Investors Presentation June 2013 financial results. August 15, 2013

Transcription

1 Investors Presentation June 2013 financial results August 15, 2013

2 Contents 1. Overview of financial results and performance forecasts 2 Topics of financial results for 18th fiscal period (June 2013) 3 Stable distributions 4 Overview of capital increase through 4th public offering (PO) 5 Overview of Properties acquired in the 18th period 6 18th fiscal period results (Income statement) 7 18th fiscal period results (Balance sheet) 8 Forecast for 19th fiscal period (December 2013) 9 2. Operating strategy Overview of portfolio 14 Portfolio map 15 Portfolio summary 17 Lease contract status 18 Rent revision and lease maturity schedules 19 Issues to tackle Financial condition 21 Maintained conservative financial operations APPENDIX 23 Operating strategy 11 External environment surrounding FRI 12 Future direction of management 13 All content presented in this document is provided solely for informational purposes with regard to Frontier Real Estate Investment Corporation (FRI) and is not intended to serve as an inducement or solicitation to trade in any product offered by FRI. Investment units issued by FRI are subject to price fluctuations due to various factors including: (1) volatile conditions in the J-REIT market, interest rates and the real estate market; (2) fluctuations in rental revenues from properties; and (3) the occurrence of unexpected losses due to natural disasters. Accordingly, investment tin FRI entails the risk of incurring i a loss. Investment tdecisions i are made at the investors discretion, and are their responsibility, as well as at their own risk. FRI disclaims any responsibility or liability for the consequences of investing in FRI. Information provided in this document contains forward-looking statements such as business forecasts, which should not be construed as commitment to or guarantee of future performance. The information provided in this document was originally published in Japanese language form and has been translated for reference purposes only. FRI guarantees neither the completeness nor the accuracy of this English translation. Please be advised dthat t forward-looking statements t t provided d herein may be subject to change without t prior notice. Duplication or reproduction of any item presented as information herein without the prior consent of FRI or its authorized representative is strictly prohibited. 1

3 1.Overview of financial results and performance forecasts 2

4 1.Overview of financial results and performance forecasts Topics of financial results for 18th fiscal period (June 2013) 1 Maintained stable distribution 2 Capital increase through public offering and new property acquisitions Maintained distributions exceeding 18,000 yen even after the capital increase through public offering (PO) Realized distributions higher than 18,000 yen for 10 consecutive periods Distribution per unit (DPU) for the 18th fiscal period (June 2013): 18,347 yen Continued to achieve DPU surpassing forecasts since being listed (-35 yen period-to-period) Forecast at beginning of period: 18,100 yen (+247 yen) Forecast DPU for the 19th fiscal period (December 2013): 18,400 yen Maintaining stable distributions above 18,000 yen Acquired property from sponsor in line with public offering Implemented public offering Total amount to be paid in: Approx billion yen Number of investment units issued: 20,500 units Ikebukuro Square Address: Higashi Ikebukuro, Toshima-ku, Tokyo Total number of investment units issued and outstanding after issuance: 248,000 units Mitsui Shopping Park ALPARK (East Building) Address: , Kusatsushinamchi, Nishi-ku, Hiroshima City, Hiroshima Acquisition date: February 1, 2013 Acquisition date: February 19, 2013 Acquisition price: 20.4 billion yen Acquisition price: 5.4 billion yen Asset size after new property acquisition: billion yen (based on acquisition price) Conservative financial standing 3 Maintained and enhanced firm financial standing through conservative financial standing Sound LTV management End of 17th fiscal period: 42.5% End of 18th fiscal period: 41.0% Maintained average maturity End of 17th fiscal period: 5.12 years End of 18th fiscal period: 5.37 years (including tenant and security deposits) Increased long-term liabilities ratio End of 17th fiscal period: 79.7% End of 18th fiscal period: 85.1% Decline in average borrowing interest rate End of 17th fiscal period: 1.11% End of 18th fiscal period: 1.08% 3

5 1.Overview of financial results and performance forecasts Stable distributions 9,543 1,985 1,053 営業収益 Operating 当期純利益 Net income 一口当たり分配金 DPU revenue (million yen) (million ( 百万円 yen) ) ( 百万円 ) 11,244 12,090 14,437 3,067 2,511 2,610 1,241 1,334 1,593 (yen) Achieved distributions higher than 18,000 yen even after public offering 17,693 17,845 17,960 18,441 18,548 18,737 18,588 18,195 18,478 18,599 19,982 18,38218,347 18,400 (forecast) 17,296 July st public offering March 2008 Third-party allotment 3,470 3,587 3,667 4,303 5,658 July nd public offering 6,168 6,233 6,364 2,950 2,967 2,997 2,974 7,407 July d 3rd public offering 7,801 8,023 8,472 3,532 3,584 3,608 3,876 March th public offering 9,026 1,909 1,953 1,970 2, properties 4,273 9,646 9,916 Acquired 2 properties 4,550 4, properties 4 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th forecast 第第 1 期 1 期第 2 第期 2 期第第 3 期 3 期第第 4 期 4 期第 5 第期 5 期第 6 期 6 期第 7 期 7 期第 8 第期 8 期第 9 第期 9 期第 10 第期 10 期第 11 第期 11 期第 期期第第 13 期 13 期第 14 期 14 期第 期期第 期期第 期期第 18 期期第 19 期期予想 (Dec. 04) (June '05) (Dec. 05) (June '06) (Dec. 06) (June '07) (Dec. 07) (June '08) (Dec. 08) (June '09) (Dec. 09) (June '10) (Dec. 10) (June '11) (Dec. 11) (June '12) (Dec. 12) (04/12 月 ) 月 ) (05/6 (05/6 月 ) 月 )(05/12 (05/12 月 ) 月 )(06/6 (06/6 月 ) 月 )(06/12 (06/12 月 ) 月 )(07/6 (07/6 月 ) 月 ) (07/12) 月 ) (08/6 月 ) (08/12 月 ) (09/6 月 ) ) (09/12 月 ) ) (10/6 月 )) (10/12 月 )) (11/6 月 ) (11/12 (11/12 月 )) (12/6 (12/6 月 )) (12/12 (12/12 月 )(June ) (13/6 (13/6 月 13) )) (Dec. (13/12 予想 13) 月 )

6 1.Overview of financial results and performance forecasts Overview of 4th public offering (PO) Number of investment units issued Number of investment units issued and outstanding after issuance Issue price Issue value Total Issue value 20,500 units (including upper limit of 1,000 units issued through over-allotment) 248,000 units (including upper limit of 1,000 units issued through over-allotment) 870,675 yen per unit (closing price on date for determination of conditions: 893,000 yen) 842,099 yen per unit Resolution date February 15, 2013 Pricing date February 26, 2013 Payment date 17,263,029,500 yen (including upper limit of 842,099,000 yen issued through over-allotment) March 5, 2013 for primary offering; March 21, 2013 for over-allotment Public offering summary 1. Stable property supply from sponsor Ikebukuro Square (Acquisition price: 20.4 billion yen) Mitsui Shopping Park ALPARK (East Building) (Acquisition price: 5.4 billion yen) 2. Continued sound financial operations LTV at the end of 17th period: 42.5% LTV at the end of 18th period: 41.0% 3. Maintained and expanded acquisition capacity for flexible growth Acquisition capacity: Approx. 45 billion yen (borrowing capacity of up to about 50% LTV) 4. Maintained stable distributions 18th fiscal period result (after public offering): distribution of 18,347 yen (billion yen) 3, Change in Market Cap Since Listing Market cap as of June 30, 2013: billion yen 2, , / / / / / / / / /08 5

7 1.Overview of financial results and performance forecasts Overview of Properties acquired in the fiscal 18th period Urban retail facility Ikebukuro Square Urban retail facility developed by Mitsui Fudosan that opened in December 2012 <Property overview> Address Acquisition price (assumed NOI yield) , Higashi Ikebukuro, Toshima-ku, Tokyo 20,400 million yen (5.4%) Construction completed November 2012 Acquisition date February 1, 2013 Contract format Tenants Overview of lease contract Fixed-term building lease contract Round One Corporation, Aoyama Trading Co., Ltd., RDC Corporation and Saizeriya Co., Ltd. Fixed rent (annual rent of 1,282 million yen) Contract term(*): 20 years (until December 20, 2032) Rent revision(*): May not be revised for 12 years from lease start date (next revision date: December 3, 2024) Regional SC Mitsui Shopping Park ALPARK (East Building) Largest-scale commercial complex in the Chugoku and Shikoku areas developed and operated by Mitsui Fudosan *Items of the lease contract with Round One Corporation, the major tenant are indicated. <Property overview> Address Kusatsushinmachi, Nishi-ku, Hiroshima-shi, Hiroshima Acquisition price (assumed NOI yield) 5,400 million yen (6.9%) Construction completed April 1990 Acquisition date February 19, 2013 Contract format Master Lessee Overview of lease contract Fixed-term building lease contract Mitsui Fudosan Co., Ltd. Fixed rent (annual rent of 529 million yen) +sales-linked rent Contract term: 20 years (until February 18, 2033) Rent revision: May not be revised for 10 years from lease start date (next revision date: February 19, 2023) 6

8 1.Overview of financial results and performance forecasts 18th fiscal period results (Income statement) 17th Period 18th Period Changes (December 2012) (June 2013) (yen in millions, unless otherwise indicated) Material factors for increase/decrease Operating revenue 9,026 9, % (*1) *1: Operating revenue Property acquired in the 18th period (Ikebukuro Square, ALPARK) +774 Operating expenses 4,307 4, (*2) Absence of total Shinagawa common area maintenance charges, etc. -27 (Expenses related to Full-period operation for Harajuku tenant (desigual) +37 3,816 4, rent business) Absence of proceeds from tenants for restorations of spaces to their original conditions at Harajuku -32 (Selling general and Absence of gain on sale in association with Harajuku land administrative expropriation -104 expenses) Operating income 4,718 5, % Non-operating income Non-operating expenses Ordinary income 4,274 4, % *2: Operating expenses Increase of CM and PM fees, etc. (related to properties acquired in the 18th period (Ikebukuro Square, ALPARK))+53 Depreciation for properties acquired in the 18th period (Ikebukuro Square, ALPARK), etc (*3) Fixed asset taxes recorded d as expenses for properties acquired in the 16th fiscal period (Yokohama Okano and VIORO) and 17th fiscal period (QANAT Rakuhoku) +87 Increase of asset management fees Net income 4,273 4, % (Provision of internal reserve) (*4) Total distribution 4,181 4, Distribution per unit 18,382 yen 18,347 yen -35 yen -0.2% Investment units issued and outstanding 227,500 units 248,000 units 20,500 units LTV (a) 42.5 % 41.0 % -1.5 points Number of properties 27 properties 29 properties 2 properties a: LTV = (Borrowings, etc. + Tenant and security deposits Unrestricted cash and deposits)/(total assets balance Unrestricted cash and deposits) *3: Non-operating expenses Increase in interest expenses +29 Increase of public offing costs +17 *4: (Provision of internal reserve) Set aside gain on sale of real estate, etc. in association with Harajuku land expropriation and part of building transfer compensation, etc. due to building removal work as reserve for reduction entry < Reference: Finance-related indicators (18th period) > FFO per unit (b) NAV per unit (c) Interest coverage ratio (d) 27,384 yen 726,795 yen 16.0 times b: FFO per unit = (Net income + Depreciation) / Investment t units issued and outstanding c: NAV per unit = (Net assets + Unrealized gain or loss) / Investment units issued and outstanding d: Interest coverage ratio = EBITDA / Interest expenses

9 1.Overview of financial results and performance forecasts 18th fiscal period results (Balance sheet) 17th period end 18th period end (December 31, 2012) (June 30, 2013) Changes Current assets 14,881 14, Non-current assets (*including deferred assets) 228, ,934 24,002 Assets 243, ,178 23,364 Current liabilities 19,097 14,409-4,687 Non-current liabilities 91, ,534 10,420 Liabilities 110, ,943 5,733 (*3) Net assets 133, ,234 17,631 Liabilities and net assets 243, ,178 23,364 (*1) (*2) (yen in millions, unless otherwise indicated) Material factors for increase/decrease *1: Assets Decrease of cash and deposits -833 Property acquired in the 18th period (Ikebukuro Square, ALPARK) +25,800 Depreciation -2,241 *2: Liabilities New borrowings in association with new property acquisitions+ 24,000 Repayment of borrowings -19,200 Scheduled repayment of security deposits -516 Repayment of amortization of long-term borrowings -160 Tenant deposit received for property acquired in the 18th period (Ikebukuro Square, ALPARK) +1,194 *3: Net assets Procurement from 4th public offering +17,262 Net assets per unit 18th period end: 609,816 yen 17th period end: 587,267 yen 8 (billion yen) Total assets Appraisal value (at the end of period) (billion yen) billion 3, 含み益 Unrealized 期末帳簿価額 Book value at the end of period Unrealized gain 3, gain of 29.0 billion 2, , , , , , , , th 15th 16th 17th 18th (June 第 14 '11) 期 (Dec. 第 15 11) 期 (June 第 16 '12) 期 (Dec. 第 17 期 '12) (Jun. 第 18 期 13) (11/6 月 ) (11/12 月 ) (12/6 月 ) (12/12 月 ) (13/6 月 ) 14th (June 第 14 期 '11) (11/6 月 ) 15th (Dec. 第 15 期 11) (11/12 月 ) 16th (June 第 16 期 '12) (12/6 月 ) 17th (Dec. 第 17 '12) 期 (12/12 月 ) 18th (Jun. 第 18 13) 期 (13/6 月 )

10 1.Overview of financial results and performance forecasts Forecast for 19th fiscal period (December 2013) Actual result for 18th Forecast for 19th period 2 Changes period 1 (June 2013) (a) (December 2013) 2-1 Operating revenue 9,676 9,916 (*1) % Operating income 5,054 5,055 (*2) 0 0.0% Ordinary income 4,551 4, % Net income 4,550 4, % Distribution per unit 18,347 yen 18,400 yen 53 yen 0.1% (*3) (yen in millions, unless otherwise indicated) Material factors for increase/decrease *1: Operating revenue Full-period operation of properties acquired in the 18th fiscal period +194 Rent reduction in association with the renewal of lease contract for Joyfultown Okayama -12 Termination penalty charges, etc. from GINZA GLASSE tenant +55 *2: Operating Income CM and PM fee (full contribution of properties acquired in the 18th fiscal period) +14 Increase in depreciation, etc. (full contribution of properties acquired in the 18th fiscal period) +38 Repair costs +98 Utilities expenses +37 Asset management fee Investment units issued and outstanding 248,000 units 248,000 units No. of properties 29 properties 29 properties LTV (*b) 41.0 % Approx. 41 % a:forecast for 19th period have been announced in the press release, Notice Concerning Operating Forecasts for the 19th Fiscal Period ending December 31, 2013 dated August 14, b:loan-to-value = (Borrowings etc. + Tenant and Unrestricted and deposits)/(total Unrestricted and Loan to ratio (LTV) Borrowings, etc.+ security deposits cash assets cash deposits) c: Includes interest expenses on investment corporation bonds and security deposits. 20,000 18,000 16,000 14,000 12,000 10,000 8,000 (yen) 1st 一口当たり分配金 Distribution per unit (Forecast) ( 予想 ) 一口当たり分配金 Distribution per unit ((Actual) 実績 ) 2nd 3rd 4th 5th 6th 7th 8th 9th 10th Period *3: Non-operating expenses Interest expenses +9 Absence of public offering costs -41 Major expenses for the 19th fiscal period Property tax, city planning tax, etc.: 978 Depreciation: 2,279 Interest expenses on borrowings, etc. (c): 460 * With regard to assets under management, the portfolio is assumed to consist of a total of 29 properties owned as of August 14, 第 Period 1 期第 Period 2 期第 Period 3 期第 Period 4 期 Period 第 5 期第 Period 6 期 Period 第 7 期第 Period 8 期第 Period 9 期第 10 期第 Period 11 期第 Period 12 期第 Period 13 期第 Period 14 期第 Period 15 期第 Period 16 期第 Period 17 期第 Period 18 期第 Period 19 期 Consistently achieved performance forecasts since listing, even under a severe environment 11th 12th 13th 14th 15th 16th 17th 18th 19th

11 10 2. Operating strategy

12 2. Operating strategy Operating strategy Continue management to secure stable earnings over the medium to long term 1. External growth 2. Management of existing portfolio 3. Financial strategy Retail environment High-price products are performing well against the backdrop of the asset effect from high stock prices The financial results of retail companies are showing clear trends of increased revenue and income However, the downward d trend for prices of general foods and common goods is ongoing Status of existing portfolio Sales at facilities overall is strong, being generally the same as the previous year However, some properties are impacted by the opening of competing shops nearby Some tenants, though few, are requesting lower rents and there are a few properties where some tenants have sent notices of termination of lease contract Financial condition The volatility of interest rates had risen starting in April but have since settled down However, there is a sense that interest rates may rise in the future with the BOJ s inflation target introduction Financial institutions continue to have an active stance of lending to J-REITs Operating strategy t Operating strategy Continue selective investment in excellent properties Aim for steady external growth with properties supplied from the sponsor, utilizing their ability to develop and operate, while securing opportunities for acquiring excellent properties from other sources Since contracts are mainly long-term fixedrent contracts, the impact of lowered rents and terminations on the entire portfolio will be minor Flexibly implement additional investment and tenant replacements conductive to increased competitiveness of properties and adjust to the environment surrounding properties Consider property replacements, taking into consideration area, building age, property characteristics, etc. Operating strategy While maintaining high distributions of over 18,000 yen, maintain conservative LTV while pursuing external growth Flexibly further external growth with debt financing through the capacity to acquire properties expanded with the public offering Promote extension of loan period for the time being 11

13 2. Operating strategy External environment surrounding FRI Year-on-year change in the consumer price index Understanding di of retail environment BOJ has decided to introduce an inflation target (inflation rate of 2%) (%) (%) 33 09/01 09/11 10/09 11/07 12/05 13/03 消費者物価指数の前年同月比 Year-on-year change of consumer price index Source: Statistics Bureau, Ministry of Internal Affairs and Communications Retail sales which had been sluggish have seen a recovery trend in 2013 SC Shopping Year-on-year change of sales by center business type 10 百貨店 Department store 5 チェーンストア Chain store /01 10/07 11/01 11/07 12/01 12/07 13/01 Source: Japan Chain Store Association, Japan Department Store Association and Japan Council of Shopping Centers 12 (%) Change in consumer confidence index An improvement of consumer confidence can be seen due to Abenomics 消費者態度指数 Consumer confidence index 08/01 09/09 11/05 13/01 Source: Cabinet Office Consumer confidence index 1.6 Due to the inflation target, interest rates which had been low and stable may rise 長期金利 Long-term (10 interest 年国債 rates ) 推移 (10-year bonds) 0 10/01 10/05 10/09 11/01 11/05 11/09 12/01 12/05 12/09 13/01 13/05 Source: Ministry of Finance

14 2. Operating strategy Future direction of management Basic policy: Secure stable earnings over the medium to long term Stage 1 Stage 2 1. Pursue expansion of the asset size 1. Maintenance of stable earnings structure 2. Conservative financial operations 2. Efforts for economic growth Realized stable distributions at the 18,000 yen level 分g Maintain and increase distributions at the 18,000 yen level 19,982 ( 円)配17,960 18,44118,548 18,737 18,58818,195 18,478 18,599 18,382 Distributions 18,347 (yen) 金External environment 3,500 factors Demographic change 3,000 Inflation and other 300 economic changes Emergence of competitor 2, facilities Rise of e-commerce, etc. Asset Size (billion yen) 200 2, , , 第 8th 8 期第 9th 9 期第 10th 期第 11th 期第 12th 期第 13th 期第 14th 期第 15th 期第 16th 期第 17th 期第 18th 期 Internal environment factors Increase of risk tolerance due to portfolio expansion Accumulation of building age Increase of repair costs, etc. property acquisition Efforts for partial growth Increasing the ratio of facilities in the city center Increasing the ratio of sales-linked rent, etc. Continue portfolio management cycle Aging of assets Change in environment Partial property replacement/transfer 1 Increase of asset value Strategic CAPEX investment Large-scale renovation LTV LTV 41.0% 41.0% 45.5% 46.2% 45.7% 43.6% 49.6% 46.8% 42.5% 46.3% 41.0% LTV control that is solid and careful Borrowings 借入 Strong financial standing through conservative financial operations 13

15 14 3. Overview of portfolio

16 3. Overview of portfolio Portfolio map 29 properties Regional SC: Outlet mall: Community SC: A large-scale shopping center (SC) which houses multiple specialty stores. A large-scale shopping center (SC) at which multiple outlet stores are concentrated. A medium-scale shopping center (SC) where the main tenant is a general merchandise store, etc. Neighborhood SC: Supermarket: Urban retail facilities: Other: A medium or small-scale shopping center (SC) where the main tenant is a food supermarket, etc. A supermarket which mainly sells food products. A store facing a main street or specialty store building located in a prime urban location. None of the above. Asset size billion yen (as of August 14, 2013) Tokyo metropolitan area 16 Costco Wholesale Warehouse Iruma (land interest) 15 Mitsui Outlet 24 Mitsui Shopping Park Park Iruma LaLagarden KASUKABE 19 AEON TOWN Tanashi-shibakubo 14 Queen s Isetan 28 Suginami-momoi Ikebukuro Square Acquired in 18th period 23 Shimura Shopping Center Ito-Yokado Higashi-yamato JR Yamanote Line Summit Store Takinogawa momijibashi 4 AEON Hadano Shopping Center 25 Summit Store Yokohama Okano (land interest) 17 Desigual Harajuku 6 Kamiikedai Tokyu Store 1 AEON Shinagawa Seaside 22 Shopping Center GINZA GLASSE 15

17 3. Overview of portfolio Portfolio map Regional SC: Outlet mall: Community SC: A large-scale shopping center (SC) which houses multiple specialty stores. Neighborhood SC: A medium or small-scale shopping center (SC) where the main tenant is a food supermarket, etc. A supermarket which mainly sells food products. A large-scale shopping center (SC) at which Supermarket: multiple outlet stores are concentrated. Urban retail facilities: A store facing a main street or specialty store A medium-scale shopping center (SC) where building located in a prime urban location. the main tenant is a general merchandise store, etc. Other: None of the above. Chugoku area Acquired in 18th period Kansai area 29 Mitsui Shopping Park ALPARK (East Building) 12 You Me Town Hiroshima 2 AEON Ibaraki 7 Shopping Center Belltown Tambaguchi Eki-mae Store 27 QANAT Rakuhoku 10 Sports Club 3 Joyfultown Renaissance Hiroshima Okayama Kyushu area Frespo Tosu (land interest) 20 TSUTAYA Fukuoka Tenjin Chubu area 26 VIORO 5 Papillon Plaza 13 WV SAKAE 8 AEON MALL 21 NAGOYADOMEmae Mitsui Shopping Park LaLaport Iwata 16

18 3. Overview of portfolio Portfolio summary (as of August 14, 2013) (yen in millions, unless otherwise indicated) No. Property name Total leasable Occupancy Age Acquisition Seller Acquisition Appraisal value Main tenants PML floor space rate (years) timing price (*5) (*6) (*1) (m 2 ) (*2) (*2) (*3) (*4) 1 AEON Shinagawa Seaside Shopping Center Aug JT 20,100 77, % 20, AEON Retail 14% 2 AEON Ibaraki Shopping Center Aug JT 18, , % 24, AEON Retail 13% 3 Joyfultown Okayama Aug JT 11,000 63, % 8, Ito-Yokado 2% 4 AEON Hadano Shopping Center Aug JT 9,300 79, % 11, AEON Retail 23% 5 Papillon Plaza Aug JT 4,810 17, % 4, Royal Home Center 1% 6 Kamiikedai Tokyu Store Aug JT 1,490 6, % 1, Tokyu Store 11% 7 Bell Town Tambaguchi Aug JT 2,130 11, % 2, Matsumoto 9% 8 AEON MALL NAGOYADOME-mae Mar JT 24, , % 25, AEON Retail 13% 9 Summit Store Takinogawa Momiji-bashi Sep JT 3,100 6, % 3, Summit 12% 10 Sports Club Renaissance Hiroshima Apr JT 1,940 4, % 1, Renaissance 12% 11 Frespo Tosu (land interest) Nov JT 3,178 79, % 3,050 - Daiwa Lease - 12 You Me Town Hiroshima Feb JT 23, , % 22, Izumi 10% 13 WV SAKAE Jul MF, etc. 7,300 4, % 6, Marui 13% 14 Queen s Isetan, Suginami-momoi Jul MF, etc. 3,560 5, % 3, Isetan Mitsukoshi Food Service 12% 15 Mitsui Outlet Park Iruma Jul MF etc. 19,900 98, % 22, Mitsui Fudosan 14% Costco Wholesale, l Warehouse Iruma 16 (land interest) Jul MF, etc. 2,600 24, % 2,630 - Costco Wholesale Japan - 17 Desigual Harajuku *7 Oct Non-sponsor 3,100 1, % 2, INTS It s not the same Japan 14% 18 Ito-Yokado, Higashi-yamato Jan Non-sponsor 11,600 53, % 11, Ito-Yokado 12% 19 AEON TOWN Tanashi-shibakubo Feb MF, etc. 3,100 8, % 3, AEON Retail 11% 20 TSUTAYA Fukuoka Tenjin Dec Non-sponsor 3,700 4, % 4, Culture Convenience Club 2% 21 Mitsui Shopping Park LaLaport Iwata Jul MF, etc. 15, , % 15, Mitsui Fudosan 16% 22 GINZA GLASSE Jul MF, etc. 13,600 5, % 13, DIESEL Japan 11% 23 Shimura Shopping Center Jan Non-sponsor 4,430 17, % 4, Summit 14% 24 Mitsui Shopping Park LaLagarden KASUKABE Feb MF, etc. 10,000 63, % 10, Mitsui Fudosan 13% 25 Summit Store Yokohama Okano (land interest) Feb Non-sponsor 5,700 14, % 5,700 - Summit - 26 VIORO Feb Non-sponsor 10,100 5, % 11, % 27 QANAT Rakuhoku Jul MF, etc. 8,800 48, % 8, Izumiya 9% 28 Ikebukuro Square Feb MF, etc. 20,400 8, % 21, Round One 14% 29 Mitsui Shopping Park ALPARK (East Building) Feb MF, etc. 5,400 65, % 5, Mitsui Fudosan 12% Total 271,638 1,338, % 281, % *1: The MF, etc. indicated in the Seller column represents Mitsui Fudosan and its subsidiaries, special purpose companies in which Mitsui Fudosan has invested. *2: For properties for which pass-through type master lease contracts are concluded, the figures are as at the end of the 18th fiscal period (June 2013) calculated based on end tenants. *3: The figures are as of the end of 18th period (June 2013). *4: The figures are as of August 14, *5: For multi-tenant properties and properties for which pass-through type master lease contracts are concluded, the end tenants with the largest leased floor space and comprise over 30% of the total leasable floor space as of August 14, 2013 are shown. *6: PML represents the probable maximum loss in earthquake risk analysis. The entered values are those of the store buildings for Ibaraki and Iruma, of the main building for Hadano, and of the Ito-Yokado building for Okayama. The figure for Desigual Harajuku includes the building portion which was partly demolished as of October 29, The value for Total represents the PML value of the entire portfolio, not the average value. *7: The acquisition price of Desigual Harajuku is as at the time of acquisition and includes part of the site (cost of sales: 259 million yen) sold on July 30,

19 3. Overview of portfolio Lease contract status Geographical diversification Tenant diversification Property type diversification Kyushu area Chugoku 8.5% area 15.8% Kansai area 11.8% Chubu area 16.9% Tokyo metropolitan area 47.0% Izumiya 3.0% Round One 4.2% 4.4% Summit Ito-Yokado 7.4% Other 23.0% AEON Retail 30.0% Mitsui Fudosan 20.1% Izumi 8.0% Urban retail facility 18.6% Food supermarket 6.7% Neighborhood SC 9.1% Other 4.5% Community SC 20.8% Regional SC 33.5% Outlet mall 6.9% Specified assets (*2) AEON MALL NAGOYADOME-mae 8.3% You Me Town Hiroshima 8.0% Ratio of fixed rent and sales-linked rent Sales-linked rent 1.2% AEON Ibaraki SC 7.9% AEON Other Shinagawa SSC 67.9% Fixed Rent 7.9% 98.8% Diversification of periods remaining until rent revision (*3) 3 years or less 32.0% 3 to 5 years 10.4% Over 10 years 30.2% 5 to 10 years 27.4% Diversification of remaining contract terms 5 years or less 10.1% 5 to 10 years 35.6% Over 10 years 54.3% Diversification of contract terms 5 years or less 3.8% 5 to 10 years 11.4% Over 10 years 84.8% 18 Average remaining i contract term: 11.9 years Average contract t term: 19.0 years *1: The above figures are all calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts that are valid as at August 14, Variable rent is not taken into account. The ratio of fixed rent and sales-linked rent are the 18th fiscal period results. *2: The figures for properties with annual rent accounting for over 7% of the entire portfolio. *3: The figures are the diversification of the period remaining until the next rent revision date or contract maturity date, whichever the earlier.

20 3. Overview of portfolio 19 Rent revision and lease maturity Property name Main tenant (*1) Lease 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th maturity 1 AEON Shinagawa Seaside Shopping Center AEON Retail Revision Oct. 10, AEON Ibaraki Shopping Center AEON Retail Revision Revision Dec. 31, Joyfultown Okayama Ito-Yokado Building Ito-Yokado Revision Nov. 5, 2018 Annex Building Sega Maturity date Recontract Nov. 5, AEON Hadano Shopping Center AEON Retail Revision Revision July 14, Papillon Plaza Royal Home Center Maturity date Jan. 31, Kamiikedai Tokyu Store Tokyu Store Mar. 19, Belltown Tambaguchi Eki-mae Store Matsumoto Aug. 29, AEON MALL NAGOYADOME-mae AEON Retail Mar. 23, Summit Store Takinogawa Momiji-bashi Summit Sept. 29, Sports Club Renaissance Hiroshima Renaissance Maturity date July 31, Frespo Tosu (land interest) Daiwa Lease Nov. 7, You Me Town Hiroshima Izumi Feb. 19, WV SAKAE Marui Maturity date Jan. 19, Queen s Isetan Suginami-momoi Isetan Mitsukoshi Food Service Dec. 8, Mitsui Outlet Park Iruma Mitsui Fudosan July 9, Costco Wholesale Warehouse Iruma (land interest) Costco Wholesale Japan Apr. 3, Desigual Harajuku INTS It s not the same Japan Sept. 16, Ito-Yokado Higashi-yamato Ito-Yokado Revision Nov. 12, AEON TOWN Tanashi-shibakubo AEON Retail Mar. 18, TSUTAYA Fukuoka Tenjin CCC June 25, Mitsui Shopping Park LaLaport Iwata Mitsui Fudosan June 30, GINZA GLASSE DIESEL Japan Mar. 31, Shimura Shopping Center Summit Revision Nov. 20, Mitsui Shopping Park LaLagarden KASUKABE Mitsui Fudosan Feb. 15, Summit Store Yokohama Okano (land interest) Summit Nov. 30, VIORO (*2) QANAT Rakuhoku Izumiya Revision Nov. 29, Ikebukuro Square Round One Dec. 20, Mitsui Shopping Park ALPARK (East Building) Mitsui Fudosan Feb. 18, 2033 *1: For multi-tenant properties and properties for which pass-through type master lease contracts are concluded, the end tenants with the largest leased floor space and comprise over 30% of the total leasable floor space are shown. *2: For 26.VIORO, The main tenant, the rent revision and lease maturity schedules are not disclosed as the status of contracts with end tenants ranges in variety.

21 3. Overview of portfolio Issues to tackle 1. Status of rent revisions Property name Tenant name Rent revision schedule Percentage of Rent revision i status t Lease contract tterm total t annual rent (*) Ito-Yokado Higashi-yamato Ito-Yokado November 2012 Under discussion 20 years (maturity: November 2023) 4.1% AEON Ibaraki Shopping Center AEON Retail January 2013 Under discussion 20 years (maturity: December 2020) 79% 7.9% AEON Hadano Shopping Center AEON Retail November 2013 Under preparation 25 years 7 months (maturity: July 2021) 4.6% *: As of August 14, Other issues Property name Issues Present status Percentage of total annual rent (*) Joyfultown Okayama (Annex Building) Current fixed-term lease contract due for maturity in July 2013 (19th fiscal period) New 5-year fixed-term building lease contracts have been completed for all sections (change of master lessee) 0.8% Papillon Plaza Current fixed-term lease contract due for maturity in January 2014 (20th fiscal period) Currently negotiating with end tenants for recontracting 2.2% *: As of August 14,

22 21 4. Financial condition

23 22 4. Financial condition Maintained conservative financial operations 1. Status of major financial indicators Conservative financial operations taking into account the LTV level Borrowings, etc. balance (*1) Tenant and security deposits balance (*2) End of the 17th period End of the 18th period (December 31, 2012) (June 30, 2013) 67,400 million 72,040 million 40,889 million 41,573 million Liabilities balance total 108,289 million 113,613 million LTV ratio (*3) 42.5% 41.0% Interest-bearing debt ratio (*4) Long-term, fixed-rate debt ratio 25.2% 25.1% 79.7% 85.1% *1: Borrowings, etc. include investment corporation bonds. *2: For overview of tenant and security deposits, please see P34. *3: LTV = (Borrowings, etc. + Tenant and security deposits Unrestricted t cash and deposits) / (Total assets balance Unrestricted cash and deposits). *4: Interest-bearing debt ratio = (Borrowings, etc. Unrestricted cash and deposits) / (Total assets balance Unrestricted cash and deposits) Realizing lower cost of fund raising, while extending the remaining period of debt (as of June 30, 2013) Average cost of fund raising Average maturity Total average Total average Borrowings, etc. *including tenant and Borrowings, etc. including tenant and security deposits security deposits 1.08% 0.77% 3.58 years 5.37 years (-0.03pt) (-0.02pt) (+0.6 years) (+0.25 years) *Figures in parenthesis are period-to-period comparisons (billion yen) 2. Status of ratings (as of August 14, 2013) Rating Firm Category Rating Outlook R&I Issuer rating AA- Stable S&P Long-term / Short-term A+/A-1 Stable Moody s Issuer rating A2 Stable 3. Status of commitment lines Lender Syndicate of 6 banks with Sumitomo Mitsui Trust Bank as the arranger Amount (billion yen) Balance of borrowings 55 - Sumitomo Mitsui Trust Bank 30 - Sumitomo Mitsui Banking Corporation 30 - Syndicate of 3 banks with Mitsubishi UFJ Trust and Banking Corporation as the arranger うち 短期借入金 Of which, short-term borrowings 長期借入金 投資法人債 Diversified maturity dates Period September 2012 to September 2015 September 2012 to September 2016 September 2012 to August February 2013 to February 2014 Long-term borrowings and investment (1 corporation 年以内に返済する長期借入金は含まない bonds ) Commitment line (as of August 14, 2013) Use of funds No restrictions No restrictions No restrictions No restrictions (as of August 19, 2013) Long-term borrowings in the 19th fiscal period New borrowings in association with new property acquisitions in the 18th fiscal period 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th 37th 38th 39th (June 14) (Dec. 14)(June 15)(Dec. 15)(June 16) (Dec. 16) (June 17)(Dec. 17)(June 18)(Dec. 18)(June 19)(Dec. 19)(June 20)(Dec. 20)(June 21)(Dec. 21)(June 22)(Dec. 22)(June 23) (Dec. 13) (Dec. 13)

24 23 5. APPENDIX

25 5. APPENDIX Income statement Item 17th Period 18th Period (December 2012) (June 2013) Changes Operating revenue 9, % 9, % % Lease business revenue (*1) 8,868 9,646 Other lease business revenue(*1) Gain on sale of real estate, etc. estate sales profits (*2) Operating expenses 4, % 4, % % Expenses related to rent business 3,816 4,110 CM and PM fee (*3) Taxes on properties(*4) Insurance Repair cost Depreciation (*5) 2,095 2,241 Other operating expenses Selling, general and administrative expenses Asset management fee (*6) Asset custody fee Administrative service fees Directors' compensations 6 6 Others Operating income 4, % 5, % % Non-operating income 25 9 Non-operating expenses Interest expenses (*7) New investment unit insurance costs (*8) Others Ordinary income 4, % 4, % % Income before income taxes 4, % 4, % % Income taxes (after net adjustment) 0 0 Net income 4, % 4, % % Unappropriated retained earnings 4, % 4, % % (yen in millions, unless otherwise indicated) Material factors for increase / decrease *1 Properties acquired in the 18th fiscal period (Ikebukuro Square and ALPARK) +774 Absence of total Shinagawa common area maintenance charges, etc. -27 Full-period for Harajuku tenant (Desigual) +37 Absence of proceeds from tenants for restorations of spaces to their original conditions at Harajuku -32 *2 Absence of gain on sale in association with Harajuku land expropriation -104 *3 CM and PM fees for properties acquired in the 18th fiscal period (Ikebukuro Square and ALPARK) +53 *4 Properties acquired in the 16th fiscal period (Yokohama Okano and VIORO) and 17th fiscal period (QANAT Rakuhoku) +86 *5 Depreciation for properties acquired in the 18th period (Ikebukuro Square, ALPARK) +145 *6 Increase in asset management fees +14 *7 Increase in interest expenses (borrowings) +19 Increase in interest expenses (security deposit) +9 *8 Public offering costs

26 5. APPENDIX Balance sheet (Assets) 17th Period 18th Period Item Changes (December 31, 2012) (June 30, 2013) Current assets 14, % 14, % % Cash and deposits (*1) 9,618 7,873 Cash and deposits in trust (*1) 5,076 5,987 Others Non-current assets (including deferred assets) 228, % 252, % 24, % Property, plant and equipment (*2) 228, ,889 Buildings 41,924 44,149 Structures Tools, furniture and fixtures 8 9 Land 66,872 69,212 Buildings in trust 37,747 41,122 Structures in trust Machinery and equipment in trust Tools, furniture and fixtures in trust Land in trust 80,830 96,536 (yen in millions, unless otherwise indicated) Material factors for increase / decrease *1 Procurement from public offering +17,262 Cash and deposits not depreciated +2,241 Property acquired in the 18th period (based on acquisition price) -25,800 Tenant deposits received for properties acquired in the 18th period +1,194 Borrowings in association with new property acquisitions +24,000 Repayment of borrowings -19,200 Scheduled repayment of security deposits -516 Repayment of amortization -160 *2 Property acquired in the 18th period (based on acquisition price) +25,800 Depreciation -2,241 Intangible assets 1 1 Investments and other assets Assets 243, % 267, % 23, % 25

27 5. APPENDIX Balance sheet (Liabilities and net assets) Item 17th Period 18th Period (December 31, 2012) (June 30, 2013) Changes (yen in millions, unless otherwise indicated) Material factors for increase / decrease Current liabilities 19, % 14, % -4, % Short-term loans payable 17,220 12,120 *1 (*1) (1) New borrowings in association with new property Accounts payable acquisitions +14,000 Repayment of borrowings -19,360 Accrued expenses Extension of short-term borrowings -1,500 Shifted from long-term borrowings Advances received 967 1,080 duewithinoneyear +1,760 Others Non-current liabilities 91, % 101, % 10, % Long-term borrowings (*2) 45,180 54,920 Investment corporation bonds 5,000 5,000 Tenant leasehold and security deposits (*3) 19,553 19,547 Tenant leasehold and security deposits in trust t 21,335 22,026 (*3) Others Liabilities 110, % 115, % 5, % *2 New borrowings in association with new property acquisitions +10,000 Extension of short-term borrowings +1,500 Long-term borrowings due within one year -1,600 *3 Tenant deposits received for property acquired in the 18th period +1,194 Scheduled repayment of security deposits -516 *4 Procurement through public offering +17,262 Unitholders equity (*4) 129, % 146, % Surplus and others 4, % 4, % Net assets (*5) 133, % 151, % 17, % Liabilities and net assets 243, % 267, % 23, % *5 Net assets per unit: At the end of 17th period At the end of 18th period 587,267 yen 609,816 yen 26

28 27 5. APPENDIX Statement of cash flows Item I Net cash provided by (used in) operating activities (yen in millions, unless otherwise indicated) 17th period 18th period (December 2012) (June ) Income before income taxes 4,274 4,551 Depreciation 2,095 2,241 Others Net cash provided by (used in) operating activities 6,488 6,987 II Net cash provided by (used in) investment activities Purchase of property, plant and equipment ,618 Purchase of property, plant and equipment in trust - 8,933-20,577 Repayments of tenant leasehold and security deposits Proceeds from tenant leasehold and security deposits Repayments of tenant leasehold and security deposits in trust Proceeds from tenant leasehold and security deposits in trust 1, Payments into deposits in trust for tenant leasehold and security deposits in trust - 1,102 - Net cash provided by (used in) investment activities - 10,066-25,511 III Net cash provided by (used in) financing activities Increase in short-term loans payable 33,800 42,800 Decrease in short-term loans payable - 48,300-47,300 Proceeds from long-term loans payable 3,800 11,500 Repayment of long-term loans payable - 1,660-2,360 Proceeds from issuance of new investment units 20,427 17,231 Dividends paid - 3,874-4,180 Net cash provided by (used in) financing activities 4,193 17,690 IV Net increase (decrease) in cash and cash equivalents V Cash and cash equivalents at beginning of period 11,546 12,162 VI Cash and cash equivalents at end of period 12,162 11,328

29 28 5. APPENDIX Financial results by property (1) AEON Shinagawa Seaside Shopping Center AEON Ibaraki Shopping Center Joyfultown Okayama (yen in millions, unless otherwise indicated) Operating revenue Expenses related to rent business NOI yield Lease Other lease (to Taxes on CM and Repair Net total NOI (*1) (to book Total business business Total Insurance Depreciation Others acquisition properties PM fee cost value) revenue revenue price) (*2) 17th % 7.4% 18th % 7.3% 17th % 8.3% 18th % 8.4% 17th % 6.2% 18th % 6.0% AEON Hadano 17th % 8.4% Shopping Center 18th % 8.0% 92% 9.2% Papillon Plaza Kamiikedai Tokyu Store 17th % 6.5% 18th % 6.3% 17th % 6.8% 18th % 6.8% Belltown Tambaguchi 17th % 7.5% Eki-mae Store 18th % 7.5% AEON MALL 17th % 5.9% NAGOYADOME-mae 18th % 6.0% Summit Store 17th % 6.1% Takinogawa Momiji- bashi 18th % 5.9% Sports Club 17th % 6.4% Renaissance Hiroshima 18th % 6.5% Frespo Tosu (land 17th % 6.1% interest) 18th % 6.1% You Me Town 17th % 5.9% Hiroshima 18th % 5.9% WV SAKAE 17th % 4.9% 18th % 4.9% Queen s Isetan 17th % 5.8% Suginami-momoi 18th % 5.7% *1: NOI = Net total + Depreciation *2: While part of the land of AEON Ibaraki Shopping Center was sold to Ibaraki City on October 12, 2010 (area of m 2 and book value of 15 million yen) for 19 million yen, its figure is calculated using the price at the time of acquisition.

30 29 5. APPENDIX Financial results by property (2) (yen in millions, unless otherwise indicated) Operating revenue Expenses related to rent business NOI yield Total Other Lease (to lease Taxes on CM and Repair Net total NOI (*1) (to book business Total Insurance Depreciation Others acquisition business properties PM fee cost value) revenue price) (*2) revenue 17th % 6.8% 18th % 7.0% 17th % 5.6% Mitsui Outlet Park Iruma Costco Wholesale 17th % 5.6% Warehouse Iruma (land interest) 18th % 5.6% Desigual Harajuku 17th % 1.0% 18th % 3.1% Ito-Yokado Higashi- 17th % 5.9% yamato 18th % 5.6% 60% 6.0% AEON TOWN 17th % 6.7% Tanashi-shibakubo 18th % 6.7% TSUTAYA Fukuoka 17th % 7.3% Tenjin 18th % 7.4% Mitsui Shopping Park 17th % 7.0% LaLaport Iwata 18th % 6.6% 73% 7.3% GINZA GLASSE Shimura Shopping Center Mitsui Shopping Park LaLagarden L KASUKABE Summit Store Yokohama Okano (land interest) VIORO QANAT Rakuhoku Ikebukuro Square 17th % 4.1% 18th % 4.1% 17th % 4.9% 18th % 4.4% 17th % 6.6% 18th % 6.6% 17th (*3)- (*3)- 18th % 4.9% 17th (*3)- (*3)- 18th % 5.1% 17th (*3)- (*3)- 18th % 5.4% 17th th (*3)- (*3)- Mitsui Shopping Park 17th ALPARK (East Building) 18th (*3)- (*3)- *1: NOI = Net total + Depreciation *2: While part of the land of Desigual Harajuku was sold to the Tokyo Metropolitan Government on July 30, 2012 (area of 26.86m 2 and book value of 259 million yen) for 333 million yen and compensation for transfer of property, etc. (approx. 55 million yen) was received due to the removal of the building, etc., its figure is calculated using the price at the time of acquisition. *3: NOI yield is not shown for properties acquired in 2012 and in 2013.

31 30 5. APPENDIX Appraisal value Area Property name Acquisition timing Acquisition price Book value 18th period end (yen in millions, unless otherwise indicated) 18th period end 17th period end Major factors of Changes (June 2013) (December 2012) increase/decrease Property Appraisal Cap rate Appraisal Cap rate Appraisal and city Cap rate Others value (*1) value (*1) value planning taxes AEON Shinagawa Seaside Shopping Center Aug ,100 16,712 20, % 19, % % AEON Hadano Shopping Center Aug ,300 8,060 11, % 11, % % Kamiikedai Tokyu Store Aug ,490 1,328 1, % 1, % % Summit Store Takinogawa Momiji-bashi Sep ,100 2,959 3, % 3, % % Queen s Isetan Suginami-momoi Jul ,560 3,470 3, % 3, % % Tokyo Mitsui Outlet Park Iruma Jul ,900 18,027 22, % 21, % % metropolitan Costco Wholesale Warehouse Iruma (land area interest) Jul ,600 2,626 2, % 2, % 0 0.0% Desigual Harajuku Oct ,100 2,939 2, % 2, % % Ito-Yokado Higashi-yamato Jan ,600 10,850 11, % 11, % 0 0.0% AEON TOWN Tanashi-shibakubo Feb ,100 2,983 3, % 3, % % GINZA GLASSE Jul ,600 13,366 13, % 13, % 0-0.1% Shimura Shopping Center Jan ,430 4,457 4, % 4, % % Mitsui Shopping Park LaLagarden KASUKABE Feb ,000 9,674 10, % 10, % % Summit Store Yokohama Okano (land interest) Feb ,700 5,945 5, % 5, % 0 0.0% Ikebukuro Square Feb ,400 20,419 21, % 20, % % AEON MALL NAGOYADOME-mae Mar ,800 22,251 25, % 25, % % Chubu area WV SAKAE Jul ,300 7,000 6, % 6, % % Mitsui Shopping Park LaLaport Iwata Jul ,200 13,905 15, % 15, % 0 0.0% AEON Ibaraki Shopping Center Aug ,100 15,070 24, % 24, % 0 0.0% Kansai area Belltown Tambaguchi Eki-mae Store Aug ,130 1,972 2, % 2, % % QANAT Rakuhoku Jul ,800 8,686 8, % 8, % % Joyfultown Okayama Aug ,000 9,609 8, % 8, % % Chugoku Sports Club Renaissance Hiroshima Apr ,940 1,910 1, % 1, % 0 0.0% 0% area You Me Town Hiroshima Feb ,200 21,501 22, % 21, % % Mitsui Shopping Park ALPARK (East Building) Feb ,400 5,558 5, % 5, % % Papillon Plaza Aug ,810 4,653 4, % 4, % % Kyushu Frespo Tosu (land interest) Nov ,178 3,256 3, % 3, % 0 0.0% area TSUTAYA Fukuoka Tenjin Dec ,700 3,605 4, % 4, % % VIORO Feb ,100 10,084 11, % 10, % % Total - 271, , , ,540-2,360 - *1: CR = Cap rate determined by the direct reduction approach. *2: For assets acquired in the 18th fiscal period, the figures pertaining to the appraisal at the time of the property acquisition are shown as the 17th period end figures. Unrealized gain: Approx billion yen (+4.5 billion yen period-to-period) (+0.8% period-to-period)

32 31 5. APPENDIX Appraisal value (supplement) Area Tokyo metropolitan area Chubu area Kansai area Chugoku area Kyushu area 18th period end (June 2013) 17th period end (December 2012) Property name Direct Direct Appraisal Discounted cash flow Appraisal Discounted cash flow reduction reduction value approach approach value approach approach (million yen) CR (*1) DR (*2) TCR (*2) (million yen ) CR (*1) DR (*2) TCR (*2) AEON Shinagawa Seaside Shopping Center 20, % 5.8% 6.3% 19, % 5.9% 6.4% AEON Hadano Shopping Center 11, % 5.4% 6.1% 11, % 5.6% 6.3% Kamiikedai Tokyu Store 1, % 5% 5.1% 5.5% 5% 1, % 5.3% 5.7% Summit Store Takinogawa Momiji-bashi 3, % 5.4% 5.9% 3, % 5.6% 6.1% Queen s Isetan Suginami-momoi 3, % 5.4% 5.8% 3, % 5.7% 6.1% Mitsui Outlet Park Iruma 22, % 5.4% 5.7% 21, % 5.4% 5.7% Costco Wholesale Warehouse Iruma (land interest) 2, % 5.2% 5.9% 2, % 5.2% 5.9% Desigual Harajuku 2,860 41% 4.1% 38% 3.8% 42% 4.2% 2,780 42% 4.2% 39% 3.9% 43% 4.3% Ito-Yokado Higashi-yamato 11, % 5.4% 5.7% 11, % 5.4% 5.7% AEON TOWN Tanashi-shibakubo 3, % 6.1% 6.5% 3, % 6.2% 6.6% GINZA GLASSE 13, % 3.6% 4.0% 13, % 3.7% 4.1% Shimura Shopping Center 4, % 5.7% 5.8% 4, % 5.9% 6.0% Mitsui Shopping Park LaLagarden KASUKABE 10,400 60% 6.0% 58% 5.8% 62% 6.2% 10, % 6.2% 60% 6.0% 64% 6.4% Summit Store Yokohama Okano (land interest) 5, % 5.2% 5.8% 5, % 5.2% 5.8% Ikebukuro Square 21, % 5.0% 5.4% 20, % 5.1% 5.5% AEON MALL NAGOYADOME-mae 25, % 5.0% 5.4% 25, % 5.0% 5.4% WV SAKAE 6, % 5.3% 5.6% 6, % 5.4% 5.7% Mitsui Shopping Park LaLaport Iwata 15, % 6.1% 6.5% 15, % 6.1% 6.5% AEON Ibaraki Shopping Center 24, % 5.3% 5.7% 24, % 5.3% 5.7% Belltown Tambaguchi Eki-mae Store 2, % 5.6% 6.0% 2, % 5.6% 6.0% QANAT Rakuhoku 8, % 5.2% 5.6% 8, % 5.2% 5.6% Joyfultown Okayama 8, % 6.1% 6.5% 8, % 6.1% 6.5% Sports Club Renaissance Hiroshima 1, % 6.2% 6.8% 1, % 6.2% 6.8% You Me Town Hiroshima 22, % 6.1% 6.5% 21, % 6.1% 6.4% Mitsui Shopping Park ALPARK (East Building) 5, % 6.3% 6.8% 5, % 6.3% 6.8% Papillon Plaza 4, % 5.5% 5.9% 4, % 5.5% 5.9% Frespo Tosu (land interest) 3, % 7.4% - 3, % 7.4% - TSUTAYA Fukuoka Tenjin 4, % 5.1% 6.9% 4, % 5.2% 7.0% VIORO 11, % 4.8% 5.0% 10, % 4.8% 5.0% Total 281, , *1: CR = Cap rate determined by the direct reduction approach *2: DR = Discount rate determined by the discounted cash flow approach; TCR = Terminal cap rate determined by the discounted cash flow approach *3: For assets acquired in the 18th fiscal period, the figures pertaining to the appraisal at the time of the property acquisition are shown as the 17th period end figures.

33 5. APPENDIX Grow cycle and result of asset acquisition July 2008 Public offering and asset acquisition utilizing sponsor support July 2010 Public offering and asset acquisition utilizing sponsor support July 2012 Public offering and asset acquisition utilizing sponsor support March 2013 Public offering and asset acquisition utilizing sponsor support Distribution per unit LTV 17,960 yen 18,441 yen 18,548 yen 18,737 yen 18,588 yen 18,478 yen 18,599 yen 18,195 yen 45.5% 46.2% 45.7% 46.3% 43.6% 46.8% 41.0% 41.0% 19,982 yen Stable distributions 18,382 yen 18,347 yen 18,400 yen 19,000 yen 41.0% Approx.41% 18,000 yen Sound and careful LTV control 49.6% 42.5% 50.0% 40.0% 0% Creation of acquisition capacity Flexible asset acquisition utilizing borrowings Creation of acquisition capacity Flexible asset acquisition utilizing borrowings Creation of acquisition capacity Creation of acquisition capacity Flexible asset acquisition utilizing borrowings et size Ass Acquisition from sponsor Acquisition from non-sponsor 4 properties Total:33.3 billion yen 1 property 3.1billion yen 1 property 1 property 1 property 3.1 billion 11.6 billion 3.7 billion yen yen yen 2 properties Total: 1 property 28.8 billion yen 10 billion yen 1 property 4.4 billion yen 1 property 8.8 billion yen 2 properties Total: 15.8 billion yen 2 properties 25.8 billion yen Aim for further growth of asset size for maintaining and enhancing stability of earnings structure bn yen bn yen bn yen 178 bn yen 178 bn yen bn yen bn yen bn yen 237 bn yen bn yen bn yen 第 8th 8 期第 9th 9 期第 10th 期第 11th 期第 12th 期第 13th 期第 14th 期第 15th 期第 16th 期第 17th 期第 18th 期 (June (08/6 08) 期 ) (Dec. (08/12 08) 期 ) (June (09/6 期 09) ) (09/12 (Dec. 09) 期 ) (June (10/6 期 10) ) (10/12 (Dec. 10) 期 ) (June (11/6 期 11) ) (11/12 (Dec. 11) 期 ) (June (12/6 期 12) ) (12/12 (Dec. 12) 期 ) (June (13/6 期 13) ) 列 1 スポンサー以外からの取得 Acquisition from スポンサーからの取得 Acquisition from non-sponsor sponsor 第 19th 期 (13/12 (Dec. 13) 期 ) (Forecast) Note: Asset size is based on acquisition price

34 5. APPENDIX Property types and resources for property acquisitions Properties acquired from the sponsor Characteristics Viewpoint on acquisition JT Mitsui Fudosan Properties acquired from non-sponsors Regional lsc Outlet mall Community SC Neighborhood SC Food supermarket Urban retail facilities - Large-scale, best-in-town town facilities - Carefully select best-in-town town serve as FRI s revenue base facilities - Stable operations with fixed-rents - Expectations on development and long-term contracts ability of the sponsor - Closely tied to daily lives with food supermarkets as anchor tenant - The relatively large number of properties throughout Japan contributes to building up the amount of assets - Enjoys solid demand - Excellent properties exist in various areas throughout Japan - New domain in which FRI will newly develop business - Stable operations possible through locational selection - Keep in mind geographical diversification through investment in core cities throughout Japan - Select properties while focusing on powerful anchor tenants - Focus on trade area and tenant credit - Location s ability to attract substitute tenants - Limit locations to prime areas of large cities - High level of asset liquidity 3 properties Total: 66.1 billion yen 4 properties Total: 45.2 billion yen 3 properties Total: 6.7 billion yen 2 properties Other - Total: 5.1 billion yen Total billion yen 29 properties - Mitsui Shopping Park LaLaport Iwata Mitsui i Shopping Park ALPARK (Total: 20.6 billion yen) Mitsui Outlet Park Iruma (Total: 19.9 billion yen) Mitsui Shopping Park LaLagarden KASUKABE QANAT Rakuhoku (Total: 18.8 billion yen) AEON TOWN Tanashishibakubo Queen s Isetan Suginamimomoi (Total: 6.6 billion yen) Ikebukuro Square GINZA GLASSE WV SAKAE (Total: 41.3 billion yen) Costco Wholesale Warehouse Iruma (land interest) (Total: 2.6 billion yen) - - Ito-Yokado Higashi-yamato (11.6 billion yen) Shimura Shopping Center (4.4 billion yen) Desigual Harajuku TSUTAYA Fukuoka Tenjin VIORO (Total: 16.9 billion yen) Summit Store Yokohama Okano (land interest) t) (5.7 billion yen) Total: Total: billion yen billion yen 11 properties 12 properties Total: 38.6 billion yen 6 properties Total: 233 billion yen 23 properties 33

35 5. APPENDIX Overview of tenant and security deposits 1. Definition 4. Remaining period for repayment Tenant deposits are generally returned to lessees without interest, when contracts are terminated. Security deposits are generally returned evenly over the contract period to lessees (repayment methods and interest payments, interest rates vary according to contracts). Within 5 years 24.4% Over 5 yrs and up to 10 yrs 44.3% Over 15 yrs and up to 20 yrs 4.9% Over 10 yrs and up to 15 years 24.5% Over 20 years 1.9% 2. Characteristics unique to FRI Over 10 years: Approx. 30% Since FRI contracts long-term leases, FRI can secure funds for the long-term with tenant and security deposits. Since FRI keeps security deposits from tenants in large quantities without t paying interest, t it can conduct fund raising i at low cost. Over 5 years: Approx. 80% Average remaining years for repayment of tenant and security deposits: 8.5 years (as of June 30, 2013) Example of repayment schedule (billion yen) Changes in balance of tenant and security deposits at You Me Town Hiroshima Security 保証金 deposits Tenant 敷金 deposits 5. Scheduled repayment of security deposits (billion yen) 20 億円 Repayment starts 2.0 at AEON Shinagawa Repayment starts at You Me Town Hiroshima Repayment ends at Joyfultown Okayama Repayment ends at AEON Shinagawa 10 億円 1.0 Repayment ends at NAGOYADOMEmae 億円 0 (year since start of contract) 2012 年 2014 年 2016 年 2018 年 2020 年 2022 年 2024 年 2026 年 2028年 Repayment ends at You Me Town Hiroshima

36 5. APPENDIX Performance of main indicators 7.0% NOI yield 6.2% 6.2% 6.2% 6.3% 6.2% 7.0% Yield after depreciation 6.0% 5.0% 4.0% 5.8% 5.8% 5.8% 5.8% 5.8% 6.0% 5.0% 4.0% 4.3% 4.3% 4.4% 4.4% 4.4% 4.1% 4.1% 4.1% 4.1% 4.1% 3.0% 2.0% 帳簿価格ベース Based on book value 取得価格ベース Based on acquisition price 第 14th 期第 15th 期第 16th 期第 17th 期第 18th 期 (June 11) (Dec. 11) (June 12) (Dec. 12) (June 13) (11/6 月 ) (11/12 月 ) (12/6 月 ) (12/12 月 ) (13/6 月 ) 3.0% 2.0% 帳簿価格ベース Based on book value 取得価格ベース Based on acquisition price 第 14 14th 期第 15 15th 期第 16th 期第 17th 期第 18th 期 (June 11) (Dec. 11) (June 12) (Dec. 12) (June 13) (11/6 月 ) (11/12 月 ) (12/6 月 ) (12/12 月 ) (13/6 月 ) LTV / Interest-bearing debt ratio NAV per unit / BPS per unit 60.0% 50.0% 40.0% 30.0% 20.0% 46.8% 46.3% 27.7% 27.4% 49.6% 31.6% 42.5% 41.0% 25.2% 25.1% (yen) 750, , , , , , , , , , , , , , % 00% 0.0% LTV 有利子負債比率有利子負債比率 Interest-bearing debt ratio 第 14th 期 第 15th 期 第 16th 期 (11/6 (June 月 11) ) (11/12 (Dec. 11) 月 ) (12/6 (June 月 12) ) 第 17th 期 (12/12 (Dec. 12) 月 ) 第 18th 期 (June (13/6 13) 月 ) 550, , 一口当たり NAV per unit NAV 一口当たり BPS per unit BPS 第 14th 期第 15th 期 (11/6 (June 月 11) ) (11/12 (Dec. 11) 月 ) 第 16th 期 (June (12/6 12) 月 ) 第 17th 期 (12/12 (Dec. 12) 月 ) 第 18th 期 (June (13/6 13) 月 ) 35

37 5. APPENDIX Overview of borrowings, etc. Total amount (million yen) Lenders Amount (million yen) Interest rate (*1) Drawdown date Maturity date (*2) Loan period (approximate) 3,000 Sumitomo Mitsui Banking Corporation 1 3, % 2013/7/ /8/19 1 month 2 1, % 2013/7/ /8/19 1 month Short-term borrowings 2,200 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3 2, % 2013/7/ /8/19 1 month 500 Mizuho Bank Ltd % 2013/3/ /10/21 7 months Short-term borrowings total 7,200 *1: All interest rates on short-term borrowings are the rates as of August 14, *2: All borrowings will be paid in full on their maturity dates. (as of August 14, 2013) Remarks Unsecured/ Unguaranteed 36

38 5. APPENDIX Overview of borrowings, etc. Long-term borrowings Investment corporation bonds 37 Total amount Interest rate Maturity date Loan period Lenders Amount (million yen) Drawdown date (million yen) (*1) (1) (*2) (2) (approximate) 1 2, % 2010/7/2 2015/7/2 5 years 2 2, % 2010/12/ /6/ years 13,000 Sumitomo Mitsui Banking Corporation 3 2, % 2011/6/ /6/20 7 years 4 3, % 2012/2/ /2/20 8 years 5 1, % 2012/8/ /8/20 8 years 6 3, % 2013/2/1 2023/2/1 10 years 3,700 Sumitomo Mitsui Trust Bank, Limited 7 1, % 2010/7/2 2015/7/2 5 years 8 2, % 2011/12/ /12/14 7 years 9 1, % 2010/7/2 2015/7/2 5 years 10 1, % 2011/2/ /8/ years 9,000 Mitsubishi UFJ Trust and Banking Corporation 11 2, % 2011/6/ /6/20 7 years 12 2, % 2012/1/ /11/ years 13 2, % 2013/2/1 2021/2/1 8 years 14 1, % 2012/7/ /7/22 2 years 15 1, % 2012/7/ /8/ years 7,300 Mizuho Corporate Bank, Ltd. 16 1, % 2011/1/ /7/ years 17 1, % 2011/5/ /5/21 7 years 18 1, % 2013/3/ /3/15 9 years 19 1, % 2011/8/ /8/19 8 years ,500 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 20 1, % 2012/2/ /2/22 7 years 21 1, % 2013/2/1 2018/2/1 5 years 22 1, % 2009/3/ /3/15 5 years 23 1, % 2009/7/ /7/12 7 years 7,840 Development Bank of Japan Inc. 24 3, % 2009/7/ /7/12 7 years 25 1, % 2010/7/2 2017/7/3 7 years 26*3 (2,000) ( %) (2013/8/19) (2023/8/21) 10 years 27 1, % 2010/7/2 2015/1/7 4.5 years 4,000 The Norinchukin Bank 28 1, % 2011/1/ /1/7 4 years 29 2, % 2013/7/ /7/18 6 years 2,500 Mizuho Trust & Banking Co., Ltd. 30 2, % 2013/2/1 2020/2/3 7 years 1,000 The Gunma Bank, Ltd. 31 1, % 2009/12/ /12/16 5 years 2,000 The Bank of Fukuoka, Ltd. 32 1, % 2012/2/ /2/24 5 years 33 1, % 2013/2/1 2018/2/1 5 years 1,000 The Hachijuni Bank, Ltd % 2010/11/ /11/19 5years % 2012/2/ /11/ years 1,000 The Yamaguchi Bank, Ltd. 36 1, % 2011/2/ /8/ years 1,000 Resona Bank, Limited 37 1, % 2011/6/3 2018/2/5 6.7 years 1,000 The Bank of Yokohama, Ltd. 38 1, % 2012/2/ /4/ years 1,000 The Hiroshima Bank, Ltd. 39 1, % 2012/2/ /11/ years 1,000 The Daishi Bank, Ltd. 40 1, % 2013/8/1 2017/8/1 4 years Long-term borrowings total 59,840 5,000 Investment corporation bonds 1 5, % 2011/3/ /3/11 5 years Borrowings, etc. total 64,840 (as of August 14, 2013) Remarks Unsecured/ Unguaranteed Unsecured/ Unguaranteed *1: All interest rates on long-term borrowings (except for 12, 14 and 15) are fixed rates. *2: All borrowings, except parts of the borrowings from Development Bank of Japan, will be paid in full on their maturity dates. *3The borrowing is not included in the total borrowings, etc. since the drawdown of the borrowing is planned on August 19, 2013.

39 5. APPENDIX Track record of Mitsui Fudosan s retail facilities business 1. Various types of retail facilities 2. Planned projects Deployment of retail facilities across Japan, mainly in the Tokyo metropolitan and Kansai areas Opening year Project name Mitsui Outlet Park Shiga Ryuo (Phase 2) Location Gamo-gun, Shiga Regional SC Lovela 2 Niigata City, Niigata Mitsui Outlet Park Lifestyle park LaLaport TOKYO-BAY West Building Urban retail facilities Reconstruction Funabashi City, Chiba Other 2013 Muromachi East District Development Projects Area 2-3 (*1) Chuo-ku, Tokyo Muromachi East District Development Projects Area 1-5 (*1) Mitsui Outlet Park Sapporo Kita Hiroshima (Phase 2) Chuo-ku, Tokyo Sapporo City, Hokkaido 38 (million yen) 150, ,000 50,000 Number of facilities *1 101 facilities (including 1 facility overseas) Total floor space *2 Approx. 4,300,000m 2 Leased floor space *2 Approx. 2,600,000m 2 Number of tenant stores *2 Number of tenant transactions *2 Approx. 5,300 stores Approx. 2,100 transactions (Source) Mitsui Fudosan *1: As of April 1, 2013; the figures include properties which are consigned to be operated and managed. *2: As of March 31, ,657 36,935 37,601 Rental revenue (non-consolidated) of Mitsui Fudosan s retail facilities 45,947 51,716 62,091 87, , , , , ,025 0 Fiscal 2002 年 Fiscal 2003 年 Fiscal 2004 年 Fiscal 2005 年 2006 Fiscal 年 2007 Fiscal 年 2008 Fiscal 年 Fiscal 年 2010 Fiscal 年 2011 Fiscal 年 Fiscal 年 2013 Fiscal 年 月期 月期 月期 月期 月期 月期 月期 月期 月期 月期 月期 3 月期 2013 (Source) Fiscal Year Ended March 2013 Investor Presentation by Mitsui Fudosan Ikebukuro S Project LaLaport Izumi Mitsui Outlet Park Kisarazu (Phase 2) Mitsui Outlet Park Kuala Lumpur International Airport Toshima-ku, Tokyo Izumi City, Osaka Kisarazu City, Chiba Malaysia LaLaportL Fujimi i Fujimi i City, Saitama Complex facility development project at former site of Expoland Suita City, Osaka Tachikawa Tappi Retail Facility Project Tachikawa City, Tokyo 2017 Taiwan Linkou Outlet Project New Taipei, Taiwan TBD Nagoya City Retail Facility Project Oyabe City Outlet Project Ebina Station West Exit Retail Facility Project Hiratsuka City Retail Facility Project Nagoya City, Aichi Oyabe City, Toyama Ebina City, Kanagawa Hiratsuka City, Kanagawa (Source) Fiscal Year Ended d August 2013 Investor Presentation ti by Mitsui i Fudosan *1: Sublease or joint projects *2: Opening years may be subject to change over time. Project names include tentative ones.

40 5. APPENDIX Investment unit price (yen) 1. Investment t unit price 1,400,000 1,200, ,000, , ,000 出来高 Volume (right ( 右軸 axis) ) FRI 投資口価格 unit price (left ( 左軸 axis) ) Until the end of June 2013 Highest (traded) Lowest (traded) Average trading volume Price at the end of the 18th period 1,340,000 yen (May 24, 2007) 428,000 yen (October 7, 2008) 899 units/day (during 18th period) 910,000 yen (June 28, 2013) Source: QUICK (Unit) 20,000 8,000 7,000 6,000 5,000 4,000 3, ,000 2, ,000 1, / / / / / / / / / / / / / / / / / / Relative price Until the end of June % 220% 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% FRI 投資口価格 unit price (left ( 左軸 axis) ) TSE 東証 REIT 指数 Index ( 左軸 (left) axis) Distribution 配当利回り ( 右軸 次期予想ベース yield (right axis, based ) on next-fiscal-period forecast) *For FRI unit price, the price upon IPO has been set at 100% *For TSE REIT Index, the closing value of August 9, 2004 has been set at 100% 2004/ / / / / / / / / / / / / / / / / /02 Source: QUICK 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

41 5. APPENDIX Initiatives in IR activities 1. Unitholders composition in the 18th fiscal period Unitholders (by units held per investor type) Unitholders (by number per investor type) 18th 第 18 期 (June (13/6 2013) 月 ) 17th 第 17 期 (Dec. (12/ ) 月 ) 25.7% 28.7% 40.8% 37.8% 8.4% 9.4% 9.4% 9.2% 15.8% 14.9% 18th (June 2013) 17th (Dec. 2012) Individual Domestic Financial Foreign investors and Total corporations institutions corporations others 9, ,908 9, ,657 0% 20% 40% 60% 80% 100% Financial institutions 金融機関 Investment trusts, etc. 投信等 Individual investors 個人 その他 Domestic corporations その他の国内法人 and others Foreign corporations 外国法人等 Variation Results of IR activities Target Institutional investors Individual investors 17th fiscal period 18th fiscal period Event Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Domestic IR events (IR on the 16th and 17th fiscal period financial results) Conferences (in Japan and abroad) Overseas IR events Operating Results Reporting Meeting J-REIT Seminar for Individual Investors organized by ARES Private seminars organized by securities firms (Tokyo) Private seminars organized by securities firms (Nagoya) Private seminars organized by securities firms s( (Kyoto) Private seminars organized by securities firms (Osaka) Private seminars organized by securities firms (Wakayama) Private seminars organized by securities firms (Sapporo) J-REIT Seminar for Individual Investors organized by ARES