaranteed

Mizuho Trust &Banking Co., Ltd.

500

0.1475%February 4, 2019

February 5, 2024

Bullet repayment

UnsecuredNon-guaranteed

1,000

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

The Yamaguchi
Bank, Ltd.

600

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

Mitsui Sumitomo
Insurance Company,
Limited600

0.20869%

February 4, 2019

August 4, 2025

Bullet repayment

UnsecuredNon-guaranteed

Total

19,000

–

–

–

–

–

The Chiba Bank, Ltd.

iii) Forecast for the Fiscal Period
MFLP-REIT’s forecasts for the fiscal period ending July 31, 2019 (from February 1, 2019 to July 31, 2019) are as follows:

Fiscal period ending
July 31, 2019(% figures denote rate of period-on-period change)
Distributions
Distributions
per unit
Distributions
per unit(excluding
in excess of(including
Net income
distributions
retained
distributions
in excess of earnings per in excess ofretained
unit
retainedearnings)
earnings)

Operating revenues

Operating income

Ordinary income

Millions ofyen%Millions ofyen%Millions ofyen%Millions of
yen

%

4,958

51.1

2,267

45.4

2,154

41.7

2,153

41.7

Yen
5,683

Yen
732

Yen
6,415

For the assumptions for this forecasts, please refer to “Forecast Assumptions for the Fiscal Period Ending July 31, 2019
(February 1, 2019 to July 31, 2019) and the Fiscal Period Ending January 31, 2020 (August 1, 2019 to January 31, 2020)”
described on page 9.
Notes:
1.

The above forecasts are the current estimations calculated based upon certain assumptions. Future additional acquisitions or sales of real estate,real estate market trends, interest rate fluctuation and other situation surrounding MFLP-REIT may cause differences from the assumptions. As aresult, actual operating revenues, operating income, ordinary income, net income, distributions per unit (excluding distributions in excess of-7-

retained earnings) and distributions in excess of retained earnings per unit may vary from these forecasts. Furthermore, these forecasts are in no
way a guarantee of amounts of distributions or distributions in excess of retained earnings.
2.

Monetary amounts have been rounded down to the display unit, and percentage values have been rounded to the nearest tenth of a percent.

(Reference)
MFLP-REIT’s forecasts for the fiscal period ending January 31, 2020 (from August 1, 2019 to January 31, 2020) are as
follows:

Fiscal period ending
January 31, 2020(% figures denote rate of period-on-period change)
Distributions
Distributions
per unit
Distributions
per unit(excluding
in excess of(including
Net income
distributions
retained
distributions
in excess of earnings per in excess ofretained
unit
retainedearnings)
earnings)

Operating revenues

Operating income

Ordinary income

Millions ofyen%Millions ofyen%Millions ofyen%Millions of
yen

%

5,044

1.7

2,268

0.0

2,184

1.4

2,184

1.4

Yen
5,762

Yen
730

Yen
6,492

For the assumptions for this forecasts, please refer to “Forecast Assumptions for the Fiscal Period Ending July 31, 2019
(February 1, 2019 to July 31, 2019) and the Fiscal Period Ending January 31, 2020 (August 1, 2019 to January 31, 2020)”
described below.
Notes:
1.

The above forecasts are the current estimations calculated based upon certain assumptions. Future additional acquisitions or sales of real estate,real estate market trends, interest rate fluctuation and other situation surrounding MFLP-REIT may cause differences from the assumptions. As aresult, actual operating revenues, operating income, ordinary income, net income, distributions per unit (excluding distributions in excess ofretained earnings) and distributions in excess of retained earnings per unit may vary from these forecasts. Furthermore, these forecasts are in no
way a guarantee of amounts of distributions or distributions in excess of retained earnings.

2.

Monetary amounts have been rounded down to the display unit, and percentage values have been rounded to the nearest tenth of a percent.

-8-Forecast Assumptions for the Fiscal Period Ending July 31, 2019 (February 1, 2019 to July 31, 2019) and the Fiscal Period Ending
January 31, 2020 (August 1, 2019 to January 31, 2020)
Item

Assumptions

Calculation period The fiscal period ending July 31, 2019 (the sixth fiscal period): February 1, 2019 to July 31, 2019 (181days)
 The fiscal period ending January 31, 2020 (the seventh fiscal period): August 1, 2019 to January 31,2020 (184 days)

Investment assets

 It is assumed that (i) the total number of the properties assets held by MFLP-REIT will be 16, which
includes the trust beneficiary interests in real estate held by MFLP-REIT as of January 31, 2019 (total of
13 properties) (“Assets Currently Held”), with the acquisition of the trust beneficiary interests in realestate related to MFLP Hino (quasi co-ownership interest of 10%), MFLP Inazawa, MFLP Atsugi II,
MFLP Fukuoka I (quasi co-ownership interest of 81%) and MFIP Inzai (quasi co-ownership interest of80%) on February 4, 2019, as well as those related to MFLP Tsukuba (quasi co-ownership interest of40%) on March 1, 2019, and those related to MFLP Fukuoka I (quasi co-ownership interest of 19%) on
April 5, 2019 (collectively, “Assets (to be) Acquired”); (ii) the abovementioned assets will continue to beheld as there will be no disposition, etc. of the assets held by MFLP-REIT until the end of the fiscal
period ending January 31, 2020 and (iii) there will be no acquisition of new properties other than the
Assets (to be) Acquired. However, the actual number of investment assets may change due to theacquisition of new properties other than the Assets (to be) Acquired or the disposition, etc. of assets heldby MFLP-REIT.

Operating revenues

 Leasing business revenues related to the Assets Currently Held are calculated based on lease contracts
already executed that are in effect as of today and other factors, including tenant movements and market
trends.
 Leasing business revenues related to the Assets (to be) Acquired are calculated by taking into accountlease contracts already executed and other factors, including tenant movements and market trends, basedon the information provided by the current owner.
 Calculations assume that there will be no gain or loss on sale of real estate.

Operating expenses

 Leasing business expenses, which are major operating expenses, other than depreciation have been
calculated by taking into consideration changes to expenses, with the historical results used as abenchmark for the Assets Currently Held and information provided by the current owner used as abenchmark for the Assets (to be) Acquired.
 Depreciation is calculated using the straight-line method. Depreciation is expected to be ¥1,319 million
for the fiscal period ending July 31, 2019 and ¥1,331 million for the fiscal period ending January 31,
2020.
 Leasing business income (excluding gain on sale of real estate) after the deduction of leasing business
expenses (including depreciation) is expected to be ¥2,811 million for the fiscal period ending July 31,
2019 and ¥2,898 million for the fiscal period ending January 31 2020.
 In general, property taxes, city planning taxes and other charges levied on new properties acquired aresettled at the time of acquisition by prorating for the period held with the present owner. However, as
MFLP-REIT includes an amount equivalent to the settled amount in the acquisitions costs for theproperty, the amount is not recorded as expenses during the operating period that includes the day on
which the property is acquired. As such, expenses relating to property taxes, city planning taxes andother charges for the Assets (to be) Acquired for fiscal 2020 will be booked from the fiscal period ending
July 31, 2020.
 Repair expenses for buildings are expected to be ¥62 million for the fiscal period ending July 31, 2019and ¥35 million for the fiscal period ending January 31, 2020 based on the medium to long-term repair
plan established by the Asset Management Company. However, given the possibility that repair expenses
may increase or additional expenses may be incurred due to difficult-to-forecast factors, the actual results
may differ significantly from the forecast amount.

Non-operating
expenses Interest expenses and other expenses related to borrowings are expected to be ¥61 million for the fiscal
period ending July 31, 2019 and ¥64 million for the fiscal period ending January 31, 2020. The expenses
for the issuance of new investment units, of which payments were completed on February 1, 2019 andFebruary 27, 2019, shall be amortized on a monthly basis over a three-year period starting from theirmonth of issuance. Said amortization is expected to be ¥19 million for the fiscal periods ending July 31,
2019 and January 31, 2020. It is also expected that there will be ¥32 million in temporary expenses
related to the issuance of new investment units in the fiscal period ending July 31, 2019.

 It is assumed that total interest-bearing debt will be ¥46,700 million at the end of the fiscal period ending
July 31, 2019 and ¥42,800 million at the end of the fiscal period ending January 31, 2020.
 The loan to value (LTV) ratio is expected to be 29.4% at the end of the fiscal period ending July 31, 2019
Interest-bearing debt
and 27.6% at the end of the fiscal period ending January 31, 2020.
The following formula is used to calculate LTV ratio.
LTV ratio = Total interest-bearing debt ÷ Total assets × 100

-9-

Item

Assumptions

Investment units It is assumed that the total number of investment units issued and outstanding is the 379,000 units as ofthe date of this document and there will be no change in the number of investment units by issuing newinvestment units, etc. through to the end of the fiscal period ending January 31, 2020.
 Distributions per unit (excluding distributions in excess of retained earnings) and distributions in excess
of retained earnings per unit are calculated based on the 379,000 units of expected total number ofinvestment units issued and outstanding at the end of the fiscal periods ending July 31, 2019 and thefiscal periods ending January 31, 2020.

 Distributions per unit (excluding distributions in excess of retained earnings) is calculated in accordanceDistributions per unit
with MFLP-REIT’s policy on distributions of cash described in its Articles of Incorporation and(excluding
assuming that the entire amount of earnings will be distributed.
distributions in However, distributions per unit (excluding distributions in excess of retained earnings) may change for aexcess of retained
variety of reasons, including changes in MFLP-REIT’s investment assets, changes in leasing businessearnings)
revenues due to tenant movements, etc., and/or the occurrence of unforeseen repairs and maintenance,
etc.

Distributions inexcess of retained
earnings per unit Distributions in excess of retained earnings per unit is calculated in accordance with MFLP-REIT’s
policy on distributions of cash described in its Articles of Incorporation and the asset management
guidelines for the asset management company. Total distributions in excess of retained earnings are
expected to be ¥277 million for the fiscal period ending July 31, 2019 and ¥276 million for the fiscal
period ending January 31, 2020.
 MFLP-REIT emphasizes cash flow generated by asset management, such as the leasing of investment
assets, excluding gain or loss on sale of real estate. For the time being, it is MFLP-REIT’s policy to
calculate the amount distributable, including distributions in excess of retained earnings, to be around
70% of FFO up to a maximum of 75% of FFO and continually distribute the amount of this that exceeds
the amount of distributions of earnings, within a scope where financial stability can be secured andowned assets can be maintained for a long duration of time, as distributions in excess of retained
earnings determined based on a comprehensive judgment of the situation (the “continuous distributions
in excess of retained earnings”). However, the continuous distributions in excess of retained earnings
may be terminated given the economic environment, trends in the real estate market or leasing market,
the situation surrounding owned assets, the percentage of distributions in excess of retained earnings
accounted for in depreciation during MFLP-REIT’s applicable operating period (Note 1), and thesituation pertaining to LTV level and retained cash and deposits, among other factors.
 In addition to the continuous distributions in excess of retained earnings, in cases where the distribution
amount for distributions per unit (including distributions in excess of retained earnings) is expected totemporarily decline by a certain degree due to such factors as the procurement of funds through theissuance of new investment units, etc., a temporary distributions in excess of retained earnings may be
executed in order to standardize the amount of the distributions per unit (including distributions in excess
of retained earnings).
 However, from the perspective of continuing to maintain owned assets for a long period of time, in cases
where the above distribution of cash is executed, and where the amount equal to the equivalent ofdepreciation and amortization for the applicable operating period minus the amount of the distribution inexcess of retained earnings for the applicable operating period falls below the standard amount of capitalfor building maintenance (Note 2), the distribution in excess of retained earnings will be decreased by amaximum amount that the distribution amount does not fall below the total equivalent of the distributionof earnings, and this may lead to cases where distribution in excess of retained earnings will not be
executed.
 In addition, from the perspective of continuing stable financial management, distributions in excess ofretained earnings will not be executed in cases where the appraisal LTV ratio (Note 3) exceeds 60% in
the event that the above distribution of cash is executed.
Notes:Other

1.

The maximum will be an amount equivalent to 60% of the depreciation for the applicable operating period.

2.

“Standard amount of capital for building maintenance” refers to the “amount equivalent to the capital expenditure amountnoted in the Building Condition Evaluation Report averaged over 12 years,” from which an amount representing six monthsof capital expenditure is determined and then multiplied by two.

3.

Appraisal LTV ratio (%) = A/B × 100 (%)
A = Total interest-bearing debt on the applicable accounts settlement date
B = Total assets on the balance sheet on the applicable accounts settlement date – Amount of book value after depreciation of
owned real estate on the applicable accounts settlement date + Appraisal value of owned real estate on the applicableaccounts settlement date

 It is assumed that there will be no change in legislation, taxation, accounting standards, listing
regulations imposed by the Tokyo Stock Exchange, rules and requirements imposed by The Investment
Trusts Association, Japan, etc. that will impact the aforementioned forecasts.
 It is assumed that there will be no unforeseen material changes in general economic trends, real estatemarket conditions, etc.

- 10 -

3.

Financial Statements(1)

Balance Sheets(Thousands of yen)
4th period(As of July 31, 2018)

5th period(As of January 31, 2019)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust

953,525

936,079

1,803,520

2,035,779

Operating accounts receivable

132,570

35,257

Prepaid expenses

18,017

17,478Consumption taxes receivable

613,050

99,710

Other
Total current assets

5,413

4,977

3,526,098

3,129,283

Non-current assets
Property and equipment
Buildings in trust

48,397,235

52,057,963

Accumulated depreciation(1,983,027)(2,613,907)

Buildings in trust, net

46,414,207

49,444,055

Structures in trust

1,637,752

1,738,043

Accumulated depreciation(209,544)(276,406)

Structures in trust, net

1,428,207

1,461,637

Machinery and equipment in trust

2,202,041

2,202,041

Accumulated depreciation(261,517)(335,865)

Machinery and equipment in trust, net

1,940,523

1,866,176

Vehicles and transport equipment in trust

–

2,642

Accumulated depreciation

–

(110)

Vehicles and transport equipment in trust, net

–

2,532

Tools, furniture and fixtures in trust

951

2,175

Accumulated depreciation

(167)

(258)

Tools, furniture and fixtures in trust, net

784

1,917

46,880,845

48,548,367–

70,98596,664,568

101,395,672

Software

7,116

5,996

Total intangible assets

7,116

5,996

Land in trust
Construction in progress in trust
Total property and equipment
Intangible assets

Investments and other assets
Lease and guarantee deposits

10,00010,000Long-term prepaid expenses

41,55549,833

13

15

Other

1,050

1,050

Total investments and other assets

52,61960,899Deferred tax assets

Total non-current assets
Total assets- 11 -

96,724,304

101,462,568

100,250,403

104,591,851

(Thousands of yen)
4th period(As of July 31, 2018)

5th period(As of January 31, 2019)

Liabilities
Current liabilities
Operating accounts payable

92,127

205,661

Short-term loans payable

700,000

1,700,000

Accounts payable322,767

444,711

Accrued expenses

222

210

Income taxes payable

883

929

538,269

570,502

1,321

382

1,655,592

2,922,397

Long-term loans payable

23,300,000

26,300,000

Tenant leasehold and security deposits in trust

1,891,354

1,978,772

Total non-current liabilities

25,191,354

28,278,772

26,846,946

31,201,169

72,120,699

72,120,699(161,728)(249,757)

71,958,971

71,870,942

1,444,484

1,519,739

Advances received
Other
Total current liabilities
Non-current liabilities

Total liabilities
Net assets
Unitholders’ capital
Unitholders’ capital
Deduction from unitholders’ capital
Unitholders’ capital (net)
Retained earnings
Unappropriated retained earnings (undisposed loss)
Total retained earnings

1,444,484

1,519,739

Total unitholders’ equity

73,403,456

73,390,682

Total net assets*2

Total liabilities and net assets

73,403,456
100,250,403- 12 -*273,390,682
104,591,851

(2)Statements of Income(Thousands of yen)
4th period(From February 1, 2018
to July 31, 2018)

5th period(From August 1, 2018
to January 31, 2019)

Operating revenues
Property-related revenues*1, *2

3,037,442*1, *23,135,601

Other revenues related to property leasing*1, *2111,226*1, *2

145,331

Total operating revenues

3,148,668

3,280,932

Operating expenses
Property-related expenses*1, *2

Asset management fee

1,306,126*1, *2

1,338,137

278,845

310,249

Asset custody fee

3,993

5,012

Administrative service fees

13,235

15,560

Directors’ compensations

5,400

5,400

Audit fee

9,100

9,100

Other operating expenses

33,69937,209Total operating expenses

1,650,398

1,720,669

1,498,269

1,560,262

Interest income

1214

Insurance income

373

35,881

Interest on refund

501

866

0

0

887

36,76232,39636,026

12,818

–

4,016

4,983

Operating income
Non-operating income

Other
Total non-operating income
Non-operating expenses
Interest expenses
Offering costs associated with issuance of investment
units
Borrowing related expenses
Disaster recovery expenses–*3

31,030

Other

4,573

4,332

Total non-operating expenses

53,80476,372

Ordinary income

1,445,352

1,520,653

Income before income taxes

1,445,352

1,520,653

Income taxes - current

885

931

Income taxes - deferred

(0)

(2)

Total income taxes

885

929

1,444,466

1,519,723

17

16

1,444,484

1,519,739

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)- 13 -

(3)Statements of Changes in Net Assets
4th period (From February 1, 2018 to July 31, 2018)(Thousands of yen)
Unitholders’ capital
Unitholders’ capital

Balance at the
beginning of theperiodUnitholders’capitalDeduction fromunitholders’capital58,350,540(100,128)

Retained earnings
Total unitholders’equityTotal net assets

59,434,941

59,434,941

13,770,159

13,770,159

13,770,159(61,600)(61,600)(61,600)

Unitholders’capital (net)Unappropriatedretained earnings(undisposed loss)

Total retained
earnings

58,250,412

1,184,529

1,184,529

Changes of items
during period
Issuance of new
investment units

13,770,159

Distribution inexcess ofretained earnings(61,600)

Dividends ofearnings(1,184,512)(1,184,512)(1,184,512)(1,184,512)

Net income

1,444,466

1,444,466

1,444,466

1,444,466

Total changes of
items during
period13,770,159(61,600)

13,708,559

259,954259,954

13,968,514

13,968,514

Balance at the endof the period*1 72,120,699(161,728)

71,958,971

1,444,484

1,444,484

73,403,456

73,403,456

5th period (From August 1, 2018 to January 31, 2019)(Thousands of yen)
Unitholders’ capital
Unitholders’ capital

Balance at the
beginning of theperiodUnitholders’capitalDeduction fromunitholders’capital72,120,699

Retained earnings
Unitholders’capital (net)Unappropriatedretained earnings(undisposed loss)

Total retained
earnings(161,728)

71,958,971

1,444,484

1,444,484(88,029)(88,029)

Total unitholders’equityTotal net assets

73,403,456

73,403,456(88,029)(88,029)

Changes of items
during period
Distribution inexcess ofretained earnings
Dividends ofearnings(1,444,468)(1,444,468)(1,444,468)(1,444,468)

Net income

1,519,723

1,519,723

1,519,723

1,519,723

Total changes of
items during
period–(88,029)(88,029)

75,25475,254(12,774)(12,774)

Balance at the endof the period*1 72,120,699(249,757)

71,870,942

1,519,739

1,519,739

73,390,682

73,390,682- 14 -

(4)Statements of Cash Distributions(Yen)
4th period(From February 1, 2018
to July 31, 2018)

I

Unappropriated retained earnings

II

Distributions in excess of retained
earnings

5th period(From August 1, 2018
to January 31, 2019)

1,444,484,929

Deduction from unitholders’ capital
III Distributions(Distribution per unit)
Distribution of earnings(Of which: Distribution of
earnings per unit)
Distribution in excess of retained
earnings(Of which: Distribution in excess
of retained earnings per unit)
IV Retained earnings carried forward

1,519,739,902

88,029,290

84,613,228

1,532,497,968

1,604,235,270(5,832)(6,105)

1,444,468,678

1,519,622,042(5,497)(5,783)88,029,290

84,613,228

(335)

(322)

16,251

117,860

In accordance with the distribution policy
as defined in the Article 35, Paragraph 1of the Articles of Incorporation of MFLPREIT, distributions shall be in excess of
the amount equivalent to 90% of theamount of earnings available for dividends
defined in the Article 67-15 of the Act on
Special Measures Concerning Taxation.
Based on this policy, for the fiscal period
ended July 31, 2018, MFLP-REIT
declared a distribution amount of¥1,444,468,678, which is the maximum
value of the integral multiple of the total
number of investment units issued andoutstanding at the end of the period inamounts not in excess of unappropriatedretained earnings.
Furthermore, based on the distribution
policy as defined in the Article 35,
Method of calculating distribution amount
Paragraph 2 of the Articles ofIncorporation, MFLP-REIT executes the
distribution of cash in excess of retained
earnings (return of capital applicable to
distribution reducing unitholders’ capitalfor tax purposes) each fiscal period on acontinuous basis.
Based on this policy, for the fiscal period
ended July 31, 2018, MFLP-REIT
declared the distribution of ¥88,029,290,
which is calculated as being almost
equivalent to the remaining amount after
subtracting the distribution of earnings of¥1,444,468,678 from ¥1,532,600,608 or
70% of FFO (funds from operation), as
distribution of cash in excess of retained
earnings (return of capital applicable to
distribution reducing unitholders’ capitalfor tax purposes).

In accordance with the distribution policy
as defined in the Article 35, Paragraph 1of the Articles of Incorporation of MFLPREIT, distributions shall be in excess of
the amount equivalent to 90% of theamount of earnings available for dividends
defined in the Article 67-15 of the Act on
Special Measures Concerning Taxation.
Based on this policy, for the fiscal periods
ended January 31, 2019, MFLP-REIT
declared a distribution amount of¥1,519,622,042, which is the maximum
value of the integral multiple of the total
number of investment units issued andoutstanding at the end of the period inamounts not in excess of unappropriatedretained earnings.
Furthermore, based on the distribution
policy as defined in the Article 35,
Paragraph 2 of the Articles ofIncorporation, MFLP-REIT executes the
distribution of cash in excess of retained
earnings (return of capital applicable to
distribution reducing unitholders’ capitalfor tax purposes) each fiscal period on acontinuous basis.
Based on this policy, for the fiscal period
ended January 31, 2019, MFLP-REIT
declared the distribution of ¥84,613,228,
which is calculated as being almost
equivalent to the remaining amount after
subtracting the distribution of earnings of¥1,519,622,042 from ¥1,604,409,211 or
70% of FFO (funds from operation), as
distribution of cash in excess of retained
earnings (return of capital applicable to
distribution reducing unitholders’ capitalfor tax purposes).

(Note)
MFLP-REIT may execute cash distribution in excess of distributable amount, in an amount it determines within a scope not to exceed the limit stipulated in therules and requirements imposed by the Investment Trusts Association, Japan, when MFLP-REIT considers it appropriate, given such factors as economic
environment, trends in the real estate market or leasing market, the situation surrounding owned assets and the financial condition. In addition, in case that any
cash distribution fails to meet the statutory requirements for special tax treatment for investment corporations, MFLP-REIT may execute cash distribution inexcess of distributable amount, in an amount it determines to meet the statutory requirements.

- 15 -

(5)Statements of Cash Flows(Thousands of yen)
4th period(From February 1, 2018
to July 31, 2018)

5th period(From August 1, 2018
to January 31, 2019)

Cash flows from operating activities
Income before income taxes

1,445,352

1,520,653

Depreciation and amortization

746,082

773,409

(12)

(14)

Interest income
Interest expenses

32,39636,026

Decrease (increase) in operating accounts receivable(99,303)

97,313

Decrease (increase) in prepaid expenses

3,538

538

Decrease (increase) in long-term prepaid expenses(2,826)(8,278)Decrease (increase) in consumption taxes receivable(510,247)

513,340

Increase (decrease) in operating accounts payable(105,961)

157,601

Increase (decrease) in accounts payable

22,60633,966

Increase (decrease) in advances received

133,825

32,233

Other, net(1,412)(502)

Subtotal

1,664,037

3,156,287

12

14(32,314)(36,038)

(872)

(885)

1,630,863

3,119,376(19,760,087)(5,460,010)(1,941)(46,583)

348,667

134,001(19,413,361)(5,372,593)

Proceeds from short-term loans payable

2,100,000

3,100,000

Repayments of short-term loans payable(1,400,000)(2,100,000)

Proceeds from long-term loans payable

5,300,000

3,000,000

Proceeds from issuance of investment units

13,770,159–

Payment of distribution of earnings(1,183,977)(1,443,990)(61,562)(87,979)

Net cash provided by (used in) financing activities

18,524,619

2,468,029

Net increase (decrease) in cash and cash equivalents

742,121214,812

Cash and cash equivalents at beginning of period

2,014,924

2,757,046

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property and equipment in trust
Repayments of tenant leasehold and security deposits intrust
Proceeds from tenant leasehold and security deposits intrust
Net cash provided by (used in) investing activities
Cash flows from financing activities

Payment of distribution in excess of retained earnings

Cash and cash equivalents at end of period*1- 16 -

2,757,046*1

2,971,858

(6)Notes to Going Concern Assumption
Not applicable.

(7)1.

Notes to Significant Accounting Policies
Method of depreciation andamortization of non-current
assets(1)

Property and equipment (including those in trust)
Amortization of property and equipment is calculated using the straight-line method
over the estimated useful lives. The useful lives of principal property and equipment
are as follows:
Buildings:
Structures:
Machinery and equipment:
Vehicles:Tools, furniture and fixtures:(2)

2 to 59 years
8 to 45 years
14 to 16 years
4 years
5 to 15 years

Intangible assets
Amortization of intangible assets is calculated using the straight-line method over theestimated useful lives.
Amortization of software for internal use is calculated using the straight-line method
over the estimated useful lives of five years at MFLP-REIT.

2.

Recognition of revenues andexpenses

Taxes on property and equipment
With respect to property taxes, city planning taxes and depreciable asset taxes imposed onreal estate properties or trust beneficiary interests in real estate, of the tax amount assessedand determined, the amount corresponding to the relevant fiscal period is accounted for as
property-related expenses.
Of the amounts paid for the acquisitions of real estate properties or trust beneficiary interests
in real estate, the amount equivalent to property-related taxes is capitalized as part of theacquisition cost of the relevant property instead of being charged as expenses.
Capitalized property-related taxes amounted to ¥111,095 thousand for the 4th period and¥1,526 thousand for the 5th period.

3.

Scope of cash and cash
equivalents in the statements ofcash flows

4.

Other significant information for (1)preparation of financial
statements

Cash and cash equivalents in the statements of cash flows consist of cash on hand and cashin trust, readily-available bank deposits, readily-available bank deposits in trust and shortterm investments that are readily convertible to cash and realizable with a maturity of threemonths or less when purchased and that are subject to an insignificant risk of changes invalue.
Trust beneficiary interests in real estate
As to trust beneficiary interests in real estate that have real estate properties as assets
in trust, all accounts of assets and liabilities within assets in trust as well as all income
generated and expenses incurred from assets in trust are recorded in the relevantbalance sheet and statement of income account items.
The following material items of the assets in trust recorded in the relevant accountitems are separately presented in the accompanying balance sheets.
i)
ii)
iii)
iv)
(2)

Cash and deposits in trust
Buildings in trust, structures in trust, machinery and equipment in trust,
Vehicles and transport equipment in trust, tools, furniture and fixtures in trust
and land in trust
Construction in progress in trust
Tenant leasehold and security deposits in trust

Consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive ofconsumption taxes.

[Notes to Change in Presentation Method]
MFLP-REIT has transitioned to presenting deferred tax assets under “Investments and other assets” classification and deferred tax
liabilities under “Non-current liabilities” classification since the “Partial Amendments to Accounting Standard for Tax EffectAccounting (ASBJ Statement No. 28, February 16, 2018) have been adopted from the fiscal period under review. As a result, in thebalance sheets of the 4th period, ¥13 thousand of “Deferred tax assets” under “Current assets” is presented included in ¥13 thousandof “Deferred tax assets” under “Investments and other assets.”- 17 -

(8)Notes to Financial Statements[Notes to Balance Sheets]
1.

Commitment line contracts
MFLP-REIT had the commitment line contracts with two banks.
(Thousands of yen)
5th period(As of January 31, 2019)

4th period(As of July 31, 2018)
Total amount of commitment line contracts
Loans executed

6,000,000–

6,000,000–

Unused line of credit

6,000,000

6,000,000*2.

Minimum net assets as required by the Article 67, Paragraph 4 of the Investment Trust Act
4th period(As of July 31, 2018)(Thousands of yen)
5th period(As of January 31, 2019)50,00050,000[Notes to Statements of Income]*1.

Components of operating income from property leasing

A. Property leasing business revenues
Property-related revenues
Rental revenues
Common area charges
Other revenues related to property leasing
Utilities charges
Parking lots
Others

4th period(From February 1, 2018
to July 31, 2018)(Thousands of yen)
5th period(From August 1, 2018
to January 31, 2019)

2,928,747
108,694

3,037,442

3,026,801
108,799

3,135,601

111,226

105,030
8,746
31,555

145,33185,3109,236
16,679Total property leasing businessrevenues
B. Property leasing business expenses
Property-related expenses
Outsourcing service expenses
Utilities expenses
Repair expenses
Taxes and dues
Depreciation and amortization
Others3,148,668

179,549
78,31732,173
257,614744,962
13,5083,280,932

178,765
96,567
20,247
257,608772,289
12,659Total property leasing business
expenses

1,306,126

1,338,137

C. Operating income from property leasing[A-B]

1,842,542

1,942,794- 18 -

*2.

Transactions with major unitholders(Thousands of yen)
5th period(From August 1, 2018
to January 31, 2019)

4th period(From February 1, 2018
to July 31, 2018)
Operating transactions:Operating revenues
Operating expenses
Non-operating transactions:Purchase of trust beneficiary interests inreal estate*3.

141,756
70,891

109,537
70,817

12,106,173

88,426

Disaster recovery expenses comprise the recovery expenses corresponding to the insurance received for damage fromnatural disasters as a result of the typhoons, etc. that occurred in 2018.

[Notes to Statements of Changes in Net Assets]*1.

Total number of investment units authorized and total number of investment units issued and outstanding
4th period(From February 1, 2018
to July 31, 2018)

Total number of investment units authorized
Total number of investment units issued and outstanding

5th period(From August 1, 2018
to January 31, 2019)

8,000,000 units

8,000,000 units

262,774 units

262,774 units[Notes to Statements of Cash Flows]*1.

Reconciliation between cash and cash equivalents and accounts and amounts in the balance sheets
4th period(From February 1, 2018
to July 31, 2018)

Cash and deposits(Thousands of yen)
5th period(From August 1, 2018
to January 31, 2019)

953,525

936,079

Cash and deposits in trust

1,803,520

2,035,779

Cash and cash equivalents

2,757,046

2,971,858[Notes to Lease Transactions]Operating Leases (lessor)
Future lease payments
4th period(As of July 31, 2018)
Due within one year
Due after one year
Total

- 19 -(Thousands of yen)
5th period(As of January 31, 2019)5,494,623

5,598,916

10,934,324

11,780,363

16,428,947

17,379,280

[Notes to Financial Instruments]
1.

Status of financial instruments(1)

Policy for financial instruments
MFLP-REIT procures funds for acquisition of assets or repayment of debts mainly through issuance of investment
units, loans or issuance of investment corporation bonds.
MFLP-REIT generally invests surplus funds in deposits considering safety of the investments although surplus
funds could be invested in securities and monetary claims as a matter of policy.
MFLP-REIT enters into derivative transactions to a limited extent for the purpose of avoiding the risk of interest
rate fluctuation and other risks. MFLP-REIT does not engage in speculative transactions.

(2)

Financial instruments, their associated risks and risk management system
Deposits are used for investment of MFLP-REIT’s surplus funds, and are exposed to credit risk such as failure of
the financial institutions holding the deposits. MFLP-REIT limits the credit risk by restricting the deposit periods toshort terms and selecting financial institutions that have high credit ratings.
Proceeds from loans are used mainly to acquire real estate properties or refinance existing loans. While these loans
are exposed to liquidity risk at the time of repayment, MFLP-REIT mitigates the liquidity risk by diversifying its
means of fund procurement and lending financial institutions, dispersing repayment dates, establishing commitment
lines and securing liquidity on hand, and also controls liquidity risk by preparing monthly fund management plans.
In addition, loans with floating interest rates are exposed to the risk of interest rate rising. MFLP-REIT limits theimpact of interest rate rises on its operations by keeping the ratio of interest-bearing debt to total assets at a low
level and maintaining the ratio of fixed-rate long-term loans at a high level.
Tenant leasehold and security deposits in trust are deposits from tenants, and are exposed to liquidity risk at the time
the tenants vacate the properties. MFLP-REIT controls the liquidity risk by preparing monthly fund management
plans.

(3)

Supplementary explanation regarding fair values of financial instruments
The fair value of financial instruments is based on their observable market value, if available. When there is noobservable market value available, fair value is based on a price that is reasonably estimated. Since variable factors
are also reflected in estimating the fair value, different assumptions and factors could result in a different value.

2.

Estimated fair value of financial instruments
4th period (As of July 31, 2018)
The carrying amounts, fair value and its differences as of July 31, 2018 are as follows. Financial instruments for which it
is extremely difficult to determine the fair value are excluded from the following tables. (Note 2)
Carrying amount

Fair value(Thousands of yen)
Difference(1)

Cash and deposits

953,525

953,525–(2)

Cash and deposits in trust

1,803,520

1,803,520–

Total assets

2,757,046

2,757,046–(3)

Short-term loans payable

700,000

700,000–(4)

Long-term loans payable

23,300,000

23,189,445(110,554)

Total liabilities

24,000,000

23,889,445(110,554)

5th period (As of January 31, 2019)
The carrying amounts, fair value and its differences as of January 31, 2019 are as follows. Financial instruments for which
it is extremely difficult to determine the fair value are excluded from the following tables. (Note 2)
Carrying amount

Fair value(Thousands of yen)
Difference(1)

Cash and deposits

936,079

936,079(2)

Cash and deposits in trust

2,035,779

2,035,779––

Total assets

2,971,858

2,971,858–(3)

Short-term loans payable

1,700,000

1,700,000–(4)Long-term loans payable

26,300,000

26,362,577

62,577

Total liabilities

28,000,000

28,062,577

62,577- 20 -

Notes:1.

Methods to estimate fair values of financial instruments(1) Cash and deposits and (2) Cash and deposits in trust
Because these are settled in a short period of time, the fair value is approximately the same as the book value and thus stated at that bookvalue.
(3) Short-term loans payable
Because these are settled in a short period of time, the fair value is approximately the same as the book value and thus stated at that bookvalue.
(4) Long-term loans payable
The fair value is determined based on the present value being calculated by discounting the sum of principal and interest by the assumed
interest rate which would be applied if a similar new loan were entered into.

2.

Financial instruments for which it is extremely difficult to determine the fair value
Category

4th period (As of July 31, 2018)

Tenant leasehold and security deposits in trust(Thousands of yen)
5th period (As of January 31, 2019)

1,891,354

1,978,772

Tenant leasehold and security deposits in trust are not subject to fair value disclosure, because a reasonable estimation of future cash flows isdifficult as no market price is available and the actual deposit period cannot be determined even when a contract period is set in the lease
contract since there is a possibility that the leases may be canceled, renewed or re-signed.
3.

Redemption schedule for monetary claims after the balance sheet date
4th period (As of July 31, 2018)(Thousands of yen)
Due within one year
Cash and deposits

953,525

Cash and deposits in trust

1,803,520

5th period (As of January 31, 2019)(Thousands of yen)
Due within one year
Cash and deposits

936,079

Cash and deposits in trust
4.

2,035,779

Redemption schedule for loans after the balance sheet date
4th period (As of July 31, 2018)(Thousands of yen)
Due within one
year

Due after one to
two years

Due after two to
three years

Due after three tofour years

Due after four tofive years

Due after five years

Short-term loans
payable700,000

–

–

–

–

–

Long-term loans
payable–––1,900,000

6,500,000

14,900,000

Due after three tofour years

Due after four tofive years

5th period (As of January 31, 2019)(Thousands of yen)
Due within one
year

Due after one to
two years

Due after two to
three years

Due after five years

Short-term loans
payable1,700,000

–

–

–

–

–

Long-term loans
payable–––5,300,000

7,100,000

13,900,000[Notes to Securities]
4th period (As of July 31, 2018)
Not applicable.
5th period (As of January 31, 2019)
Not applicable.

- 21 -

[Notes to Derivative Transactions]
4th period (As of July 31, 2018)
Not applicable.
5th period (As of January 31, 2019)
Not applicable.
[Notes to Retirement Benefits]
4th period (As of July 31, 2018)
Not applicable.
5th period (As of January 31, 2019)
Not applicable.
[Notes to Tax Effect Accounting]1.

Breakdown of significant components of deferred tax assets and deferred tax liabilities
4th period(As of July 31, 2018)

Deferred tax assets
Accrued enterprise tax excluded from expenses

2.

13(Thousands of yen)
5th period(As of January 31, 2019)15

Total deferred tax assets

13

15

Net deferred tax assets

13

15

Reconciliation of significant difference between the statutory tax rate and the effective income tax rate after applicationof tax-effect accounting
4th period(As of July 31, 2018)

Statutory tax rate
Adjustments:
Deductible distributions
Other
Effective income tax rate after application of tax-effectaccounting[Notes to Equity in Income or Loss of Equity Method Investments]
4th period (As of July 31, 2018)
Not applicable.
5th period (As of January 31, 2019)
Not applicable.

- 22 -(%)
5th period(As of January 31, 2019)

31.74

31.51

(31.72)0.04(31.49)
0.04

0.06

0.06

[Notes to Transactions with Related Parties]
1.

Parent company and major corporate unitholders
4th period (From February 1, 2018 to July 31, 2018)

Type

Major
corporateunitholder

Name ofcompany

Mitsui
Fudosan Co.,Ltd.

Location

Chuo-ku,Tokyo

Capital stockorinvestments
in capital(millions ofyen)

339,766

Type ofbusiness

Percentage
of voting Relationshiprights held in with related(by) relatedparties
party

Real estatebusiness

10.99%

Transaction
Type ofamounttransaction(thousands of(Note 2)
yen)
Logistics
managementfee

69,283

Repairs andrelated work

607

Other
propertyrelated
expenses

1,000

Outsourcing
of logistics
managementbusiness Rent income,etc.

141,756

Purchase oftrust
beneficiary 12,106,173
interests inreal estate

Account

Balance at
end of period(thousands ofyen)

Operatingaccounts
payable15,341

Operatingaccounts
receivable

58,003––

Notes:
1.

Consumption taxes are not included in the transaction amounts but included in the balances at the end of the period.

2.

Conditions of these transactions are determined based on the prevailing market price.

5th period (From August 1, 2018 to January 31, 2019)

Type

Major
corporateunitholder

Name ofcompany

Mitsui
Fudosan Co.,Ltd.

Location

Chuo-ku,Tokyo

Capital stockorinvestments
in capital(millions ofyen)

339,766

Type ofbusiness

Percentage
of voting Relationshiprights held in with related(by) relatedparties
party

Real estatebusiness

10.99%

Transaction
Type ofamounttransaction(thousands of(Note 2)yen)

Consumption taxes are not included in the transaction amounts but included in the balances at the end of the period.

- 23 -

29,242

88,426–847

Outsourcing
of logistics
managementbusiness Rent income,

Conditions of these transactions are determined based on the prevailing market price.

Not applicable.

Operatingaccounts
receivable

Other
propertyrelated
expenses2.

5th period (From August 1, 2018 to January 31, 2019)109,537

1,220

1.

Not applicable.

13,057

Repairs andrelated work

Notes:

4th period (From February 1, 2018 to July 31, 2018)

Operatingaccounts
payable68,749Purchase oftrust
beneficiaryinterests inreal estate

Affiliated company, etc.

Balance at
end of period(thousands ofyen)

Logistics
management
fee

etc.

2.

Account–

3.

Subsidiaries of parent company, etc.
4th period (From February 1, 2018 to July 31, 2018)

Name ofcompany

Location

Capital stockorinvestments
in capital(millions ofyen)

Mitsui
Subsidiary of Fudosan
major
Logistics
corporate
REIT
unitholders Management
Co., Ltd.

Chuo-ku,
Tokyo

200

Investment
managementbusiness

–

Asset
Asset
management
managementfee
outsourcing(Note 3)

Mitsui
Subsidiary of
Fudosanmajor
Building
corporate
Management
unitholders
Co., Ltd.

Chuo-ku,
Tokyo

490

Building
management
fee

–

Type

Subsidiary of Mitsui
major
Fudosancorporate
Facilities
unitholders Co., Ltd.

Chuo-ku,Tokyo

Mitsui
Subsidiary of
Fudosanmajor
Facilities
corporateWest Co.,
unitholders
Ltd.

Osaka-shi,
Osaka

Subsidiary ofDaiichimajor
Engei Co.,
corporateLtd.
unitholders

Shinagawaku, Tokyo

Subsidiary ofHino Tokutei
major
Mokutekicorporate
Kaishaunitholders

Chuo-ku,
Tokyo

490

200

Type ofbusiness

Building
management
fee

Building
management
fee

480

Leasing andotherbusinesses

3,311Real estatebusiness

Percentage
of voting Relationshiprights held in with related(by) relatedparties
party

–

–

Transaction
Type ofamounttransaction(thousands of(Note 2)yen)

Account

Balance at
end of period(thousands ofyen)

327,740

Accounts
payable302,929

Building
Repairs andmanagement
related work
outsourcing

3,957

Operatingaccounts
payable1,377

Building
managementfee

66,665
Operatingaccounts
payable12,835

Repairs andrelated work
Building
management
Other
outsourcing
propertyrelated
expenses

12,494

1,660

Other
income214

Building
management
fee

6,242

Repairs andBuilding
management related work
outsourcing
Otherpropertyrelated
expenses

1,278

–

–

Operatingaccounts
payable

1,443

88

–

Repair andmaintenance Repairs andof real estate related work
held

788

Operatingaccounts
payable527–

Purchase oftrust
beneficiaryinterests inreal estate

7,562,921

Operatingaccounts
receivable

53,987–

Notes:
1.

Consumption taxes are not included in the transaction amounts but included in the balances at the end of the period.

2.

Methods to determine terms and conditions of transactions

3.

(1)

Asset management fee is in accordance with terms set forth in the Articles of Incorporation of MFLP-REIT.

(2)

Other terms and conditions of these transactions are determined based on the prevailing market price.

The asset management fee above includes ¥48,895 thousand of a management fee for property acquisitions included in the book value of real estate.

- 24 -

5th period (From August 1, 2018 to January 31, 2019)

Name ofcompany

Location

Capital stockorinvestments
in capital(millions ofyen)

Mitsui
Subsidiary of Fudosan
major
Logistics
corporate
REIT
unitholders Management
Co., Ltd.

Chuo-ku,
Tokyo

200

Investment
managementbusiness

–

Asset
Asset
management
managementfee
outsourcing(Note 3)

Mitsui
Subsidiary of
Fudosanmajor
Building
corporate
Management
unitholders
Co., Ltd.

Chuo-ku,
Tokyo

490

Building
management
fee

–

Type

Subsidiary of Mitsui
major
Fudosancorporate
Facilities
unitholders Co., Ltd.

Mitsui
Subsidiary of
Fudosanmajor
Facilities
corporateWest Co.,
unitholders
Ltd.

Chuo-ku,Tokyo

Osaka-shi,
Osaka

490

200

Type ofbusiness

Percentage
of voting Relationshiprights held in with related(by) relatedparties
party

Building
management
fee–

Building
management
fee–Transaction
Type ofamounttransaction(thousands of(Note 2)yen)

Account

Balance at
end of period(thousands ofyen)

336,593

Accounts
payable379,328

Building
Repairs andmanagement
related work
outsourcing

2,937

–

Building
managementfee

65,744

Repairs andrelated work
Building
management
Other
outsourcing
propertyrelated
expenses

16,602

14,424

1,423

Other
income234

Building
management
fee

7,130

Repairs andBuilding
management related work
outsourcing
Otherpropertyrelated
expenses

Operatingaccounts
payable

–

2,131

–

Operatingaccounts
payable

–

4,508

94

Notes:
1.

Consumption taxes are not included in the transaction amounts but included in the balances at the end of the period.

2.

Methods to determine terms and conditions of transactions

3.

(1)

Asset management fee is in accordance with terms set forth in the Articles of Incorporation of MFLP-REIT.

(2)

Other terms and conditions of these transactions are determined based on the prevailing market price.

The asset management fee above includes ¥26,343 thousand of a management fee for property acquisitions included in the book value of real estate.

4.

Directors and major individual unitholders
4th period (From February 1, 2018 to July 31, 2018)
Not applicable.
5th period (From August 1, 2018 to January 31, 2019)
Not applicable.

[Notes to Asset Retirement Obligations]
4th period (As of July 31, 2018)
Not applicable.
5th period (As of January 31, 2019)
Not applicable.

- 25 -

[Notes to Investment and Rental Properties]
MFLP-REIT owns logistics facilities and industrial properties for the purpose of earning rental income. The carrying amount,net changes in the carrying amount during the periods and fair value of these investment and rental properties are as follows:
4th period(From February 1, 2018 to
July 31, 2018)(Thousands of yen)
5th period(From August 1, 2018 toJanuary 31, 2019)

Carrying amount
Balance at the beginning of the period

77,615,688

Changes during the period

19,048,880

4,660,118

Balance at the end of period

96,664,568

101,324,687

105,180,000

112,140,000

Balance at the end of the period

96,664,568

Notes:
1. The carrying amount represents acquisition cost less accumulated depreciation.
2. Changes in the carrying amount during the 4th period consisted of the increase mainly attributable to acquisition of trust beneficiary interests in realestate for three properties (¥19,747,009 thousand), and the decrease mainly attributable to depreciation (¥744,962 thousand). Changes in the carrying
amount during the 5th period consisted of the increase mainly attributable to acquisition of trust beneficiary interests in real estate for one property(¥5,395,942 thousand), and the decrease mainly attributable to depreciation (¥772,289 thousand).
3. The fair value at the end of the period represents the appraisal value or surveyed value by external real estate appraisers.

Information about income and loss from investment and rental properties is stated in “Notes to Statements of Income.”[Notes to Segment and Related Information]
1.

Segment Information
Segment information has been omitted as MFLP-REIT engages in a single segment of the real estate leasing business.

2.

Related information
4th period (From February 1, 2018 to July 31, 2018)(1)

Information by product and service
Disclosure of this information has been omitted as revenues from external customers in a single product and service
category exceed 90% of the total operating revenues on the statements of income.

(2)

Information by geographical areai) Operating revenues
Disclosure of this information has been omitted as revenues from external customers in Japan exceed 90% of thetotal operating revenues on the statements of income.

ii) Property and equipment
Disclosure of this information has been omitted as the amount of property and equipment located in Japan exceeds
90% of the total amount of property and equipment on the balance sheets.
(3)

Information on major tenant
Tenant nameOperating revenues

Nippon Express Co., Ltd.

Not disclosed (Note)(Thousands of yen)
Related segment
Real estate leasing business(Note)
Not disclosed, because consent regarding disclosure of rent, etc. has not been obtained from the tenant.

5th period (From August 1, 2018 to January 31, 2019)(1)

Information by product and service
Disclosure of this information has been omitted as revenues from external customers in a single product and service
category exceed 90% of the total operating revenues on the statements of income.

(2)

Information by geographical areai) Operating revenues
Disclosure of this information has been omitted as revenues from external customers in Japan exceed 90% of thetotal operating revenues on the statements of income.

- 26 -

ii) Property and equipment
Disclosure of this information has been omitted as the amount of property and equipment located in Japan exceeds
90% of the total amount of property and equipment on the balance sheets.
(3)

Information on major tenant
Disclosure of this information has been omitted because there is no tenant whose operating revenues makes up 10%
or more of total operating revenues.

[Notes to Per Unit Information]
4th period(From February 1, 2018
to July 31, 2018)

5th period(From August 1, 2018
to January 31, 2019)

Net assets per unit

¥279,340¥279,292

Net income per unit

¥5,499¥5,783

Notes:
1. Net income per unit is calculated by dividing net income by the daily weighted average number of investment units outstanding during the period.
Diluted net income per unit is not stated because there are no dilutive investment units.
2. The basis for calculating net income per unit is as follow:

Net income(thousands of yen)Amount not attributable to common unitholders(thousands of yen)
Net income attributable to common investment units(thousands of yen)
Average number of investment units for the period(unit)

4th period(From February 1, 2018
to July 31, 2018)

5th period(From August 1, 2018
to January 31, 2019)

1,444,466

1,519,723––

1,444,466

1,519,723

262,659

262,774[Notes to Significant Subsequent Events]
1.

Issuance of new investment units
Regarding the issuance of new investment units decided in the meetings of the Board of Directors of MFLP-REIT held on
January 9, 2019 and January 23, 2019, as stated below, payment for the issuance of said units was completed throughpublic offering on February 1, 2019 and through a third-party allotment on February 27, 2019.
As a result, the total investment amount (net) is ¥107,166,453,976, and there are 379,000 units of total number ofinvestment units issued and outstanding.
a.

Issuance of new investment units through public offering (primary offering)Number of new investment units to be issued:
Issue price:
Total amount of issue price:Amount to be paid in (paid-in amount):
Total amount to be paid in (total paid in amount):
Payment date:b.

110,700 units (Domestic: 75,900 units, Overseas: 34,800 units)¥313,986 per unit
¥34,758,250,200¥303,680 per unit
¥33,617,376,000
February 1, 2019

Issuance of new investment units through a third-party allotment (third-party allotment)
Number of new investment units to be issued:
Amount to be paid in (paid-in amount):
Total amount to be paid in (total paid in amount):
Payment date:
Allottee:

5,526 units¥303,680 per unit
¥1,678,135,680
February 27, 2019
Daiwa Securities Co. Ltd.

- 27 -

2.

Acquisitions of properties
MFLP-REIT acquired the trust beneficiary interests for the following assets on February 4, 2019 and March 1, 2019. It
also plans to acquire MFLP Fukuoka I (remaining 19% quasi co-ownership interest) on April 5, 2019 (6 properties
inclusive of additional acquisition; total amount of acquisition price is ¥53,128 million).

Category

Location

Acquisition price(Note 1)(millions of yen)

Acquisition date

L-10

MFLP Hino(Note 2)Hino-shi, Tokyo

5,013(Additional 10%
quasi co-ownershipinterest)

February 4, 2019

L–12

MFLP Tsukuba(Note 3, 6)

Tsukubamirai-shi,
Ibaraki

3,512(Additional 40%
quasi co-ownershipinterest)

March 1, 2019

L–13

MFLP Inazawa

Inazawa-shi, Aichi

16,200February 4, 2019

L–14

MFLP Atsugi II

Isehara-shi,
Kanagawa

13,100February 4, 2019

L–15

MFLP Fukuoka I(Note 4, 6)

Sue-machi, Kasuyagun, Fukuokai) 4,263ii) 1,000
Total 5,263

i) February 4, 2019ii) April 5, 2019

I–1

MFIP Inzai(Note 5)

Inzai-shi, Chiba

10,040(Additional 80%
quasi co-ownershipinterest)

February 4, 2019

Property no.

Property name

Logistics facilities

Industrial real estate

Notes:
1.

“Acquisition price” is the purchase price of each trust beneficiary interest as set forth in the agreement for sale and purchase of trust beneficiary interest for
the acquired asset, rounded down to the nearest million yen. The transaction price does not include consumption tax and local consumption tax or thevarious costs required in the acquisition.

2.

For “MFLP Hino,” “Acquisition price” is the prorated figure equivalent to the quasi co-ownership interest in this property that MFLP-REIT additionallyacquired (10%).

3.

For “MFLP Tsukuba,” “Acquisition price” is the prorated figure equivalent to the quasi co-ownership interest in this property that MFLP-REIT
additionally acquired (40%).

4.

For “MFLP Fukuoka I,” “Acquisition price” noted in the upper section is the prorated figure equivalent to the quasi co-ownership interest in this property
that MFLP-REIT acquired (81%), and the price noted in the lower section is the prorated figure equivalent to the quasi co-ownership interest of the same tobe acquired on April 5, 2019 (19%).

5.

For “MFIP Inzai,” “Acquisition price” is the prorated figure equivalent to the quasi co-ownership interest in this property that MFLP-REIT additionallyacquired (80%).

6.

The sale and purchase agreements relating to “MFLP Tsukuba” and “MFLP Fukuoka I” (19% quasi co-ownership interest) fall under the definition of“forward commitments, etc.” (as defined as “a postdated sales contract under which payment and delivery shall be made at least one month after theconclusion of the contract, or any other contract similar thereto” stated in the “Comprehensive Guidelines for Supervision of Financial Instruments
Business Operators, etc.” established by the Financial Services Agency).

- 28 -

3.

Borrowing of funds
MFLP-REIT has borrowed the following funds to apply to part of the acquisition funds and related expenses for the realestate trust beneficiary interests in the above 2. Acquisitions of properties, as well as to the repayment of loans.

LenderBorrowing amount(millions of yen)Interest rate

Drawdown date

Repayment date

Repayment method

Collateral

Mizuho Bank, Ltd.

2,900

0.08387%

February 4, 2019

April 5, 2019

Bullet repayment

UnsecuredNon-guaranteed

The Bank ofFukuoka, Ltd.

1,100

0.08318%

March 1, 2019

May 7, 2019

Bullet repayment

UnsecuredNon-guaranteed

Sumitomo Mitsui
Banking Corporation

1,000

0.25%

February 4, 2019

February 6, 2023

Bullet repayment

UnsecuredNon-guaranteed

Sumitomo Mitsui
Banking Corporation

1,000

0.1475%February 4, 2019

February 5, 2024

Bullet repayment

UnsecuredNon-guaranteed

Sumitomo Mitsui
Trust Bank, Limited

1,500

0.1475%February 4, 2019

February 5, 2024

Bullet repayment

UnsecuredNon-guaranteed

Mizuho Bank, Ltd.

2,000

0.36869%

February 4, 2019

August 4, 2028

Bullet repayment

UnsecuredNon-guaranteed

MUFG Bank, Ltd.

1,000

0.25%

February 4, 2019

February 6, 2023

Bullet repayment

UnsecuredNon-guaranteed

MUFG Bank, Ltd.

500

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

The Bank ofFukuoka, Ltd.

2,000

0.3988%February 4, 2019

February 5, 2029

Bullet repayment

UnsecuredNon-guaranteed

Shinkin Central Bank

1,800

0.1863%February 4, 2019

February 4, 2025

Bullet repayment

UnsecuredNon-guaranteed

The Norinchukin
Bank

1,000

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

Mizuho Trust &Banking Co., Ltd.

500

0.1163%February 4, 2019

February 6, 2023

Bullet repayment

UnsecuredNon-guaranteed

Mizuho Trust &Banking Co., Ltd.

500

0.1475%February 4, 2019

February 5, 2024

Bullet repayment

UnsecuredNon-guaranteed

1,000

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

The Yamaguchi
Bank, Ltd.

600

0.2313%February 4, 2019

February 4, 2026

Bullet repayment

UnsecuredNon-guaranteed

Mitsui Sumitomo
Insurance Company,
Limited600

0.20869%

February 4, 2019

August 4, 2025

Bullet repayment

UnsecuredNon-guaranteed

Total

19,000

–

–

–

–

–

The Chiba Bank, Ltd.

- 29 -

(9)Changes in Total Number of Investment Units Issued and Outstanding
The following are the changes in the total number of investment units issued and outstanding and unitholders’ capital, net,
since the establishment of MFLP-REIT.

Date

Description

Total number of investment units
issued and outstanding (units)

Unitholders’ capital, net (Note 1)(millions of yen)

Increase(Decrease)

Balance

Increase(Decrease)

Balance

Remarks

March 4, 2016

Establishment throughprivate placement

600

600

300

300

(Note 2)June 15, 2016

Split of investment
units

600

1,200

–

300

(Note 3)

August 1, 2016

Capital increase
through public offering

212,800

214,000

55,44555,745(Note 4)

August 29, 2016

Capital increase
through third-party
allotment

10,000224,000

2,605

58,350(Note 5)

April 21, 2017

Distribution of cash inexcess of retained
earnings (return ofcapital)–224,000(54)

58,296(Note 6)

October 13,
2017

Distribution of cash inexcess of retained
earnings (return ofcapital)–224,000(45)

58,250(Note 7)

February 1, 2018

Capital increase
through public offering

38,000262,000

13,49571,745(Note 8)February 28,
2018

Capital increase
through third-party
allotment

774

262,774274

72,020(Note 9)April 23, 2018

Distribution of cash inexcess of retained
earnings (return ofcapital)–262,774(61)

71,958(Note 10)October 19,
2018

Distribution of cash inexcess of retained
earnings (return ofcapital)–262,774(88)

71,870(Note 11)

Notes:
1.

“Unitholders’ capital, net” is the amount of “Unitholders’ capital” less “Deduction from unitholders’ capital.”

2.

MFLP-REIT was established at an issue price of ¥500,000 per unit.

3.

A two-for-one split of investment units was conducted on June 15, 2016 as the effective date.

4.

New investment units were issued through public offering at an issue price of ¥270,000 (paid-in amount of ¥260,550) per unit for the purpose of procuring
funds for acquisition of new properties.

5.

New investment units were issued with Daiwa Securities Co. Ltd. as the allottee at a paid-in amount of ¥260,550 per unit.

6.

By resolution of the Board of Directors of MFLP-REIT at its meeting held on March 16, 2017, distribution of cash in excess of retained earnings (return ofcapital) of ¥243 per unit was declared as distribution of cash for the 1st fiscal period (fiscal period ended January 31, 2017), the payout of which
commenced on April 21, 2017.

7.

By resolution of the Board of Directors of MFLP-REIT at its meeting held on September 13, 2017, distribution of cash in excess of retained earnings(return of capital) of ¥204 per unit was declared as distribution of cash for the 2nd fiscal period (fiscal period ended July 31, 2017), the payout of which
commenced on October 13, 2017.

8.

New investment units were issued through public offering at an issue price of ¥367,581 (paid-in amount of ¥355,139) per unit for the purpose of procuring
funds for acquisition of new properties.

9.

New investment units were issued with Daiwa Securities Co. Ltd. as the allottee at a paid-in amount of ¥355,139 per unit.

10. By resolution of the Board of Directors of MFLP-REIT at its meeting held on March 15, 2018, distribution of cash in excess of retained earnings (return ofcapital) of ¥275 per unit was declared as distribution of cash for the 3rd fiscal period (fiscal period ended January 31, 2018), the payout of which
commenced on April 23, 2018.
11. By resolution of the Board of Directors of MFLP-REIT at its meeting held on September 14, 2018, distribution of cash in excess of retained earnings(return of capital) of ¥335 per unit was declared as distribution of cash for the 4th fiscal period (fiscal period ended July 31, 2018), the payout of which
commenced on October 19, 2018.

- 30 -

4.
(1)

Changes in Directors
Changes in Directors of MFLP-REIT
There have been no changes of Directors during the Period.

(2)

Changes in Officers of Asset Management Company
There have been no changes of Directors during the Period.

- 31 -

5. Reference Information(1)

Status of Investment

Type of asset

Geographic
classification(Note 1)

Use

Logistics
facilities
Real estate intrust(Note 4)(Note 5)4th period (As of July 31, 2018)

Total amount held As a percentage Total amount held As a percentage(millions of yen) of total assets (%) (millions of yen) of total assets (%)(Note 2)
(Note 3)(Note 2)
(Note 3)Tokyo
metropolitan area

81,92881.7

86,736

82.9

Kansai area

4,374

4.4

4,333

4.1

Other areas

8,219

8.2

8,131

7.8

94,522

94.3

99,201

94.8

2,142

2.1

2,123

2.0

Kansai area

–

–

–

–

Other areas

–

–

–

–

SubtotalTokyo
metropolitan area

Industrial realestate(Note 6)5th period (As of January 31, 2019)

2,142

2.1

2,123

2.0

Real estate in trust total

Subtotal

96,664

96.4

101,324

96.9

Deposits and other assets

3,585

3.6

3,267

3.1

100,250

100.0

104,591

100.0

Total assets

4th period(As of July 31, 2018)

5th period(As of January 31, 2019)

AmountAs a percentage
AmountAs a percentage(millions of yen) of total assets (%) (millions of yen) of total assets (%)
Total liabilities

26,84626.8

31,201

29.8

Total net assets

73,403

73.2

73,39070.2

Notes:
1.

“Tokyo metropolitan area” refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture, Saitama Prefecture and Ibaraki Prefecture. “Kansai area” refers to
Osaka Prefecture, Kyoto Prefecture, Hyogo Prefecture, Nara Prefecture and Shiga Prefecture.

2.

“Total amount held” is based on the carrying amount (for real estate in trust, the book value after depreciation and amortization) as of each accounts
settlement date, rounded down to the nearest million yen.

3.

“As a percentage of total assets” is rounded to the first decimal place.

4.

“Real estate in trust” refers to real estate of trust beneficiary interests that have mainly real estate in trust.

5.

For real estate in trust, the amount does not include the amount of construction in progress in trust.

6.

“Industrial real estate” refers to data centers, communications facilities, research facilities, factories, supply and treatment facilities, and other real estateserving as corporate bases. The same shall apply hereinafter.

(2)

Investment Assetsi) Major investment securities
Not applicable.

ii) Investment properties
Real estate trust beneficiary interests held by MFLP-REIT are included in the below section “iii) Other investment assets.”- 32 -

iii) Other major investment assets(A)

Summary of the assets held
The following summarizes the real estate in trust held by MFLP-REIT.
a.

List of portfolio
The property names, addresses, acquisition dates, acquisition prices, acquisition price ratios, book values andappraisal values of the portfolio assets are as follows.

Category

Logistics
facilities

Acquisition
price ratio(Note 2)

Appraisal value
Book value(millions of yen)(millions of yen)
(Note 3)

Property nameLocation

Acquisition date

L-1

GLP/MFLP
Ichikawa
Shiohama(Note 4)

Ichikawa-shi,
Chiba

September 1,
2016

15,50015.0

15,204

17,250

L-2

MFLP Kuki

Kuki-shi,
Saitama

August 2, 2016

12,50012.1

12,04813,700

L-3

MFLP
Yokohama
Daikoku(Note 4)

Yokohama-shi,August 2, 2016
Kanagawa

10,1009.8

9,808

10,500

L-4

MFLP Yashio

Yashio-shi,
Saitama

August 2, 2016

9,650

9.3

9,396

10,900

L-5

MFLP Atsugi

Aiko-gun,Kanagawa

August 2, 2016

7,810

7.5

7,552

8,700

L-6

MFLP
Funabashi
Nishiura

Funabashi-shi,
Chiba

August 2, 2016

6,970

6.7

6,757

7,680

L-7

MFLP Kashiwa

Kashiwa-shi,
Chiba

August 2, 2016

6,300

6.1

6,100

6,900

L-8

MFLP Sakai(Note 4)

Sakai-shi, Osaka August 2, 2016

4,500

4.3

4,333

4,880

L-9

MFLP Komaki(Note 5)

Komaki-shi
Aichi

August 4, 2017

8,260

8.0

8,131

8,530

L-10

MFLP Hino(Note 4)Hino-shi, Tokyo

February 2,
2018

7,520

7.3

7,493

7,570

L-11

MFLP Hiratsuka

Hiratsuka-shi,
Kanagawa

March 15, 2018

7,027

6.8

6,998

7,090

L-12

MFLP Tsukuba(Note 4)

Tsukubamiraishi, Ibaraki

December 3,
2018

5,268

5.1

5,376

6,000

101,405

97.9

99,201

109,700

I–1

MFIP Inzai(Note 4)

2,180

2.1

2,123

2,440

Logistics facilities total
Industrial realestateAcquisition
price(millions of yen)
(Note 1)

Property no.

Inzai-shi, Chiba August 2, 2016

Industrial real estate total
Total

2,180

2.1

2,123

2,440

103,585100.0

101,324

112,140

Notes:
1.

“Acquisition price” is the purchase price of each trust beneficiary interest as set forth in the agreement for sale and purchase of trust beneficiary interest of
the assets held by MFLP-REIT, rounded down to the nearest million yen. The transaction price does not include consumption tax and local consumption
tax or the various costs required in the acquisition.

2.

“Acquisition price ratio” is the portfolio asset acquisition price share of MFLP-REIT of the total acquisition price rounded to the first decimal place.

3.

“Appraisal value” is the value in the real estate appraisal reports as of the valuation date of January 31, 2019. The appraisal of each asset held is entrusted
to Japan Real Estate Institute, The Tanizawa Sōgō Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd. and CBRE K.K.

4.

For “GLP/MFLP Ichikawa Shiohama,” “MFLP Yokohama Daikoku,” “MFLP Sakai,” “MFLP Hino,” “MFLP Tsukuba” and “MFIP Inzai,” acquisition
price, book value, appraisal value are the prorated figures equivalent to the quasi co-ownership interest in each property that MFLP-REIT has acquired(50%, 50%, 20%, 15%, 60% and 20%, respectively).

5.

40% quasi co-ownership in MFLP Komaki was acquired on August 4, 2017 and 60% quasi co-ownership was additionally acquired on February 2, 2018,
but the acquisition date lists the initial date of acquisition of the property.

- 33 -

b.

Summary of buildings
The property names, property types, site areas, total floor areas, completion dates and building ages of theportfolio assets are as follows.

Category

Property no.

L-1
L-2
L-3

Logistics facilities

Property type
(Note 1)

Total floor area(m2) (Note 2)

52,887105,019(52,509)

January 14, 2014

5.0

35,03773,153

July 7, 2014

4.6

47,974

100,530(50,265)

April 14, 2009

9.8

GLP/MFLP
Ichikawa
Rampway MFLP
Shiohama (Note 5)
MFLP Kuki

Construction
completion(Note 3)Site area (m2)(Note 2)

Slope MFLP

MFLP Yokohama
Rampway MFLP
Daikoku (Note 5)

Building age(years) (Note 4)L-4

MFLP Yashio

Box MFLP

23,422

40,728March 24, 2014

4.9

L-5

MFLP Atsugi

Slope MFLP

20,52240,942

March 13, 2015

3.9

L-6

MFLP Funabashi
Nishiura

Box MFLP

15,51830,947

February 6, 2015

4.0

L-7

MFLP Kashiwa

Box MFLP

15,484

31,242

November 30,
2015

3.2

L-8

MFLP Sakai(Note 5)

Rampway MFLP

57,792

125,127(25,025)

Sept. 11, 2014

4.4

L-9

MFLP Komaki

Slope MFLP

23,48440,597January 31, 2017

2.0

L-10

MFLP Hino(Note 5)

Rampway MFLP

97,579205,200(30,780)

October 16, 2015

3.3

L-11

MFLP Hiratsuka

Box MFLP

16,39833,061

November 30,
2016

2.2

L-12

Industrial realestateProperty name

MFLP Tsukuba(Note 5)

Box MFLP

45,605

Existing building: Existing building: Existing building:
37,027
June 30, 2010
8.6
(22,216)
Annex building: Annex building: Annex building:
25,457
March 30, 2018
0.8
(15,274)
889,036(486,745)

Logistics facilities total (average) (Note 5)

451,707

MFIP Inzai(Note 5)25,00040,478February 28, 2014
(8,095)

4.9

Industrial real estate total (average) (Note 5)

25,00040,478(8,095)–

4.9

Total (average) (Note 5)

476,707929,514(494,840)

–

4.6

I–1

Data center–

4.6

Notes:
1.

Property types are as follows: Rampway MFLPs are properties that are logistics facilities that provide spiral rampways that allow delivery trucks to directly
access each of the upper-floor truck berths (hereinafter “Rampway MFLP”), Slope MFLPs are properties that are logistics facilities that provide slopes thatallow delivery trucks to directly access some of the upper-floor truck berths (hereinafter “Slope MFLP”), and Box MFLPs are properties that are logistics
facilities that allow delivery trucks to access truck berths located on the ground floor and are equipped with vertical conveyors for delivery to upper floors(hereinafter “Box MFLP”). For Industrial real estate, a specific usage is described in the “Property type” of the building.

2.

“Site area” and “Total floor area” are rounded down to the nearest whole number based upon presentations in the registers for the land or buildings in theportfolio assets of MFLP-REIT. “Total floor area” is the total floor area for main buildings and ancillary buildings. If there is more than one main building,“Total floor area” represents the total floor area for each main building. For MFLP Tsukuba, total floor area for existing buildings is in the upper section
and that for added buildings is in the lower section.

3.

“Construction completed” is the date of construction of the main building of each asset held by MFLP-REIT in the register. If there is more than one mainbuilding, the construction completed is the oldest date shown in the register. For MFLP Tsukuba, completion dates for existing buildings are in the upper
section and those for added buildings are in the lower section.

4.

“Building age” is the age from the date of completion in the register for the main building in the portfolio asset of MFLP-REIT to January 31, 2019,
rounded to the first decimal place. Sections for totals (averages) and sections for totals (averages) in each category describe the weighted average values
based upon acquisition prices. For MFLP Tsukuba, building ages for existing buildings are in the upper section and those for added buildings are in thelower section.

5.

Total floor area for “GLP/MFLP Ichikawa Shiohama,” “MFLP Yokohama Daikoku,” “MFLP Sakai,” “MFLP Hino,” “MFLP Tsukuba” and “MFIP Inzai”
in parentheses are the prorated figures equivalent to the quasi co-ownership interest in each property that MFLP-REIT holds (50%, 50%, 20%, 15%, 60%
and 20%, respectively). Sections for totals and sections for totals in each category for “Total floor area” contain in parentheses total values or total values
in each category under “Total floor area” for each portfolio asset taking into consideration the quasi co-ownership interest in each property.

- 34 -

c.

Summary of real estate appraisal reports
The following summarizes the real estate appraisal reports prepared based upon MFLP-REIT and the AssetManagement Company entrusting appraisal to Japan Real Estate Institute, The Tanizawa Sōgō Appraisal Co.,
Ltd., Daiwa Real Estate Appraisal Co., Ltd. or CBRE K.K., concerning the portfolio assets. These appraisal
reports are the judgments and views of appraisal agencies conducting evaluations at a certain point in time, andthey do not constitute a guarantee of their appropriateness, accuracy or potential for transactions at the appraised
price. Also, there is no particular conflict of interest between Japan Real Estate Institute, The Tanizawa Sōgō
Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd. or CBRE K.K., and MFLP-REIT and the AssetManagement Company.
Appraisal value based on income method (millions of yen)Appraisal
agency

GLP/MFLP
Ichikawa
Shiohama(Note 1)

Japan Real
EstateInstitute

January
31, 2019

L-2

MFLP Kuki

The
Tanizawa
Sōgō
Appraisal
Co., Ltd.

January
31, 2019

13,70011,90013,6004.7

13,700

L-3

MFLP
Yokohama
Daikoku(Note 1)

Daiwa Real
EstateAppraisal
Co., Ltd.

January
31, 2019

10,50010,00010,600

4.6

10,500

4.4

4.8

L-4

MFLP
YashioJapan Real
EstateInstitute

January
31, 2019

10,90010,10011,0004.4

10,700

4.1

4.7

L-5

MFLP
AtsugiJapan Real
EstateInstitute

January
31, 2019

8,700

8,140

8,780

4.6

8,620

4.2

4.9

L-6

MFLP
Funabashi
Nishiura

Japan Real
EstateInstitute

January
31, 2019

7,680

6,790

7,800

4.5

7,560

4.2

4.8

L-7

MFLP
Kashiwa

Japan Real
EstateInstitute

January
31, 2019

6,900

5,960

6,930

4.6

6,860

4.3

4.8

L-8

MFLP Sakai(Note 1)The
Tanizawa
Sōgō
Appraisal
Co., Ltd.

January
31, 2019

4,880

4,380

4,920

4.7

4,860

L-9

MFLP
KomakiThe
Tanizawa
Sōgō
Appraisal
Co., Ltd.

January
31, 2019

8,530

7,800

8,580

4.6

L-10

MFLP Hino(Note 1)The
Tanizawa
Sōgō
Appraisal
Co., Ltd.

January
31, 2019

7,570

7,550

7,610

L-11

MFLP
Hiratsuka

Japan Real
EstateInstitute

January
31, 2019

7,090

6,790

L-12

MFLP
Tsukuba(Note 1)

Japan Real
EstateInstitute

January
31, 2019

6,000

I–1

MFIP Inzai
CBRE K.K.
(Note 1)

L-1

Logistics
facilities

Appraisal
Appraisal Integrated
Appraisalvalue based
Date ofvalue
value
value based Capitalizaon
valuation (millions of (millions ofon direct
tion rate
discounted
yen)
yen)
capitalization(%)
cash flow
methodmethodReal estatein trust(property
name)

Property
Categoryno.

Industrial real estate total
Portfolio total

13,70017,400

4.1

17,1003.8

Terminal
capitalization
rate (%)

4.3

Year 1
4.7
From year 2
4.8

4.9

Year 1

Logistics facilities total
Industrial
real estate

17,250Discount
rate (%)

January
31, 2019

4.6
From year 2
4.8

4.9

8,510

Years 1 - 3
4.6
From year 4
4.7

4.8

4.2

7,550

Years 1 - 3
4.2
From year 4
4.3

4.4

7,150

4.5

7,020

4.3

4.7

5,328

6,060

4.9

5,952

4.6

5.1

109,700

98,438110,430

2,440

1,800

2,440

4.5

4.9

108,932
4.8

2,440

2,440

1,800

2,440

2,440

112,140

100,238

112,870

111,372(Note)
The appraisal value, integrated value, appraisal value based on direct capitalization method and discounted cash flow method for “GLP/MFLP Ichikawa
Shiohama,” “MFLP Yokohama Daikoku,” “MFLP Sakai,” “MFLP Hino,” “MFLP Tsukuba” and “MFIP Inzai” are the prorated figures equivalent to the quasi
co-ownership interest in each property that MFLP-REIT holds (50%, 50%, 20%, 15%, 60% and 20%, respectively).

- 35 -

d.

Summary of the Building Condition Evaluation Report and Earthquake Risk Evaluation Report
The following summarizes the evaluation results report (Building Condition Evaluation Report) prepared as aresult of a building status evaluation and the evaluation results report (Earthquake Risk Evaluation Report)
prepared as a result of an earthquake risk analysis, both conducted by Tokio Marine & Nichido Risk Consulting
Co., Ltd., which was entrusted by MFLP-REIT and the Asset Management Company, concerning the portfolio
assets. These reports are the judgments and views of an inspection contractor at a certain point in time, and they
do not constitute a guarantee of their appropriateness or accuracy.
Building Condition Evaluation Report

Category

Logistics
facilities

Property no.

Property name

Inspection
contractor

Inspection
report date

Estimated midto long-term
repair andrenewal costs(thousands ofyen) (Note 1)

L-1

GLP/MFLP
Ichikawa
Shiohama(Note 2)

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

L-2

MFLP Kuki

Tokio Marine &Nichido Risk
Consulting Co.,
Ltd.

L-3

MFLP
Yokohama
Daikoku(Note 2)

L-4

Inspection
contractor

Evaluation
report date

Probable
maximum loss
(PML) (%)

220,644

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

1.4

April 2016

398,351

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

2.7

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

370,738

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

1.5

MFLP Yashio

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

258,915

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

1.7

L-5

MFLP Atsugi

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

241,488

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

4.4

L-6

MFLP
Funabashi
Nishiura

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

184,916

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

3.4

L-7

MFLP Kashiwa

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

103,923

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

1.9

L-8

MFLP Sakai(Note 2)

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

107,842

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

3.5

L-9

Tokio Marine &Nichido Risk
MFLP Komaki
Consulting Co.,Ltd.

145,906

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

July 2017

1.6

L-10

MFLP Hino(Note 2)

July 2017

Warehousebuilding
Tokio Marine &58,415
Nichido Risk
December 2017
Consulting Co.,
WelfareLtd.
facilities
254

L-11

Tokio Marine &Nichido Risk
MFLP Hiratsuka
December 2017
Consulting Co.,
Ltd.

L-12

Tokio Marine &MFLP Tsukuba Nichido Risk
(Note 2)
Consulting Co.,Ltd.

August 2018

Subtotal
Industrial realestateEarthquake Risk Evaluation Report

I-1

MFIP Inzai(Note 2)

Warehousebuilding
Tokio Marine &0.6
Nichido Risk
December 2017
Consulting Co.,
WelfareLtd.
facilities
11.8

66,609Tokio Marine &Nichido Risk
December 2017
Consulting Co.,
Ltd.

7.0

113,234

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

August 2018

2.6

Tokio Marine &Nichido Risk
Consulting Co.,Ltd.

April 2016

1.9

2,271,235

Tokio Marine &Nichido Risk
December 2018
Consulting Co.,Ltd.

Subtotal

68,213
68,213

Total / PML in the Portfolio (Note 3)

2,339,448- 36 -

1.4

Notes:1.

“Estimated mid- to long-term repair and renewal costs” represent the cost of repairs and renewal, as identified in the engineering report that are likely toarise within twelve years from the date of the report.

2.

Estimated mid- to long-term repair and renewal costs for “GLP/MFLP Ichikawa Shiohama,” “MFLP Yokohama Daikoku,” “MFLP Sakai,” “MFLP Hino,”“MFLP Tsukuba” and “MFIP Inzai” are the prorated figures equivalent to the quasi co-ownership interest in each property that MFLP-REIT holds (50%,50%, 20%, 15%, 60% and 20%, respectively), rounded down to the nearest 1,000 yen.

3.

“PML in the Portfolio” is based upon the December 2018 Earthquake Risk Survey Portfolio Analysis Report calculated by Tokio Marine & Nichido Risk
Consulting Co., Ltd. The properties in the portfolio to which PML applies are “GLP/MFLP Ichikawa Shiohama,” “MFLP Kuki,” “MFLP Yokohama
Daikoku,” “MFLP Yashio,” “MFLP Atsugi,” “MFLP Funabashi Nishiura,” “MFLP Kashiwa,” “MFLP Sakai,” “MFLP Komaki,” “MFLP Hino,” “MFLP
Hiratsuka,” “MFLP Tsukuba” and “MFIP Inzai,” and the quasi co-ownership interest of each property was taken into account.

e.

Status of portfolio asset collateral
Not applicable.

- 37 -

(B)Summary of leasea.

Summary of lease
The property names, leasable areas, leased areas, occupancy rates, number of tenants, names of main tenants,
annual rents, tenant leasehold / security deposits, average lease periods and average remaining lease periods of theportfolio assets are as follows.

Category

Logistics
facilities

AverageTenantlease period
Annual rent leasehold/sec (Remaining(millions of urity deposits
lease
yen)
(millions ofcontract(Note 6)yen)
period)(Note 7)
(years)(Note 8, 9)

Propertyno.

Property
nameLeasablearea(m²)(Note 1)

Leased area(m²)
(Note 2)

Occupancy
rate(%)(Note 3)

Number oftenants(tenants)(Note 4)

Name of main
tenant(Note 5)

L-1

GLP/MFLP
Ichikawa
Shiohama(Note 10)50,81350,813100.0

5

Rakuten, Inc.

862

123

6.9
(2.6)

L-2

MFLP Kuki

67,92567,925100.0

3

KOKUBUSHUTOKEN
CORP.

820

310

6.6
(3.5)

L-3

MFLP
Yokohama
Daikoku(Note 10)47,92947,929100.0

5ACROSS
TRANSPORT
Corp.

660

239

5.6
(2.1)

L-4

MFLP
Yashio39,692

39,692100.0

2e-LogiT co., ltd.

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

L-5

MFLP
Atsugi40,95840,958100.0

1

Sun Toshi
Tatemono
Kabusihiki Kaisha

Notdisclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

L-6

MFLP
Funabashi
Nishiura

31,03431,034

100.0

1

DAIWA
CORPORATION.,
Ltd.

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

L-7

MFLP
Kashiwa

31,291

31,291100.0

1Hitachi Transport
SystemMetropolitan Co.,
Ltd.

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

L-8

MFLP Sakai(Note 10)

22,42922,429100.0

5Not disclosed(Note 11)

292

132

4.2
(1.8)

L-9

MFLP
Komaki40,60540,605100.0

1KIMURA UNITY
CO., LTD.

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

L-10

MFLP Hino(Note 10)28,08028,080100.0

16Celestica Japan
K.K.

415

144

5.9
(3.6)

L-11

MFLP
Hiratsuka

33,05533,055100.0

Notdisclosed(Note 11)

Nippon Express
Co., Ltd.

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

L-12

MFLP
Tsukuba(Note 10)

Existingbuilding
22,762

Existingbuilding
22,762

Annexbuilding
15,360Annex
building
15,360100.0

1MARUBENILOGISTICS
CORPORATION

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Subtotal (average)

471,933

471,933

100.0

Not
disclosed(Note 11)–

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

I–1

MFIP Inzai

Notdisclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)Not disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Subtotal (average)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)–

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

Not
disclosed(Note 11)

100.0

Not
disclosed(Note 11)

–

6,267

1,971

6.4
(3.3)

Industrial
real estate

Total (average)
Notes:
1.

“Total leasable area” is the total floor area (rounded down to the nearest whole number) of each asset held by MFLP-REIT that is deemed to be leasable
based on the lease agreement or floor plan, etc. for such building as of January 31, 2019, and does not include the leased area indicated in the leaseagreements concerning shops, vending machines, photovoltaic power generation facilities, parking lots, nursery centers and the like.

2.

“Leased area” is the total leased area rounded down to the nearest whole number presented in the lease agreements for buildings in the portfolio assets of
MFLP-REIT as of January 31, 2019 (Excluding lease agreements concerning shops, vending machines, photovoltaic power generation facilities andparking lots. Lease agreements for said buildings hereinafter referred to as “Subject Lease Agreements” in (B)). If a master lease agreement has been

- 38 -

executed for assets held by MFLP-REIT, the total leased area represents the sum total of the area that is actually leased based on the Subject Lease
Agreement signed with end-tenant rounded down to the nearest whole number. Total leased area is calculated based on the assumption that the subject
property is actually leased if the Subject Lease Agreement has been executed as of January 31, 2019 even if there is no occupancy / delivery relating to thesubject property as of January 31, 2019.
3.

“Occupancy rate” is the share of the leased area of the buildings in the leasable area for said buildings in the real estate in trust in lease agreements
concluded for properties as of January 31, 2019, rounded to the first decimal place. Occupancy rates for the subtotal (average) section and total (average)
section are the share of the total leased area of the properties of the total leasable area of said properties, rounded to the first decimal place.

4.

“Number of tenants” is the total number of Subject Lease Agreements. If a master lease agreement has been signed for the assets held by MFLP-REIT, thetotal number of end-tenants will be indicated. However, if one lessee enters into a multiple number of the Subject Lease Agreements for the same buildingof assets held by MFLP-REIT, the number of tenants is calculated on the assumption that such lessee is one party.

5.

“Name of main tenant” is the name of the tenant with the largest leased floor area in the Subject Lease Agreement.

6.

“Annual rent” represents the annualized amount of rent (the sum of annualized amounts of rent if a multiple number of lease agreements have been
executed), which is 12 times monthly rent indicated in the Subject Lease Agreement, rounded down to the nearest million yen. However, if there aredifferent provisions for monthly rent depending on the time period in the Subject Lease Agreement, the monthly rent (including common area expenses)
for January 2019 shown in said lease agreement is the basis of the calculation. The rent-free periods and annual rent holiday periods (meaning that thepayment of rents for specific months is exempted) as of the date shall not be included.

7.

“Tenant leasehold/security deposits” represent the sum of the outstanding amounts of tenant leasehold/security deposits (the sum of the outstanding
amounts of tenant leasehold/security deposits if a multiple number of lease agreements have been executed), rounded down to the nearest million yen,shown in the Subject Lease Agreement. However, if there are different provisions for the sum of outstanding leasehold/security deposits depending on thetime period in each Subject Lease Agreement, the sum of the amount of tenant leasehold/security deposits for January 2019 shown in the lease agreement
is the basis of the calculation.

8.

“Average lease period” is calculated by weight averaging the lease periods presented in the Subject Lease Agreements with rents and rounded to the firstdecimal place. Concerning the Subject Lease Agreements, when a new lease agreement (hereinafter, referred to as “re-contract”) starting on the day
immediately following the expiration date (including the case of cancellation, the same applies hereinafter) of the respective lease agreement is concluded
with the same lessee in the Subject Lease Agreements as of January 31, 2019, lease period is deemed to be from the start of the initial lease agreement to
the expiration date of the re-contract, and used in the calculation as such.

9.

“Average remaining lease period” is calculated by weight averaging the lease periods remaining from January 31, 2019 based upon the Subject Lease
Agreements with rents and rounded to the first decimal place. Concerning the Subject Lease Agreements, when the re-contract is concluded with the samelessee as of January 31, 2019, the remaining period shall be calculated assuming that the lease period continues from January 31, 2019 to the expiration
date of the re-contract.

10. For “GLP/MFLP Ichikawa Shiohama,” “MFLP Yokohama Daikoku,” “MFLP Sakai,” “MFLP Hino,” and “MFLP Tsukuba,” leasable area, leased area,
annual rent, and tenant leasehold/security deposits are the prorated figures equivalent to the quasi co-ownership interest in each property that MFLP-REIT
holds (50%, 50%, 20%, 15% and 60%, respectively).
11. Not disclosed, because consent has not been obtained from the lessee.

- 39 -

b.

Occupancy rate trends
Trends in portfolio asset occupancy rates as at the end of each accounting period are as follows.
(%)
Occupancy rate (Note 1)

Category

Logistics
facilities

1st period(From March 4,2016 to January
31, 2017)

2nd period(From February
1, 2017 to July
31, 2017)

3rd period(From August 1,
2017 to January
31, 2018)

4th period(From February
1, 2018 to July
31, 2018)

5th period(From August 1,
2018 to January
31, 2019)

GLP/MFLP
Ichikawa
Shiohama

100.0

100.0

100.0

100.0

100.0

L-2

MFLP Kuki

100.0

100.0

100.0

100.0

100.0

L-3

MFLP Yokohama
Daikoku

100.0

100.0

100.0

100.0

100.0

L-4

MFLP Yashio

100.0

100.0

100.0

100.0

100.0

L-5

MFLP Atsugi

100.0

100.0

100.0

100.0

100.0

L-6

MFLP Funabashi
Nishiura

100.0

100.0

100.0

100.0

100.0

L-7

MFLP Kashiwa

100.0

100.0

100.0

100.0

100.0

L-8

MFLP Sakai

100.0

100.0

100.0

100.0

100.0

L-9

MFLP Komaki

–

–

100.0

100.0

100.0

L-10

MFLP Hino

–

–

–

100.0

100.0

L-11

MFLP Hiratsuka

–

–

–

100.0

100.0

L-12

MFLP Tsukuba

–

–

–

–

100.0

Property no.

Property nameL-1

Subtotal (average)
I–1

Industrial realestateMFIP Inzai

Subtotal (average)
Total (average)

100.0

100.0

100.0

100.0

100.0

Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)Not disclosed(Note 2)

100.0

100.0

100.0

100.0

100.0

Notes:
1.

“Occupancy rate” is the share of the leased area of the buildings in the leasable area for said buildings in the real estate in trust in lease agreements
concluded for properties at the end of each accounting period, rounded to the first decimal place. Occupancy rates for the subtotal (average) section andtotal (average) section are the share of the total leased area of the properties of the total leasable area of said properties, rounded to the first decimal place.

2.

Not disclosed, because consent has not been obtained from the lessee.

c.

Information on major real estates and other properties
The following is an overview of the real estates held whose annual rent makes up 10% or more of the total annual
rent for the entire portfolio as of January 31, 2019.

Property name

Annual rent (millions of yen) (Note 1, 3)

Rent ratio (%) (Note 2)

GLP/MFLP Ichikawa Shiohama

862

13.8

MFLP Kuki

820

13.1

MFLP Yokohama Daikoku

660

10.5

2,343

37.4

Total
Notes:
1.

“Annual rent” represents the annualized amount of rent (the sum of annualized amounts of rent if a multiple number of lease agreements have been
executed), which is 12 times monthly rent (including common service fees) indicated in the Subject Lease Agreements for buildings in the portfolio assets
as of January 31, 2019, rounded down to the nearest million yen. If a master lease agreement has been concluded based upon said portfolio assets, this iscalculated based upon lease agreements with the end-tenants. However, if there are different provisions for monthly rent depending on the time period in
the subject lease agreement, the monthly rent (including common area expenses) for January 2019 shown in the lease agreement is the basis of thecalculation. The rent-free periods and annual rent holiday periods (meaning that the payment of rents for specific months is exempted) as of January 31,
2019 shall not be included.

2.

“Rent ratio” is the ratio of the annual rent of said property to the total of annual rents for the entire portfolio rounded to the first decimal place.

3.

For “GLP/MFLP Ichikawa Shiohama” and “MFLP Yokohama Daikoku,” annual rent are the prorated figures equivalent to the quasi co-ownership interestin each property that MFLP-REIT holds (50% and 50%, respectively).

d.

Information about main tenant
Disclosure of this information has been omitted as there were no tenants of the assets held with a leased area of
10% or more of the total leased area of the entire portfolio as of January 31, 2019 (including end-tenants for assets
with a pass-through master lease agreement concluded or to be concluded, but not including master lease
companies concluding or planning to conclude said master lease agreements).

- 40 -

(C)Capital expenditures of real estate helda.

Schedule of capital expenditures
Of the capital expenditures accompanying renovations, etc. currently planned for real estate and real estate in trustof real estate trust beneficiary interests held by MFLP-REIT, the following are the major planned amounts. Theremay be cases where the planned construction amount ends up being in part expensed in accounting instead ofbeing capitalized.
Planned construction amount (millions of yen) (Note)

Name of real estate, etc.

Location

PurposeScheduled time

Total amountAmount paid
during period

Total amountalready paid

MFLP Kuki

Kuki-shi, Saitama

Renewal of equipment of access From October 2019
management facilities
to October 2019

5

–

–

MFLP Yokohama
Daikoku

Yokohama-shi,
Kanagawa

Exterior wall painting(Section 4)

From January 2019
to June 2019

48

–

–

MFLP Yokohama
Daikoku

Yokohama-shi,
Kanagawa

Replacement of heads of foam
fire extinguishing system

From April 2019
to June 2019

12

–

–

MFLP Yokohama
Daikoku

Yokohama-shi,
Kanagawa

Exterior wall painting(Section 5)

From July 2019
to December 2019

49

–

–

MFLP Yokohama
Daikoku

Yokohama-shi,
Kanagawa

Replacement of heads of foam
fire extinguishing system

From October 2019
to December 2019

12

–

–

MFLP Yashio

Yashio-shi, Saitama

Renewal of equipment of accessmanagement facilities

From June 2019
to July 2019

4

–

–

MFLP Hino

Hino-shi, Tokyo

Construction for expansion of
bicycle parking

From June 2019
to July 2019

5

–

–

(Note)For “MFLP Yokohama Daikoku,” and “MFLP Hino,” planned construction amount are the prorated figures equivalent to the quasi co-ownership interest ineach property that MFLP-REIT holds (50% and 25%, respectively). For “MFLP Hino,” the amount stated above includes additional acquisition of 10% quasi
co-ownership interest acquired on February 4, 2019.

b.

Capital expenditures during period
The following summarizes the major construction work falling under capital expenditures conducted during the
fiscal period under review for real estate, etc. held by MFLP-REIT. Capital expenditures in the fiscal period underreview amounted to ¥36 million and, other than this, there was ¥20 million in repair expenses categorized as
operating expenses in the fiscal period under review.

Name of real estate, etc.
MFLP Yokohama
Daikoku

Location
Yokohama-shi,
Kanagawa

Purpose

PeriodExterior wall painting(Section 2)

From September 2018 to
December 2018

Other capital expenditures

Construction amount(millions of yen) (Note)
21
15

Total

36

(Note)For “MFLP Yokohama Daikoku,” construction amount is the prorated figure equivalent to the quasi co-ownership interest in the property that MFLP-REIT
holds (50%).

c.

Cash reserves for long-term repair and maintenance plans
Not applicable.

- 41 -

(D)Status of individual asset earnings

Property no.

L–1

L–2

L–3

L–4

(Thousands of yen)
L–5

Name

GLP/MFLP
Ichikawa Shiohama

MFLP Kuki

MFLP Yokohama
Daikoku

MFLP Yashio

MFLP Atsugi

From August 1,
2018 to January 31,
2019

From August 1,
2018 to January 31,
2019

From August 1,
2018 to January 31,
2019

From August 1,
2018 to January 31,
2019

184 days

184 days

184 days

184 days

Not disclosed(Note)

Not disclosed(Note)

From August 1,
Management period 2018 to January 31,
2019
Number of days ofmanagement(A) Property
leasingbusiness
revenues

184 days481,660

476,055

351,171

Real estateleasingbusiness
revenues

450,608

436,787

331,517

Other revenues
related toproperty
leasing

31,05239,26819,653

95,194110,488

91,258Outsourcing
serviceexpenses

35,92230,96025,435

Utilities
expenses

19,18928,664

16,075

Repairexpenses

831

5,309

8,796

Taxes and dues

37,76543,29039,421

Various costs
required

1,486

2,263

1,528

(C) NOI (=A–B)

386,466

365,567

259,913260,943

223,471(D) Depreciation
andamortization

79,894

107,298

84,53362,47063,638(E) Operating
income fromproperty
leasing (=C–D)

306,571258,268

175,379

198,473

159,833(B) Property
leasingbusiness
expenses- 42 -

Property no.

L–6

L–7

L–8

L–9

L–10

Name

MFLP Funabashi
Nishiura

MFLP Kashiwa

MFLP Sakai

MFLP Komaki

MFLP Hino

From August 1,
2018 to January 31,
2019

From August 1,
2018 to January 31,
2019

From August 1,
2018 to January 31,
2019

From August 1,
2018 to January 31,
2019

184 days

184 days

184 days

184 days

From August 1,
Management period 2018 to January 31,
2019
Number of days ofmanagement

184 days(A) Property
leasingbusiness
revenues

162,427

230,057

Real estateleasingbusiness
revenues

138,598

213,252

Other revenues
related toproperty
leasing

23,82916,805(B) Property
leasingbusiness
expenses

Not disclosed(Note)

Not disclosed(Note)

36,429Not disclosed(Note)

34,108Outsourcing
serviceexpenses

11,10818,780Utilities
expenses

4,616

13,584

Repairexpenses

3,015

936

Taxes and dues

17,051–

Various costs
required

638808(C) NOI (=A–B)

185,051

172,055

125,997229,883

195,949(D) Depreciation
andamortization

50,30950,02143,80388,57852,888(E) Operating
income fromproperty
leasing (=C–D)

134,741

122,034

82,193

141,304

143,060- 43 -

Property no.

L–11

Name

MFLP Hiratsuka

From August 1,
Management period 2018 to January 31,
2019
Number of days ofmanagement

184 days

L–12

I–1

MFLP Tsukuba

MFIP Inzai

From December 3,
2018 to January 31,
2019

From August 1,
2018 to January 31,
2019

60 days

184 days(A) Property
leasingbusiness
revenues

3,280,932

Real estateleasingbusiness
revenues

3,135,601

Other revenues
related toproperty
leasing(B) Property
leasingbusiness
expenses

Total

145,331

Not disclosed(Note)

Not disclosed(Note)

Not disclosed(Note)

565,848

Outsourcing
serviceexpenses

178,765

Utilities
expenses

96,567

Repairexpenses

20,247

Taxes and dues

257,608

Various costs
required

12,659(C) NOI (=A–B)

192,004

56,436

61,3452,715,084(D) Depreciation
andamortization

51,02819,174

18,649772,289(E) Operating
income fromproperty
leasing (=C–D)

140,975

37,261

42,695

1,942,794(Note)
Not disclosed, because consent has not been obtained from the tenants.

- 44 -