Mori Hills REIT Investment Corporation
Results of the 29th Fiscal Period ended January 31, 2021
Presentation Material
March 18, 2021

TSE Code： 3234
https://www.mori-hills-reit.co.jp/en/(Asset Manager) Mori Building Investment Management Co., Ltd.
https://www.morifund.co.jp/en/

Disclaimer

This document has been prepared by Mori Hills REIT Investment Corporation (“MHR”) for informational
purposes only and should not be construed as an offer of any transactions or the solicitation of an offer
of any transactions. MHR is a publicly-offered real estate investment corporation (J-REIT) investing inreal estate and related assets the prices of which may fluctuate. Unitholders of MHR may suffer loss
when unit prices decline due to fluctuation of real estate value and profitability, aggravation of financial
status of MHR and other reasons.
Please make investment decisions at your own discretion and responsibility, and contact securities
company when purchasing investment units of MHR.
This document’s content includes forward-looking statements about business performance; however,no guarantees are implied concerning future business performance. Although the data and opinions
contained in this document are derived from what we believe are reliable and accurate sources, we do
not guarantee their accuracy or completeness. The contents contained herein may change or cease toexist without prior notice. Regardless of the purpose, any reproduction and/or use of this document inany shape or form without the prior written consent from MHR is prohibited.
This document contains charts, data, etc. that were prepared by Mori Building Investment
Management Co., Ltd. (hereafter, the “Asset Manager”) based on charts, data, indicators, etc. releasedby third parties. Furthermore, this document includes statements based on analyses, judgments, andother observations concerning such matters by the asset manager as of the date of preparation.
Asset Management Company : Mori Building Investment Management Co., Ltd.
(Registered as a financial instruments business, Kanto Local Finance Bureau registration no. 408
Member of The Investment Trusts Association, Japan)

1

Contents

1. Executive summary

3

3. Operation highlights

37

Factors that led to changes in dividends per unit
from the previous fiscal period

38

4Change in assets under management

39

Unit price performance

5

Change in unrealized capital gain/loss

40

Financial results

6

Appraisal value

41

Change in the rent and occupancy rates

42

Tenant status by month and major tenants

43

Financial overview (as of January 31, 2021)

44

Debt status (as of January 31, 2021)

45

Unitholders breakdown (as of January 31, 2021)

46

2. Investment highlights

Overview of new acquisition(Scheduled as of August 2, 2021)

7

Dividends per unit growth record

9Strengths of continuous growth in DPU and NAV

10Increase in appraisal NAV per unit

11

Forecasts

12

Highest quality portfolio among all J-REITs

13

External growth

22Internal growth25

Financial management

29

Business environment recognition

48

Sustainability initiatives

31

MHR’s policy/strategy

49

MHR’s representative property

33

Market-related information

51

4. Business environment recognition &MHR’s policy/strategy

5. Appendix

47

57

2

1. Executive summary
Financialsummary

Operating revenue: 9,820 million yen, operating income: 6,173 million yen,

29th period

DPU: 2,909 yen (+0.4% from 28th period) Increasing for 21 consecutive fiscal periods(Jan. 2021)

net income: 5,575 million yen Increased revenue and income period-over-period

NAV per unit: 147,182 yen (+0.5% from 28th period) Increasing for 20 consecutive fiscal periods
Conducted a public offering and additionally acquired Toranomon Hills Mori Tower. Due in part to the factthat the acquisition took place at a price significantly below the appraisal value, DPU and NAV per unit
continued to increase.

External
growthAdditionally acquired Toranomon Hills Mori Tower for 12.2 billion yen as of September 1, 2020
While the contract for the only master lease for which fixed rent significantly deviates from the market
rent will be renewed at a lower level in the 31st period, because the Toranomon Hills Mori Tower(7.8 billion yen) will be additionally acquired at the same time, the DPU (forecast) will remain the same

period-over-period.
Going forward, premium properties in central Tokyo are expected to continuously demonstratecompetitive advantages even after the spread of telecommuting, as these properties can capture officedemand by functioning as headquarters.

Internal
growthEven as office vacancy rates rise in central Tokyo, the office occupancy rate for the 29th period maintained
a high level of 99.6% due in part to the excellent location and quality of MHR’s properties. Rent increases
have continued for both rent revision and tenant replacement.
The residential occupancy rate for the current period was 94.9%, and while this was a slight decline fromthe previous period, the overall portfolio impact has been minimal.

Financialmanagement

The fund procurement environment has not changed despite the COVID-19 pandemic. Maintained thetarget level by book value basis LTV 45.8%, appraisal value basis LTV 38.1%, remaining duration of debt
4.6 years. (After the property acquisition in the 31st period, LTV based on book value is forecast at 46.8% and LTV
based on appraisal value is forecast at 38.9%)

New green bonds were issued. (November 2020: 3.5 billion yen, February 2021: 2.0 billion yen)3

2. Investment highlights

42-1 Unit price performance(yen)

200,000
PublicOffering inMar. 2013

190,000

PublicOffering in
Sep. 2013

PublicOffering in
Aug. 2014

PublicOffering inFeb. 2016

PublicOffering in
Aug. 2020

PublicOffering in
Aug. 2018180,000
170,000
160,000
150,000
140,000
130,000

Mori Hills REIT

120,000
110,000
100,000
90,000TSE REIT Index

80,00070,00060,00050,00040,00030,000

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

19th

20th

21st

22nd

23rd

24th

25th

26th

27th

28th

29th

Sep. 14, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31, Jul. 31, Jan. 31,
2021
2018
2019
2020
2010
2014
2016
2020
2017
2019
2011
2016
2012
2013
2013
2014
2015
2017
2011
2012
2015
2018

Marketvalue

41.9 bn yen(Sep. 14, 2010)

279.4 bn yen(Jan. 31, 2021)(Note 1) Unless otherwise stated in this document, all amounts are rounded down below the unit and all fractions and areas are rounded up below the decimal point.
(Note 2) TSE REIT Index is adjusted as of the 8th period result announcement (Sep. 14, 2010) and shows the relative performance vs. MHR’s unit price performance.

52-2 Financial results
The 29th period (January 2021) saw increased revenue and income compared with the 28th period and posted a
DPU increase for the 21st consecutive fiscal period
A public offering was conducted, and Toranomon Hills Mori Tower (12.2 billion yen) was additionally acquired in September 2020. The acquisition took
place at a price significantly below the appraisal value, and both DPU and NAV increased.
A high occupancy rate has been maintained even as vacancy rates rise for offices in central Tokyo, and rent increases have continued for both rent
revision and tenant replacement.
28th period
Jul. 31, 2020
Actual29th period
Jan. 31, 2021
Actual29th period
Jan. 31, 2021

Difference

Forecasted

Operating Highlights (million yen)
Operating revenue

9,602

9,820

+ 218

9,826

Rent revenues

9,389

9,614

+ 225

9,603

213

206

222

3,573

3,646

△6

+ 73

3,665

3,251

3,315

+ 63

3,354

321

331

+9

310

6,028

6,173

+ 145

6,160

Non-operating income

1

0

0

Non-operating expenses

595

598

Ordinary inc ome

5,434

△0

Net income
Total dividends

Other operating revenues

Operating expenses
Expenses related to properties
SG&A

Operating inc ome

+3

603

5,576

+ 141

5,558

5,433

5,575

+ 141

5,557

5,433

5,574

+ 140

5,557

DPU (yen)

1,874,960

1,916,330

41,3701,916,330

2,898

2,909

+ 11

2,900

Other Indices (million yen)
NOI

7,391

7,561

+ 170

7,531

NOI yield

3.8%

3.7%

3.7%

390,690

400,851△ 0.1PT

Ac quisition price(weighted average based on the numberof operating days during the period) (Note)・Operating revenue (+218 mn yen)
- Property acquisition in 29th period- Office rent (pass-through)- Utilities and other revenue- Residential Rent (pass-through)- Cancellation penalty

・Operating expenses (+73 mn yen)
- Property acquisition in 29th period- Property management fee- Property taxes- Asset management fee- Maintenance and repairs- Depreciation

・Non-operating expenses (+3 mn yen)
- Interest expenses, etc.

(new borrowings in 29th period)- Amortization of investment unit issuance cost
- Interest expenses, etc.

+219
+9
+4
△8
△8
+50
+24
+16
+4
△13
△9
+11
+5
△13

Increase/decrease factor for 29th period

DPU
Total units outstanding (units)

Increase/decrease factor (28th – 29th)+ 10,161(Forecasted - Actual)・Operating income (+13 mn yen)
- Maintenance and repairs- Office rent (pass-through)- Residential rent (pass-through)- Depreciation- Asset management fee

400,851(Note) If properties are acquired during the period, the acquisition price is the weighted average based on the number of operating days.

+20
+7
+4
+3
△20

6

2-3 Overview of new acquisition (Scheduled as of August 2, 2021)
Toranomon Hills Mori Tower (Additional acquisition)

Office1. Super high rise tower - Tokyo’s new landmark
Quake-resistance structure with 52 floors and 247 meters above ground.
High-specification offices with a broad floor plate of approx. 1,000 tsubo,
international-standard conference facilities, Japan’s first Andaz hotel “theAndaz Tokyo”, retail facilities and residences.

2. Located in the center of the Toranomon area where further
development is expected
Directly connected to "Toranomon Hills Station" on the Hibiya subway line
and 6 transit stations and 11 lines are nearby. It is easily accessible fromHaneda Airport and ideal as a new hub for international business.
As a result of a number of redevelopment projects currently in progressaround the building, the Toranomon area has begun to rapidly evolve into aninternational urban center.

＜Acquisition portion＞
Hotel
Residential
Location

23-1, Toranomon 1-chome,
Minato-ku, Tokyo

C onstruction date

May 2014

Total number of floors

52 floors above ground,
5 floors below ground

Gross floor area

241,581.95 m2

Acquisition
priceAppraisalvalue

Portions ofacquisition

NOI yield(note)

Conference
facilities

3.4%

To be acquired on
August 2, 2021

3.4%

9,856 mn yen

Portion of
the red area

OfficeAcquired as of
12,220 mn yen 15,232 mn yen
September 1, 2020
7,870 mn yen

11% quasi-co-ownershipinterest in trust
beneficial interests

Total acquired: 78%
quasi-co-ownershipinterest including
past acquisition

Restaurant, etc.

(Note) MHR acquired the trust beneficial interests in 87.95% co-ownership interest incompartmentalized ownership of the 28-35th floors

7Residence

Toranomon Hills Residence

Pleasing views of central Tokyo landmarks such as Tokyo
Tower, Rainbow Bridge, Tokyo Sky Tree and the open
green space of the Imperial Palace can be viewed fromresidences located on the 37th to 46th floors. Hotelservices in cooperation with Andaz Tokyo are available.

RetailShops and Restaurants

With the concept of "Communication Hub", restaurants
are designed to provide international cuisine that satisfy
customers from Japan and overseas. Various people suchas office workers, conference attendees and hotel guests
gather in this space uniquely designed to facilitatecommunication.

Hotel

Andaz Tokyo

Hyatt’s boutique lifestyle hotel "Andaz Tokyo" isJapan's first Andaz. Andaz means "personal style" in
Hindi. The hotel values the individuality of the area andincorporates the charm of the land into design and its’service.

Evolving as an International Urban Center and a Global
Business Hub
Upon completion of Toranomon Hills Business Tower, Toranomon Hills
Residential Tower and the currently planned Toranomon Hills Station Tower(tentative name), the total area of the Toranomon Hills complex including
Toranomon Hills Mori Tower will reach about 7.5 hectares and about
800,000m2 of the total floor space. The area will evolve into a true
"international unban center and a global business hub" with integratedfunctions such as international standard offices, residences, hotels, retailfacilities and transportation infrastructure.

82-4 Dividends per unit growth record(yen/unit)

3,200

3,000

21 consecutive
fiscal period
increase

2,800

Longest among
all J-REITs

2,822

2,850

2,883 2,898

2,910 2,910
2,909 (forecast) (forecast)

2,753
2,659
2,567

2,600

2,606 2,610

2,502
2,367

2,400
2,303
2,200

2,151
2,019

2,000

1,910
1,833

1,800

1,724 1,740
1,670
1,589

1,600

1,400

1,200

1,315

8th
period
Jul.
2010

9th
period
Jan.
2011

10th
period
Jul.
2011

11th
period
Jan.
2012

12th
13th
14th
15th
period period period period
Jul.
Jan.
Jul.
Jan.
2012
2013
2013
2014

16th
period
Jul.
2014

17th
period
Jan.
2015

18th
period
Jul.
2015

19th
period
Jan.
2016

20th
21st
22nd
23rd
24th
period period period period period
Jul.
Jan.
Jul.
Jan.
Jul.
2016
2017
2017
2018
2018

25th
period
Jan.
2019

26th
period
Jul.
2019

27th
period
Jan.
2020

28th
period
Jul.
2020

29th
30th
31st
period period period
Jan.
Jul.
Jan.
2021
2021
2022

※ Implemented a 5-for-1 investment unit split effective on February 1, 2014. Actual dividends per unit was divided by 5 for the periods before the split of investment units in the graph.

92-5 Strengths of continuous growth in DPU and NAV① Premium properties in central Tokyo(+ external growth potentialfrom property pipeline)
Central Tokyo
ratio
Tokyo’s three
central wards

88.1%

Tokyo’s five central
wards and vicinity

100%

Premium
Properties② Stability throughfixed-rent master
leases③ Strong financial
structure

Credit rating(JCR)

Fixed-rent master
lease ratioAA(Stable)

99.0%

Green building
ratio

PML

93.5%

0.90%

A group of properties with high convenience, comfort, andsafety that will be chosen to function as headquarters evenafter the spread of telecommuting

65.5%

LTV (Appraisal)Premium properties in central
Tokyo are advantageous for
capturing medium- to longterm demand, and fixed-rent
master leases can be effective
for short-term vacancies

38.9%
The procurement environment
has not changed despite the
COVID-19 pandemic.
Investment unit prices arestable, and public offerings
have been conducted*The figure above is for after the acquisition of the new property

Impact of COVID-19 on business performance (29th period)
Office: No significant impact. Maintained
high occupancy rates

Residential: Occupancy rates have declined atsome properties, but the impact has
been minimal

Occupancy Rate 99.7% in the 28th period and99.6% in the 29th period

Occupancy Rate decreased from 96.1% in the 28th period to94.9% in the 29th period

Even as office vacancy rates rose in the five central wards, including
Minato Ward, a high occupancy rate was maintained due in part to theexcellent location and quality of MHR’s properties

While occupancy rates have declined at some properties, the overall
portfolio impact has been minimal

Rent trends

Rent trends

Rent increases have continued for both rent revision and tenant
replacement. As a result, the rent gap has narrowed

Rent increase upon rent revision has continued to result inincreases. New rents have declined temporarily at someproperties where occupancy rates declined

Rent exemption and non-payment

Rent exemption and non-payment

No incidents

No incidents102-6 Increase in appraisal NAV per unit
(yen/unit)

160,000

150,000

20 consecutive
fiscal period
increase

140,000

145,583

Longest among
all J-REITs

146,390

147,182

148,218

137,697
134,550130,000
124,618
120,000

117,627
114,893
112,546 112,811

110,000

99,665100,000

90,00086,941

104,064
101,957

88,82681,99278,027 78,434

80,00072,73570,00062,73164,85660,00050,0009th
period
Jan.
2011

10th
period
Jul.
2011

11th
period
Jan.
2012

12th
period
Jul.
2012

13th
period
Jan.
2013

14th
period
Jul.
2013

15th
period
Jan.
2014

16th
period
Jul.
2014

17th
period
Jan.
2015

18th
period
Jul.
2015

19th
period
Jan.
2016

20th
period
Jul.
2016

21st
period
Jan.
2017

22nd
period
Jul.
2017

23rd
period
Jan.
2018

24th
period
Jul.
2018

25th
period
Jan.
2019

26th
period
Jul.
2019

27th
period
Jan.
2020

28th
period
Jul.
2020

29th
After
period acquisition
Jan.
2021

※ Implemented a 5-for-1 investment unit split effective on February 1, 2014. Actual dividends per unit was divided by 5 for the periods before the split of investment units in the graph.

112-7 Forecasts
The 30th period is forecast to have increased revenue, income, and DPU compared with the 29th period. The 31st
period is expected to end at around the same level as the 30th period
While the contract for the only master lease for which fixed rent significantly deviates from the market rent will be renewed at a lower level in the
31st period, a property acquisition will be conducted at the same time to maintain the DPU (forecast) at the same level of the 30th period
Cancellations have not particularly increased due to COVID-19, and the occupancy rate is expected to remain at a high level
29th period
Jan. 31, 2021
Actual30th period
Jul. 31, 2021
Forecast

31st period
Jan. 31, 2022

Difference

Forecast

Operating Highlights (million yen)
Operating revenue

9,820

9,820

+0

9,899

Rent revenues

9,614

9,620

+6

9,664

206

200

235

3,646

3,667

△6

+ 20

3,736

3,315

3,354

+ 38

3,420

331

312

△ 18

315

Other operating revenues

Operating expenses
Expenses related to properties
SG&A

Operating inc ome

6,173

6,153

△ 20

6,163

+2

5,579

+2

5,577

Non-operating income01

Non-operating expenses

598

576

Ordinary inc ome

5,576

5,578

Net income

5,575

5,577

Total dividends

5,574

5,576

+1

5,576

1,916,330

1,916,330－

1,916,330

2,909

2,910

+1

2,910

NOI

7,561

7,535

7,564

NOI yield

3.7%

3.8%

△ 26

0.0PT

3.7%

400,851

402,910+ 2,058

410,737

+0

0

△ 22

585

DPU
Total units outstanding (units)
DPU (yen)

Other Indices (million yen)

Ac quisition price(weighted average based on the numberof operating days during the period)

Increase/decrease factor (29th – 30th)・Operating revenue (+0 mn yen)
- Full period contribution of property
acquired in 29th period- Office Rent (pass-through)- Residential (pass-through)- Cancellation penalty- Utilities and other revenue
・Operating expenses (+20 mn yen)
- Maintenance and repairs- Full period contribution of property
acquired in 29th period- Property taxes for property
acquired in 29th period- Depreciation- Asset management fee- Property management fee
・Non-operating expenses (△22 mn yen)
- Interest expenses, etc.

+43
△25
△7
△5
△3
+12
+10
+10
+7
△15
△8
△18

Increase/decrease factor (30th – 31st)・Operating revenue (+79 mn yen)
- Property acquisition in 31st period- Utilities and other revenue- Residential Rent (pass-through)- Office Rent (fixed rent master lease)- Office Rent (pass-through)・Operating expenses (+69 mn yen)
- Property acquisition in 31st period- Utilities- Property taxes for property
acquired in 29th period- Property management fee
・Non-operating expenses (+9 mn yen)
- Interest expenses, etc.
(new borrowings in 31st period)- Interest expenses, etc.
- Amortization of investment unit issuance cost

+169
+32
+4
△92
△41
+40
+28

+10
△11

+22
△5
△6

12

2-8 Highest quality portfolio among all J-REITs
Investment strategy based on long-term perspective
Invest in properties that can be expected to maintain and improve asset value over the long run
True premium properties in central Tokyo are sure to capture office demand by functioning as headquarters, even after the spread oftelecommuting that has been triggered by COVID-19
Invest in properties that are located in areas that can expect improved asset value for the entire area based on regional development and area
management, instead of only focusing on the value of individual properties

Even amidst Japan’s declining population and changes① Investment in central Tokyo“Truly central and excellent location” even
within central Tokyo

to work styles that have been triggered by COVID-19,
premium properties in central Tokyo that are “truly

Location

central” and in “excellent locations” are sure to capture
office demand by functioning as headquarters

Premium properties with excellent facilities, high② Investing in premium properties
Property with excellent facilities, earthquake
resistance and environmental performanceearthquake resistance, and environmental performancethat offer excellent convenience, comfort, and safety
will provide competitive advantages, regardless of

Qualityof assets

economic trends or the spread of telecommuting thathas been triggered by COVID-19

Invest in properties that can be expected to further
improve profitability and asset value by continuously③ Value creation
Value improvement through regional
development and area management

developing over time alongside the entire region
through excellent regional development and area

Value
Creationmanagement, instead of only focusing on the value ofindividual properties13

2-9 (1) Location
Highest property percentage in Central Tokyo among J-REITs

Tokyo’s Five
Central Wards
and their vicinity

Tokyo’s ThreeCentral Wards

88.1%

100%

(Note) The ratios represent proportion of acquisition price to total acquisition price.

Estimated population in central Tokyo
Area

Population in2015

Estimated
population in
2045

Change3 central wards
in Tokyo

442,000

594,000+34.3%

5 central wards
in Tokyo

1,000,000

1,175,000+17.5%

Tokyo

13,515,000

13,606,000

+0.7%

Osaka

8,839,000

7,335,000

Aic hi

7,483,000

6,899,000△ 17.0%127,094,000

106,421,000

Nationwide△ 7.8%△ 16.3%(Source) Prepared by the Asset Manager based on the “Regional Population Projections forJapan (estimated in 2018)” by the National Institute of Population and Social
Security Research.

14

2-10 (2) Quality of assets
Premium Properties (Excellent comfort and safety with extensive facilities)＜Overview and facilities of representative properties＞
Property nameGross floor
area

Access fromthe nearest
stationNumber ofshops &
restaurants

Roppongi Hills

Connected to758,203㎡- Roppongi
Station

228

Toranomon Hills(Afte r tota lproje ct com ple tion)

Connected to793,585㎡- Toranomon
Hills Station

Not fixed

Hotel
(spa)

Grand Hyatt Tokyo(NAGO MI SP A AND FITNESS)

Andaz Tokyo(approx .
(AO SPA AND CLUB)8,000 tsubo)

ARK Hills

2-minute walk
310,979㎡- from Roppongi
1-chome Station

55(THANN SANC TUAR Y
SP A AKASAKA)

Atago Green Hills

3-minute walk
151,106㎡- from Onarimon
Station18(Ata go Gre en Hills SP A)

ANA InterContinental

Green
Residential coverage ofthe site

Cultural facility
Observatory

Conference

ShareofficeMori Art Museum
Tokyo City View
TOHO Cinemas

Academyhills
Ropponngi Hills
Club

〇

〇

30.1%

-

Toranomon Hills
Forum

〇

〇

30.4%

ARK Hills Club

〇

〇

43.3%

-

-

〇

51.9%

Suntory Hall-

(Source) Prepared by the Asset Manager based on disclosed materials as of August 31, 2020.
(Note 1) Describes the outline of the entire areas and facilities including properties owned by MHR.
(Note 2) “Connected” under the “Access from the nearest station” describes the possible direct connection by concourse etc..

15

2-11 (2) Quality of assets
Earthquake-resistant feature

Environmental performance

Ratio of GB certified
properties in portfolio

Lowest portfolio
PML of all listed
J-REITsBest among
all J-REITs

0.90%

93.5%
In highest Ratings
72.1%※ PML refers to the probable maximum loss ratio expected to result from an earthquake.
A smaller figure indicates superiority in earthquake-resistance.

PML

Earthquakeresistant feature

Roppongi Hills Mori Tower

0.59%

Seismic damping

ARK Mori Building

0.78%

Seismic damping

0.73%

Seismic damping

1.56%

Seismic damping

Toranomon Hills Mori Tower

0.50%

Seismic damping

Holland Hills Mori Tower

0.85%

Seismic damping

Akasaka Tameike Tower

1.79%

Seismic damping

2.35%

Seismic damping

2.34%

Seismic damping

5.94%

－

2.20%

－

2.20%

－

Property nameKoraku Mori Building
ARK Hills South Tower

MORI Tower
Atago Green Hills

Forest Tower

Type

OfficeOffice(Partly
residential)

Plaza
Roppongi First Plaza
Roppongi View Tower

Highest quality
among all J-REITs

Residential※ In acquisition price base by excluding Laforet Harajuku (Land)

CASBEE for Existing Buildings: Rank S

Roppongi Hills
Mori Tower

ARK Mori
Building

Atago Green Hills Toranomon Hills(MORI Tower)
Mori Tower

CASBEE for
Existing Buildings: Rank A

Akasaka Tameike
Tower

Koraku Mori
Building

Holland Hills
Mori Tower

DBJ Green Building
Certification: Four stars

ARK Hills
South Tower16

2-12 (3) Value creation
Developments around MHR’s properties

Shintora-Dori CORE (Completed Sep. 2018)(Toranomon Hills area)
Toranomon Hills
Mori Tower

Toranomon Hills
Residential Tower

Opened Jun. 2014

Projected completion in 2021

Toranomon Hills Station Tower

Toranomon Hills
Business Tower(Tentative name)
Projected completion Jul. 2023

Opened Jun. 2020

Total area: approx. 7.5ha
Total floor area: approx. 800,000m2

Toranomon Hills Station of
Hibiya subway line
Opened Jun. 2020

Office space: approx. 300,000m2
Residential units: approx. 720
Retail space: approx. 26,000m2
Green space: approx. 15,000m2

Mixed use Tower located at the center of future
grand boulevard in Tokyo
A 15-story mixed use tower with commercial facilities with a total
rental floor area of approximately 10,000m²
Cafe/dining and event space “THE CORE KITCHEN/SPACE” whichfaces the Shintora–Dori aims to be a creator's hub where creative
industry people gather, interact, and generate ideas.
An “incubation center” with shared lounges and meeting rooms is
located on the 3rd floor and start-ups expanding into Japan fromoverseas and venture companies have moved in.

17

2-13 (3) Value creation
Toranomon Hills Business Tower (Completed Jan. 2020)
An international-standard, large-scale officebuilding with an innovation center
Business Tower is a 36-story office tower, featuring
international-standard, large-scale office space ofapproximately 96,000m2, and retail facility area ofapproximately 7,600m2.
The tower is directly connected to Toranomon Hills stationon the Hibiya subway line as well as Toranomon station on
the Ginza subway. A bus terminal is located on the firstfloor to function as a “Gateway to Tokyo” via various bus
lines including the BRT (Bus Rapid Transit) connecting city
center and waterfront areas, and via airport limousine buses.
Offices occupy 32 floors from the 5th floor to the 36th floor
with the standard rentable floor area of 3,000m2.
Refreshment corners are provided in the common area oneach floor aimed at promoting communication. In addition,
preparation for an emergency has been arranged through adisaster stockpiling warehouse on each floor.
An original energy plant that supplies electricity and heat is
installed in the Toranomon Hills area on the third basement
floor. It also provides the electricity and heat sufficient tocontinue urban functions even in the event of a disaster,
contributing to the safety and security of the Global
Business Center.
（c）Mariko Mori≪Cycloid Ⅴ≫<Retail><Innovation center>

From the first basement floor
to the 3rd floor, commercial
spaces with a total of 58
restaurants and stores will
support global lifestyles.
The 3rd floor will house
Toranomon Yokocho, alandmark dining facility
featuring offerings from famous
stores from all over Tokyo.

On the 4th floor will be a large
membership-based incubation
center “ARCH,” which wasestablished especially to support
large enterprises' internal businessreforms and new business creation.
It boasts around 3,800m2 of office
work space and aims to become abase for Japan's unique innovation
ecosystem.

18

2-14 (3) Value creation
Development around MHR’s properties (Toranomon-Azabudai Project: projected completion Mar. 2023)
The future version of “Hills” boasts anastonishing scale and impact
Large central square of approx. 6,000m² is set in the center ofthe city and various city functions such as offices, residences,hotel, an international school, retail facilities and cultural
facilities will be tightly integrated.
Total floor area will be 861,500m², with 213,900m² of officespace, approx. 1,400 residential units. Approx. 20,000 office
workers and 25-30 million people per year are expected to visit.
The main tower will soar 64 stories and 330m in height. Officesin the main tower, the West Tower and Podium Building willencourage free and creative work.

“Modern Urban Village”, a city-within-a-city full of greenery andconnects people
The core concept of the “Toranomon-Azabudai Project” is a “Modern Urban Village,”a unique neighborhood that will combine the sophistication of a megalopolis with theintimacy of a small village. It will be a completely new city like no other in the world.
It will cover an area of approx. 8.1 ha and will feature extensive landscaping totaling
approx. 2.4 ha including a 6,000m² central square.

19

2-15 (3) Value creation
Creating community and innovation through the Area Management by sponsor

Toranomon Hills Area
Community
connected byflowers

Partnership withworld's largest
innovation center“Thursday Gathering” by“Toranomon Flower Mart,” aVenture Café, a sister

new market unique toorganization of Cambridge

Toranomon Hills serves as an

Innovation Center, promotesintersection connecting

exchanges between

prominent greenery in central

participants to support theTokyo including Atagoyama

creation of new innovations.

and Hibiya Park. Unique andpopular flower shops that do
TORANOMON FLOWER MART(Toranomon Hills Mori Tower)

Thursday Gathering(Toranomon Hills)

ARCH(Toranomon Hills Business Tower)

not usually get together
gather at the same place, andworkshops, etc. are also held.

Incubation Center“ARCH”

Understanding
attractivenessacross Japan“ARCH,” a large membership-“Touring Stand” is a collection

based incubation center wasof dining facilities standing

established especially toside by side along the roadsupport large enterprises'

where people can enjoy

internal business reforms andseasonal ingredients and local

new business creation. It

cuisine from across Japanboasts around 3,800 m2 ofincluding at the special event

office work space and aims tobecome a base for Japan's
unique innovation ecosystem.

Touring stand(Shintora-Dori)“Touring Ippinichi.”20

2-16 (3) Value creation
Creating community and innovation through the Area Management by sponsor
ARK Hills Area
Workplace where
venture capitalgathers

KaleidWorks(ARK Mori Building)

Pioneer of urban
markets:
Hills Marche“KaleidWorks” consists of an

Hills Marche is the first

office area where independent

Marche Japon Project of theventure capitalists

Ministry of Agriculture,

representing Japan are located

Forestry and Fisheries. Basedand a lounge area. People whoon the concept that “the best

want to innovate in a wide

ingredients are in the city,"

range of fields can interact on

through fresh, local food wecommon grounds in sharedspaces.

Hills Marche(ARK Karajan Place)

reinforce the rich lifestyle of
ARK Hills.

Roppongi Hills Area

ARK Hills Music Week
(ARK Karajan Place)

Close experienceof high-quality
music

Art Festival
representing
Tokyo“ARK Hills Music Week” is a“Roppongi Art Night,” an art

unique music festival where

festival representing Tokyo,

people can casually enjoy high-integrates art and the city toquality music. Many specially

improve the cultural image of

selected music events where

Roppongi and create apeople of various ages andpioneering model of urban

nationalities can interact with

development through art ineach other in the city are held
during the period.

(c) Roppongi Art Night Execution Committee

the metropolis Tokyo.

Roppongi Art Night(Roppongi Hills Arena)21

2-17 External growth
Realized growth in DPU and NAV by acquiring premium property in central Tokyo
Additional acquisition of Toranomon Hills (September 2020, 12.2 billion yen), with additional acquisition planned (August 2021, 7.8 billion yen).
Acquisitions made at a cost lower than appraisal value, leading to growth in DPU and NAV
Ability to acquire premium properties in central Tokyo without competitive bidding by utilizing the abundant and extensive property pipeline ofMori Building, the sponsor

Change in rent and vacancy rate of office buildings (Tokyo’s five central wards)
(%)

200
8.1%

180

9.0

⇒ Estimate

7.3%

145

149

5.5%

Rent index
Vacancy rate

4.7%

4.0%

3.6%

127

120

3.1%

4.5% 4.5% 4.5% 4.6%

128

3.7%
114

2.6%

100
80
2007

2008

2009

2010

92

91

2011

2012

95
2013

99
2014

(Source)
Prepared by the Asset Manager based on the“Autumn 2020 Office Rent Forecast in Tokyo,
5.0 Osaka and Nagoya (2020-2025)” by the OfficeMarket Trends Research Committee
4.0 (Japan Real Estate Institute and Miki Shoji Co.,
Ltd.).
3.0(Note)
2.0 The rent index targets large and medium
buildings (standard floor area of 100 tsubo or
1.0more) in Tokyo’s five central wards. The rent
0.0 index is rebased to 100 as of 2010.
6.0

120
100

8.0
7.0

160
140

10.0

8.9% 9.0% 8.7%

103

2015

109

2016

125

122

113
1.9%

2017

4.3%

119

118

119

2023

2024

2025

1.6%

2018

2019

Change in return on real estate investment

2020

2021

2022

Mori Building’s extensive property pipeline

(%)

4.9
4.6
4.2%

4.3

3.4
3.1

2.2 trillion yen

3.8%

4.0
3.7

Total assets:

4.2%(as of the end of September, 2020)

Number of properties undermanagement: 96 buildings(as of April, 2020)

3.7%
3.5%

Cap rate of class A
office buildings(Marunouchi and Otemachi)

3.3%
3.0%

3.0%

2.8
06
08
10
12
14
16
18
20
(Source) Prepared by the Asset Manager based on “The Japanese Real Estate Investor
Survey” by the Japan Real Estate Institute.
(Note) Figures reflect the time of survey as of October each year.

MHR has “preferential negotiation rights”

22

2-18 External growth
Trend in assets under management (based on acquisition price)(billion yen)

450

410

Growth utilizing
sponsor’s pipeline

400
350

339

300

281

200

100

390

25th
Jan.
2019

27th
Jan.
2020

billion yen

352

293

252

250

150

390

402

142

142

1st
Jan.
2007

3rd
Jan.
2008

201

201

5th
Jan.
2009

7th
Jan.
2010

211

211

210

9th
Jan.
2011

11th
Jan.
2012

13th
Jan.
2013

15th
Jan.
2014

17th
Jan.
2015

19th
Jan.
2016

21st
Jan.
2017

23rd
Jan.
2018

29th
Jan.
2021

After
acquisition

Acquired premium properties in central Tokyo lower than appraisal values(Scheduled as of August 2, 2021)
Toranomon Hills Mori Tower
Toranomon Hills
Mori Tower

Recent officeacquisition bylisted REITs (Note 1)△ 20.2%△ 6.2%

Building age

6.6 years

22.0 years

PML

0.50%

4.33%

Discount ofacquisition price toappraisal value (Note 2)

Anticipatedacquisition price

7,870 million yen

Appraisal value

9,856 million yen

Location

Minato-ku, Tokyo(Note 1) Average based on information of acquisitions (23 properties) disclosed from August 2020 to January 2021.
(Note 2) Discount of acquisition price to appraisal value = (Acquisition price – appraisal value) / appraisal value23

2-19 External growthMori Building Group’s involvement

MHR (Note 1)
In Operation(注4)

MB Group (Note 2)(注5)

Planning / Under Construction(Source) Prepared by the Asset Manager based on Mori Building’s “Mori Building Handy Map Mori Building Map/Home Route Support Map 2021.”(Note 1) Some of the properties have been partially acquired and held by MHR.
(Note 2) Properties are developed, owned, managed and planned for development by Mori Building Group, and there are no properties currently anticipated to be acquired by MHR.

24

2-20 Internal growth
Maintained high occupancy rate amidst COVID-19 pandemic
Even as office vacancy rates rose in the five central wards, including Minato Ward, MHR’s properties have not been impacted due to their
excellent location and quality
Office rents (pass-through type) in the 29th period have continued to increase for both rent revision and tenant replacement. While theoccupancy rates for some residential properties decreased, the overall portfolio impact has been minimal

Comparison of Vacancy Rates in Central
Tokyo Offices (since January 2020)

Trend in occupancy rates
(%)

100

99.5%

99.7%

99.9%

100%

99.7%

99.6%

(%)

7.0

6.5%
Minato Ward

97.9%

96.8%
97.7%

96.2%

6.0

96.1%

5 central wards

94.9%

5.6%

MHR

95

4.8%

5.0
4.3%
4.0

3.5%

90

4.3%

3.4%

3.0
Office (total)
Residential (total)

85

2.0

Office (pass-through)

1.7%

1.5%

1.5%

0.0%

0.1%

0.1%

Mar.

May.

1.0

80

1.9%

1.8%

2.8%
1.6%
1.2%

1.6%

0.4%

0.2%

0.0
24th
July 2018

25th
January 2019

26th
July 2019

27th
January 2020

28th
July 2020

29th
January 2021

Jan.
2020

Jul.

Sep.

Nov.

Jan.
2021

(Source) Prepared by the Asset Manager based on “Office Market Data” by Miki Shoji Co.,
Ltd.
(Note)
Figures of “Mori Hills REIT” are the total figures for the office sections of all
owned properties.

25

2-21 Internal growth
Result of rent revision and tenant replacement (pass-through type)Net impact of rent revisions accumulated since 24th period

Rent revision rate (Office)(Monthly rent basis)(%)(million yen)

+10

+30
+27.0 mn yen

+8

+25

+7.1%

+6.9%

Office+21.8 mn yen

5.6

5.2

+5.6%

+6

+20

4.9
+16.7 mn yen

+3.6%

+4

+2

+25.7 mn yen

Residential+15.4 mn yen+15+13.0 mn yen

3.7

4.2

3.1
+10

+1.5%

+2.5%

0
25th
Jan. 201926th
Jul. 201927th
Jan. 2020

21.3

28th
Jul. 2020

29th
Jan. 2021

16.8※ Average of all contracts subject to revision
24th
Jul. 2018

20.5

28th
Jul. 2020

29th
Jan. 2021

Rent revision rate (Residential)

+5

9.9

11.7

12.5

25th
Jan. 201926th
Jul. 2019+024th
Jul. 2018

(%)

27th
Jan. 2020+10

Net impact on increase/decrease of tenant replacement+8(million yen)

+6

(Monthly rent basis)

+5.4%

+5.3%

+5.9%

+30

+6.0%

(Residential)(Office)+14.9%

+25

+4.8%

+4

+20
+15

+3.6%
+7.5%

New tenant+5※ Average of all contracts subject to revision△0.5％

Old tenant

+10

+2.7%

+2

※ Average of
all contracts
with replacement

+0

0
24th
Jul. 2018

25th
Jan. 201926th
Jul. 201927th
Jan. 2020

28th
Jul. 2020

29th
Jan. 2021

28th
Jul. 2020

29th
Jan. 2021

28th
Jul. 2020

29th
Jan. 202126

2-22 Internal growth
Comparison with office market rent (pass-through type)
Rent gap (Total monthly rent)

Rent gap by revision (Total monthly rent)(million yen)(million yen)

400

160

Above market rent
(over +5%)300

Above market rent
(under +5%)

140

140
120
100
80

200

60

100

Below market rent

68
51

40

29

37

40

33rd
Jan. 2023

34th
Jul. 2023

20
0

0
28th
Jul. 2020

29th
Jan. 2021

30thJul. 2021

31stJan. 2022

32nd
Jul. 2022

35th
Jan. 2024
or afterRate of rent gap

△4.2%

△2.3%

This indicates that contracts have
not reached market rent levels
and have room for upside(Note 1) Market rent is based on the report by CBRE K.K.
(Note 2) Rent gap = Total tenants’ rent ÷ “Total market rent” – 1(Note 3) Figures reflect move outs of end tenants confirmed as of January 31, 2021

The rent gap has narrowed due to the continued rent
increases for both rent revision and tenant replacement
and only the slight decrease in new rents at someproperties
Aim for the maintenance and improvement of overall rental
income, while considering the upward revision of rents fortenants with a large rent gap

27

2-23 Internal growth
Overview of fixed rent master lease
Ratio of fixed rent master lease (after new acquisition)● Structural changes to office demand will not
impact premium properties in central Tokyo
Fixedrent
65.5%● Display a defensive posture to the temporary
uptick in vacancy

Realize stable
cash flow

Realize stable cash flow in both the short term
and the mid to long termMonthly rent by contract expiration
Property nameRoppongi Hills Mori Tower(10 floors)

ARK Mori Building(8 floors + DHC)

Atago Green Hills(approx. 32.9% of entire
property)
Toranomon Hills Mori Tower(approx. 10.8% of entire
property)
Total

Total monthly% of portfolio
rent
total rent
(mn yen)

475.2

225.2

29.1%

13.8%

Breakdownof property

Leased floor
area
2
(m )

Payer ofmanagement
associated fee

Monthly rent by contract expiration (mn yen)
2022

2023

2024

2025 or after

Expiration of
the leaseagreement

23rd & 24th

8,993.45

－

－

－

99.2

Jul. 2026

19th & 22nd

8,609.47

－

95.0

－

－

Sep. 2023

20th

3,879.19

－

－

42.8

－

Jul. 2024

28th

4,460.13

－

－

－

49.2

Sep. 2025

MHR

25th

4,156.66

－

－

－

45.8

Jan. 2026

26th, 27th & 29th

12,942.64

－

－

－

142.9

Mar. 2026

13th/12th & 22nd

7,952.55

－

－

－

77.9

Jan. 2026

23rd & 25th

5,742.95

－

－

－

55.5

Jan. 2026

4th, 15th & 24th

7,680.52

－

－

－

73.8

Jan. 2026

DHC

3,212.41

Master lessee

－

17.9

－

－

Mar. 2023

MHR

168.7

10.3%

Office, residential& retail

29,667.58

Master lessee

168.7

－

－

－

Apr. 2022

201.6

12.3%

Part of 28th to
35th floors

19,046.16

MHR

201.6

－

－

－

Jul. 2022

1,070.8

65.5%

370.3

113.0

42.8

544.6

(34.6%)(10.6%)(4.0%)(50.9%)(Note) Figures reflect the acquisition as of August 2, 2021.

28

2-24 Financial management
Maintaining a strong financial structure with a credit rating (JCR) of AA (stable), and LTV(appraisal-value basis) of 38.1%
The fund procurement environment has not changed despite the COVID-19 pandemic, and because the interest rate for new debt is below theinterest rates of existing debt, financial costs are expected to decline upon refinancing
The policy is to continue to maintain LTV (book-value basis) in the mid-40% range and the average remaining duration of debt at 4.0 years or
longer. New green bonds have been issued (November 2020: 3.5 billion yen, February 2021: 2.0 billion yen)

Reduction in LTV

Overview of debt financing

(%)

60.0

57.4%

55.0

End of 28th
periodDebt Balance

50.0
49.3%

44.7%

48.8%

45.0

45.4%

Jul. 31, 2020

End of 29th
periodJan. 31, 2021

179,222 mn yen

184,422 mn yen

45.7%

45.8%

38.0%

38.1%

4.7 years

4.6 years

LTV (appraisal value basis)

LTV (book value basis)

53.7%

46.8%
45.8%

45.7%

46.2%

LTV (book value basis)(Note 1)
(Note 2)

LTV (appraisal value basis)
Avg. remaining duration

42.4%

40.0

42.3%
40.4%

35.0
9th
10th
11th
period period period
Jan.
2011

Jul.
2011

Jan.
2012

・・・

38.2%

38.1%

After
21st
22nd 23rd
24th
25th
26th
27th
28th
29th
period period period period period period period period period acquisition
Jan.
2017

Jul.
2017

Jan.
2018

Jul.
2018

Jan.
2019

Jul.
2019

Jan.
2020

Jul.
2020

Long-term debt ratio/
Fixed rate ratio(including borrowing expenses)＜Long-term debt ratio＞

2.1%

2.0%

(Note 1) LTV (book value basis) is calculated as [Interest bearing debt
/Total assets].
(Note 2) LTV (appraisal value basis) is calculated as [Interest-bearing
debt/Appraisal value based total assets (Total assets + Total
appraisal value - Total book value)].

Jan.
2021

Reduction in average interest rate
(%)
2.25

38.9%

＜Fixed rate ratio＞

2.00
1.75
1.50

Long-term
100%

1.25
1.00

0.76%

0.75

0.74%

0.69%

0.68%

Fixed
91.7%

0.63%

0.50
0.25
9th
10th 11th
period period period
Jan.
2011

Jul.
2011

Jan.
2012

・・・

21st 22nd 23rd 24th 25th 26th 27th 28th 29th (Note) Total interest-bearing debt cost is calculated as [(interest expenses + interest
expenses on investment corporation bonds + borrowing expenses + amortization
period period period period period period period period period
Jan.
Jul.
Jan.
Jan.
Jul.
Jan.
Jul.
Jan.
Jul.
of investment corporation bond issuance costs) ×365 ÷operating days during
2017
2017
2018
2018
2019
2019 2020
2021
2020
each period ÷average interest-bearing debt balance during each period].

29

2-25 Financial management
Extension in remaining duration of debt

Rating(years)

5.5
5.0
4.5

4.2
3.8

4.0

4.0

4.3

4.4

4.6

4.7

Japan Credit Rating (JCR)

4.6

Long-term issuer rating:

3.7

3.5

AA (Stable)

3.0
2.5
2.0
1.5

1.5

1.2

1.4

・・・

1.0
9th
10th 11th
period period period
Jan.
Jul.
Jan.
2011 2011
2012

・・・

21st 22nd 23rd 24th 25th 26th 27th 28th 29th
period period period period period period period period period
Jan.
Jul.
Jan.
Jan.
Jul.
Jan.
Jul.
Jan.
Jul.
2020 2020 2021
2017
2017
2018 2018 2019 2019

Overview of maturity (as of January 31, 2021)(billion yen)

20
Long-term loans

Investment corporation bonds

15

10
8.0
5

6.5

12.5

11.2

9.5
6.0

0

8.2

9.2

5

Averageinterest 0.8%
rate

2

2
38th
period
Jul.
2025

31st
period
Jan.
2022

32n d
period
Jul.
2022

33rd
period
Jan.
2023

34th
period
Jul.
2023

35th
period
Jan.
2024

36th
period
Jul.
2024

37th
period
Jan.
2025

0.9%

0.7%

0.5%

0.6%

0.7%

0.6%

0.5%

8.2

9.7

7.6

2
30th
period
Jul.
2021

7.8

9.1

39th
period
Jan.
2026

4
40th
period
Jul.
2026

41st
period
Jan.
2027

13.6
10.9

13.1
5.9

5.3

4.7

46th
period
Jul.
2029

47th
period
Jan.
2030

48th
period
Jul.
2030

2
42n d
period
Jul.
2027

43rd
period
Jan.
2028

44th
period
Jul.
2028

45th
period
Jan.
2029

30

2-26 Sustainability initiatives
Important ESG Issues (Materiality)
Materiality● Reduce greenhouse gas emissions

E
Environment

and promote energy saving at
owned properties● Use of renewable energy● Coexist with nature

Main Initiatives

Main related SDGs

● Participate in Japan Climate Initiative● Support the TCFD recommendations● Promote energy savings (such as introducing the energy saving

technologies)● Expand use of renewable energy● Promote greenery and take measures against heat island● Protection of biodiversity● Various initiatives to obtain Green Building certifications and make● Response to sustainability certifications

improvements● Implement training regarding Green Building● BCP measures (disaster prevention

and building resilience)● Tenants' health, comfort andconvenience

S
Social● Respect for human rights● Promote diversity● Enhance BCP Measures● Strengthen emergency management systems and implement

general disaster-readiness training● Initiative for barrier-free accress● Due diligence when acquiring real estate● Conduct Tenant Satisfaction Survey● Create an appropriate environment for a whistleblower system● Implement human rights and diversity training (including LGBT)● Create a pleasant working environment for women● Provide personnel evaluations and feedback from diverse● Talent development

perspectives including compliance and ESG initiatives● Provide various training and qualification acquisition systems based on courses● Promote a healthy and comfortableG

work environment and improve
employee's work/life balance● Increase employee's satisfaction● Promote paid holiday acquisition and overtime work reduction● Maintain systems for employee safety and health management● Implement health checks● Conduct Employee Satisfaction Survey● Mutual communication with Stakeholders

See "ESG Report"● Strive for fair and effective corporate

governance● Adhere to compliance and corporate ethics
Governance● Prevent conflict-of-interest transactions● Identify risks and manage responses● Respond to requests for ESG information
disclosure● Implement evaluation of the effectiveness of the board of directors● Conduct compliance training including fraud prevention● Regularly expose risks, as well as monitor and respond to risks

appropriately● Enhance ESG information disclosure on the website● Issuance of ESG Report31

2-27 Sustainability initiatives
GRESB Assessment
In the 2020 GRESB Real Estate Assessment, MHR received a “Green Star” rating forthe ninth consecutive year, and received the highest evaluation of “5 Stars” in the
GRESB Rating (Note).
(Note) The comparative assessment of the overall score was initially introduced in 2016. It is a global ranking utilizing
a five-star scale (“5 Stars” as the highest rank).
GRESB is an annual benchmarking assessment to measure ESG (Environmental, Social and Governance) integration ofreal estate companies and funds, as well as the name of organization which runs the assessment. It was founded in2009 by a group of major European pension funds who played leading roles in launching Principles for Responsible
Investment (PRI).

ESG Report (Japanese)

MHR’s Website

This report describes the overall efforts of MHR and the AssetManager Mori Building Investment Management Co., Ltd. tocontribute to the realization of a sustainable society and to
maximize unitholder value over the medium to long term.
URL: https://www.mori-hillsreit.co.jp/Portals/0/images/ir/ir_pdf/ESG_Report_2020.pdf

The pages dedicated to ESG have expanded, andinformation is proactively disclosed.
URL: https://www.mori-hillsreit.co.jp/en/outline/Sustainability/tabid/171/Default.aspx

32

2-28 MHR’s representative property (1) Roppongi Hills

Roppongi Hills Mori Tower
Since its opening in 2003 as Japan’s largest ever urban

Roppongi
Hills

redevelopment at about 11.6 hectares, more than 40 million

OfficeRoppongi Hills Mori Tower

people have visited Roppongi Hills each year from all over

Roppongi Hills Mori Tower is the main tower of Roppongi Hills and is 54 floors above

the world. As this community has matured, Roppongi Hills

ground and 238 meters high and has established itself as a landmark of Tokyo. Offices

has only multiplied its global magnetic attraction. Japan real

located from the 8th floor to the 48th floor boast floor plates of about 1,360 tsubo

estate development had been limited by an economic(about 4,500m²), among the largest floor areas of skyscrapers in Japan. It is a state-of-perspective until Mori Building revolutionized the concept by

the-art office building with an ultra high-speed network, outstanding earthquake

creating a community where humanity, culture, interaction

resistance performance and thorough security.

and vision toward the next era is born.

33

Residence

Roppongi Hills Residence

In Roppongi Hills where international cultural is fosteredand people come to interact, Mori Building designed
these residences with the comfort of the people as a toppriority, to provide the template for a “new life
overflowing with affluence and warmth”.

RetailShops and Restaurants

Retail facilities are comprised of more than 200 “onlyone” shops and restaurants divided into four areas withdifferent concepts. There are many shops on the lower
floors of the buildings and on the street so visitors canenjoy shopping, eating and drinking while walking
around the open spaces that are full of greenery.

Hotel

Grand Hyatt Tokyo

Grand Hyatt Tokyo offers a dynamic city space featuring
10 highly distinctive restaurants and bars, 387
guestrooms designed for the highest level of relaxation,
16 banquet facilities and much more. The wide range ofCinemaTOHO Cinemas Roppongi Hills

One of the top cinema complexes in Japan, TOHO offers ninemovie screens, a variety of daily show times and facilities

facilities inside the hotel and in Roppongi Hills enable
guests to enjoy leisurely time at the hotel to the fullest
extent.

with unprecedented comfort and functions. These theaters
ushered in a whole new culture of movie going in Roppongi.

Stable Supply of Power from Independent Power Station
Roppongi Hills uses its own energy plant (a specially designated power

MuseumMori Art Museum“The world’s nearest art museum to the sky”, the museum
collaborates with a network of highly respected internationalart museums to create a space to appreciate the world’s top
modern art. It is open until 10 pm during exhibitions towelcome visitors after work or dinner.

supply business facility) to supply electrical power to the area. Because thisplant uses city gas (medium pressure gas) as the fuel, it is not affected bypower restrictions on the use of electricity and is able to provide an extremely
stable supply of electricity. The use of a power supply with triple redundantsafety allows the building to construct a power supply system with highreliability.

34

2-29 MHR’s representative property (2) Toranomon Hills

Toranomon Hills Mori Tower
Toranomon
Hills

Toranomon Hills is located in the “Special Zone for Asian
Headquarters” where Tokyo Metropolitan Government seeks toattract foreign companies. This building is Tokyo’s new landmark
and consists of Japan’s first Andaz hotel “Andaz Tokyo”, highspecification offices, a high class residential area with outstanding
views where hotel services are available, international-standard
conference facilities and commercial facilities to supports various
urban functions, along with an open space of about 6,000m².

OfficeToranomon Hills Mori Tower

Offices occupy the 6th to the 35th floors of “Toranomon Hills Mori Tower”, a super highrise tower with 52 floors rising 247 meters above ground with a gross floor area of
30,000 tsubo. Standard rent floors’ average size are about 1,000 tsubo (about 3,300m²)
with a ceiling height of 2.8 meters and they provide flexible and comfortable workspaces
without pillars. Six transit stations and 11 lines are nearby and provide access to Haneda
Airport which makes this building an optimal global business base.

35

Residence

Toranomon Hills Residence

Pleasing views of central Tokyo landmarks such as Tokyo
Tower, Rainbow Bridge, Tokyo Sky Tree and the open
green space of the Imperial Palace can be viewed fromresidences located on the 37th to 46th floors. Hotelservices in cooperation with Andaz Tokyo are available.

RetailShops and Restaurants

With the concept of "Communication Hub", restaurants
are designed to provide international cuisine that satisfy
customers from Japan and overseas. Various people suchas office workers, conference attendees and hotel guests
gather in this space uniquely designed to facilitatecommunication.

Hotel

Andaz Tokyo

Hyatt’s boutique lifestyle hotel "Andaz Tokyo" isJapan's first Andaz. Andaz means "personal style" in
Hindi. The hotel values the individuality of the area andincorporates the charm of the land into design and its’service.

Evolving as an International Urban Center and a Global
Business Hub
Upon completion of Toranomon Hills Business Tower, Toranomon Hills
Residential Tower and the currently planned Toranomon Hills Station Tower(tentative name), the total area of the Toranomon Hills complex including
Toranomon Hills Mori Tower will reach about 7.5 hectares and about
800,000m2 of the total floor space. The area will evolve into a true
"international unban center and a global business hub" with integratedfunctions such as international standard offices, residences, hotels, retailfacilities and transportation infrastructure.

36

3. Operation highlights

37Factors that led to changes in dividends per unit
3-1 from the previous fiscal period
28th period

30th period (Jul. 2021) Forecast

29th period (Jan. 2021)(yen/unit)

2,950

Dividends per unit

2,898
yen/unit＋72,910
yen/unit

2,909
yen/unit(forecast)

＋10

2,900

△32

△63

2,850

＋11
＋12

＋79
△7

△5

2,800

2,750

Dilution
due to PO

NOIchange ofexisting
properties

OthersProperties
acquired(29th)

Financingcosts
decrease

Major factors behind change in NOI from existing properties:+ Decrease in maintenance and repairs+ Decrease in depreciation+ Office rent (pass-through)+ Utilities and other revenue (net)－ Increase in property management fee－ Increase in property taxes－ Residential rent (pass-through)NOIchange ofexisting
properties

Properties
acquired(29th)

Financingcosts
decrease

OthersMajor factors behind change in NOI from existing properties:
+7
+5
+5
+2
△13
△8
△5

+ Decrease in property management fee－ Office rent (pass-through)－ Increase in maintenance and repairs－ Increase in depreciation－ Residential rent (pass-through)－ Decrease in cancellation penalty(Note) Factors that led to change are arrived at by dividing the change from the previous fiscal period by 1,916,330 units and indicated as an approximate figure in yen.

+4
△13
△7
△4
△4
△3

38

3-2 Change in assets under management(billion yen)

450
Existing properties

New property

410

402

400

390

billion yen

7

360
350

339

293

300

250

201

200

159
150

142

・・・

100

50

0
1st
period
Jan.
2007

2nd
period
Jul.
2007

3rd
period
Jan.
2008

4th
period
Jul.
2008

5th
period
Jan.
2009

・・・

19th
period
Jan.
2016

20th
period
Jul.
2016

21st
period
Jan.
2017

22nd
period
Jul.
2017

23rd
period
Jan.
2018

24th
period
Jul.
2018

25th
period
Jan.
2019

26th
period
Jul.
2019

27th
period
Jan.
2020

28th
period
Jul.
2020

29th
period
Jan.
2021

After
acquisition39

3-3 Change in unrealized capital gain/loss(billion yen)

(%)

100

50
Unrealized capital gain/loss

Unrealized capital gain/loss ratio

90

83
81

bn yen

80

40

70

60

30

50
20.8% 20.9%

20.2%
40

20
28

30

20

8.2%

10

11
10

0

0

△10
△20

△14.9%△30△40

Unrealized capital gain/loss = Period end appraisal value – Period end book value
Unrealized capital gain/loss ratio = Unrealized capital gain/loss / Period end book value

△31

1st
period
Jan.
2007

2nd
period
Jul.
2007

3rd
period
Jan.
2008

4th
period
Jul.
2008

5th
period
Jan.
2009

6th
period
Jul.
2009

7th
period
Jan.
2010

8th
period
Jul.
2010

9th
period
Jan.
2011

10th
period
Jul.
2011

・・・

21st
period
Jan.
2017

22nd
period
Jul.
2017

23rd
period
Jan.
2018

24th
period
Jul.
2018

25th
period
Jan.
2019

26th
period
Jul.
2019

27th
period
Jan.
2020

28th
period
Jul.
2020

29th
After
period acquisition
Jan.
2021

△10

△20

40

3-4 Appraisal value
Reflects the impact ofadditional acquisition
As of end of 28th period
Jul. 31, 2020
Principal
use

Property
name

PropertyNo.

Acquisition
price

Book
value

(A)
Appraisal
value(Note 1)

OfficeAs of end of 29th period
Jan. 31, 2021

Yield (Direct
capitalization
method)(B)
Appraisal
value(Note 1)

Yield (Direct
capitalization
method)Discount
rate
(DCF)

Terminal
yield
(DCF)

(million yen)
Unrealized
capitalgain/loss(B)-book
value

Difference(B)－(A)

Difference(B)/(A)－1△ 1,800△ 1.2%

34,969

0.3%

2,420

△ 1,000△ 3.8%

771

Roppongi Hills
Mori Tower

O-0

115,380

111,330

148,100

2.9%

146,300

2.8%

2.5%

3.0%

ARK Mori Building

O-1

62,48061,47963,7003.2%

63,900

3.2%

2.9%

3.4%

Koraku Mori Building

O-4

27,20024,72826,5003.4%

25,500

3.4%

3.0%

3.7%

Akasaka Tameike Tower

O-6

43,93041,45334,5003.2%

34,800

3.2%

2.9%

3.4%

Atago Green Hills

O-7

42,09040,08546,9003.4%

47,100

3.4%

2.9%

3.6%

200

0.4%

ARK Hills South Tower

O-8

19,15018,66325,2003.0%

25,200

3.0%

2.8%

3.2%

0

0.0%

6,536

Toranomon Hills
Mori Tower

O-9

48,43047,99844,8002.6%

60,032

2.6%

2.3%

2.8%

15,232

34.0%

12,033

Holland Hills Mori Tower

O-10

16,330

16,23921,8003.2%

21,800

3.2%

2.8%

3.4%

0

0.0%

5,560

374,990361,979

411,500－

424,632－－－

13,132

3.2%

62,652Sub total

200

300

0.9%

△ 6,653
7,014

Roppongi First Plaza

R-3

2,100

2,228

2,530

3.9%

2,610

3.8%

3.6%

4.0%

80

3.2%

381

ResidenRoppongi View Tower
tial

R-4

4,000

4,074

3,260

4.0%

3,400

3.9%

3.7%

4.1%

140

4.3%

6,100

6,302

5,790

－

6,010

－

－

－

220

3.8%

△ 674

21,82022,07440,6003.8%

41,000

－

3.8%

－

400

1.0%

18,925

21,82022,07440,600－41,000

－

－

－

400

1.0%

18,925402,910390,355

457,890－471,642－－－

13,752

3.0%

81,286

Sub total
Laforet Harajuku (Land)
Retail (Note 2)andothers
Sub total
Total

S-1

△ 292

(Note 1) “Appraisal values” at the end of each fiscal period are based on the Ordinance Concerning Calculation of Investment Corporations, asset valuation methods and standards defined in the
Articles of Incorporation of the Company and rules defined by the Investment Trust Association. Figures in the property appraisal reports created by Japan Real Estate Institute areindicated for properties other than ARK Hills South Tower and figures in the property appraisal report created by Daiwa Real Estate Appraisal Co., Ltd. are indicated for ARK Hills South
Tower, respectively.
(Note 2) For Laforet Harajuku (Land), value in the “Yield (Direct capitalization method)” column for the 28th period shows the discount rate used in the DCF analysis.

41

3-5 Changes in the rent and occupancy rates(yen/tsubo)(%)

40,000100

35,00095

30,00090

25,00085

20,00080

15,00075

10,000

70

5,000

65

0

22nd
periodJul. 2017(actual)

23rd
periodJan. 2018(actual)24th
periodJul. 2018(actual)25th
periodJan. 2019(actual)

26th
periodJul. 2019(actual)27th
periodJan. 2020(actual)28th
periodJul. 2020(actual)29th
periodJan. 2021(actual)

30th
periodJul. 2021(forecast)

31st
periodJan. 2022(forecast)

Office rent (yen/tsubo)

31,06930,642

30,62930,84230,92431,02031,13931,30931,394

31,167

Residential rent (yen/tsubo)

15,27814,85815,09515,302

15,49815,69815,766

15,741

15,60915,525

Office occupancy

95.7%

98.4%

99.5%

99.7%

99.9%

100%

99.7%

99.6%

99.0%

98.4%

Residential occupancy

96.7%

96.3%

97.9%

97.7%

96.8%

96.2%

96.1%

94.9%

94.8%

95.8%

Retail occupancy

99.7%

100%

100%

100%

99.2%

98.8%

98.5%

98.9%

98.9%

98.9%

60

(Note) The above rents and occupancy rates indicate the average rent and the average occupancy rate during relevant fiscal periods.

423-6 Tenant status by month and major tenants
Office: Rent and occupancy rate

Residential: Rent and occupancy rate(yen/tsubo)

(%)
100

40,000(yen/tsubo)
25,000(%)
100

20,00030,00090

90

15,00020,00080
10,000

80

5,000

0

70

Aug.
2020

Sep.

Oct.

Nov.

Dec.

Jan.
2021

Rent (yen/tsubo)

31,221

31,332

31,32931,37731,252

31,342

Occupancy rate

99.8%

99.8%

99.8%

98.8%

99.6%

99.6%

Top 5 tenants
End tenantsMori Building Co., Ltd.

0

Aug.
2020

Sep.

Oct.

Nov.

Dec.

Jan.
2021

Rent (yen/tsubo)

15,766

15,767

15,65015,69015,795

15,778

Occupancy rate

95.5%

95.2%

94.5%

95.0%

94.9%

94.5%

70

Tenant Contribution by Industry
Type-Office

Property nameLeased space(N ote 1 )Ratio

Roppongi Hills Mori Tow er
ARK Mori Building
Koraku Mori Building
Atago Green Hills
ARK Hills South Tow er
Toranomon Hills Mori Tow er

113,996.81 m2

64.5%
Others22.1%

Mylan Seiyaku Ltd.

Holland Hills Mori Tow er

3,458.53 m2

2.0%

Mitsubishi UFJ Research andConsulting Co.,Ltd.

Holland Hills Mori Tow er

3,436.90 m2

1.9%

Mori Building Ryutsu
System Co., Ltd.

Laforet Harajuku (Land)22,565.06 m

1.5%

ITOCHU Techno-Solutions
Corporation

Koraku Mori Building

2,116.88 m2

1.2%

125,574.18 m2

71.1%

Total of top 5 tenants

10,000(Note 1) Leased space is the lease area stated in the lease contract with the end tenant.
It is multiplied by the relevant percentage of ownership for each properties.
(Note 2) This indicates the figures as of January 31, 2021.

Law firms,
etc .
11.3%

Information
andcommunication
37.7%

Financ e/
insuranc e
Manufac turing
11.4%
17.5%

(Note 1) As for fixed rent master lease, ratios are based on monthly rents of tenants who are
actually using the floor areas as of January 31, 2021.
It is multiplied by the relevant percentage of ownership for each property.
(Note 2) Business types are classified by the Asset Manager.

43

3-7 Financial overview (as of January 31, 2021)
Long-term debt ratio/Fixed rate ratio＜Long-term debt ratio＞＜Fixed rate ratio＞

Long-termLong-term
100%
100%

Fixed
91.7%

Major financial indicator
End of 21st period
Jan. 31, 2017
Debt balance

End of 28th period
Jul. 31, 2020

End of 29th period
Jan. 31, 2021

179,222 mn yen

184,422 mn yen

Long-term loan

162,222 mn yen

167,422 mn yen

Investment corporation bonds

17,000 mn yen

17,000 mn yen

45.7%

45.8%

LTV (Appraisal value basis) (Note 2)

38.0%

38.1%

DSCR (Note 3)

16.0x

16.3x

4.7 years

4.6 years

0.48%

0.46%

LTV (Book value basis)(Note 1)

Avg. remaining duration
Weighted avg. interest rate

Outstanding balances(Note 1) LTV (Book value basis) is calculated as [Interest bearing debt/Total assets].
(Note 2) LTV (Appraisal value basis) is calculated as [Interest-bearing debt/Appraisal value
based total assets (Total assets ＋Total appraisal value－Total book value)].
(Note 3) DSCR is calculated as [Net income before interest expenses +Depreciation/
Interest expenses].

Lenders

BalanceRatio

MUFG Bank, Ltd.

43,696 mn yen

26.1%

Mizuho Bank, Ltd.

29,898 mn yen

17.9%

Sumitomo Mitsui Banking Corporation

24,425 mn yen

14.6%

Sumitomo Mitsui Trust Bank, Limited

20,923 mn yen

12.5%

The Bank of Fukuoka

8,300 mn yen

5.0%

Resona Bank, Limited.

7,430 mn yen

4.4%

The Norinc hukin Bank

7,000 mn yen

4.2%

Development Bank of Japan Inc.

5,950 mn yen

3.6%

Shinsei Bank, Limited

5,200 mn yen

3.1%

Mizuho Trust & Banking Co., Ltd.

4,800 mn yen

2.9%

The Nishi-Nippon City Bank, Ltd.

3,300 mn yen

2.0%

The Chugoku Bank, Limited.

1,500 mn yen

0.9%

Aozora Bank, Ltd.

1,000 mn yen

0.6%

The Hiroshima Bank, Ltd.

1,000 mn yen

0.6%

Oita Bank Co. Ltd.

1,000 mn yen

0.6%

Shinkin Central Bank

1,000 mn yen

0.6%

Nippon Life Insuranc e Company

1,000 mn yen

0.6%

Total borrowings

167,422 mn yen

100%

Investment c orporation bonds

17,000 mn yen

Total interest-bearing debt

184,422 mn yen

443-8 Debt status (as of January 31, 2021)
Debt
LenderSumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.
Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited
Development Bank of Japan Inc .
Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.
Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.
Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited
Mizuho Bank, Ltd., MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.
Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.
MUFG Bank, Ltd., Mizuho Bank, Ltd.,Sumitomo Mitsui
Trust Bank, Limited, Shinsei Bank, Limited
Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.
The Norinchukin Bank, Resona Bank, Limited.
Shinsei Bank, Limited, Mizuho Trust & Banking Co., Ltd.
The Hiroshima Bank, Ltd.
Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.
Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited
The Bank of Fukuoka, Development Bank of Japan, Inc.
Aozora Bank, Ltd.
MUFG Bank, Ltd., Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
Shinkin Central Bank
The Norinchukin Bank
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
The Bank of Fukuoka
Resona Bank, Limited.
Sumitomo Mitsui Trust Bank, Limited
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
Oita Bank Co. Ltd.
The Norinchukin Bank
The Nishi-Nippon City Bank, Ltd.
The Bank of Fukuoka
Resona Bank, Limited.
Mizuho Trust & Banking Co., Ltd.
Shinsei Bank, Limited
The Nishi-Nippon City Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Development Bank of Japan Inc .
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Bank, Ltd.
The Nishi-Nippon City Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
Mizuho Bank, Ltd.
The Bank of Fukuoka
The Norinchukin Bank
Shinsei Bank, Limited
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Development Bank of Japan Inc .
MUFG Bank, Ltd.
Resona Bank, Limited.
Mizuho Bank, Ltd.

Balance(mn yen)Rate ofinterest

Borrowingdate

Maturity
date

6,500

0.75%

2014/11/28

2021/11/30

1,700

0.80%

2015/3/27

2023/3/27

6,500

0.57%

2015/5/29

2021/5/31

6,500

0.70%

2015/5/29

2022/5/31

6,000

0.49%

2015/8/31

2021/8/31

2,500

0.65%

2015/9/16

2023/8/31

3,200

0.50%

2015/11/30

2022/11/30

6,300

0.62%

2015/11/30

2023/11/30

7,500

0.33%

2016/3/31

2023/3/31

7,100

0.41%

2016/3/31

2024/3/31

7,200

0.50%

2016/3/31

2025/3/31

1,000
500
1,100
1,000
500
500
2,000
1,100
500
1,000
600
1,000
500
500
1,500
500
500
2,650
2,600
750
4,700
2,700
3,000
800
2,400
3,000
1,300
1,300
1,300
1,300
3,600
1,400
500
5,000
1,300
1,400

0.18%
0.37%
0.47%
0.52%
0.52%
0.61%
0.48%
0.58%
0.58%
0.23%
0.49%
0.49%
0.47%
0.47%
0.47%
0.54%
0.54%
0.55%
0.58%
0.64%
0.41%
0.60%
0.19%
0.26%
0.33%
0.43%
0.38%
0.43%
0.52%
0.47%
0.56%
0.67%
0.67%
0.43%
0.48%
0.43%

2016/3/31
2017/8/1
2017/8/1
2017/8/1
2017/8/1
2017/8/1
2017/8/1
2017/8/1
2017/8/1
2017/11/30
2017/11/30
2017/11/30
2018/2/28
2018/2/28
2018/2/28
2018/2/28
2018/2/28
2018/2/28
2018/2/28
2018/2/28
2018/2/28
2018/2/28
2018/5/23
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31
2018/8/31

2022/9/30
2024/7/31
2025/7/31
2026/7/31
2026/7/31
2027/7/31
2028/7/31
2029/7/31
2029/7/31
2022/11/30
2024/11/30
2024/11/30
2025/8/31
2025/8/31
2025/8/31
2025/8/31
2025/8/31
2026/2/28
2027/2/28
2027/2/28
2027/8/31
2030/2/28
2022/5/23
2022/8/31
2023/8/31
2024/8/31
2024/8/31
2024/8/31
2025/8/31
2025/8/31
2026/8/31
2027/8/31
2027/8/31
2028/2/29
2028/8/31
2029/8/31

LenderThe Bank of Fukuoka
The Norinchukin Bank
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Bank, Ltd.
The Chugoku Bank, Limited.
Resona Bank, Limited.
Sumitomo Mitsui Trust Bank, Limited
The Norinchukin BankMUFG Bank, Ltd.
Mizuho Bank, Ltd.
Shinsei Bank, Limited
Sumitomo Mitsui Banking Corporation
The Bank of Fukuoka
Development Bank of Japan Inc.
The Chugoku Bank, Limited.
Shinsei Bank, Limited
Nippon Life Insuranc e Company
Mizuho Trust & Banking Co., Ltd.
The Bank of Fukuoka
The Nishi-Nippon City Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
MUFG Bank, Ltd.
Resona Bank, Limited.
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Resona Bank, Limited.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Total

Balance
Rate of(mn yen) interest
2,000 0.17%
3,000 0.27%
1,144 0.40%
3,904 0.30%
1,952 0.43%
1,000 0.20%
1,000 0.22%
2,500 0.33%
1,000 0.14%
600 0.26%
2,200 0.19%
1,100 0.33%
900 0.36%
1,600 0.47%
2,000 0.28%
2,000 0.43%
500 0.32%
500 0.38%
1,000 0.48%
1,000 0.45%
1,000 0.31%
1,000 0.57%
834 0.27%
2,816 0.26%
830 0.30%
1,134 0.48%
1,408 0.40%
1,000 0.24%
1,400 0.21%
1,400 0.38%
1,400 0.36%
960 0.21%
2,400 0.22%
1,200 0.24%
1,440 0.39%

Borrowingdate
2019/5/31
2019/5/31
2019/5/31
2019/5/31
2019/5/31
2019/8/30
2019/8/30
2019/8/30
2019/11/29
2019/11/29
2019/11/29
2019/11/29
2019/11/29
2019/11/29
2019/11/29
2019/11/29
2020/5/20
2020/5/20
2020/5/20
2020/5/20
2020/5/20
2020/5/20
2020/5/29
2020/5/29
2020/5/29
2020/5/29
2020/5/29
2020/8/31
2020/8/31
2020/8/31
2020/8/31
2020/11/30
2020/11/30
2020/11/30
2020/11/30

Maturitydate
2026/5/31
2026/5/31
2027/11/30
2028/11/30
2029/5/31
2025/8/31
2026/8/31
2029/8/31
2024/11/30
2026/5/31
2026/11/30
2027/5/31
2027/11/30
2028/5/31
2028/11/30
2028/11/30
2027/5/20
2028/5/20
2028/5/20
2029/5/20
2030/5/20
2030/5/20
2025/5/31
2027/5/31
2028/5/31
2028/11/30
2029/5/31
2026/8/31
2027/8/31
2028/8/31
2029/8/31
2025/11/30
2027/11/30
2027/11/30
2028/11/30

167,422(Note) The interest rates above are the interest rates actually fixed following the conclusion of an interest
swap agreement.

Investment corporation bonds
Bond
11th Series Unsec ured Corporation Bond (7 years)
12th Series Unsec ured Corporation Bond (10 years)
14th Series Unsec ured Corporation Bond (10 years)
16th Series Unsec ured Corporation Bond (10 years)
17th Series Unsec ured Corporation Bond (10 years)
18th Series Unsec ured Corporation Bond (10 years)
19th Series Unsec ured Corporation Bond (10 years)
20th Series Unsec ured Corporation Bond (5 years)(Green Bond)
Total

AmountRate of(mn yen) Interest
2,000 0.69%
2,000 0.87%
2,000 0.82%
1,500 0.89%
2,000 0.34%
2,000 0.49%
2,000 0.50%
3,500
17,000

0.25%

Payment
date
2014/2/24
2014/11/27
2015/5/26
2015/11/26
2016/8/30
2017/1/31
2017/6/30

Maturitydate
2021/2/24
2024/11/27
2025/5/26
2025/11/26
2026/8/28
2027/1/29
2027/6/30

2020/11/25

2025/11/25

45

3-9 Unitholders breakdown (as of January 31, 2021)
Unitholders breakdown

End of 29th period＜Number of unitholders＞
Other domestic
Financialcorporations
institutions
1.6%
Foreign(Incl. securities
corporations
companies)
and individuals
1.4%
2.1%

＜Number of investment units＞

Foreigncorporations
and individuals
15.9%

Other domestic
Financialcorporations
institutions
1.7%
Foreign(Incl. securities
corporations
companies)
and individuals
1.4%
1.9%

Financial
institutions(Incl. securities
companies)
61.5%

Foreigncorporations
and individuals
14.6%(Investment
trust 35.6%)

Individuals
6.0%

Other
domestic
corporations
16.8%

Individuals
95.0%

Financial
institutions(Incl. securities
companies)
62.6%

Name

Number of units
held

1

Custody Bank of Japan, Ltd.
(Trust account)

424,199

22.1%

2

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

301,227

15.7%

3

Mori Building Co., Ltd.

287,472

15.0%

4

The Nomura Trust & Banking Co., Ltd.
(Investment trust account)

74,557

3.9%

5

Custody Bank of Japan, Ltd.
(Securities investment trust account)

44,095

2.3%

6

Custody Bank of Japan, Ltd.
(Money trust taxable account)

23,874

1.2%

7

STATE STREET BANK W EST CLIENT - TREATY
50523423,203

1.2%

8JAPAN SECURITIES FINANCE CO., LTD.

19,146

1.0%

9

LEGAL + GENERAL ASSURANCE PENSIONSMANAGEMENT LIMITED

17,6990.9%

10The Gunma Bank, Ltd.

16,9860.9%

1,232,458

64.3%

Rank

Individuals
6.0%

Other
domestic
corporations
16.6%

Individuals
94.9%

End of 28th period

Top 10 unitholders

Total of top 10 unitholders

Ratio(Investment
trust 37.7%)46

4. Business environment recognition & MHR’s policy/strategy

47

4-1 Business environment recognition
Real estate market / Lending attitude

Interest rate trends / Macro environment

Vacancy rates for office buildings in central Tokyo turned upwards
while new rents trended down.

Long-term interest rates remain low due to the monetary easing
policy, and although the money supply grew significantly amid
carrying out countermeasures against COVID-19, the core CPI
rate of increase remains at a low level.
10-year bond rates: 0.15% (February 26, 2021)(Forecast of Office Market Trends Research Committee for Tokyo’s five
central wards)

Vacancy rate (forecast): 4.5% in 2021 → 4.5% in 2022
Rent index (forecast): 125 in 2021 → 122 in 2022
Cap rates have remained at historically low levels.
(Japan Real Estate Institute’s “The Japanese Real Estate Investor Survey”)

Class A buildings in Marunouchi
Cap rate: 3.0% in Apr. 2020 → 3.0% in Oct. 2020
Lending attitude toward the real estate industry has temporarily
soured but remains at a highly positive level.

Core CPI: △0.6% (January 2021)

In the December 2020 preliminary business conditions composite
index, the leading index was at 95.3 (△0.8 PT decrease from previous
month) and the coincident index was at 88.3 (△0.7 PT decrease fromprevious month).
While both leading and coincidental indices deteriorated
significantly after the spread of COVID-19, these are currently on
a recovery trend.
Investors across the world have become more interested in ESG
and the amount of funds directed to companies with high ESG
evaluation is on the rise.

The office market is expected to remain weak for the time being
due to the impact of the proliferation of telecommuting and the
downturn in business sentiment.
On the other hand, premium properties in central Tokyo are
expected to demonstrate continued competitive advantages evenafter the proliferation of telecommuting, as these properties cancapture office demand by functioning as headquarters.

Global business sentiment deteriorated significantly due to
COVID-19, but is now on a recovery trend due to various
policies.
The interest rate level is expected to remain low for a while, but
it is necessary to assume an interest rate rise in the medium tolong term.
Inflow of funds to companies with high ESG ratings is expected
to increase further in the future.

Continues to “MHR’s policy/strategy” on the next page48

4-2 MHR’s policy/strategy

MHR’s Medium- to Long-Term Vision

The best portfolio
quality

The highest ESG
assessment

Dividend-driven
Management

By focusing primarily on
premium properties in central
Tokyo developed by thesponsor, MHR seeks tomaintain highly competitive
portfolio quality while further
expanding the scale of theportfolio.

By making positive socialand environmental
contributions, MHR will
position itself to benefit fromthe long-term trend of funds
flowing into companies withhigh ESG ratings and build
competitiveness as aninvestment corporation.

By aiming for a continuous
improvement of dividends
and NAV per unit, anddeveloping the culture,policies and systems
necessary to realize thevision, MHR will continue tofoster the trust of unitholders.

Optimal REIT investment49

4-3 MHR’s policy/strategy
External
growth policy

Target premium properties in Central Tokyo and aim for annual external growth of approximately 30 billion
yen by best utilizing sponsors’ pipeline. (Set target yield at the mid 3% range or higher for NOI-based yield
and around 3.0% or higher for after-depreciation-based yield.)Going forward, premium properties in central Tokyo are expected to continuously demonstrate competitive
advantages even after the spread of telecommuting, as these properties can capture office demand byfunctioning as headquarters.
Focus on portfolio size expansion in order to further enhance stability and liquidity as an investment
corporation while also considering disposition depending on conditions.

Internal
growth policy

Financialmanagement
policyMaintain stable revenue through fixed-rent master leases, and aim to continually maintain and improve rent
levels at pass-through-type properties.
Properly implement office property repairs as necessary and conduct value-enhancement renovation forresidential properties if such is judged to be cost-effective (there are no office properties that require largescale renewal in terms of building age or competitiveness).

Set the current LTV level (book value basis: in the mid 40% range; appraisal value basis: in the upper 30%
range) as the target in order to secure property acquisition capacity while maintaining a durable position fortimes of economic slowdown.
Target average remaining duration of debt of 4 years or longer, and gradually increase the fixed rate ratio at
the appropriate timing.

ESG policy

Contribute to the improvement of various social and environmental issues by positioning ESG initiatives as anintegral part of management policy, and steadily implement them in actual management operations leading to
improved ESG ratings and stronger competitiveness.
Implement proactive information disclosure through publication of ESG reports organizing various policies andefforts.

50

4-4 Market-related information (1)Change in rent and vacancy rate of office buildings (Tokyo’s five central wards)
(%)

200

10.0
8.9% 9.0%
8.1%

180

160

8.7%

9.0

⇒ Estimate

8.0

7.3%

7.0

6.1%

149

145

140

5.5%

4.2%

6.0
4.5% 4.5% 4.5% 4.6%

4.0%

124

127

3.6%

4.7%

120
3.1%

120
2.9%
109

100

2.6%

114

109
100

101

92

80

91

95

99

128

4.3%

4.0
125
3.7%

122

119

118

119

113

103

5.0

3.0
2.0

1.9%

1.6%

1.0
0.0

Rent index
Vacancy rate
(Source)
Prepared by the Asset Manager based on the“Autumn 2020 Office Rent Forecast in Tokyo,
Osaka and Nagoya (2020-2025)” by the OfficeMarket Trends Research Committee(Japan Real Estate Institute and Miki Shoji Co.,
Ltd.).
(Note)The rent index targets large and medium
buildings (standard floor area of 100 tsubo ormore) in Tokyo’s five central wards. The rent
index is rebased to 100 as of 2010.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

New supply of office buildings (Tokyo’s five central wards)(thousand tsubo)

700⇒ Estimate

600
500

536
478

473

400

343
294

300
221

265

245

220

480

460

254

308
250

239

190

200

140

140

100
0
2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

(Source)
Prepared by the Asset Manager based on the“Autumn 2020 Office Rent Forecast in Tokyo,
Osaka and Nagoya (2020-2025)” by
the Office Market Trends Research Committee(Japan Real Estate Institute and Miki Shoji
Co., Ltd.).

2024

51

4-5 Market-related information (2)Change in rents and vacancy rates of luxury housing (Minato ward)(yen tsubo)(%)

24,00014.0

22,000

12.0

Minato ward’s averagevacancy rate over past
10 years: 7.1%

20,00010.0

18,000

8.0
5.1% 5.0%

16,00012,00010,000

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

18,8804.0
19,24014,000

6.0

19

20

2.0
0.0

Avg. rents of Minato ward
Avg. vacancy rates of Minato ward
(Source)
Prepared by the Asset Manager based on Ken Real
Estate Investment Advisors’ “Ken Residential
Market Report” included in real estate appraisal
reports by Japan Real Estate Institute regarding
properties held by MHR.
(Note)
Data is based on rental housing with monthly rentof 300,000 yen or more or exclusive floor area of
30 tsubo or more.
“Avg. rents of Minato ward” is the contracted rent
excluding the management fee.
In the case of years, “Avg. vacancy rates of
Minato ward” is the average of the relevant year’s
January to March, April to June, July to September
and October to December figures, and “Avg. rentsof Minato ward” is the annual average.

Change in number of foreign residents in Minato ward
(people)24,000No. of foreigners registered under the
Ministry of Justice

Method for foreigner
registration was revised in2012 impacting head count

22,000The population of the Basic Resident Register(Source)
Prepared by the Asset Manager based on “Numberof registered foreign residents” prepared by
Statistics Division Bureau of General Affairs of Tokyo.

20,000(Note 1)
“Number of foreign residents” was the number offoreigners registered under the Ministry of Justiceuntil 2012. However, as the foreigner registration
system was abolished based on revision of the law,
the figure is the population of the Basic Resident
Register. Therefore, the data may not be consistent.

18,00018,71816,00014,000
03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

(Note 2)
Number of foreign residents as of January 1 of eachyear is used for the year-based figures.

21
01

52

4-6 Market-related information (3)Change in return on real estate investment
(%)

6.5
6.0%

6.0
5.5

6.0%

6.0%

5.6%

5.3%

5.5%

Cap rate of class
A office buildings(Marunouchi and Otemachi)

5.9%
5.3%

5.0%

5.0%

4.8%

5.0

4.5%

4.5%
4.5
4.0%
4.0
3.5

4.5%

4.5%

4.5%

4.0%
3.8%

4.2%
4.2%

4.0%

4.2%

4.2%

4.0%

3.8%

4.2%
4.0%

3.8%
3.5%

4.9%

3.7%

3.5%

3.5%

3.0

4.7%

4.5%

4.5% 4.5%

Expected cap rate of high-end
multifamily residences (high-rise)

3.7%

3.5%

3.3%

3.2%

3.5%

3.5% 3.5%

3.0%

3.0% 3.0%

Oct.
2018

Oct.
2019

2.5
Oct.
2005

Oct.
2006

Oct.
2007

Oct.
2008

Oct.
2009

Oct.
2010

Oct.
2011

Oct.
2012

Oct.
2013

Oct.
2014

Oct.
2015

Change in real estate transaction amount(billion yen)
6,000

Oct.
2016

Expected cap rate of class
A office buildings(Marunouchi and Otemachi)

Oct.
2017

(Source)
Prepared by the Asset Manager based on“The Japanese Real Estate Investor Survey” by theJapan Real Estate Institute.

Oct.
2020

Lending attitude DI (Real estate industry)
+ 25
+ 20
+ 15

5,000

+ 10
4,000

+5

3,000

△5

+0
△ 10
△ 15

2,000

△ 20
△ 25

1,000
0
FY
04

FY
05

FY
06

FY
07

FY
08

FY
09

FY
10

FY
11

FY
12

FY
13

FY
14

FY
15

FY
16

FY
17

FY
18

FY
19

1H
20

(Source) Prepared by the Asset Manager based on the “Real Estate Transaction Survey”(Estimated amount of domestic real estate transactions publicized by listedcompanies) by the Urban Research Institute.

△ 30
△ 35

Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar.
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20(Source) Prepared by the Asset Manager based on “National Short-Term Economic
Survey on Enterprises in Japan” by the Bank of Japan. Difference between
the proportion of firms feeling the lending attitude to be accommodative
less firms feeling the lending attitude to be restrictive.

53

4-7 Market-related information (4)Change in 10-year bond interest rates
(%)

1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
△ 0.1

(Source)
Prepared by the Asset Manager based on
Refinitiv.

△ 0.2
△ 0.3
△ 0.4

Jan. Jul.
2013

Jan.
2014

Jan.
2015

Jul.

Jul.

Jan.
2016

Jul.

Jan.
2017

Jul.

Jan.
2018

Jul.

Jan.
2019

Jul.

Jan.
2020

Jul.

Jan.
2021

Change in core CPI (Year-on-year comparison)
(%)

+ 2.0

Based on figures excluding thedirect effects of theconsumption tax rate increase

+ 1.5
+ 1.0

(Source)
Prepared by the Asset Manager based on“Consumer Price Index” by Statistic Bureau,
Ministry of Internal Affairs and Communicationsand “Economic Statistics Monthly” by the Bankof Japan.

+ 0.5
+ 0.0
△ 0.5

(Note)
Figures from April 2014 to April 2015 arederived on “the basis of excluding the direct
impact of the consumption tax rate increase”(Bank of Japan’s “Economic Statistics Monthly”).

△ 1.0
△ 1.5

Jan.
2013

Jul.

Jan.
2014

Jul.

Jan.
2015

Jul.

Jan.
2016

Jul.

Jan.
2017

Jul.

Jan.
2018

Jul.

Jan.
2019

Jul.

Jan.
2020

Jul.

Jan.
2021

54

4-8 Market-related information (5)Business conditions composite index
110
105
100
95

Leading index

90

Coincident index(Source)
Prepared by the Asset Manager based on the“Business Conditions Composite Index” by
the Cabinet Office.

85
80
75

(Note)The index is rebased to 100 as of 2015.

70
Jan.
2013

Jul.

Jan.
2014

Jul.

Jan.
2015

Jul.

Jan.
2016

Jul.

Jan.
2017

Jul.

Jan.
2018

Jul.

Jan.
2019

Jul.

Jan.
2020

Jul

Jan.
2021

Money stock (M3: year-on-year comparison)
(%)

+7.8
+7.2
+6.6
+6.0
+5.4
+4.8
+4.2
+3.6
+3.0
(Source)
Prepared by the Asset Manager based on“Money Stock Statistics” by the Bank of Japan.

+2.4
+1.8
Jan.
2013

Jul.

Jan.
2014

Jul.

Jan.
2015

Jul.

Jan.
2016

Jul.

Jan.
2017

Jul.

Jan.
2018

Jul.

Jan.
2019

Jul.

Jan.
2020

Jul

Jan.
2021

55

4-9 Market-related information (6)Total cash earnings (Year-on-year comparison)
(%)

+ 4.0
+ 3.0
+ 2.0
+ 1.0
+ 0.0
Nominal

△ 1.0

Real

△ 2.0

(Source)
Prepared by the Asset Manager based on“Monthly Labour Survey (establishments with 5
or more employees)” by the Ministry of Health,Labour and Welfare.

△ 3.0
△ 4.0
△ 5.0

Jan.
2013

Jul.

Jan.
2014

Jul.

Jan.
2015

Jul.

Jan.
2016

Jul.

Jan.
2017

Jul.

Jan.
2018

Jul.

Jan.
2019

Jul.

Jan.
2020

Jul

Jan.
2021

Consumer confidence survey
52
47
42
37
Employment

32
Consumer confidence index

27

Income growth22(Source)
Prepared by the Asset Manager based on“Consumer Confidence Survey” by the Cabinet
Office.

17
12
Jan.
2013

Jul.

Jan.
2014

Jul.

Jan.
2015

Jul.

Jan.
2016

Jul.

Jan.
2017

Jul.

Jan.
2018

Jul.

Jan.
2019

Jul.

Jan.
2020

Jul.

Jan.
2021

56

5. Appendix

57

5-1 Financial highlights
Indices

28th period
Period ended Jul. 31, 2020

29th period
Period ended Jan. 31, 2021

Net inc ome

5,433 mn yen

5,575 mn yen

Depreciation and amortization

1,041 mn yen

1,056 mn yen

CAPEX

732 mn yen

240 mn yen

Total assets

392,258 mn yen

402,887 mn yen

Total net assets

195,503 mn yen

200,763 mn yen

Calculation formula

Total net assets/unit (BPS)

104,270 yen

104,764 yen Total net assets/Total units outstanding

Unit price (as of end of each period)

137,100 yen

145,800 yen

1,874,960 units

1,916,330 units

5,433 mn yen

5,574 mn yen

Dividends/unit

2,898 yen

2,909 yen

Dividend yield

4.2%

Total units outstanding
Total dividends

FFO

6,474 mn yen

4.0% Dividends per unit (annualized)/Unit price as of end of period
6,631 mn yen Net income + Depreciation and amortization - Gain or loss on sales of real estate properties

FFO/unit

3,453 yen

3,460 yen FFO/Total units outstanding

Annualized

6,925 yen

6,864 yen Based on a period of 365 days

FFO multiple

19.8x

21.2x Unit price as of end of period/FFO per unit (annualized)

PER

23.6x

25.2x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PBR

1.3x

1.4x Unit price as of end of period/Net assets per unit

ROA

1.4%

1.4% Ordinary income/Average of total assets during the period

2.8%

2.8% Based on a period of 365 days

2.8%

2.8% Net income/Average of total net assets during the period

5.6%

5.6% Based on a period of 365 days

Annualized
ROE
Annualized
NAV
NAV/unit
NAV multiple

274,476 mn yen
146,390 yen
0.9x

282,049 mn yen Total assets + Total appraisal value - Total book value - Total liabilities
147,182 yen
1.0x Unit price as of end of period/NAV per unit

Interest-bearing debt

179,222 mn yen

LTV (book value basis)

45.7%

45.8% Interest-bearing debt/Total assets

LTV (appraisal value basis)

38.0%

38.1% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)

Operating days

182 days

184,422 mn yen

184 days58

5-2 Balance sheet(thousand yen)(thousand yen)

28th period

29th period

28th period

29th period

Period ended Jul. 31, 2020

Period ended Jan. 31, 2021

Period ended Jul. 31, 2020

Period ended Jan. 31, 2021

19,940,732

22,894,889

5,500,000

2,000,000

12,500,000

19,000,000

1,940,732

1,894,889

176,813,975

179,229,087

11,500,000

15,000,000

149,722,000

148,422,000

14,856,183

14,957,614

735,791

849,472

196,754,707

202,123,976

Liabilities

AssetsCurrent assets

12,270,828

11,504,301

C ash and deposits

6,575,310

5,479,946

C ash and deposits in trust

4,984,129

5,340,188711,388684,166

379,918,648

391,282,393

348,266,097

359,704,855

30,650,962

30,650,962

Other

Nonc urrent assets
Property, plant and equipment
Intangible assets
Investments and other assets

Deferred assets
Total assets

Current liabilities
C urrent portion of investment
corporation bonds
C urrent portion of long-termloans payable
Other

Noncurrent liabilities
Investment corporation bonds
Long-term loans payable

1,001,587

926,574

Lease and guarantee depositedin trust

68,529101,047

Other

392,258,006

402,887,742

Total liabilities
Net assets
Unitholders' equity
Unitholders' capital,net
Total surplus

196,212,731(Note)

190,051,613

201,612,224(Note)

195,324,850

6,161,117

6,287,373

291,944

291,9445,869,173

5,995,429△ 709,432

Total net assets△ 709,432△ 848,458

195,503,298

200,763,766

Total liabilities and net assets

392,258,006

402,887,742

Voluntary retained earnings
Unappropriated retained
earnings

Valuation and translation
adjustments

Deferred gains or losses onhedges△ 848,458(Note) Figure after deducting allowance for temporary difference adjustments.

595-3 Income statement(thousand yen)

28th period

29th period

Period ended Jul. 31, 2020

Period ended Jan. 31, 2021

Operating revenue

9,602,257

9,820,632

Rent revenues

9,389,038

9,614,085

213,218

206,546

3,573,365

3,646,701

3,251,861

3,315,661

Asset management fee

224,815

229,246

Directors' compensation

4,200

4,200

Asset custody fee

9,805

9,806

Administrative service fees

18,52818,996

Other operating expenses

64,15568,791

6,028,891

6,173,930

1,428

995

48

54

1,379

941

595,654598,798

Interest expenses

370,700

383,400

Interest expenses on investment corporation bonds

61,17549,526

Am ortiza tion of inve stm e nt corporation bonds issuance cost

9,022

7,757

145,882

143,930

Amortization of investment unit issuance c ost

6,952

12,310

Other

1,922

1,873

Ordinary income

5,434,665

5,576,128

Inc ome before inc ome taxes

5,434,665

5,576,128

Net inc ome

5,433,733

5,575,042

Unappropriated retained earnings

5,869,173

5,995,429

Other operating revenues
Operating expenses
Expenses related to properties

Operating income
Non-operating income
Interest income
Gain on forfeiture of unclaimed dividends
Non-operating expenses

Borrowing expenses

OfficeResidential
RetailLand
Other rent revenue

Parking revenue
Utilities and other revenue
Cancellation penalty

Property management fees
Property taxes
Utilities
Maintenance and repairs
Insurance premium
Custodian fees
Depreciation
Rent expenses
Other lease business expenses

8,088,239
774,130
78,102
667,800
5,812

51,171
149,697
5,677

1,172,247
736,413116,730
65,31917,877
5,968
1,056,619
129,800
14,68460

5-4 Statement of cash flows / Retained earnings
Statement of cash flows(thousand yen)

Net cash provided by (used in) operating activities(thousand yen)

28th period

29th period

28th period

29th period

Period ended Jul. 31, 2020

Period ended Jan. 31, 2021

Period ended Jul. 31, 2020

Period ended Jan. 31, 2021

Net cash provided by (used in) financing activities

6,452,555

6,672,228

Inc ome before income taxes

5,434,665

5,576,128

Proc eeds from long-term loans payable

Deprec iation and amortization

1,041,061

1,056,619

Repayments of long-term loans payable

Amortization of investment corporation bonds
issuanc e cost

9,022

7,757

Proceeds from issuance of investment corporationbonds

Amortization of investment unit issuance c ost

6,952

12,310

Redemption of investment corporation bonds

Interest income

△ 48

△ 54

Gain on forfeiture of unclaimed dividends
Interest expenses△ 1,379

431,875

432,926

Decrease (increase) in ac counts rec eivable

41,003

3,694

Inc rease (dec rease) in acc ounts payable△ 65,325△ 108,707
44,479Inc rease (dec rease) in deposits received△ 10,545

Decrease (increase) in prepaid expenses△ 7,595

16,48518,87837,11049,676△ 71

6,886,443△ 24

7,097,409

48

54△ 432,597△ 424,325△ 595,774△ 12,383,015△ 117,924△ 364,315

Inc rease (dec rease) in acc rued expenses
Inc rease (dec rease) in advanc es rec eived

Decrease (increase) in long-term prepaid
expenses
Other, net
SubtotalInterest income received
Interest expenses paid
Inc ome taxes paid

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in
trust
Repayments of lease and guarantee depositedin trust
Proceeds from lease and guarantee deposited intrust△ 46,766△ 1,339△ 693,420
215,570

△ 941

4,902

△ 235

△ 909

△ 12,478,273

459,574

Proceeds from issuance of investment units

Dividends paid
Net increase (dec rease) in c ash and cash
equivalents
Cash and c ash equivalents at beginning of theperiodCash and c ash equivalents at the end of theperiodRetained earnings
Ⅰ Unappropriated retained earnings
Ⅱ Addition of dividends in exc ess of earnings
Allowance for temporary difference
adjustments
Ⅲ Capitalization
Reversal of allowanc e for temporary
difference adjustments
Ⅳ Amount of Dividends
Amount of dividends per unit
Dividends of earnings
Dividends of earnings per unit
Allowance for temporary difference adjustments△ 5,404,873

4,971,481

12,022,000

11,200,000△ 7,022,000－△ 6,000,000△ 5,000,000－△ 3,500,000△ 5,404,873
451,906△ 5,434,018

11,107,533

11,559,439

11,559,439

10,820,134

3,479,567

5,225,932△ 739,304(yen)
28th period

29th period

Period ended Jul. 31, 2020

Period ended Jan. 31, 2021

5,869,173,511

5,995,429,871－

136,059,430－

136,059,430

15,151,632－

15,151,632－

5,433,634,080

5,574,603,970

2,898

2,909

5,433,634,080

5,438,544,540

2,898
－

2,838
(Note)

136,059,430

Dividends in excess of earnings per unit
(allowance for temporary difference
adjustments)
Ⅴ Retained earnings carried forward－

71

420,387,799

556,885,331(Note) Due to consideration of the impact of the items of deduction from net assets (deferred gains orlosses on hedges).

61

5-5 Status of income and expenditures (1)(thousand yen)P rope rty num ber

O -0

O -1

O -4

O -6

P rope rty na m e

Roppongi Hills Mori Towe r

ARK Mori Building

Korak u Mori Building

Ak asa k a Tam eik e Towe r

Acquisition price

115,380,000
28th

29th

Jul. 2020

Ja n. 2021

O pe ra tion da ys

182 da ys

184 days

O ccupa ncy ra te

100%

100%

Avg. O ccupancy rate
(during pe riod)100%

Num ber of te na nts

1

P e riod

Re nt re ve nue s

62,480,000
28th

29th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys

0.0P T

100%

100%

100%

0.0P T

100%

1

0

1

Differe nce

27,200,000
28th

29th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys

0.0P T

86.1%

99.4%

100%

0.0P T

96.9%

97.2%

1

0

22

23

Differe nce

43,930,000
28th

29th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys

2 da ys

13.3P T

95.7%

94.2%

0.3P T

96.4%

94.2%

△ 1.5PT

1

135

129

Differe nce

Differe nce△ 2.2PT△6

2,943,450

2,943,450－

1,351,486

1,351,486－

644,277

649,547

5,270

791,134

787,242

－

－

－

－

－

－

73,75073,945

195

78,13078,054

2,943,450

2,943,450－

1,351,486

1,351,486－

718,027

723,493

5,465

869,264

865,297447,868

447,868－

164,853

164,853－

68,962

94,71925,756

167,722

175,610

255,651

263,478

7,826

84,23784,968730

32,972

30,77443,80442,321

－

－

－

－

－

－

54,72055,685△ 2,197965

26,74326,094△ 1,482

－

－

－

355

－

31,736

10,77345,061

16,034

4,094

44

1,912

1,933

21

1,661

1,679

△ 20,963

29,026

4,050

△ 355

18

2,068

2,092

23

332,052

333,285

1,233

66,946

67,914968

97,657

97,199135,262

127,520

376

374

2,789

2,788

83,971

83,953

10,623

9,102

321,094

322,458

1,364

371,681374,785△ 18

10,624

1,049,101△1△ 7,742

1,039,999

△1

△ 457
3,104

415,253429,324

14,071

1,903,451

1,894,349

1,030,392

1,029,028

348,707

2,361

454,011435,972

2,235,503

2,227,635

1,097,338

1,096,943

444,003445,907

1,904

589,274

563,492

4,483,290

4,418,949

2,200,706

2,176,001

884,545

1,117,797

3.8%

3.5%

3.5%

3.3%

3.3%

2.5%

－

36,50759,337

22,829149,962

62,36445,212

3,160

1,963,341

2,227,635

264,293

1,060,830

1,037,605△ 23,225

294,040

383,543△ 87,598

42,051

NCF (3)-(4)△ 272,162△ 0.0P T

2.7%

272,162△ 0.0P T△ 63,988

CAP EX (4)△ 0.1P T△ 5,901

1,181,786

3.9%△ 24,705

890,446

Annua lize d NO I/
Acquisition price△ 64,340△ 395△ 18,039

Annua lize d NO I

△ 7,868△ 1,364

346,346

NO I (3) ((1)+(2))△ 9,10289,503547,222518,280

O the r ope rating
reve nue s
Tota l property
ope rating re ve nue
P rope rty
m a na gem ent
P rope rty tax e s(Note 1)

Utilitie s
Maintena nce a nd
repairs
Insura nce
pre m ium
De pre cia tion (1)O the r e xpe nse s(Note 2)

Tota l property
ope rating ex penses
P roperty ope rating
incom e (2)△ 3,891△ 76△ 3,967
7,887

△ 649

△0

△ 25,781△ 0.2PT△ 28,942(Note 1) For property tax, city planning tax and depreciable assets tax, MHR charges the amount of property taxes assessed and determined applicable to the fiscal period to expenses related to properties. Registeredowners of properties in Japan as of January 1 are responsible for paying property taxes for the calendar year based on assessments by local governments. Therefore, registered owners who sold properties to
MHR were liable for property taxes for the calendar year, including the period from the date of the acquisition by MHR until the end of the year. MHR reimbursed sellers of properties for the equivalent amount ofproperty taxes and included the amount in the acquisition cost of real estate.
(Note 2) “Other expenses” denotes the sum of custodian fees, rent expenses, and other lease business expenses (residential property management costs, and other property-related miscellaneous expenses) in aggregate.
(Note 3) Property acquired during the relevant period. “Annualized NOI/ Acquisition price” was calculated by taking into consideration the changes in acquisition price during the relevant period.
“Annualized NOI” denotes the value which is based on the acquisition price as of the end of the relevant period.

625-6 Status of income and expenditures (2)(thousand yen)P rope rty num ber

O -7

O -8

O -9

O -10

P rope rty na m e

Ata go Gree n Hills

ARK Hills South Tower

Tora nom on Hills Mori Towe r

Holla nd Hills Mori Tower

19,150,000

48,430,000 (before acquisition 36,210,000)

Acquisition price

42,090,000
28th

29th

Jul. 2020

Ja n. 2021

O pe ra tion da ys

182 da ys

184 days

O ccupa ncy ra te

100%

100%

Avg. O ccupancy rate
(during pe riod)100%

Num ber of te na nts

1

P e riod

Re nt re ve nue s

28th

29th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys

0.0P T

100%

94.4%

100%

0.0P T

99.8%

97.1%

1

0

44

43

△1

Differe nce

28th

29th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys△ 5.6P T

100%

100%

100%

16,330,000
28th

29th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys

2 da ys

0.0P T

100%

100%

0.0P T100%

0.0P T

99.4%

100%

0.6P T

1

1

0

23

23

0

△ 7,857

775,581995,329

219,748

530,636

537,654

7,017

6,831

－

－

－

34,81920,085775,581995,329

219,748565,456

557,739△ 14,733

88,742

113,885

25,143

106,416

100,636△ 7,71632

Differe nce△ 2.7P T

Differe nce

Differe nce

1,012,320

1,012,320－

482,942475,084－－－

26,51833,3491,012,320

1,012,320－

509,460

508,434

2,664

2,664

－

47,60545,754△ 1,025

69,23069,503273

35,94436,025△ 1,85081

60,874

62,147

1,273

35,60435,636－－－26,48627,659

1,173

－

－

－

5,380

5,104

－

－

－

2,346

5,226

2,879

－

－

－

1,308

－

3,627

3,667

39

1,018

1,030

11

1,305

1,693

387

1,098

1,110

185,657

186,107450

44,24544,32378

101,038

126,385

25,34649,47745,38045,76546,411

646

2,235

1,593

71

92

21

210

209

306,945

308,355

1,410

159,882

161,614

△ 641

1,731

252,031304,204

52,173

199,496

188,077

705,374

703,964

349,578

346,820

691,124

167,574

365,959

369,662

891,032

890,072

393,823

391,144624,588817,509

192,921415,437

415,042Annua lize d NO I

1,786,961

1,765,633△ 960△ 2,757

523,549

NO I (3) ((1)+(2))△ 1,410

775,911

1,693,691

441,083

833,156

823,318

4.2%

4.1%

4.1%

3.5%

0.0P T

5.1%

5.0%

144,950

54,297

149

3,352

3,203

－

－

－

66,564

6,905

NCF (3)-(4)746,081835,774△ 90,652△ 0.1P T

3.5%

CAP EX (4)△ 0.1P T△ 13,899

1,252,607

4.2%△ 21,327

789,811

Annua lize d NO I/
Acquisition price

89,692

393,674

387,792△ 5,882

624,588817,509

192,921348,872

408,136

O the r ope rating
reve nue s
Tota l property
ope rating re ve nue
P rope rty
m a na gem ent
P rope rty tax e s(Note 1)

Utilitie s
Maintena nce a nd
repairs
Insura nce
pre m ium
De pre cia tion (1)O the r e xpe nse s(Note 2)

Tota l property
ope rating ex penses
P roperty ope rating
incom e (2)△ 2,679△ 5,780△ 276△ 1,30812△ 4,096△1△ 11,418
3,702

△ 394

△ 9,838△ 0.1PT△ 59,658

59,26463

5-7 Status of income and expenditures (3)(thousand yen)P rope rty num ber

R-3

R-4

S-1

P rope rty na m e

Roppongi First P la za

R oppongi View Tower

La foret Hara juk u (La nd)

Acquisition price

2,100,000
28th

29th

Jul. 2020

Ja n. 2021

O pe ra tion da ys

182 da ys

184 days

O ccupa ncy ra te

94.6%

96.6%

Avg. O ccupancy rate
(during pe riod)

90.7%

Num ber of te na nts

4,000,000

21,820,000

28th

29th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys

2.0P T

98.1%

93.1%

97.3%

6.6P T

97.0%

95.0%

40

40

0

90

85

81,41687,5686,152

107,992

106,600

△5

－

450

450

－

661

81,41688,018

6,602

107,992

107,261

13,88013,293

14,153

12,960

8,159

8,376

△ 587

217

12,387

12,729

1,231

1,181

1,087

1,005

12,316

3,108

△ 49

2,208

1,150

228

230

△ 9,208
2

340

344

11,405

11,42419

17,31817,076

3,830

3,818

588

588

51,051

41,433△ 11

48,08645,85630,364

46,584△ 9,617
16,22059,905NO I (3) ((1)+(2))

41,77058,00916,239Annua lize d NO I

83,769115,073

Annua lize d NO I/
Acquisition price

4.0%

CAP EX (4)NCF (3)-(4)P e riod

Re nt re ve nue s
O the r ope rating
reve nue s
Tota l property
ope rating re ve nue
P rope rty
m a na gem ent
P rope rty tax e s(Note 1)

Utilitie s
Maintena nce a nd
repairs
Insura nce
pre m ium
De pre cia tion (1)O the r e xpe nse s(Note 2)

Tota l property
ope rating ex penses
P roperty ope rating
incom e (2)P ortfolio tota l

29thJul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys

2 da ys

0.0P T

98.1%

98.8%

0.7P T100%

0.0P T

99.0%

98.8%

1

1

0

359

348

△ 0.2PT△ 1,392

667,800

667,800－

9,389,038

9,614,085

661

－

－

－

213,218

206,546△ 731

667,800

667,800－

9,602,257

9,820,632

218,375－－－

1,122,870

1,172,247

49,376341

86,33990,4504,111

725,205

736,413

11,207

△ 82

－

－

－

115,650

116,730

1,080△ 1,058－－－

79,29865,3193－－－

17,313

17,877△ 13,978

△ 241

－

－

－

1,041,061

1,056,619

15,558

△0

－

－

－

150,462

150,453

86,33990,4504,111

3,251,861

3,315,661

63,80061,405△ 2,230△8

1,499

581,461

577,350

6,350,396

6,504,970

154,574

77,22478,482

1,257

581,461

577,350△ 4,111

7,391,457

7,561,590

170,132

31,304

154,873

155,684811

1,166,116

1,145,286

14,823,527

15,076,934

253,407

5.5%

1.5P T

3.9%

3.9%

0.0P T

5.3%

5.2%△ 20,830

3.8%

3.7%

13,689

1,819

6,629

7,198

568

－

－

－

732,668

240,488

28,08056,189△ 11,869△ 0.1PT

70,59471,284689

581,461

577,350△ 4,111

6,658,788

7,321,102

28,10929th

Jul. 2020

Ja n. 2021

2 da ys

182 da ys

184 da ys△ 5.0P T

100%

100%

100%

402,910,000 (before acquisition 390,690,000)
28th

Differe nce

28th

Differe nce△ 2.0P T△ 1,193

Differe nce△ 4,111△ 0.1P T

Differe nce△ 11225,047△ 6,672564△ 492,180
662,31364

5-8 Unit price performance since IPO
Relative price performance (Since IPO - January 31, 2021)
200

Performance since listing180(At listing vs. January 31, 2021)■ MHR:△2.8%■ TSE REIT Index: +0.5%

160
140
120
100
80
60
40
20
0

Nov. 30, Jul. 31,
2006
2007

Jul. 31,
2008

Jul. 31,
2009

Jul. 31,
2010

Jul. 31,
2011

Jul. 31,
2012

Jul. 31,
2013

Jul. 31,
2014

Jul. 31,
2015

Jul. 31,
2016

Jul. 31,2017

Jul. 31,2018

Jul. 31,
2019

Jul. 31,2020(Source) Prepared by the Asset Manager based on Refinitiv.
(Note)
Rebased to 100 as per IPO price

Unit price per period-end (Closing price)
Accounting period

Unit price

Accounting period

Unit price

Accounting period

Unit price

1st (January 2007)

1,100,000 yen

11th (January 2012)

252,200 yen

21st (January 2017)

153,500 yen

2nd (July 2007)

1,080,000 yen

12th (July 2012)

330,500 yen

22nd (July 2017)

138,900 yen(Reference)
IPO Price(November 30, 2006)(Split adjusted)

3rd (January 2008)

716,000 yen

13th (January 2013)

485,000 yen

23rd (January 2018)

137,100 yen

4th (July 2008)

465,000 yen

14th (July 2013)

548,000 yen

24th (July 2018)

138,100 yenHigh

5th (January 2009)

265,000 yen

15th (January 2014)

135,900 yen

25th (January 2019)

144,500 yen(May 8, 2007: in trade)

6th (July 2009)

352,000 yen

16th (July 2014)

151,100 yen

26th (July 2019)

160,300 yen

7th (January 2010)

264,900 yen

17th (January 2015)

166,600 yen

27th (January 2020)

181,700 yen

8th (July 2010)

177,300 yen

18th (July 2015)

145,300 yen

28th (July 2020)

9th (January 2011)

281,000 yen

19th (January 2016)

152,100 yen

29th (January 2021)

10th (July 2011)

258,100 yen

20th (July 2016)

160,500 yen

750,000 yen(150,000 yen)

1,460,000 yen(Split adjusted)(292,000 yen)

137,100 yen(August 12, 2010: in trade)

168,200 yen

145,800 yen(Split adjusted)(33,640 yen)

Low

(Note) Implemented a 5-for-1 investment unit split on February 1, 2014 (effective date).

65

5-9 Investment criteria
Investments focusing on Premium Properties for development of urban-type portfolio
Investments focusing on Premium Properties
Among properties that are located in Tokyo’s five central wards and in surrounding areas,
our investments mainly focus on “Premium Properties” that are able to maintain theircompetitiveness going forward based on their quality, size and specification.
Focus onPremium Properties

Premium properties

50% or more

Office building

Premium Properties
Type

Location

Scale

Gross floor area of 10,000㎡ ormore per buildingStandard leasable floor area of
1,000㎡ or more

Officebuildings

Tokyo's five central wards
and their vincity

Residential
properties

Tokyo's five central wards
Gross floor area of 2,000㎡ or
and their vincity
more per building(Primarily in the "three-A" area)〈Office buildings〉〈Residential properties〉〈Retail facilities〉

Office building foc us〈Department stores, downtown shopping centers,
large specialty stores & retail complexes, etc.〉

Flourishing areas of Tokyo's five Gross floor area of 10,000㎡ or
central wards and their vincity
more per-building
Retail facilities

50% or more

Tokyo' five central wards
foc usTokyo's five central
wards and their vincity

50% or more(Tokyo Metropolitan Area:
80% or more)〈Street front luxury brand shops, etc.〉

Exclusive, well-known
retail destinations such as
Ginza area, Aoyama area, andOmotesando area

Gross floor area of 1,000㎡ ormore per building(Note 1)

Tokyo’s five central wards： Minato, Chiyoda, Chuo, Shinjuku and Shibuya ward

(Note 2)Three-A area： Akasaka and Roppongi area, Aoyama and Harajuku area and Azabu and Hiroo area

(Note 3)

Ratios are based on the acquisition prices(Note 4)

Tokyo Metropolitan Area： Tokyo Metropolis, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture

Earthquake-resistance foc us

Investment focused on
properties' earthquake
resistance, the safety of thearea, disastercountermeasures, etc.

66

5-10 Portfolio map (as of January 31, 2021)

MHR (Note 1)
In Operation(注4)

MB Group (Note 2)(注5)

Planning / Under Construction(Source) Prepared by the Asset Manager based on Mori Building’s “Mori Building Handy Map Mori Building Map/Home Route Support Map 2021.”(Note 1) Some of the properties have been partially acquired and held by MHR.
(Note 2) Properties are developed, owned, managed and planned for development by Mori Building Group, and there are no properties currently anticipated to be acquired by MHR.

67

5-11 Portfolio overview (as of January 31, 2021)
Type

Office building

Office building (Partly residential)
Atago Green Hills

Roppongi
View
Tow erLaforet
Harajuku(Land)

O-7

R-3

R-4

S-1

Premium

Premium-

Premium

Toranomon,
Minato-ku,
TokyoRoppongi,
Minato-ku, Tokyo

Jingumae,
Shibuya-ku,
Tokyo

Oct. 2001

Jul. 2001

Oct. 1993−

19 years
6 months

19 years
3 months

19 year6 months

27 years 3 months−

25 aboveground,2 below

42 aboveground,2 below

43 aboveground,4 below

2 aboveground,1 below

20 above ground,
1 below−

approx.
46,971㎡

approx.
85,266㎡

approx.
60,815㎡

approx.
2,083㎡

approx.
22,906㎡−

Holland Hills
Mori Tow er

AkasakaTameikeTow er

O-8

O-9

O-10

O-6

Premium

Premium

Premium

Premium

Premium

Koraku,Bunkyo-ku,
TokyoRoppongi,
Minato-ku,
Tokyo

Toranomon,
Minato-ku,
Tokyo

Toranomon,
Minato-ku,
TokyoAkasaka,Minato-ku,
TokyoMar. 2000

Jul. 2013

May. 2014

Jan. 2005

Sep. 2000

Jul. 2001

34 years
10 months

20 years
10 months

7 years
6 month

6 years
8 months

16 years
0 months

20 years
4 months

Total number offloors54 aboveground,6 below

37 aboveground,4 below

19 aboveground,6 below

20 aboveground,4 below

52 aboveground,5 below

24 aboveground,2 below

Gross floor area

approx.
442,150㎡

approx.
177,486㎡

approx.
46,154㎡

approx.
53,043㎡

approx.
241,581㎡

approx.
35,076㎡

ARK
Mori Building

O-0

O-1

O-4

Premium

Premium

Premium

Location

Roppongi,
Minato-ku,
TokyoAkasaka,Minato-ku,
TokyoCompletion

Apr. 2003

Building age

17 years
9 months

Property nameKoraku Mori
ARK Hills
Building
South Tow er

RetailRoppongi
First
Plaza

Toranomon
Hills Mori
Tower

Roppongi
Hills
Mori Tow er

Residential

MORI Tower Forest Tower

Plaza

Photo

Ownership(Note 1)Land

Building

PML (Note 2)
Earthquakeresistant feature(Note 3)Acquisition price(mn yen)Occupancy rate
(Note 4)Mar. 1986(Large-scalerenovation in 2005)

C o- owners hip
C o- owners hip(approx. 1 7 .7 % ) (approx.1 0 .9 % )L eas edCompartmentalizedCompartmentalizedCompartmentalized

ownershipownershipownership(approx. 1 3 .6 % ) (approx. 1 7 .9 % ) (approx. 5 7 .9 % )C o- owners hip(2 5 % )Atago,
Minato-ku, Tokyo

C o- owners hip
C o- owners hip
C o- owners hip(approx. 1 7 .0 % ) (approx. 6 2 .9 % ) (approx. 5 6 .4 % )C o- owners hip

C o- owners hip(2 5 % )(approx. 9 .3 % )CompartmentalizedCompartmentalized

ownershipownership

C o- owners hip

C o- owners hip

C o- owners hip(approx. 2 8 .8 % )(4 7 % )(4 6 % )CompartmentalizedCompartmentalized

ownershipownership

C o- owners hip(approx. 3 2 .9 % )(approx. 4 8 .5 % ) (approx. 6 5 .5 % )O wners hip−(approx. 4 6 .4 % ) (approx. 4 4 .7 % )

0.59%

0.78%

0.73%

1.56%

0.50%

0.85%

1.79%

2.35%

2.34%

5.94%

2.20%

2.20%

−

Seismic
Damping

Seismic
Damping

Seismic
Damping

Seismic
Damping

Seismic
Damping

Seismic
Damping

Seismic
Damping

Seismic
Damping

Seismic
Damping

−

−

−

−

115,380

62,48027,20019,15048,43016,33043,93042,090

2,100

4,000

21,820

100%

100%

99.4%

94.4%

100%

100%

94.2%

100%

96.6%

93.1%

100%

Average building age
19.5 years (Note 5)

Portfolio PML
0.91% (Note 2)

Total acquisition price402,910 mn yen

685-12 Portfolio overview (Note)(Note 1) “Type of ownership” denotes the type of rights held by MHR or the Trustee. “Ownership” stands for ownership, “Co-ownership” stands for the ownership of beneficiary interests,“Compartmentalized ownership” denotes ownership and the rights for exclusive use in or over parts of a building, and “Leased land” denotes Leasehold land. The land site of Atago
Green Hills includes joint ownership in quasi-undivided interests of leasehold land and easement.
(Note 2) This indicates the figure described in the “Report on evaluation of seismic PML for portfolio” dated July 13, 2020 by Sompo Risk Management Inc.
(Note 3) ARK Mori Building adopts “slitwall” as an earthquake-resistant feature.
(Note 4) “Occupancy rate” indicates the figures as of January 31, 2021.
(Note 5) For calculation of the “Average building age” of Atago Green Hills, we have assumed that construction of the building was completed on July 30, 2001.

69