Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties

Transcription

1 July 28, 2016 Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties Issuer of Real Estate Investment Trust Units Invesco Office J-REIT, Inc. Yoshifumi Matsumoto, Executive Director (Securities code: 3298) Inquiries: Asset Management Company Invesco Global Real Estate Asia Pacific, Inc. Yasuyuki Tsuji, Representative in Japan 1. Basic Information (1) Basic Policy concerning Compliance (i) Overview Invesco Global Real Estate Asia Pacific, Inc. (herein referred to as the Company or the Asset Management Company ) has set legal compliance as its management policy, and the management is proactively striving to develop and strengthen systems for legal compliance and internal controls. In order to build an appropriate management structure and system, a compliance officer has been appointed as the person responsible for overseeing compliance matters, thereby ensuring an effective internal check function over other divisions. In addition, the installation and operation of the Compliance Committee has ensured a multilayered legal compliance system. (ii) Board of Directors As the organ ultimately responsible for the execution of business, the Board of Directors endeavors to ensure strict compliance, receives reports on matters approved, etc. by the Compliance Committee, etc. and resolves important compliance matters of the Company. (iii) Compliance Committee The Compliance Committee collaborates with the Board of Directors and the Compliance Officer and performs the tasks prescribed in the Compliance Committee Rules. (iv) Compliance Officer As the person responsible for overseeing compliance matters of the Company, the Compliance Officer establishes the Company s internal compliance system and 1

2 endeavors to enhance the internal normative consciousness of adhering to laws and regulations and other rules. In order to do this, the Compliance Officer constantly ensures that the Company s execution of the asset management business is based on laws and regulations and other rules and performs monitoring and supervision of the status of compliance in daily business execution as well. In light of the importance of the role and responsibility of the Compliance Officer described above, a person with sufficient reviewing and supervision capabilities has been appointed as the Compliance Officer. (v) Internal compliance system and inspection of status of compliance The Compliance Officer ensures that a system is established that allows for the receipt of reports from each officer, employee, etc. immediately upon the discovery of a violation of laws or regulations in connection with the business execution of the Company or an act that is highly likely to be in violation of laws and regulations in the Company. The compliance status of the Company will be checked by an external third party and inspections will be conducted as necessary. As regards transactions with interested parties, etc., a structure has been in place such that decisions on transactions are made based on adequate investigations and discussions, etc. by the Compliance Committee, Investment Committee, Board of Directors and the Executive Committee of Invesco Office J-REIT, Inc. (hereinafter referred to as the Investment Corporation ). Members of the Compliance Committee and Investment Committee include those from outside the Company who have professional knowledge. The transaction in question cannot be conducted if these external members do not approve it (provided, however, that with regard to the Investment Committee, this is limited to cases where the fairness of prices in real estate and other asset transactions (Note) is addressed ). (Note): Real estate and other assets has the meaning defined in Part 1. Fund Information - I. Status of the Fund - 2. Investment Policy (2) Investment medium (i) Investment Targets (a) Real Estate Assets (Paragraph 1, Article 29 of the Articles of Incorporation) in the securities report for the 4th fiscal period filed on July 28, The same applies hereafter. (2) Status of Unitholders As of the end of the 4th fiscal period, the number of investment units issued was 542,210 units, and the total number of unitholders came to 16,640. Of the unitholders, the top 10 unitholders with high holding percentages are shown in the table below. As of April 30, 2016 Rercentage Investment Background and Relation with Invetmenet Corporation, Investment of units Name of Company Asset Management Company, or Supponsor unit number issued (note) (unit) (%) Japan Trustee Services Bank, Ltd. (Trust account) Not applicable. 130,

3 Trust & Custody Service Bank of Japan, Ltd. (Securities investment trust account) Not applicable. 29, HSBC BANK PLC A/C CLIENTS, NON TREATY 1 Standing proxy: The Hongkong and Shanghai Banking Corporation Limited, Tokyo Branch The investment units shown on the right (20,180 units) are held in the capacity as trustee in trust for the benefit of Invesco Investments (Bermuda) Ltd, a subsidiary of Invesco Ltd. Invesco Ltd. is the parent company of the Asset Management Company. 20, The Master Trust Bank of Japan, Ltd. (Trust account) Not applicable. 19, The Nomura Trust & Banking Co., Ltd. (Trust account) Not applicable. 15, NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON LENDING 15 PCT, TREATY ACCOUNT Standing proxy: The Hongkong and Shanghai Banking Corporation Limited, Tokyo Branch Not applicable. 13, SBI SECURITIES Co., Ltd. Not applicable. 7, Trust & Custody Service Bank of Japan, Ltd. (Taxable money trust account) Not applicable. 5, Japan Trustee Services Bank, Ltd. (Trust Account9) Not applicable. 4, NOMURA BANK (LUXEMBOURG) S.A. Not applicable. 4, Total of the top 10 unitholders 251, (Note): The percentage of units issued means the ratio of the number of units owned to the total number of issued units, and is indicated by rounding down to the second decimal place. 3

4 (3) Major Shareholders of the Asset Management Company Tower Asiapac Holdco, LLC. Name of Company Investment Background and Relation with Invetmenet Corporation, Asset Management Company, or Supponsor Tower Asiapac Holdco, LLC. is the 100% parent company of the Company (the Asset Management Company) and is a 100% indirect subsidiary of the sponsor (Invesco Ltd.) As of July 28, 2016 Rercentage of Investment unit units issued (note) number (unit) (%) 1, Total 1, (4) Investment Policy and Investment Targets Please refer to Part 1. Fund Information - I. Status of the Fund - 2. Investment Policy (1) Investment Policy and (2) Investment Targets in the securities report for the 4th fiscal period filed on July 28, (4)-2 Matters Concerning Criteria for Selection of Tenants In its tenant leasing activities, the Investment Corporation sets appropriate rent conditions based on its assessment and understanding of market trends and consideration of real estate characteristics for each managed asset. It also endeavors to select high-quality tenants by fully utilizing property management companies. Leasing activities are also carried out by taking into consideration the impact of the tenant composition on not only each individual property but also the portfolio as a whole. Prior to concluding a leasing contract with a tenant, the Asset Management Company checks for any relationship with anti-social forces in accordance with its internal rules to determine whether or not to conclude the contract. It also validates the rent level, type of leasing contract, contract period, possibility of re-contract, etc. in a comprehensive manner by analyzing the prospective tenant s type of business, number of continuous business years, capital relationships, industry trends and creditworthiness (a credit check evaluation report will be obtained from a credit evaluation company as necessary). In the case of leasing by an individual for residential purposes, the situation of an individual s employer, the number of service years, etc. will be considered in a comprehensive manner. In selecting property management companies for outsourcing the operation, management, etc. of the assets under management, the Investment Corporation makes it a principle to select contractors through bidding among a number of selected contractors registered on a list of those who satisfy specific requirements. As regards existing property management companies as at the time of the acquisition of properties, the Investment Corporation considers whether their replacement through bidding is necessary by examining the appropriateness of their operational contents (and upon discussions with other rights holders and interested parties as necessary). (As regards assets that require 4

5 consensus building with other rights holders (co-owners, etc.) due to the legal ownership status of the assets under management, the selection and replacement of property are conducted within the scope that enables the building of a consensus.) Each property management company engages in budgetary management, tenant solicitation, tenant management, negotiation of leasing contracts, claims management, repairs and maintenance and other operations. Using its know-how of administration and supervision in property management operations as a whole, which has been built on its years of experience, the Asset Management Company performs the administration and supervision of the property management companies by such means as conducting the monitoring and evaluation of the contractors entrusted with property management on a yearly basis and providing instructions on corrective actions as necessary. (4)-3 Matters Concerning Overseas Real Estate Investment In order to secure potential for investing in overseas real estate as a means for the time when it is deemed to contribute to the improvement of unitholder value, the Investment Corporation amended its Articles of Incorporation to enable overseas real estate investment at the 2 nd General Meeting of Unitholders held on January 20, As of the date of this report, there is no specific plan for investing in overseas real estate. A detailed management system for overseas real estate investment will be developed prior to the commencement thereof. (5) Matters Concerning Sponsors (i) Details of Business of Sponsor Company Group The Invesco Group (Note) sets its mission as helping investors worldwide to achieve their financial objectives, and is a world-leading independent asset manager that provides global management capabilities. The Group is pursuing business development globally through bases in more than 20 countries worldwide. Invesco Real Estate, one business division of the Group, engages in the direct investment and management of real estate assets, listed real estate securities and other real estate-related products through 21 offices globally (Americas, Europe and the Asia-Pacific region). (Note): The Invesco Group is a corporate group consisting of Invesco Ltd. (location of principal office: Atlanta, Georgia, the United States of America; listed on the New York Stock Exchange) and its subsidiaries, including the Asset Management Company, and affiliated companies. (ii) Agreements, etc. with the Sponsor Company Group on the Supply of Properties and Information Provision The Investment Corporation and Asset Management Company do not have any agreement on the supply of properties and information provision with the sponsor company group. The Asset Management Company is the sole asset management arm of the Invesco Group that manages domestic real estate in Japan, and it manages all domestic real estate assets related to real estate funds and other assets with whose management the Invesco Group is entrusted. Consequently, there is no competition between the Asset Management Company and other companies in the Invesco Group with regard to the management of real estate funds and other assets (including J-REITs) whose 5

6 investment targets are domestic real estate. On the other hand, the Asset Management Company manages private placement funds and assets other than the Investment Corporation. Although competition for opportunities for the acquisition of properties with such private placement funds and other assets may be assumed, the Asset Management Company prevents any arbitrary allocation of information on real estate by adopting rotation rules on evaluations for acquisition. The details of the rotation rules are as follows: When new funds, etc. (meaning the Investment Corporation whose management is entrusted to the Asset Management Company, private placement funds and separate accounts (meaning contracts under which specific investment deals are managed for specific investors for specific periods of time); the same applies hereafter) that can invest in real estate in Japan are established, the Asset Management Company records them in the order of establishment in the rotation log. The initial order in the rotation log is the order of the establishment of each fund, etc. When a new fund, etc. is added, it is recorded at the lowest level. Funds, etc. to be recorded in the rotation log are categorized by target area for investment, investment criteria, investment period, etc., and are limited to those that can actually execute investments. The rotation log is used only for the purpose of granting preferential rights in the case where several funds desire to conduct evaluations for the acquisition of the subject property. When only one fund desires to conduct evaluations for the acquisition of the property (case where there is no conflict), then the one fund is given the opportunity to evaluate for the acquisition of the subject property regardless of its position in the rotation log at that time ( evaluations for acquisition in this paragraph includes cases of investment to be conducted solely by the Investment Corporation as well as cases of joint investment in which the Investment Corporation participates; the same applies hereafter). Information on real estate sourced by the Investment Department and other information, etc. obtained through the Investment Department and other newly acquired information on deals on domestic real estate and other assets is firstly checked against the Registry of Received Information on Real Estate and Other Transactions (Japan) controlled by the Investment Department to confirm that the information has not already been recorded. If not, it is promptly registered under a consecutive numeral. At regular meetings of the Investment Department held once a week in principle, explanations are provided on new deals registered in the Registry of Received Information on Real Estate and Other Transactions (Japan). If the Director of the Investment Division and the Head of the Investment Department determine that a specific new deal may match the mandate of one or more of the funds, the relevant information on the deal is registered in the Deal Log (Japan). At a meeting for Information on New Transactions (Japan), the Director of the Investment Division and the Head of the Investment Department introduce the new deal registered in the Deal Log (Japan) to each manager of the funds, etc. that can invest in real estate in Japan. At the meeting, each fund manager makes an initial judgment in light of the investment policy and investment criteria of the fund, etc. for which he/she is responsible. If only the Investment Corporation is interested in the new deal during such initial judgment phase, then it may preferentially conduct evaluations for the acquisition of the subject property. On the other hand, if several funds express an interest in evaluating the relevant transaction, the fund, etc. with the highest position in the rotation log at that time may preferentially conduct evaluations for the acquisition of the subject property. If such fund, etc. acquires the property, its position in the rotation log moves to the lowest place. If it abandons considering the acquisition of the property as a result of preferential evaluation, its position in the rotation log does not change but remains the same. If another new deal on real estate and other assets is introduced during the period when a fund, etc. is preferentially evaluating the relevant transaction, other funds, etc., excluding the fund, etc. that is conducting such evaluation, may preferentially evaluate the new deal. If another new deal on real estate and other assets is introduced during 6

7 the period when all of the funds, etc. are preferentially evaluating the relevant transactions, respectively, the procedures above shall be followed for the allotment of the new deal. The Investment Department selects candidates for assets to be acquired in accordance with the rules described above. The flow for the selection of candidates for assets to be acquired (Rotation Rules on Information on Deals on Real Estate and Other Assets) is as follows. < Rotation Rules on Information on Deals on Real Estate and Other Assets> Sourcing of Information on Real Estate and Other Transactions (Japan) Sourcing of information on real estate and other transactions in Japan for real estate funds of Invesco Real Estate (managed by the Investment Department). Introduction of new deals to each fund manager Registration in the Registry of Received Information on Real Estate and Other Transactions (Japan): Regular Meeting Registration in the Deal Log (Japan) of Information on New Deals that may Match the Mandate of One or More of the Funds Holding of Meetings for Information on New Transactions (Japan) Information on real estate and other transactions in Japan is registered accordingly, and the representative explains the outline of deals at weekly regular meetings of the Investment Department (managed by the Investment Department). If the Director of the Investment Division and the Head of the Investment Department determine that a specific new deal may match the mandate of one or more of the funds, the relevant information on the transactions shall be registered in the Deal Log (Japan). Meetings are held regularly (on a weekly basis). The participants include each of the fund managers related to real estate in Japan. (Meetings are held by the Director of the Investment Division and Investment Department.) Initial Judgment by Each Fund Manager Determine whether any Fund expresses an interest in evaluating the relevant transaction If only the investment corporation expresses an interest in evaluating the relevant transaction If several funds, including the Investment Corporation, express an interest in evaluating the relevant transaction Position Under the Rotation Log The Investment Corporation will consider the acquisition of the relevant property If the Investment Corporation ranks higher If the Investment Corporation ranks lower Other Funds will consider the acquisition of the relevant property 7

8 In cases where exceptional circumstances exist in connection with information on deals on real estate and other assets, such information is handled in the manner described below. In cases where none of (A) to (D) below is applicable and where the Compliance Officer determines that there is a question about the allocation of information to the funds, etc. for granting preferential rights to consider the acquisition of the subject property, a meeting of the Compliance Committee shall be held to discuss such question regarding the allocation of information and the determination of the funds, etc. to be entitled to preferentially consider such acquisition. (A) In the case where it is necessary to purchase information on a deal that involves several real estate and other assets (for example, a bulk sale), such several real estate and other assets are handled as one deal. (B) In the case where a fund, etc. holds sectional ownership or an interest of common elements of real estate or a building on leased land, where such information on a deal on real estate and other assets is about other sectional ownership or interest of common elements of real estate, other buildings on leased land, leased land itself, etc. and where there exists an arrangement concerning preferential negotiation rights with the seller, the above rules do not apply. (C) In the case where several funds, etc. jointly acquire the subject property after having considered such joint investment based on information on the deal on real estate and other assets, all the participating funds, etc. will be moved to the bottom of the list. The order among the participating funds, etc. will be the same as before the execution of the said joint investment. (D) The Asset Management Company may preferentially consider information on a deal on real estate and other assets that is directly introduced by an investor in funds, etc., and the above rules do not apply. 8

9 2. Management Structures and Systems of the Investment Corporation and Asset Management Company (1) Investment Corporation (i) Officers of the Investment Corporation (as of July 28, 2016) Title Name Brief Career Summary Reason for Appointment Executive Yoshifumi April 1992 Joined East Japan Railway Company Mr. Yoshifumi Matsumoto has Director Matsumoto October 2001 Joined Morgan Stanley Properties Japan (now Morgan Stanley Capital extensive experience and K.K.) expertise in real estate asset April 2003 Joined Nomura Real Estate Development Co., Ltd. (transferred to Nomura management, etc., and the October 2007 Real Estate Investment Management) Joined Invesco Real Estate Japan K.K. (dissolved in November 2011) Company believes that he is suitable to serve as Executive February 2011 Invesco Global Real Estate Asia Pacific, Inc. (transferred within Invesco Director of the Investment Group) Corporation. December 2011 Head of Client Portfolio Management, Invesco Global Real Estate Asia Pacific, Inc. December 2013 Fund Manager, Invesco Office J-REIT, Inc., Invesco Global Real Estate Asia Pacific, Inc. February 2014 April 2016 Executive Director, Invesco Office J-REIT, Inc. (current position) Head of Business Development, Invesco Global Real Estate Asia Pacific, Inc. (current position) Supervisory Director Takashi Shimokado April 1985 September 1996 September 2009 February 2014 Joined Yanagida & Nomura Law Offices (now Yanagida & Partners) Joined Akai Law Offices (now Sullivan & Cromwell Gaikokuho Kyodo Jigyo Horitsu Jimusyo) Launched Shimokado International Law Office (current position) Supervisory Director, Invesco Office J-REIT, Inc. (current position) Mr. Takashi Shimokado can be expected to conduct supervision of the management of the Investment Corporation, making full use of the independence of his duties as attorney and professional expertise and extensive experience. Supervisory Director Eiji Kawasaki April 1974 September 1990 Joined Tokyo Sowa Bank Joined American Life Insurance Company Japan Branch (now Met Life, Inc.) Mr. Eiji Kawasaki can be expected to conduct supervision of the management of the 9

10 January 2008 Chief Investment Officer, American Life Insurance Company Japan Investment Corporation, making Branch full use of his December 2009 President, ALICO Asset Management K.K. professional expertise and February 2014 Supervisory Director, Invesco Office J-REIT, Inc. (current position) extensive experience in the banking and asset management businesses. (Note) In preparation for cases where there is a vacancy or a shortfall in the number of Executive Directors as provided by laws and regulations, Mr. Yasuyuki Tsuji, Representative in Japan of the Asset Management Company, has been elected Substitute Executive Director. (ii) Reasons Why the Executive Director of the Investment Corporation Concurrently Holds the Position of Officer or Employee of the Asset Management Company and Measures for Relationships Involving Conflicts of Interest Name Title in Asset Reason for Concorrent Post Management Company Structure relating to Conflicts of Interest Yoshifumi Head of Business As the concurrent holding of the positions of As regards conflicts of interest between the Investment Corporation and Matsumoto Development, Invesco Executive Director of Invesco Office J-REIT, Inc. the Asset Management Company, relevant provisions have been Global Real Estate Asia (the Investment Corporation) and an employee who developed in the Act on Investment Trusts and Investment Corporations Pacific, Inc. has an experience to head asset management (hereinafter referred to as the Investment Trust Act ), and the Asset businesses as fund manager of the Investment Management Company has set a framework for avoiding conflict of Corporation since its inception more than 2 years interest acts as follows. ago further smooth cooperation between the In accordance with the Investment Trust Act and Articles of Investment Corporation and the Asset Management Incorporation, the Executive Director of the Investment Corporation Company and it is considered to facilitate the may not conduct any transaction that is harmful to the interests of the appropriate and speedy management of the Investment Corporation. In addition, the attorney and expert in the Investment Corporation. It also contributes to the banking and asset management businesses, who are impartial third provision of accurate and adequate information to parties, supervise the execution of duties of the Executive Director. As investors at general meetings of investors, thereby such, we believe that the check-and-balance system is working well conforming to the benefit of the protection of over matters related to conflict of interest transactions. investors. In order to prevent the occurrence of any harm to the interest of the Investment Corporation, the Asset Management Company has established a framework for avoiding conflicts of interest in related- 10

11 party transactions by setting out Regulations on Related Party Transactions. Please see below for the relevant procedures. Prior approval to ensure the arm s length nature of transactions by the Compliance Committee that includes external commission members who satisfy the qualification requirements for attorney or public accountancy (unanimous approval by all members of the Committee with the attendance of the said external professionals is required). Approval of the reasonableness of the price by the Investment Committee, which includes external commission members who satisfy the qualification requirements for real estate appraisers (approval of the reasonableness of price must be based on the affirmative votes of the said external professionals). Final decisions on relevant transactions are made with the approval of the Asset Management Company and discussions by the Executive Committee of the Investment Corporation. In addition to the above procedures, the Asset Management Company endeavors to improve fairness and transparency in related-party transactions. The Executive Director of the Investment Corporation understands his duty of loyalty to the Investment Corporation, and the Directors of the Asset Management Company endeavor to achieve the strict performance of the procedures. (iii) Relationships Involving Conflicts of Interest due to Other Positions Held Concurrently by Officers of the Investment Corporation (excluding the content described in (ii) above) Not applicable. 11

12 (2) Asset Management Company (i) Officers of the Asset Management Company (as of July 28, 2016) Title and Status (Full/Part Time) Name Director and Representative in Yasuyuki Tsuji April 1990 Japan (full time) October 1992 February 1998 July 2000 October 2003 October 2013 December 2013 Director (full time) Ryukichi Nakata April 1989 January 2001 June 2007 October 2007 February 2011 Director(part time) Cheng Soon Lau July 1979 August 1981 May 1988 October 1990 November 1991 May 2000 January 2006 Brief Career Summary Joined Recruit Cosmos Co., Ltd. (now Cosmos Initia Co., Ltd.) Joined Soken Co., Ltd. Joined The Tanizawa Sogo Appraisal Co., Ltd. Joined Lend Lease Japan Inc. Joined AIG Global Real Estate Asia Pacific, Inc. (now Invesco Global Real Estate Asia Pacific, Inc.; changed its trade name in February 2011) Director, Invesco Global Real Estate Asia Pacific, Inc. (current position) Representative in Japan, Invesco Global Real Estate Asia Pacific, Inc. (current position) Joined the Sanwa Bank, Limited (now The Bank of Tokyo- Mitsubishi UFJ) Joined Citigroup (now Citibank Japan Ltd.) Joined Invesco Asset Management (Japan) Limited Established Invesco Real Estate Japan K.K. (dissolved in November 2011), Director and Head of Japan Director, Invesco Global Real Estate Asia Pacific, Inc. (current position) Joined Shell Eastern Petroleum Ltd. Joined Petrochemical Corporation of Singapore Ltd. Joined Booz, Allen and Hamilton Inc. Joined Pepsi Cola International Ltd. Joined Tuan Sing Holdings Ltd. Joined Ayala International Ltd. Joined Invesco (Hong Kong) Ltd. Status (Concurrent Post or Transfer) Not applicable. Not applicable. Mr. Cheng Soon Lau concurrently holds positions at 18 Invesco Group companies. 12

13 January 2011 Joined IRE (Hong Kong) Ltd. (now Invesco Real Estate Investment Asia Pacific Ltd.), Managing Director in charge of Asia (current position) (transferred from Invesco (Hong Kong) Ltd.) October 2013 Director, Invesco Real Estate Investment Asia Pacific Ltd. (current position) Director ( part time) Ian Schilling October, 1992 April, 1996 July, 2000 March, 2006 November, 2007 May, 2008 August, 2012 December, 2012 July, 2016 Joined CB Richard Ellis Joined Goldman Sachs JB Were Joined Colonial First State Global Asset Management Joined Evolution Funds Management Joined Allco Finance Group Joined Investa Property Group Joined Invesco Asset Management Australia (Holdings) Limited Director, Invesco Asset Management Australia (Holdings) Limited (current position) Director, Invesco Global Real Estate Asia Pacific, Inc. (current position) Mr. Ian Schilling concurrently holds positions at 12 Invesco Group companies. (Note) The Asset Management Company is a foreign corporation established in accordance with the laws of the State of Delaware, the United States, and there is no position called auditor. The Asset Management Company established the position of auditor in order to satisfy the requirement under Article 29-4(1)(v)(a) of the Financial Instruments and Exchange Act of a corporation of the same kind as a company with a board of directors incorporated in compliance with foreign laws and regulations when registering itself as an investment management business operator under the Financial Instruments and Exchange Act. The auditor has the rights and obligations equivalent to those of an auditor of a company with a board of directors under the Companies Act of Japan. 13

14 Title and Status (Full/Part Time) Name Auditor Yoshihiro Kozai April, 1962 April, 1995 July, 1998 June, 2000 September, 2006 June, 2012 July,2016 Brief Career Summary Joined Yasuda Trust and Banking Co., Ltd. (now Mizuho Trust and Banking Co., Ltd.) Joined Warburg Investment Trust Management Co., Ltd. Joined Merrill Lynch Mercury Asset Management Japan Ltd. Joined Merrill Lynch Investment Managers Co., Ltd. Compliance Officer, Invesco Asset Management (Japan) Ltd. Statutory Auditor, Invesco Asset Management (Japan) Ltd. (current position) Company Auditor, Invesco Global Real Estate Asia Pacific, Inc. (current position) Status (Concurrent Post or Transfer) Yoshihiro Kozai concurrently holds a position at Invesco Asset Management (Japan) Limited. (ii) Employees of the Asset Management Company (As of July 28, 2016) Assignor Company Headcount Status of Concurrent Post (if applicable) Total number of loaned employees 0 The number of employees except loaned employees 35 Total number of employees of the Asset Management Company 35 (iii) Management Structures and Systems of the Investment Corporation and Asset Management Company The organization chart of the Asset Management Company is as follows. 14

15 Under the above organizational structure, the Asset Management Company conducts asset management business entrusted by the Investment Corporation. The Asset Management Company has established the Investment Committee as the panel for reviewing matters concerning the management, etc. of assets in accordance with the investment policies of the Investment Corporation stipulated in the Articles of Incorporation. In addition, the Compliance Officer has been appointed as the person responsible for overseeing compliance matters independently from other departments. As an organ for deliberating and determining basic compliance matters, important matters, etc., the Compliance Committee has also been established with the Compliance Officer acting as the chairperson. The asset management business is conducted based on the allocation of business operations stipulated in (A) Outline of Activities of Each Organization of the Asset Management Company. 15

16 (A) Outline of Activities of Each Organization of the Asset Management Company Name of Organization Outline of Activities of Each Organization Investment Department Sourcing / acquisition of real estates (1) Sourcing (2) Pricing and cashflow underwriting (3) Due diligence (4) Negotiations for acquisition (5) Planning and formation of acquisition plans (6) Closing operations (7) Planning and formation of asset management guidelines, etc. (including asset management guidelines, asset management plans and other policies) Asset Management Department Administration and management of real estate / leasing management / real estate sales (1) Administration and management of investment real estate (2) Formulation of fiscal year management plan for investment real estate (3) General leasing operation (4) Formulation of plans for capital spending (5) Cost control for real estate management (6) Arrangement operations for real estate development (7) Construction management (8) Negotiations for sale of real estate and beneficial interests in trusts and closing operations Closing Services Department Legal operations concerning closing operations and property management (1) Preparation and review of contracts, etc. concerning real estate transactions (2) Legal research (3) Closing operations (4) Establishment, management, liquidation and filing of special purpose companies (5) Retention and management of important documents 16

17 Name of Organization Fund Accounting Department Finance Department Legal Officer Compliance Officer Portfolio Management Department Outline of Activities of Each Organization Accounting for funds and SPCs (1) Matters concerning account settlement and accounting of investment corporations (2) Cash management for investment corporations (3) Matters concerning distribution of monies for investment corporations (4) Matters concerning accounting, receipts and disbursements, tax affairs, and preparation of account statements for investment corporations Corporate accounting (1) Preparation of financial statements, etc. (2) Accounting operations (3) Tax affairs (4) Response to audits (5) Formulation and management of budgets Corporate legal affairs / legal affairs, etc. concerning structuring of real estate-related products (1) Administration of the Board of Directors, etc. of the Asset Management Company (2) Preparation and review of contracts, etc. (3) Legal research (4) Legal affairs concerning the structuring of real estate-related products (5) Matters concerning the interpretation of laws and regulations and so forth related to the business of the Company and advisory services Compliance, etc. (1) Planning and drafting of compliance measures (2) Execution of compliance operations (3) Management of internal rules (4) Management of important corporate information, insider trading, etc. (5) Matters concerning internal inspections Fund management / portfolio management / IR, etc. (1) Analysis and construction of portfolios (2) Response to customers 17

18 Name of Organization Fund Manager Business Development Research Outline of Activities of Each Organization (3) Management of portfolio performance (4) Market value analysis of assets under management (5) Preparation of asset management report (6) Database management (7) Matters concerning information disclosure (8) Formulation and implementation of IR strategies (9) Public relations for investment corporations (10) Formulation of fiscal year management plan for investment corporations (11) Management of budgets and actual results (12) Matters concerning issuance of investment units (13) Administration of general investors meetings and meetings of the Executive Committee of investment corporations (14) Matters concerning debt financing for investment corporations and issuance of bonds of investment corporations (15) Management and reporting of loan covenants Supervision of operations concerning investment management of funds / formation of management strategies (1) Supervision of operations concerning investment management of each fund (including investment corporations) (2) Acquisition, administration and management and disposal of assets under management in each fund (including investment corporations) and formation of management strategies, including financing, financial affairs and IR Customer development / new product-related operations (1) Product development (2) New customer development (3) Customer needs surveys Market research (1) Market research and analysis (2) Research reports 18

19 Name of Organization IT / Human Resources Board of Directors Outline of Activities of Each Organization IT / Office management / human resources and labor affairs (Specific operations are outsourced to group companies based on service agreements with them.) (1) Safety management of offices (2) Formulation of contingency plans (including disaster prevention drills) (3) Management of furniture and office equipment (4) Management of PCs and servers (5) IT and security management (6) Personnel affairs Supervision of the execution of business by the Directors / making decisions about corporate management (1) Formulation of basic management policy and business plans (2) Convocation of general meetings of shareholders and determination of agenda for resolution by shareholders meetings (3) Approval of transfer of shares of stocks (4) Appointment and removal of the Representative, President, officers and Directors (5) Appointment of Directors who oversee the execution of duties (6) Determination of job ranking for Substitute Directors who have the capacity and power to call for meetings of the Board of Directors and act as the chairperson of such meetings (7) Appointment and removal of managers and important employees (8) Determination of the establishment, amendment and termination of important management organizations (9) Determination of the conclusion and amendment of important contracts (10) Determination of the filing of important lawsuits (11) Approval of a transaction between a Director and the Asset Management Company (12) Approval of a transaction between a Director and a competitor of the Asset Management Company (13) Approval of proposed financial statements and supplementary statements and disposal of profit and loss (14) Determination of a new share issue and issuance of a certificate of stock aquistion right (15) Determination of issuance of corporate bonds (16) Determination of stock splits (17) Determination of disposal and acquisition of important assets (18) Guarantee of important lending or debts (19) Determination of compliance regulations and compliance programs 19

20 Auditor Name of Organization Outline of Activities of Each Organization (20) Determination of internal audit regulations and inspection plans (21) Determination of risk management regulations and risk management plans (22) Determination of the establishment, amendment and termination of regulations and rules of the Asset Management Company (23) Determination of other matters stipulated by laws and regulations, the Articles of Incorporations and resolutions of general shareholder meetings (24) Determination of investment policies and matters, etc. concerning transactions that are approved by the Investment Committee (25) Submission of agenda to the Executive Committee of the Investment Corporation on transactions with interested parties, etc. of the Asset Management Company in connection with the Investment Corporation (26) Appointment and removal of external commission members for the Compliance Committee and Investment Committee (27) Determination of other important matters, other than the above, concerning the Asset Management Company Supervision of the execution of duties by the Directors / accounting and operations audits (B) Committees As of the date of this report, the Asset Management Company has the Investment Committee and the Compliance Committee, and the outlines thereof are as follows. a. Investment Committee Chairperson Director and Representative in Japan Committee members The Committee comprises the Directors (two full-time and two part-time), the Head of the Closing Services Department, the Compliance Officer and the external commission member (one real estate appraiser). Qualification requirements for the external commission member (one real estate appraiser) are that the person is not an officer or employee of the Asset Management Company, has specialized knowledge and is an independent third party with no interest in the real estate appraiser who is entrusted with real estate appraisal at the time of sale or purchase of assets under management by the Investment Corporation or at the time of the fiscal year-end closing of the accounts of the Investment Corporation. The external commission member is appointed by the Board of Directors. The chairperson may have observers other than the members of the Investment Committee attend meetings of the Committee and request that they express their opinions or provide explanations. 20

21 Timing of meetings Matters for deliberation and resolution Deliberation method, etc. Meetings of the Committee are held from time to time as necessary at the call of the chairperson. Matters concerning the determination of investment policy measures and transactions for the Investment Corporation (1) Matters concerning investment management policies (2) Matters concerning the acquisition and disposal of assets in connection with investment management operations (3) Matters concerning management risk (4) Matters concerning the appropriateness and adequateness of management (5) Matters concerning fiscal year management plans (6) Important matters concerning financing for assets under management (7) Other matters determined by the Committee members as necessary Deliberations and decision-making by the Investment Committee are undertaken when more than two-thirds of Committee members who have voting rights for the subject agenda are present, and resolutions are adopted with more than two-thirds of affirmative votes of the members present. However, in cases where transactions with related parties, etc. are involved and where there is a question about the appropriateness of the price of the real estate or other assets subject to the relevant transactions, it is essential that the external commission member (real estate appraiser) is present at the meeting and casts an affirmative vote. In the event that a non-attending member of the Committee has expressed his/her opinion about the subject agenda to all the other Committee members in advance and has obtained the approval of all such other Committee members, the non-attending member may be deemed to have attended the meeting. However, such treatment may not be undertaken for the external commission member in the event that there is a question about the appropriateness of the price of the real estate or other assets subject to the relevant transaction. In addition, such non-attending member may not entrust his/her judgment to another attending Committee member or have another attending Committee member exercise his/her voting right. In the event that conflicts of interest, etc. are likely to arise with respect to the external commission member s primary business, the external commission member may self-report such possibility and leave the meeting without participating in the subject business thereof and without expressing his/her opinion about the subject agenda. In this case, the meeting of the Committee is held with the attendance of a temporary Committee member in place of the external commission member upon the recommendation of the external commission member and the approval of the chairperson. At the chairperson s discretion, a meeting of the Committee may be held by means of in-person meeting, telephone conference or round-robin decision-making process. Each Committee member has one voting right. A Committee member who concurrently holds more than one position still has one voting right. However, a Committee member who has a special interest in a subject agenda may not participate in the relevant decision-making process. 21

22 b. Compliance Committee Chairperson Committee members Timing of meetings Matters for deliberation and resolution Deliberation method, etc. Compliance Officer The Committee comprises the Compliance Officer, the Directors (two full-time) and the external commission member (one attorney or certified public accountant). Meetings of the Committee are held once every three months at the call of the chairperson, in principle, as well as as-needed basis. The qualification requirements of the external commission member (one attorney or certified public accountant) are that the person is not an officer or employee of the Asset Management Company, has specialized knowledge and is an independent third party with no interest in the Asset Management Company. The external commission member is appointed by the Board of Directors. The chairperson may have observers, other than the members of the Compliance Committee, attend meetings of the Committee and request them to express their opinions or provide explanations. (1) Matters concerning the formation of compliance policies (2) Matters concerning the formation and review of compliance measures (3) Matters concerning examinations of transactions with interested parties, etc. (4) Matters concerning compliance-related risk management (5) Matters concerning the establishment, amendment and abolishment of important internal rules (6) Matters concerning internal inspection (7) Other matters determined by the Committee members as necessary Deliberations and decision-making by the Compliance Committee are undertaken when more than two-thirds of Committee members who have voting rights for the subject agenda are present, and a decision is made based on the common accord of all the attending members. In the event that a non-attending member of the Committee, who should not be the Compliance Officer or external commission member, has expressed his/her opinion about the subject agenda to all the other Committee members in advance and has obtained the approval of all such other Committee members, the non-attending member may be deemed to have attended the meeting. However, such non-attending member may not entrust his/her judgment to another attending Committee member or have another attending Committee member exercise his/her voting right. In the event that conflicts of interest, etc. are likely to arise with respect to the external commission member s primary business, the external commission member may self-report such possibility and leave the meeting without participating in the subject business thereof and without expressing his/her opinion about the subject agenda. In this case, the meeting of the Committee is held with the attendance of a temporary Committee member in place of the external commission member upon the recommendation of the external 22

23 commission member and the approval of the chairperson. At the chairperson s discretion, a meeting of the Committee may be held by means of in-person meeting, telephone conference or round-robin decision-making process. Each Committee member has one voting right. A Committee member who concurrently holds more than one position still has one voting right. However, a Committee member who has a special interest in a subject agenda may not participate in the relevant decision-making process. (3) Approaches, etc. toward Transactions Involving Conflicts of Interest (i) Policy and Management Structure and System for Dealing with Transactions Involving Conflicts of Interest (A) General Principles In light of the conduct of the financial instruments and exchange business and other business stipulated in the Financial Instruments and Exchange Act, the Asset Management Company has established the Related Parties Transaction Regulations as part of its internal rules for the purpose of specifying fundamental matters concerning potential conflicts of interest that may arise in transactions with related parties, etc. of the Company ((a) the Asset Management Company and its officers, employees, etc., (b) the parent corporation, etc. defined in Article 31-4(3) of the Financial Instruments and Exchange Act, (c) susideries etc. defined in Article 31-4(4) of the Financial Instruments and Exchange Act, (d) interested persons, etc. defined in Article 201(1) of the Act on Investment Trust and Invetment Corporations, (e) entities to which the Asset Management Company has contributed a majority of the capital thereof (including special purpose companies, limited liability companies, stock companies and investment corporations, and regardless of their form; the same applies in this (A)), partnerships, other funds, etc., (f) a corporation in which officers and employees of the Asset Management Company constitute a majority of such corporation s officers, and other partnerships, other funds, etc. upon which officers and employees of the Asset Management Company are considered to be able to exert an influence on their important decision-making, (g) corporations, partnerships, other funds, etc. with whom the Asset Management Company has concluded investment advisory contracts, discretionary investment contracts or asset management contracts) and ensuring that appropriate codes of conduct are established in connection with the investment management and so forth of assets. (B) Overview of Procedures With regard to a transaction with related parties, etc., the Compliance Officer examines whether there is any problem related to compliance with laws and regulations, the Articles of Incorporation of the Investment Corporation, internal rules and so forth. If the Compliance Officer approves the relevant transaction, it is brought up for discussion by the Investment Committee. If the Investment Committee approves the relevant transaction, it is submitted to the Board of Directors for deliberation. If the Board of Directors approves the relevant transaction, it is submitted to the Executive Committee of the Investment Corporation. Upon the approval of the Executive Committee, a final decision is made for the execution of the relevant transaction. However, with regard to specific transactions among the transactions with related parties, etc. stipulated in the Related Parties Transaction Regulations, the decision-making procedures described above may be replaced with approval from Compliance Officer 23