Contents. Translation Purpose Only. Management highlights Medium-scale shopping centers (neighborhood SCs, supermarkets)

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2 Contents Translation Purpose Only 1. Overview of FRI Overview of FRI 3 Management strategy 4 Portfolio map 5 Portfolio asset categories 6 2. Financial results and forecasts Summary 9 Steady distribution growth 10 26th period results 11 27th period forecast Management highlights Management highlights Large-scale shopping centers (regional SCs, outlet malls) Management highlights Community shopping centers (GMSs) Management highlights Medium-scale shopping centers (neighborhood SCs, supermarkets) Management highlights Urban retail facilities Management highlights Land interests and other properties FRI and the retail market 20 Sound balance sheet 21 Internal growth financial 22 Sustainability initiatives Portfolio overview Portfolio summary 27 FRI s portfolio in graphs 29 Rent revision and lease maturity schedules Appendix All content 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) volatility 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 in FRI entails the risk of incurring a loss. Investment decisions are made at the investors discretion and risk. FRI disclaims any responsibility or liability for the consequences of investing in FRI. Information provided in this document contains such forward-looking statements 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 that all information provided herein may be subject to change without prior notice. Duplication or reproduction of any content presented herein without the prior consent of FRI or its authorized representative is strictly prohibited. 1

3 1. Overview of FRI

4 Overview of FRI Corporate profile Name Frontier Real Estate Investment Corporation ("FRI") TSE Listing August 9, 2004 Securities code: 8964 Sponsor Mitsui Fudosan Co., Ltd. Changed from Japan Tobacco Inc. as of March 2008 Area 2 Kyushu/ Okinawa 9.4% Chugoku 10.6% Tokyo metropolitan area 51.9% Investment target Retail facilities Fiscal period ends June 30, December 31 Kansai 13.7% Investment units issued 496,000 Asset management company Mitsui Fudosan Frontier REIT Management Inc. (Wholly owned subsidiary of Mitsui Fudosan) Chubu 14.4% Portfolio Asset size billion; 33 properties Geographic distribution Urban areas: 51.9%; Other: 48.1% Occupancy rate 100% Total leasable floor space 1 1,433,781 m 2 Financial indicators LTV 41.6% Interest-bearing debt ratio Ratings 28.8% JCR: AA Stable; R&I: AA- Stable; S&P: A+ Stable Property type 2 Other 7.7% Urban retail facility 18.4% Supermarket 6.5% Neighborhood SC 8.9% Key properties Regional SC 40.2% Outlet Mall 6.7% Community SC 11.6% Distributions 26th period (June 2017) 10,022 per unit 27th period (Dec. 2017) forecast 1 10,080 per unit 1. As of August 15, All other figures are as of June 30, Calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, Variable rent is not taken into account. Mitsui Shopping Park LaLaport SHIN-MISATO AEON MALL NAGOYADOME-Mae Mitsui Outlet Park IRUMA GINZA GLASSE 3

5 Management strategy Turning fluctuating real estate revenue into steady distribution growth over the long term External growth Fully utilize the sponsor s pipeline to continue acquiring excellent properties Selectively invest in non-sponsor properties utilizing the Asset Management Company s unique network, keeping a close eye on risk Carefully select properties for investment considering the certainty of cash flows and growth potential of the surrounding retail zone Make acquisitions with an eye to maintaining the whole portfolio s ratio of asset value to yield after depreciation Internal growth Secure a foundation for stable earnings based on long-term fixed rent Adjust to changes in the environments surrounding properties, maintaining and enhancing competitiveness through such measures as additional investment and tenant replacement Consider replacing properties that pose future uncertainties in order to further enhance portfolio quality Financial strategy Maintain sound financial standing through LTV control Execute capital procurement flexibly and strategically based on careful monitoring of the procurement environment Leveling out repayment periods and amounts to increase financial stability 4

6 Portfolio map 33 properties Asset size: billion (as of August 15, 2017) 3 Kyushu/ Okinawa area Papillon Plaza Kansai area 2 AEON MALL Ibaraki Regional SC: Outlet mall: Community SC: Neighborhood SC: Supermarket: Urban retail facilities: Tokyo metropolitan area A large-scale shopping center that houses multiple specialty stores. A large-scale shopping center in which multiple outlet stores are concentrated. A medium-scale shopping center (GMS) where the main tenant typically stocks general merchandise and groceries. A medium- or small-scale shopping center where the main tenant is typically a supermarket. A supermarket that mainly sells food products. 9 Frespo Tosu 5 1 Belltown Tambaguchi AEON Shinagawa Seaside (land interest) 21 Eki-Mae Store Shopping Center 17 TSUTAYA BOOK 24 QANAT Rakuhoku STORE TENJIN Omiya 4 Kamiikedai Tokyu Store Shinsaibashi Square VIORO 7 Summit Store Takinogawa KOJIMA x BIC 28 Momiji-Bashi CAMERA Naha Store Yamanote JR Line 山手線 11 Queen s Isetan Tachikawa 11 Suginami-Momoi Mitsui Outlet Park IRUMA Other: A store facing a main street or specialty store building in a prime urban location. Land interests, etc Chugoku area Chubu area AEON MALL NAGOYADOME-Mae Mitsui Shopping Park LaLaport IWATA Mitsui Shopping Park LaLaport SHIN-MISATO Annex Mitsui Shopping Park LaLaport SHIN-MISATO Yokohama Mitsui Shopping Park LaLagarden KASUKABE Summit Store Yokohama Okano (land interest) Costco Wholesale Warehouse Iruma (land interest) Desigual Harajuku Ito-Yokado Higashi- Yamato AEON TOWN Tanashi-Shibakubo GINZA GLASSE 8 10 (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) You Me Town Hiroshima 26 Mitsui Shopping Park ALPARK (East Building) Costco Wholesale Warehouse Shin-Misato (land interest) Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) Ikebukuro Square Kohnan Kawasaki- Odasakae Mall (land interest) 20 Shimura Shopping Center 5

7 Portfolio asset categories Total acquisition price: billion Large-scale shopping centers (regional SCs, outlet malls) Outlet malls Regional SCs 8 properties Average acquisition price: 16.2 bn NOI yield: 5.9% NOI yield after depreciation: 4.1% Community shopping centers (GMS) 2 properties Average acquisition price: 15.8 bn AEON MALL NAGOYADOME-Mae You Me Town Hiroshima AEON MALL Ibaraki Mitsui Shopping Park LaLaport IWATA Mitsui Shopping Park Mitsui Shopping Park ALPARK (East Building) LaLaport SHIN-MISATO Mitsui Outlet Park IRUMA 31.7 billion Community SCs NOI yield: 5.8% NOI yield after depreciation: 3.8% Medium-scale shopping centers 41.4 billion (neighborhood SCs, supermarkets) 9 properties Average acquisition price: 4.6 bn Ito-Yokado Higashi-Yamato AEON Shinagawa Seaside Shopping Center Neighborhood SCs Belltown Tambaguchi Eki-Mae Store Supermarkets Kamiikedai Tokyu Store NOI yield: 5.7% NOI yield after depreciation: 4.1% Mitsui Shopping Park QANAT Rakuhoku LaLagarden KASUKABE Shimura Shopping Center Ikebukuro Square 8 properties Average acquisition price: 3.7 bn Summit Store AEON TOWN Takinogawa Momiji-Bashi Tanashi-Shibakubo TSUTAYA BOOK STORE TENJIN Desigual Harajuku Urban retail facilities NOI yield: 4.8% NOI yield after depreciation: 3.9% Land interests and other properties Queen s Isetan Suginami-Momoi 59.5 billion Urban retail facilities 6 properties Average acquisition price: 9.9 bn Papillon Plaza GINZA GLASSE VIORO Shinsaibashi Square 30.3 billion KOJIMA x BIC CAMERA Naha Store Other properties NOI yield: 5.2% NOI yield after depreciation: 5.1% Kohnan Kawasaki-Odasakae Mall (land interest) Summit Store Yokohama Okano (land interest) Costco Wholesale Warehouse Shin-Misato (land interest) Frespo Tosu (land interest) Costco Wholesale Warehouse Iruma (land interest) (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) NOI yield and NOI yield after depreciation are calculated using figures as of June 30, 2017 (those for Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) are the forecast yields at the date of acquisition) 6

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9 2. Financial results and forecasts

10 Summary Steady distribution growth 1 Aiming for a distribution per unit (DPU) of over 10,000 for two consecutive periods for the first time ever 3 Initiatives to strengthen the portfolio DPU 2 26th period Agreement reached with new tenant, Don Quijote, for TSUTAYA BOOK STORE TENJIN(20-year contract) Property to be renamed (provisional name) Don Quijote Tenjin (from August 24, 2017) 27th period Acquired Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) using the Asset Management Companyʼs unique network Acquisition price: Appraisal value: 26th period 27th period Assumed NOI yield: 3.7% 4,320 million 4,550 million Acquisition date: July 31, ,022 (up 119 from the 25th period; 222 above forecast) 10,080 (forecast) (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest), formerly Sports Club Renaissance Hiroshima, began generating revenue again 3 Conservative financial operations Maintained strong financial standing through conservative operations LTV 26th period end: 41.6% (including leasehold and security deposits) Interest-bearing debt ratio 26th period end: 28.8% (excluding leasehold and security deposits) Reduced debt cost 26th period end: 0.69% (-0.03 pt from the 25th period end) 9

11 Steady distribution growth Distribution per unit (yen) 10,000 9,500 9,000 8,500 8,000 10,000 8,000 6,000 4,000 2,000 5,622 DPU* 4, , ,045 8,648 8, , ,980 9,205.5 Operating revenue, net income and asset size Operating revenue (left axis) Net income (left axis) July st public offering March 2008 Third-party allotment 9,274 9,368.5 Asset size (right axis) 9,294 July nd public offering 6,168 6,233 6,364 5,658 9, ,239 9, ,991 9,191 March th public offering July rd public offering 9,026 8,472 8,023 7,801 7,407 9, ,405 10,211 9,707 9,360 10,022 9,695 9,903 9,694 10,080 (billion yen) 10,107 10,633 10,390 9,676 9,960 9,853 10,037 10,051 10,011 3,500 10, ,307 5,007 4,550 4,303 4,273 4,664 4,642 4,808 4,911 4,970 4,467 3,067 3,470 3,587 3,876 3,667 3,532 3,584 3,608 2,950 2,967 2,997 2,974 2,511 2,610 1,985 1,053 1,241 1,334 1,593 1,909 1,953 1,970 2,245 (Forecast) 5, , , , , , st 第 1 期 2nd 第 2 期 3rd 第 3 期 4th 第 4 期 5th 第 5 期 6th 第 6 期 7th 第 7 期 8th 第 8 期 9th 第 9 期 10th 第期 11th 第期 12th 第期 13th 第期 14th 第期 15th 第期 16th 第期 17th 第期 18th 第期 19th 第期 20th 第期 21st 第期 22nd 第期 23rd 第期 24th 第期 25th 第期 26th 第期 27th Forecast** 04/12 月 05/6 月 05/12 月 06/6 月 06/12 月 07/6 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 月 12/6 月 12/12 月 13/6 月 13/12 月 14/6 月 14/12 月 15/6 月 15/12 月 16/6 月 16/12 月 17/6 月 Dec. 04 Jun. 05 Dec. 05 Jun. 06 Dec. 06 Jun. 07 Dec. 07 Jun. 08 Dec. 08 Jun. 09 Dec. 09 Jun. 10 Dec. 10 Jun. 11 Dec. 11 Jun. 12 Dec. 12 Jun. 13 Dec. 13 Jun. 14 Dec. 14 Jun. 15 Dec. 15 Jun. 16 Dec. 16 Jun. 17 Dec. 17 * FRI implemented a two-for-one split of its investment units effective January 1, Distributions before the split have been divided by two. ** Distribution per unit (DPU), operating revenue and net income forecasts for the 27th period are given as the figures announced in Summary of Financial Results for the 26th Fiscal Period, published August 15,

12 26th period results 25th period (July 1, 2016 to December 31, 2016) 26th period (January 1, 2017 to June 30, 2017) Change Major factors in changes Operating revenue 10,022 10, % Expenses related to rent business (excluding depreciation) 1,927 1, NOI 8,095 8, Depreciation 2,156 2, Property leasing operating income Selling, general and administrative expenses (a) 5,939 5, Operating income 5,379 5, % Non-operating income Non-operating expenses Ordinary income 5,050 4, % Extraordinary losses Net income 4,911 4, % Distribution per unit (yen) 9,903 10, % Investment units issued and outstanding (units) 496, ,000 pt LTV at period-end (b) 42.3% 41.6% -0.7 pt Interest-bearing debt ratio (c) 29.6% 28.8% -0.8 Number of properties a. Selling, general and administrative expenses = Asset custody fee + Administrative service fees + Directors compensations + Other operating expenses b. Loan-to-value ratio = (Borrowings and bonds + Leasehold and security deposits Unrestricted cash and deposits ) / (Balance of total assets Unrestricted cash and deposits) c. Interest-bearing debt ratio = (Borrowings and bonds Unrestricted cash and deposits) / (Balance of total assets Unrestricted cash and deposits) Unrestricted cash and deposits = Cash and cash equivalents distributions for the period Note 1 Note 2 Note 2 Note 2 Note 3 Note 1. Operating revenue Full-period operation of 25th period acquisition (50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO) +95 Sales-linked rent +10 Income from utilities expenses -22 Absence of lump-sum payments received due to tenant change at Sports Club Renaissance Hiroshima (former name) -91 Absence of rent due to reconstruction at Sports Club Renaissance Hiroshima (former name) -11 Note 2. Expenses related to rent business/selling, general and administrative expenses Property and city planning taxes for properties acquired in the 24th and 25 periods (KOJIMA x BIC CAMERA Naha Store and a 50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO, respectively) +50 Utilities expenses -12 Depreciation -39 Change in asset management fee rates +70 Note 3. Extraordinary losses Absence of loss on retirement of building for Sports Club Renaissance Hiroshima (former name) -137 (d) (e) Reference: Financial indicators FFO per unit (d) (f) 14,291 NAV per unit (e) 415,987 Interest coverage (f) ratio 23.0 times d. Funds from operations per unit = (Net income + Depreciation) / Investment units issued and outstanding e. Net asset value per unit = (Net assets + Unrealized gain or loss) / Investment units issued and outstanding f. Interest coverage ratio = EBITDA / Interest expenses 11

13 27th period forecast 26th period results (January 1, 2017 to June 30, 2017) 27th period forecast (a) (July 1, 2017 to December 31, 2017) Change Operating revenue 10,011 10, % Operating income 5,300 5, % Ordinary income 4,971 5, % Net income 4,970 5, % Distribution per unit (yen) 10,022 10, % Note 1 Note 2 Major factors in changes Note 1. Operating revenue Rent from 27th period acquisition (Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) and full-period operation of (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) +147 Sales-linked rent -17 Income from utilities expenses +23 Rent due to tenant change at TSUTAYA BOOK STORE TENJIN -24 Decrease due to contract termination at VIORO during the 27th period -41 Note 2. Operating income (excluding difference in operating revenue) Investment units issued and outstanding (units) 496, ,000 Repairs and maintenance -77 Utilities expenses -18 Depreciation +50 Selling, general and administrative expenses -36 LTV at period-end (b) 41.6% Approx. 42% Number of properties a. Forward-looking figures given here are as announced in Summary of Financial Results for the 26th Fiscal Period, published August 15, b. Loan-to-value ratio = (Borrowings and bonds + Leasehold and security deposits Unrestricted cash and deposits) / (Balance of total assets Unrestricted cash and deposits) Major expenses 26th period results ( 単位 : 百万円 ) 27th period forecast Property tax, city planning tax 1,043 1,043 Depreciation 2,117 2,066 Non-operating expenses

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15 3. Management highlights

16 Management highlights Large-scale shopping centers (regional SCs, outlet malls) Mitsui Shopping Park LaLaport SHIN-MISATO (regional SC) Reinforced revenue base due to full-period operation starting in the 26th period JR 武蔵野線 FRI s greatest investment area Total acquisition price of 27.5 billion together with LaLaport SHIN- MISATO Annex and Costco Wholesale Warehouse Shin-Misato (land interest) Mitsui Outlet Park IRUMA (outlet mall) Among the largest outlet malls in the Tokyo metropolitan area, attracting customers from a broad area, with synergies with the neighboring Costco Wholesale Warehouse Iruma Generates sales-linked rent every period Just off the Iruma IC 大宮 さいたま Connected to station Shin-Misato Sta. JR Musashino Line 所沢 LaLaport Costco SHIN-MISATO Shin-Misato FRI properties Annex Commercial zone IKEA Logistics zone Residential zone 八王子 国分寺 立川 新宿 渋谷 品川 東京 AEON MALL Ibaraki (regional SC) Features of FRIʼs large-scale shopping centers Introduced sales-linked rent after large-scale renovations in Continued to generate sales-linked rent in the 26th period Ritsumeikan University Osaka-Ibaraki Campus now open Major increase in daytime population JR line underpass to open in spring 2018 Will expand the retail zone Repairs of exterior walls planned AEON MALL Ibaraki Underpass Stable revenue base Portion under master leases 100% Percentage of total annual rent Mitsui Shopping Park LaLaport IWATA Mitsui Outlet Park IRUMA Over 7: 27.7% Excellent locations near train stations Over 70% adjacent to a station Adjacent to a station Under 7: 72.3% 7 min. on foot 46.9% Minutes on foot to nearest train station 1 1. Calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, Variable rent is not taken into account. 15

17 Management highlights Community shopping centers (GMSs) AEON Shinagawa Seaside Shopping Center (community SC) Ito-Yokado Higashi-Yamato (community SC) Flagship central Tokyo AEON Group retail facility Located in the Shinagawa Seaside Forest, a mixed-use facility with office, retail and hotel space, enabling the capture of office workers weekday dining and other consumption Approximately 1,800 condominiums under construction within a 500 m radius Approx. 1,800 condominiums to be completed by 2020 Planned development near AEON Shinagawa To be completed Nov units Aomono-Yokocho Sta. To be completed Feb units To be completed Oct units Radius AEON Shinagawa Seaside Forest Shinagawa Seaside Sta. 500 m Population growth 1 km 40, % 3 km 267, % 5 km 793, % Further growth expected Higashiyamato ranked first among Tokyo municipalities in 2015 birthrate survey Forms the leading retail area in Higashiyamato City with neighboring retail facilities Nojima store newly opened on the second floor on June 2017 In discussions regarding rent revisions (November 2012 and November 2015) Features of FRIʼs community shopping centers 30.0% 20.0% 10.0% 0.0% Percentage of total annual rent accounted for by community shopping centers YAOKO Ito-Yokado Higashi- Yamato FRI owns only community SCs in excellent locations in Tokyo with growing populations 23.2% 16.4% 11.6% 16th 第期第 21st 期第 26th 期 16

18 Management highlights Medium-scale shopping centers (neighborhood SCs, supermarkets) Mitsui Shopping Park LaLagarden KASUKABE (neighborhood SC) Renovated by master lessee (Mitsui Fudosan) in anticipation of the facility s 10-year anniversary in November 2017 Five new stores, including Wakuwaku Hiroba, a store offering vegetables and other foods direct from producers, and seven renovated stores Renovated baby care room, kids restrooms, community room and employee break room Papillon Plaza (neighborhood SC) Local retail zone population growing due to neighboring condominium development Contract to reach maturity in April 2019 Now looking into future internal growth opportunities Radius Population growth 1 km 33, % 3 km 210, % 5 km 512, % 3 min. to Hakata station Yoshizuka Sta. Nearby housing development Papillon Plaza Hakata Sta. QANAT Rakuhoku (neighborhood SC) *Concept images H2O Retail Group, the main tenant, has acquired an adjacent lot Now looking into future internal growth opportunities In discussions regarding rent revisions (January 2015 ) Adjacent lot (approx, 6,300 m2) QANAT Rakuhoku カナート 2 (approx. 洛北13,000 m ) More accommodating and enjoyable for visitors of all ages, from older adults to families with children Takano 高野川River 17

19 Management highlights Urban retail facilities TSUTAYA BOOK STORE TENJIN / (Provisional name) Don Quijote Tenjin Successor to TSUTAYA, Don Quijote, to rent the entire property from August 24, 2017, achieving tenant change with no downtime To be renamed (provisional name) Don Quijote Tenjin (Aug. 24th, 2017) Features of FRIʼs urban retail facilities FRI owns stores with street level access and buildings that house specialty stores in prime urban locations with high liquidity These properties account for a growing portion of overall portfolio rent FRI maintains a good balance of acquisitions from the sponsor (sponsordeveloped properties) and from third parties The lengthening of the Nanakuma subway line (to be completed in 2020) will improve access to Hakata Station 26th (Jan. Jun.) 27th (Jul. Dec.) Jul. Aug. Sep. Oct. Nov. Dec. Acquired from the sponsor Ginza Ikebukuro Acquired from third parties Harajuku Tenjin Previous tenant: TSUTAYA New tenant: Don Quijote Aug. 23 contract cancellation Aug. 24 new contract begins Original maturity Original contract start Shinsaibashi Rent payments begin November Facility opening GINZA GLASSE roadside land price (Thousand yen/m 2 ) 25,000 Percentage of total annual rent accounted for by urban retail facilities Tenant Don Quijote Co., Ltd. VIORO Nishitetsu Fukuoka (Tenjin) Sta. 20,000 At 16th period-end Contract type Contract period Leased floor space Fixed-term building lease Aug Mar (just under 21 years) 4, m 2 ZARA DIESEL Muji H&M Don Quijote Apple Store Sony Store Brooks Brothers 15,000 10,000 5, (year) Source: National Tax Agency 12.5% At 26th period-end 18.4% 18

20 Management highlights Land interests and other properties 27th period acquisition Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) Easy access via Yamato-Atsugi Bypass (National Route 246) Offers synergy with neighboring Costco Wholesale Zama Warehouse Viva Home/ Super Sanwa Costco Location Acquisition price (assumed NOI yield) Appraisal value Radius 商圏 Population 人口 / 比 growth 1km 1 km 2.5 万人 25, % +2.8% 3km 3 km 24.7 万人 247, % +2.1% 5km 5 km 57.3 万人 573, % +2.3% 1 Higashihara, Zama City, Kanagawa 4,320 million (3.7%) 4,550 million Acquisition date July 31, 2017 Contract period Leased floor space 28, m 2 Jul Jul (30 years) (fixed-term business-use lease contract) Demolished the Sports Club Renaissance Hiroshima building, and will now operate the property as a land interest Began generating rent (for the land) July 1, 2017, contributing to revenue from the 27th period onward Synergies with the nearby You Me Town Hiroshima expected after the new facility opens New tenant: Kohnan Shoji Location Period-end book value (assumed NOI yield) Contract period 25th (Jul. Dec.) 26th (Jan. Jun.) 27th (Jul. Dec.) New contract begins Aug. 1 Demolition of existing building (completed) New construction Rent payments begin Operations begin autumn Minami-machi, Minami-ku, Hiroshima City, Hiroshima 1,754 million (7.6%) Leased floor space 6, m 2 Aug Jul (21 years) (fixed-term business-use land lease contract) 19

21 FRI and the retail market 2016/ / / / / / / / / / / / / / /06 Annual retail product sales by region Consumption by overseas tourists visiting Japan Hokkaido Tohoku Tokyo metropolitan area Chubu Kansai Chugoku Shikoku Kyushu/Okinawa 12.0% 3.1% 6.0% 17.9% 5.8% Annual retail product sales by region 4.8% 39.6% 10.6% 13.7% 9.4% Distribution of FRI properties* 51.9% (trillion yen) Government target: 8 trillion 10.8% Year-on-year comparison of monthly sales at FRI properties 30% 14.4% * Calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, Variable rent is not taken into account. Source: Data on 2016 retail sales volumes by regional Bureau of Economy, Trade and Industry, Ministry of Economy, Trade and Industry 1 0 (trillion yen) Source: Consumption Trend Survey for Foreigners Visiting Japan, Japan Tourism Agency BtoC E-commerce market size and e-commerce adoption rate (product sales) E-commerce market size E-commerce adoption rate EC 市場規模 ( 左目盛 ) EC (right 化率 ( axis) 右目盛 ) (left axis) 7% 20% SC FRI 6% 10% 0% -10% % 4.37% 4.75% 5.43% 5% 4% 3% 2% -20% -30% % 0% * Calculated based on sales at properties for which comparisons with the previous year are possible Source: SC sales statistics report, Japan Council of Shopping Centers Source: Ministry of Economy, Trade and Industry FY2016 E-Commerce Market Survey 20

22 Sound balance sheet 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th Key financial indicators Unrealized gain based on appraisal value and NAV Balance of borrowings and bonds 25th (December 31, 2016) 26th (June 30, 2017) 86,400 million 86,400 million Balance of leasehold 1 34,032 million 33,951 million and security deposits Total balance of liabilities 120,432 million 120,351 million LTV ratio % 41.6% Interest-bearing % 28.8% debt ratio billion (Appraisal value) Total assets: billion (as of June 30, 2017) Cash and deposits, etc. 16 billion Book value of assets under management billion Borrowings and bonds 86.4 billion Leasehold and security deposits 33.9 billion Other liabilities 2.7 billion Net assets billion billion billion (NAV) Long-term debt ratio 88.4% 84.6% 1. For an overview of leasehold and security deposits, please see p LTV = (Borrowings and bonds + Leasehold and security deposits Unrestricted cash and deposits) / (Balance of total assets Unrestricted cash and deposits) 3. Interest-bearing debt ratio = (Borrowings and bonds Unrestricted cash and deposits) / (Balance of total assets Unrestricted cash and deposits) Unrealized gain 54.5 billion Unrealized gain based on appraisal value NAV (billion yen) billion (billion yen) 250 NAV growth +30.5% over five years th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 21

23 Internal growth financial 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th 37th 38th 39th 40th 41st 42nd 43rd 44th 45th 46th 47th 48th 49th 50th 第 27 期 第 28 期 第 29 期 第 30 期 第 31 期 第 32 期 第 33 期 第 34 期 第 35 期 第 36 期 第 37 期 第 38 期 第 39 期 第 40 期 第 41 期 第 42 期 第 43 期 第 44 期 第 45 期 第 46 期 第 47 期 第 48 期 第 49 期 第 50 期 第 51 期 第 54 期第 55th 期 Refinancing to reduce debt cost(excluding short-term loans) (%) (years) % % 5.9 Average interest rate of repayments in each period % 0.43% Average period of repayments in each period % Average interest rate of new loans/bonds in each period Average period of new loans/bonds in each period 第 22nd 期第 23rd 期第 24th 期第 25th 期第 26th 期第 27th 期第 28th 期第 29th 期第 30th 期 Average remaining loan/bond period and debt cost (at each period end) (years) Average including leasehold and security deposits: 1.11% 1.08% 1.09% 1.07% 1.05% 0.52% 0.98% 0.72% 0.92% 0.69% 0.84% Years remaining Debt cost 残存年数 (left axis) ( 左軸 ) 調達コスト (right axis) ( 右軸 ) Average including leasehold and security deposits: 6.04 第 17th 期第 18th 期第 19th 期第 20th 期第 21st 期第 22nd 期第 23rd 期第 24th 期第 25th 期第 26th 期 (%) 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% -0.20% Distribution of maturity dates Balance of borrowings and bonds and interest paid (billion yen) Commitment line (as of August 15, 2017) 90,000 Balance of borrowings and bonds (left axis) Interest paid (right axis) Long-term borrowings 長期借入金 Long-term borrowings in 26th Security 保証金 deposits Investment corporation bonds Long-term borrowings in 27th 80,000 70,000 Impact on DPU: , ,000 40, ,000 第 17th 期第 18th 期第 19th 期第 20th 期第 21st 期第 22nd 期第 23rd 期第 24th 期第 25th 期第 26th 期

24 Sustainability initiatives Reducing environmental burden Contributing to society Per-unit reductions in fiscal 2016 (compared with fiscal 2013 levels) *Fiscal 2013 levels as 100% 12%reduction 14%reduction 26%reduction 17th &EARTH Clothing Support Project Results of events at FRI properties (May June 2017) 1,602 7,659 kg 69,722 participants of clothing collected in additional donations Energy Water Waste Facility Participants Clothing collected Additional donations LaLagarden KASUKABE 480 2,568 kg 10,810 LaLaport SHIN-MISATO 315 1,363 kg 17,534 4% average annual reduction 5% average annual reduction Coverage ratio: More than 90% of the overall portfolio (floor space basis) 9% average annual reduction LaLaport IWATA 389 1,947 kg 13,987 ALPARK (Hiroshima) 418 1,781 kg 27,391 LaLaport IWATA LaLaport SHIN-MISATO & EARTH Clothing Support Project Carried out twice annually since 2008, this project is organized by the Mitsui Fudosan Group and invites people to donate unneeded clothing at retail facilities. This clothing is then distributed to people in need through the NPO Japan Relief Clothing Center. Wind power turbines Quick chargers for electric vehicles Green walls Wind power turbines with small solar panels 23

25 Sustainability initiatives External certification DBJ Green Building Certification 26th period certifications Four FRI properties newly certified Previously certified properties Mitsui Shopping Park LaLaport SHIN-MISATO VIORO (24th period) AEON MALL Ibaraki (24th period) (22nd period) Mitsui Shopping Park LaLaport IWATA Mitsui Shopping Park LaLagarden KASUKABE GINZA GLASSE Recognized for providing superior convenience that meets the needs of diverse consumers, through such means as offering ample facilities for children and installing charging points for electric vehicles. Ikebukuro Square (24th period) AEON MALL NAGOYADOME-Mae GRESB Real Estate Assessment Mitsui Outlet Park IRUMA (22nd period) Rank :Property with the best class environmental & social awareness :Property with excellent environmental & social awareness East Asia / Retail / Listed 1st (of 6 entities) Global 101st (of 733 entities) DBJ Green Building Certification A comprehensive evaluation system for real estate properties demonstrating high environmental and social awareness. Based on a proprietary scoring model developed by Development Bank of Japan Inc. (DBJ), certified properties receive a rank of one to five stars. GRESB (Global Real Estate Sustainability Benchmark) GRESB assesses the sustainability of real estate companies and operators, and is used by leading global institutional investors to help select investment targets. 24

26

27 4. Portfolio overview

28 Portfolio summary No. Property name Acquisition date Seller 1 Acquisition price Total leasable floor space 2 Occupancy rate 2 Appraisal value Age (years) Main tenants 3 PML 4 1 AEON Shinagawa Seaside Shopping Center Aug JT 20,100 77,547 m 2 100% 19, AEON Retail 14% 2 AEON MALL Ibaraki Aug JT 18, ,092 m 2 100% 23, AEON Retail 13% 3 Papillon Plaza Aug JT 4,810 17,095 m 2 100% 5, Royal Home Center 1% 4 Kamiikedai Tokyu Store Aug JT 1,490 6,640 m 2 100% 1, Tokyu Store 11% 5 Belltown Tambaguchi Eki-Mae Store Aug JT 2,130 11,176 m 2 100% 2, Matsumoto 9% 6 AEON MALL NAGOYADOME-Mae Mar JT 24, ,766 m 2 100% 25, AEON Retail 13% 7 Summit Store Takinogawa Momiji-Bashi Sep JT 3,100 6,455 m 2 100% 3, Summit 12% 8 (Provisional name) Home Center Kohnan Hiroshima- -Shi Minami-Machi (land interest) 5 Apr JT 1,940 6,055 m 2 100% 2,540 Kohnan Shoji 9 Frespo Tosu (land interest) Nov JT 3,178 79,447 m 2 100% 3,060 Daiwa Lease 10 You Me Town Hiroshima Feb JT 23, ,169 m 2 100% 21, Izumi 10% 11 Queen s Isetan Suginami-Momoi Jul MF, etc. 3,560 5,212 m 2 100% 4, Isetan Mitsukoshi Food Service 12% 12 Mitsui Outlet Park IRUMA Jul MF, etc. 19,900 98,714 m 2 100% 22, Mitsui Fudosan 14% 13 Costco Wholesale Warehouse Iruma (land interest) Jul MF, etc. 2,600 24,019 m 2 100% 2,750 Costco 14 Desigual Harajuku 6 Oct Non-sponsor 3,100 1,149 m 2 100% 3, INTS 14% 15 Ito-Yokado Higashi-Yamato Jan Non-sponsor 11,600 53,374 m 2 100% 11, Ito-Yokado 12% 16 AEON TOWN Tanashi-Shibakubo Feb MF, etc. 3,100 8,785 m 2 100% 3, AEON Town 11% 17 TSUTAYA BOOK STORE TENJIN 7 Dec Non-sponsor 3,700 4,532 m 2 100% 4, TSUTAYA 2% 18 Mitsui Shopping Park LaLaport IWATA Jul MF, etc. 15, ,136 m 2 100% 15, Mitsui Fudosan 16% 19 GINZA GLASSE Jul MF, etc. 13,600 5,174 m 2 100% 15, % 20 Shimura Shopping Center Jan Non-sponsor 4,430 17,126 m 2 100% 5, Summit 14% 21 Mitsui Shopping Park LaLagarden KASUKABE Feb MF, etc. 10,000 63,415 m 2 100% 11, Mitsui Fudosan 13% 22 Summit Store Yokohama Okano (land interest) Feb Non-sponsor 5,700 14,394 m 2 100% 6,630 Summit 23 VIORO Feb Non-sponsor 10,100 5,834 m % 11, % 24 QANAT Rakuhoku Jul MF, etc. 8,800 48,303 m 2 100% 9, H 2 O Asset Management 9% 25 Ikebukuro Square Feb MF, etc. 20,400 8,863 m 2 100% 24, Round One 14% 27

29 Portfolio summary No. Property name Acquisition date Seller 1 Acquisition price Total leasable floor space 2 Occupancy rate 2 Appraisal value Age (years) Main tenants 3 PML 4 26 Mitsui Shopping Park ALPARK (East Building) Feb MF, etc. 5,400 65,603 m 2 100% 5, Mitsui Fudosan 12% 27 Kohnan Kawasaki-Odasakae Mall (land interest) Jan Non-sponsor 7,000 23,393 m 2 100% 8,710 Kohnan Shoji 28 Mitsui Shopping Park LaLaport SHIN-MISATO Annex Mar MF, etc. 3,930 6,714 m 2 100% 3, FOREVER21 12% 29 Shinsaibashi Square Mar MF, etc. 8,620 1,750 m 2 100% 9, Burberry Japan 7% 30 Mitsui Shopping Park LaLaport SHIN-MISATO 8 Apr Aug MF, etc. 19, ,315 m 2 100% 20, Mitsui Fudosan 11% Costco Wholesale Warehouse Shin-Misato 31 (land interest) Apr MF, etc. 3,810 30,292 m 2 100% 3,950 Costco 32 KOJIMA x BIC CAMERA Naha Store Jan Non-sponsor 1,850 7,301 m 2 100% 2, Kojima 6% Total (32 properties, as of Jun. 30, 2017) 289,088 1,404,855 m 2 100% 313, % 33 Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) 9 Jul Non-sponsor 4,320 28,926 m 2 100% 4,550 Total (33 properties, as of Aug. 15, 2017) 293,408 1,433,781 m 2 100% Sumitomo Mitsui Finance and Leasing 1. MF, etc. represents Mitsui Fudosan and its consolidated subsidiaries as well as 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 June 30, 2017, calculated on an end tenant basis. 3. For multi-tenant properties and properties for which pass-through type master lease contracts are concluded, the end tenant that leases the largest portion of leasable floor space is shown if they lease more than 30% of the total. 4. PML represents the probable maximum loss in earthquake risk analysis. The values stated for AEON MALL Ibaraki and Mitsui Outlet Park IRUMA are for the store buildings. The figure for Desigual Harajuku includes the portion of the building that was demolished as of October 29, The figure for Shinsaibashi Square is for the north tower. The value listed under Total represents the PML value at June 30, 2017 of the entire portfolio (properties from No. 1 to No. 32) as a whole, not the average value of the properties in the portfolio. 5. The acquisition price is as at the time of acquisition and includes the price of the building on the property at the time ( 208 million). Said building was demolished as of December The acquisition price is as at the time of acquisition and includes a portion of the site sold on July 30, 2012 (cost of sales: 259 million). 7. FRI and TSUTAYA Co., Ltd. have reached an agreement to terminate the lease contract for the property effective August 23, FRI entered a fixed-term building lease with the new tenant, Don Quijote Co., Ltd., on July 31, FRI acquired a 16% co-ownership stake on April 1, 2015, and an addition 50% co-ownership stake on August 10, 2016, but the total leasable floor space presented here is that for the entire property. The acquisition price presented is the total after the additional acquisition. 9. This property s appraisal value is as at the date of acquisition. 28

30 FRIʼs portfolio in graphs Kyushu/ Okinawa 9.4% Chugoku 10.6% Kansai 13.7% Area Tokyo metropolitan area 51.9% Urban retail facility 18.4% Supermarket 6.5% Other 7.7% Property type Regional SC 40.2% Over 20 years 3.9% Building age 2 5 years or less 11.0% Other 32.7% Tenants Mitsui Fudosan 25.8% Chubu 14.4% Neighborhood SC 8.9% Outlet Mall 6.7% Community SC 11.6% 10 to 20 years 45.3% Average building age: 11.1 years 5 to 10 years 39.9% Round One 4.1% Summit 4.3% Izumi 7.8% AEON Group 25.4% 5 years or less 3.1% 5 to 10 years 8.9% Over 10 years 88.0% 5 years or less 15.5% 3 years or less 25.0% Sales-linked rent 1.3% Over 10 years 22.6% Contract term Remaining contract term Period remaining until rent revision 3 Ratio of fixed rent and saleslinked rent 5 to 10 years 32.1% Over 10 years 3 to 5 years 52.4% 12.8% 5 to 10 years 39.6% Fixed rent 98.7% Average contract term: 18.8 years Average remaining contract term: 11.0 years 1. All figures are calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, Variable rent is not taken into account. The ratio of fixed rent and sales-linked rent is that of the 26th fiscal period 2. Based on acquisition price, excluding properties operated as land interests. 3. Balance of time remaining until the next rent revision date or contract maturity date, whichever is earlier. 29

31 Rent revision and lease maturity schedules Property name Main tenant 1 Contract type 2 Saleslinked rent Percentage of total annual rent th 27th 28th 29th 30th 31th 32th 33th 34th 35th 1 AEON Shinagawa Seaside Shopping Center AEON Retail ML T 7.7% Oct-22 2 AEON MALL Ibaraki AEON Retail ML F 7.9% Apr-35 3 Papillon Plaza Royal Home Center M/P 4 F/T 2.1% Apr-19 4 Kamiikedai Tokyu Store Tokyu Store ML F 0.6% Mar-22 5 Belltown Tambaguchi Eki-Mae Store Matsumoto ML F 0.9% Aug-25 6 AEON MALL NAGOYADOME-Mae AEON Retail ML F 8.1% Mar-26 7 Summit Store Takinogawa Momiji-Bashi Summit S F 1.0% Sep-26 8 (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) Kohnan Shoji S F Undisclosed Jul-37 9 Frespo Tosu (land interest) Daiwa Lease S F 1.2% Nov You Me Town Hiroshima Izumi ML F 7.8% Feb Queen s Isetan Suginami-Momoi Isetan Mitsukoshi Food Service 1. For multi-tenant properties and properties for which pass-through type master lease contracts are concluded, the end tenant that leases the largest leased floor space is shown if they lease over 30% of the total. 2. ML: Master lease contract; P: Pass-through type master lease contract (in which the amount of rent that the master lessee pays FRI is the same as the amount of rent that end tenants are contracted to pay the master lessee); S: Contract with a single tenant; M: Contract with multiple tenants; T: Traditional lease; F: Fixed-term lease 3. Figures are calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 31, FRI has a direct lease contract with Royal Home Center and pass-through type master lease contracts with the other end tenants. 5. FRI and TSUTAYA Co., Ltd. have reached an agreement to terminate the lease contract for the property effective August 23, FRI entered a fixed-term building lease with the new tenant, Don Quijote Co., Ltd., on July 31, The main tenant and the rent revision and lease maturity schedules are not disclosed as the status of contracts with end tenants varies significantly. Lease maturity ML F 1.2% Dec Mitsui Outlet Park IRUMA Mitsui Fudosan ML F 6.7% Jul Costco Wholesale Warehouse Iruma (land interest) Costco S F 0.8% Apr Desigual Harajuku INTS S F 0.7% Sep Ito-Yokado Higashi-Yamato Ito-Yokado ML T 4.0% Nov AEON TOWN Tanashi-Shibakubo AEON Town ML T 1.2% Mar TSUTAYA BOOK STORE TENJIN 5 TSUTAYA S F 1.5% Mar Mitsui Shopping Park LaLaport IWATA Mitsui Fudosan ML F 6.3% Jun GINZA GLASSE 6 P F/T 3.7% - 20 Shimura Shopping Center Summit ML T 1.7% Nov Mitsui Shopping Park LaLagarden KASUKABE Mitsui Fudosan ML T 3.9% Feb Summit Store Yokohama Okano (land interest) Summit S F 1.6% Nov VIORO 6 P F 3.8% - 24 QANAT Rakuhoku H2O Asset Management ML T 2.9% Nov Ikebukuro Square Round One M F 6.7% Dec Mitsui Shopping Park ALPARK (East Building) Mitsui Fudosan ML T 2.8% Feb Kohnan Kawasaki-Odasakae Mall (land interest) Kohnan Shoji S F 2.2% Jan Mitsui Shopping Park LaLaport SHIN-MISATO Annex FOREVER21 P F/T 1.2% Apr Shinsaibashi Square Burberry Japan M F Undisclosed Undisclosed 30 Mitsui Shopping Park LaLaport SHIN-MISATO Mitsui Fudosan ML T 6.1% Mar Costco Wholesale Warehouse Shin-Misato (land interest) Revision Costco S F Undisclosed Undisclosed 32 KOJIMA x BIC CAMERA Naha Store Kojima S F Undisclosed May-27 Revision Recontracting Revision New Contract Revision Maturity Revision Maturity Maturity Revision 30

32

33 5. Appendix

34 Statement of income 25th period (July 1, 2016 to December 31, 2016) 26th period (January 1, 2017 to June 30, 2017) Change Amount % of total Amount % of total Amount % change Operating revenue 10, % 10, % % Rent revenue real estate 1 9,893 9, Rent revenue other Operating expenses 4, % 4, % % Expenses related to rent business 4,083 4,091 7 Property management expenses Property and other taxes , Casualty insurance Repairs and maintenance Depreciation 5 2,156 2, Other expenses Selling, general and administrative expenses Asset management fee Asset custody fee Administrative service fees Directors' compensations Other Operating income 5, % 5, % % Non-operating income Non-operating expenses Interest expenses Other Ordinary income 5, % 4, % % Extraordinary losses Income before income taxes 4, % 4, % % Income taxes (after net adjustment) Net income 4, % 4, % % Unappropriated retained earnings 4, % 4, % % Major factors in changes 1 Full-period operation of 25th period acquisition (50% stake in Mitsui Shopping Park LaLaport SHIN- MISATO) Sales-linked rent Income from utilities expenses Absence of rent due to reconstruction at Sports Club Renaissance Hiroshima (former name) VIORO: Rent Absence of lump sum income from tenant change at -91 Sports Club Renaissance Hiroshima (former name) VIORO: Penalty payment income, etc AEON Shinagawa Seaside Shopping Center, VIORO, +24 others: Building management expenses 4 Property and city planning taxes for properties acquired in the 24th and 25 periods (KOJIMA x BIC +50 CAMERA Naha Store and a 50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO, respectively) 5 25th period acquisition (50% stake in Mitsui +17 Shopping Park LaLaport SHIN-MISATO) Completion of amortization of properties attached -56 facilities, etc. (AEON MALL Ibaraki, Shimura Shopping Center, etc.) 6 Utilities expenses -12 VIORO: Absence of 10th anniversary sales -32 promotion expenses 7 Change in asset management fee rates +70 Promotional expenses -6 8 Absence of loss on retirement of building for Sports Club Renaissance Hiroshima (former name)

35 Balance sheet (assets) 25th Period (as of Dec. 31, 2016) 26th Period (as of June 30, 2017) Change Major factors in changes Amount % of total Amount % of total Amount % change Current assets 13, % 15, % 2, % Cash and deposits 1 9,411 11,800 2,389 Cash and deposits in trust 1 3,487 4, Other Non-current assets (including deferred assets) 260, % 258, % -1, % Property, plant and equipment 3 260, ,770-1,980 Buildings 39,009 37,995-1,013 Structures Cash and deposits matching depreciation +2,117 Payments for construction at properties -142 Partial return of security deposits -276 Leasehold deposits received due to tenant +202 change Consumption taxes payable +317 Consumption taxes receivable Consumption taxes receivable th period capital expenses +125 Depreciation -2, Amortization of insurance payments -12 Tools, furniture and fixtures Land 72,924 72,924 - Buildings in trust 34,295 33, Structures in trust Machinery and equipment in trust Tools, furniture and fixtures in trust Land in trust 113, ,359 - Construction in progress in trust Intangible assets Investments and other assets Total assets 274, % 274, % % 34

36 Balance sheet (liabilities and net assets) 25th Period (as of Dec. 31, 2016) 26th Period (as of June 30, 2017) Change Major factors in changes Amount % of total Amount % of total Amount % change Current liabilities 16, % 21, % 5, % Short-term loans payable 1 14,000 18,500 4,500 Operating accounts payable Accrued expenses Advances received 1,048 1, Other Non-current liabilities 106, % 101, % -4, % 1. Extension of short-term loans -5,000 Current portion of long-term loans payable +9, Extension of short-term loans +5,000 Current portion of long-term loans payable -9, Partial return of security deposits -276 Leasehold deposits received due to tenant change 4. Net assets per unit (yen): At the end of 25th period At the end of 26th period ,829 円 305,948 円 Long-term loans payable 2 69,400 64,900-4,500 Investment corporation bonds 3,000 3,000 - Tenant leasehold and security deposits 3 17,950 17, Tenant leasehold and security deposits in trust 3 16,082 16, Other Total liabilities 122, % 123, % % Unitholders capital 146, % 146, % - Total surplus 5, % 5, % 59 Reserve for reduction entry Unappropriated retained earnings 4,912 4, Total net assets 4 151, % 151, % % Total liabilities and net assets 274, % 274, % % 35

37 Statement of cash flows Item Cash flows from operating activities Income before income taxes Depreciation and amortization Other Net cash provided by (used in) operating activities 25th period (July 1, 2016 to December 31, 2016) 26th period (January 1, 2017 to June 30, 2017) 4,912 4,971 2,156 2,117 (757) 980 6,311 8,069 Cash flows from investing activities Purchase of property, plant and equipment (17) (39) Purchase of property, plant and equipment in trust (15,229) (103) Repayments of tenant leasehold and security deposits (297) (278) Proceeds from tenant leasehold and security deposits 71 1 Repayments of tenant leasehold and security deposits in trust (517) (43) Proceeds from tenant leasehold and security deposits in trust Payments of restricted bank deposits in trust (9) (201) Net cash provided by (used in) investment activities (15,537) (424) Cash flows from financing activities Proceeds from short-term loans payable Repayment of short-term loans payable Proceeds from long-term loans payable Repayment of long-term loans payable Proceeds from issuance of investment corporation bonds Redemption of investment corporation bonds Payments for investment corporation bond issuance costs Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 65,000 25,000 (63,000) (27,000) 7,000 5,000 (4,440) (3,000) 3,000 (22) (0) (4,808) (4,911) 2,729 (4,911) (6,495) 2,732 18,958 12,462 12,462 15,194 36

38 Key indicators NOI yield * Yield after depreciation * 7.0% 6.2% 6.2% 6.3% 6.2% 6.3% 7.0% 6.0% 5.0% 5.6% 5.6% 5.7% 5.6% 5.6% 5.4% 5.3% 5.2% 5.2% 5.2% 6.0% 5.0% 4.5% 4.5% 4.6% 4.5% 4.6% 4.0% 4.0% 4.1% 4.1% 4.2% 4.1% 4.1% 3.0% 2.0% Book 帳簿価額ベース value Acquisition 取得価格ベース鑑定価額ベース Appraisal value basis price basis basis 3.0% 2.0% 3.9% 3.8% 3.8% 3.8% 3.8% 帳簿価額ベース Book value Acquisition 取得価格ベース鑑定価額ベース Appraisal value basis price basis basis 第 22nd 期 (15/6 (June 15) 月 ) 第 23rd 期 (15/12 (Dec. 15) 月 ) 第 24th 期 (16/6 (June 16) 月 ) 第 25th 期 (16/12 (Dec. 16) 月 ) 第 26th 期 (17/6 (June. 月 17) ) 22nd 第期 (June (15/6 15) 月 ) 第 23rd 期 (15/12 (Dec. 15) 月 ) 第 24th 期 (16/6 (June 16) 月 ) 第 25th 期 (16/12 (Dec. 16) 月 ) 第 26th 期 (17/6 (June. 17) 月 ) LTV / Interest-bearing debt ratio NAV per unit / BPS per unit 50% 40% 41.7% 41.2% 39.1% 42.3% 41.6% (yen) 450, , , , , , ,987 30% 27.5% 27.2% 25.5% 29.6% 28.8% 350, , , , , ,948 20% 300,000 10% 0% LTV 有利子負債比率 Interest-bearing debt ratio 250, ,000 一口当たり NAV per NAV unit 一口当たり BPS per BPS unit 第 22nd 期 (15/6 (June 15) 月 ) 第 23rd 期 (15/12 (Dec. 15) 月 ) 第 24th 期 (16/6 (June 16) 月 ) 第 25th 期 (16/12 (Dec. 16) 月 ) 第 26th 期 (17/6 (June. 月 17) ) 第 22nd 期 (15/6 (June 15) 月 ) 第 23rd 期 (15/12 (Dec. 15) 月 ) 第 24th 期 (16/6 (June 16) 月 ) 第 25th 期 (16/12 (Dec. 16) 月 ) 第 26th 期 (17/6 (June. 17) 月 ) * The above figures are calculated excluding extraordinary factors. 37

39 Leasing income and expenses by property AEON Shinagawa Seaside Shopping Center AEON MALL Ibaraki Papillon Plaza Kamiikedai Tokyu Store Belltown Tambaguchi Eki-Mae Store AEON MALL NAGOYADOME-Mae Summit Store Takinogawa Momiji-Bashi (Provisional name) Home Center Kohnan Hiroshima- Shi Minami-Machi (land interest) 3 Frespo Tosu (land interest) You Me Town Hiroshima Queen s Isetan Suginami-Momoi Mitsui Outlet Park IRUMA Real estate rent revenue Expenses related to rent business Property leasing Rent Rent Property Property Casualty Repairs and Other Total revenue revenue Total and other management Depreciation operating real estate other taxes expenses insurance maintenance expenses income NOI 1 (to acquisition price) 2 NOI yield (to book value) 25th % 7.6% 26th % 7.7% 25th % 8.7% 26th % 8.9% 25th % 6.5% 26th % 6.7% 25th % 3.0% 26th % 7.4% 25th % 7.8% 26th % 7.9% 25th % 6.3% 26th % 6.3% 25th % 6.3% 26th % 6.3% 25th th Not disclosed th % 6.2% 26th % 6.2% 25th % 6.3% 26th % 6.4% 25th % 6.0% 26th % 6.0% 25th % 7.4% 26th % 7.4% 1. NOI = Property leasing operating income + Depreciation 2. Part of the land of AEON MALL Ibaraki was sold to Ibaraki City on October 12, 2010 (area of m 2 and book value of 15 million) for 19 million. However, the figure given here is calculated using the price at the time of acquisition. 3. FRI s contract with RENAISSANCE INC. reached maturity on July 31, FRI entered a new fixed-term business-use land lease contract with Kohnan Shoji Co., Ltd. on August 1, FRI received lump-sum payments totaling 91 million as a result of this tenant change and the reconstruction of the building on the property. 4. Only NOI is disclosed, as FRI has not obtained the permission of the lessee to disclose other information 38

40 Leasing income and expenses by property Costco Wholesale Warehouse Iruma (land interest) Desigual Harajuku Ito-Yokado Higashi-Yamato AEON TOWN Tanashi-Shibakubo Real estate rent revenue Expenses related to rent business Property leasing Rent Rent Property Property Casualty Repairs and Other Total revenue revenue Total and other management Depreciation operating real estate other taxes expenses insurance maintenance expenses income NOI 1 (to acquisition price) 2 NOI yield (to book value) 25th % 5.4% 26th % 5.6% 25th % 3.9% 26th % 3.9% 25th % 6.5% 26th % 6.6% 25th % 6.9% 26th % 7.1% TSUTAYA BOOKSTORE 25th % 7.7% TENJIN 3 26th % 7.5% Mitsui Shopping Park LaLaport IWATA GINZA GLASSE Shimura Shopping Center Mitsui Shopping Park LaLagarden KASUKABE Summit Store Yokohama Okano (land interest) VIORO QANAT Rakuhoku 25th % 8.3% 26th % 8.4% 25th % 3.9% 26th % 3.9% 25th % 6.5% 26th % 6.6% 25th % 7.2% 26th % 7.0% 25th % 4.9% 26th % 4.9% 25th % 5.4% 26th % 5.7% 25th % 5.0% 26th % 4.1% 1. NOI = Property leasing operating income + Depreciation 2. Part of the land of Desigual Harajuku was sold to the Tokyo Metropolitan Government on July 30, 2012 (area of m 2 and book value of 259 million) for 333 million and compensation for transfer of property, etc. (approx. 55 million) was received due to the removal of part of the building, etc. However, the figure given here is calculated using the price at the time of acquisition. 3. FRI and TSUTAYA Co., Ltd. have reached an agreement to terminate the lease contract for the property effective August 23, FRI entered a fixed-term building lease with the new tenant, Don Quijote Co., Ltd., on July 31,

41 Leasing income and expenses by property Ikebukuro Square Mitsui Shopping Park ALPARK (East Building) Kohnan Kawasaki- Odasakae Mall (land interest) Mitsui Shopping Park LaLaport SHIN-MISATO Annex Shinsaibashi Square Real estate rent revenue Expenses related to rent business Property leasing Rent Rent Property Property Casualty Repairs and Other Total revenue revenue Total and other management Depreciation operating real estate other taxes expenses insurance maintenance expenses income NOI 1 (to acquisition price) 2 NOI yield (to book value) 25th % 5.6% 26th % 5.6% 25th % 6.8% 26th % 7.9% 25th % 5.3% 26th % 5.3% 25th % 5.6% 26th % 5.4% 25th Not disclosed % 4.0% 26th Not disclosed % 4.0% Mitsui Shopping Park 25th LaLaport SHIN-MISATO 4 26th % 5.1% Costco Wholesale Warehouse Shin-Misato (land interest) KOJIMA x BIC CAMERA Naha Store Total 25th Not 3 disclosed % 4.5% 26th Not 3 disclosed % 4.5% 25th Not 3 disclosed % 7.4% 26th Not 3 disclosed % 7.1% 25th 10,022 9, , , ,939 8, % 6.2% 26th 10,011 9, ,091 1, , ,920 8, % 6.3% 1. NOI = Property leasing operating income + Depreciation 2. NOI yield is not shown for the property acquired in the 25th period. 3. Only NOI is disclosed, as FRI has not obtained the permission of the lessee to disclose other information. 4. FRI acquired an additional 50% co-ownership stake in Mitsui Shopping Park LaLaport SHIN-MISATO on August 10,

42 Appraisal value Tokyo metropolitan area 1. CR = Cap rate determined by the direct reduction approach 2. The values shown are for FRI s 66% co-ownership stake. 3. Acquisition price includes the portion for the building demolished as of December The value given for book value at end of 26th period is that after the building s demolition. 26th period (June 30, 2017) 25th period (December 31, 2016) 4. Based on the assumption that TSUTAYA Co., Ltd. will move out on October 27, 2017, and the fixed-term building lease contract signed with Don Quijote Co., Ltd. on March 30, 2017 (to take effect December 1, 2017). Major factor in increase/ decrease Book value Changes Acquisition Acquisition Area Property name at end of date price 26th period Appraisal Appraisal Appraisal value CR 1 value CR 1 CR 1 CR 1 Other value AEON Shinagawa Seaside Shopping Center Aug ,100 15,446 19, % 19, % % Kamiikedai Tokyu Store Aug ,490 1,250 1, % 1, % % Summit Store Takinogawa Momiji-Bashi Sep ,100 2,860 3, % 3, % % Queen s Isetan Suginami-Momoi Jul ,560 3,378 4, % 4, % % Mitsui Outlet Park IRUMA Jul ,900 16,367 22, % 22, % 0 0.0% Costco Wholesale Warehouse Iruma (land interest) Jul ,600 2,626 2, % 2, % 0 0.0% Desigual Harajuku Oct ,100 2,903 3, % 3, % % Ito-Yokado Higashi-Yamato Jan ,600 9,947 11, % 11, % 0 0.0% AEON TOWN Tanashi-Shibakubo Feb ,100 2,848 3, % 3, % % GINZA GLASSE Jul ,600 12,953 15, % 15, % % Shimura Shopping Center Jan ,430 4,236 5, % 5, % % Mitsui Shopping Park LaLagarden KASUKABE Feb ,000 8,830 11, % 11, % 0 0.0% Summit Store Yokohama Okano (land interest) Feb ,700 5,945 6, % 6, % % Ikebukuro Square Feb ,400 19,476 24, % 24, % % Kohnan Kawasaki-Odasakae Mall (land interest) Jan ,000 7,069 8, % 8, % % Mitsui Shopping Park LaLaport SHIN-MISATO Annex Mar ,930 3,751 3, % 4, % % Mitsui Shopping Park LaLaport SHIN-MISATO 2 Apr Aug ,840 19,648 20, % 20, % % Costco Wholesale Warehouse Shin-Misato (land interest) Apr ,810 3,854 3, % 3, % % Chubu AEON MALL NAGOYADOME-Mae Mar ,800 20,966 25, % 25, % 0 0.0% Mitsui Shopping Park LaLaport IWATA Jul ,200 11,795 15, % 15, % % Kansai AEON MALL Ibaraki Aug ,100 14,361 23, % 23, % 0 0.0% Belltown Tambaguchi Eki-Mae Store Aug ,130 1,883 2, % 2, % % QANAT Rakuhoku Jul ,800 8,018 9, % 9, % % Shinsaibashi Square Mar ,620 8,664 9, % 8, % % Chugoku (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) 3 Apr ,940 1,754 2, % 2, % % You Me Town Hiroshima Feb ,200 20,143 21, % 21, % 0 0.0% Mitsui Shopping Park ALPARK (East Building) Feb ,400 4,998 5, % 5, % 0 0.0% Kyushu/ Okinawa Papillon Plaza Aug ,810 4,521 5, % 5, % % Frespo Tosu (land interest) Nov ,178 3,256 3, % 3, % % TSUTAYA BOOK STORE TENJIN 4 Dec ,700 3,343 4, % 4, % % VIORO Feb ,100 9,726 11, % 12, % % KOJIMA x BIC CAMERA Naha Store Jan ,850 1,929 2, % 2, % % Total 289, , , ,220 +1,130 Unrealized gain: 54.5 billion (up 3.1 billion from 25th period) 41

43 Appraisal value (supplement) Area Tokyo metropolitan area Property name Appraisal value 26th period (June 30, 2017) 25th period (December 31, 2016) Direct reduction approach Discounted cash flow approach Appraisal value 1. CR = Cap rate determined by the direct reduction approach 2. DR = Discount rate determined by the discounted cash flow approach 3. TCR = Terminal cap rate determined by the discounted cash flow approach 4. The appraisal values are for FRI s 66% co-ownership stake. 5. Based on the assumption that TSUTAYA Co., Ltd. will move out on October 27, 2017, and the fixed-term building lease contract signed with Don Quijote Co., Ltd. on March 30, 2017 (to take effect December 1, 2017). Direct reduction approach Discounted cash flow approach CR 1 DR 2 TCR 3 CR 1 DR 2 TCR 3 AEON Shinagawa Seaside Shopping Center 19, % 5.6% 6.1% 19, % 5.6% 6.1% Kamiikedai Tokyu Store 1, % 4.5% 4.9% 1, % 4.6% 5.0% Summit Store Takinogawa Momiji-Bashi 3, % 4.6% 5.1% 3, % 4.7% 5.2% Queen s Isetan Suginami-Momoi 4, % 4.6% 5.0% 4, % 4.7% 5.1% Mitsui Outlet Park IRUMA 22, % 5.2% 5.6% 22, % 5.2% 5.6% Costco Wholesale Warehouse Iruma (land interest) 2, % 4.8% 5.7% 2, % 4.8% 5.7% Desigual Harajuku 3, % 3.0% 3.4% 3, % 3.1% 3.5% Ito-Yokado Higashi-Yamato 11, % 5.3% 5.7% 11, % 5.3% 5.7% AEON TOWN Tanashi-Shibakubo 3, % 5.3% 5.7% 3, % 5.4% 5.8% GINZA GLASSE 15, % 2.8% 3.2% 15, % 2.9% 3.3% Shimura Shopping Center 5, % 4.7% 4.8% 5, % 4.8% 4.9% Mitsui Shopping Park LaLagarden KASUKABE 11, % 5.2% 5.6% 11, % 5.2% 5.6% Summit Store Yokohama Okano (land interest) 6, % 4.5% 6, % 4.6% Ikebukuro Square 24, % 4.2% 4.6% 24, % 4.3% 4.7% Kohnan Kawasaki-Odasakae Mall (land interest) 8, % 4.4% 8, % 4.5% Mitsui Shopping Park LaLaport SHIN-MISATO Annex 3, % 5.0% 5.4% 4, % 5.0% 5.4% Mitsui Shopping Park LaLaport SHIN-MISATO 4 20, % 4.5% 4.9% 20, % 4.5% 4.9% Costco Wholesale Warehouse Shin-Misato (land interest) 3, % 4.5% 4.3% 3, % 4.6% 4.4% Chubu AEON MALL NAGOYADOME-Mae 25, % 4.9% 5.3% 25, % 4.9% 5.3% Mitsui Shopping Park LaLaport IWATA 15, % 5.9% 6.3% 15, % 5.9% 6.3% Kansai AEON MALL Ibaraki 23, % 5.0% 5.4% 23, % 5.0% 5.4% Belltown Tambaguchi Eki-Mae Store 2, % 4.7% 5.1% 2, % 4.8% 5.2% QANAT Rakuhoku 9, % 4.6% 5.0% 9, % 4.7% 5.1% Shinsaibashi Square 9, % 3.5% 3.9% 8, % 3.6% 4.0% Chugoku (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) 2, % 4.8% 2, % 4.8% You Me Town Hiroshima 21, % 5.9% 6.3% 21, % 5.9% 6.3% Mitsui Shopping Park ALPARK (East Building) 5, % 6.2% 6.7% 5, % 6.2% 6.7% Kyushu/ Okinawa Papillon Plaza 5, % 4.7% 5.1% 5, % 4.8% 5.2% Frespo Tosu (land interest) 3, % 7.3% 3, % 7.3% TSUTAYA BOOK STORE TENJIN 5 4, % 4.1% 4.5% 4, % 4.2% 4.7% VIORO 11, % 4.0% 4.1% 12, % 4.1% 4.2% KOJIMA x BIC CAMERA Naha Store 2, % 5.5% 5.9% 2, % 5.6% 6.0% 42

44 Borrowings and bonds Short-term borrowings Short-term borrowings Long-term borrowings 2 Total amount Lender Total amount Lender 15,500 Sumitomo Mitsui Banking Corporation No. No. Amount Amount Interest rate Interest rate Drawdown date Drawdown date Maturity date 1 Loan period (approximate) Maturity date 1 Loan period (approximate) 1 2, % 6/20/2011 6/20/ years 2 3, % 2/20/2012 2/20/ years 3 1, % 8/20/2012 8/20/ years 4 3, % 2/1/2013 2/1/ years 5 1, % 5/19/ /19/ years 6 1, % 8/29/2014 8/29/ years 7 2, % 7/2/2015 7/2/ years 8 2, % 6/20/2017 6/21/ years 13,000 Mitsubishi UFJ Trust and Banking 9 1, % 2/21/2011 8/21/ years Corporation 10 2, % 6/20/2011 6/20/ years 11 2, % 2/1/2013 2/1/ years 12 2, % 2/19/2015 2/19/ years 13 1, % 3/2/2015 3/4/ years 14 1, % 3/2/2015 3/3/ years 15 1,000 Note % 7/2/2015 7/2/ years 16 1, % 3/9/2016 3/9/ years 10,500 Development Bank of Japan Inc. 17 2, % 8/19/2013 8/21/ years 18 1, % 3/17/2014 5/19/ years 19 2, % 3/9/2016 3/9/ years 20 1, % 4/19/2016 7/20/ years 21 4, % 8/9/2016 2/9/ years 5,800 Mizuho Bank, Ltd. 22 1, % 5/19/2011 5/21/ years 23 1, % 3/15/2013 3/15/ years 24 1,300 Note % 7/22/2014 7/19/ years 25 1, % 7/19/2017 1/19/ years Remarks 3,000 Mizuho Bank, Ltd. 1 3, % 7/19/2017 8/21/ month Unsecured/ 1,000 The 77 Bank, Ltd. 2 1, % 7/19/2017 8/21/ month Unguaranteed 1. Repayment method is lump-sum repayment for all borrowings. Long-term borrowings Total short-term borrowings 4,000 (as of August 15, 2017) (as of August 15, 2017) Remarks Unsecured/ Unguaranteed 1. Repayment method is lump-sum repayment for all borrowings. 2. All interest rates on long-term borrowings (except for those covered by note 3) are fixed rates. 3. These borrowings have been swapped into fixed rates to avoid the risk of interest rate fluctuations. The rates indicated are those at the time the rate swap contracts were formed. 43

45 Borrowings and bonds Long-term borrowings 2 Total amount Lender No. Amount Interest rate Drawdown date Maturity date 1 Loan period (approximate) 5,700 Sumitomo Mitsui Trust Bank, Limited ,200 1, % % 12/16/2011 7/2/ /14/2018 7/2/ years 4.0 years 28 2, % 11/30/ /30/ years 4,400 Mizuho Trust & Banking Co., Ltd. 29 2, % 2/1/2013 2/3/ years 30 1, % 3/9/2016 3/11/ years 4,000 The Norinchukin Bank 31 2, % 7/18/2013 7/18/ years 32 1,000 Note % 1/7/2015 1/23/ years 33 1,000 Note % 1/7/2015 1/23/ years 4,000 The Bank of Fukuoka, Ltd. 34 1, % 2/1/2013 2/1/ years 35 1, % 11/21/ /24/ years 36 2, % 2/24/2017 2/24/ years 3,500 The Bank of Tokyo-Mitsubishi UFJ, Ltd. Investment corporation bonds Investment corporation bonds Total amount 37 1, % 8/19/2011 8/19/ years 38 1, % 2/24/2012 2/22/ years 39 1, % 2/1/2013 2/1/ years 2,000 Resona Bank, Limited 40 1, % 6/3/2011 2/5/ years 41 1,000 Note % 3/2/2015 3/4/ years 2,000 The Daishi Bank, Ltd 42 1,000 Note % 2/10/2016 2/10/ years 43 1, % 8/1/2017 2/19/ years 2,000 The Iyo Bank, Ltd. 44 1,000 Note % 4/1/2015 5/14/ years 45 1, % 11/21/ /22/ years 2,000 The Yamaguchi Bank, Ltd. 46 1, % 8/18/2014 8/19/ years 47 1, % 6/19/2017 6/19/ years 1,000 The Hiroshima Bank, Ltd. 48 1,000 Note % 11/25/ /25/ years 1,000 The Gunma Bank, Ltd. 49 1,000 Note % 12/16/ /16/ years 1,000 The Hachijuni Bank, Ltd. 50 1,000 Note % 11/19/2015 5/19/ years 1,000 The Musashino Bank, Ltd. 51 1, % 3/25/2014 5/27/ years 1,000 The 77 Bank, Ltd. 52 1, % 12/22/ /22/ years Total long-term borrowings 79,400 Issue No. Amount Remarks Unsecured/ Unguaranteed Interest rate Issue date Maturity date Period Remarks 3,000 2nd Investment corporation bonds 1 3, % 11/25/ /25/ years Total Investment corporation bonds 3, Repayment method is lump-sum repayment for all borrowings. 2. All interest rates on long-term borrowings (except for those covered by note 3) are fixed rates. 3. These borrowings have been swapped into fixed rates to avoid the risk of interest rate fluctuations. The rates indicated are those at the time the rate swap contracts were formed. (as of August 15, 2017) (as of August 15, 2017) Unsecured/ Unguaranteed 44

46 Ratings and indices Ratings Inclusion in global REIT indices FRI maintains top-level ratings among J-REITs, making its investment units eligible for purchase by the Bank of Japan. (as of June 30, 2017) Rating Firm Category Rating Outlook Indices JCR Long-term issuer AA Stable FTSE EPRA/NAREIT Global Real Estate Index R&I Issuer AA- Stable Dow Jones Global Select REIT Index Long-term A+ Stable S&P Global REIT Index/S&P Developed REIT Index S&P Short-term A-1 Stable GPR 250 Index/GPR 250 REIT Index 45

47 Leasehold and security deposits and depreciation Leasehold and security deposit features Since FRI contracts long-term leases, it can use leasehold and security deposits to procure significant long-term funding. Since FRI holds many security deposits at zero interest, these deposits provide a source of low-cost funding. Utilizing depreciation Utilizing capital equivalent to each period s depreciation enables aggressive strategic investment in addition to the repayment of security deposits. ( 百万円 ) Property acquisition, etc. Large-scale renovations Ordinary capital expenditure Return of security deposits Remaining period until full repayment Within 5 years 29.5% Over 5 years, up to 10 years 30.4% Over 10 years, up to 15 years 15.1% Over 5 years: Approx. 70% (As of June 30, 2017) Over 15 years, up to 20 years 21.2% Average remaining years until full repayment of leasehold and security deposits: 9.1 years Schedule of security deposit repayment Over 20 years Over 10 years: Approx. 40% 3.8% 2,000 1,500 1, , , ,306 1,089 1,636 1, , , , , ,003 1, th 第 17th 期第 18th 期第 19th 期第 20th 期第 21st 期第 22nd 期第 23rd 期第 24th 期第 25th 期第 26th 期 (forecast) 第 27 期 ( 予想 ) (billion yen) 億円 億円 Repayment starts at You Me Town Hiroshima Repayment ends at AEON Shinagawa Repayment ends at NAGOYADOME-Mae Large-scale renovations AEON Hadano Shopping Center * 2011 AEON Shinagawa Seaside Shopping Center 2014 AEON MALL Ibaraki 2015 Repayment ends at You Me Town Hiroshima 0 億円 年 2019 年 2021 年 2023 年 2025 年 2027 年 *The disposition of AEON Hadano Shopping Center was completed on November 28,

48 Stable distribution management Breakdown of distribution per unit (yen) 11,000 10,000 9,000 8,000 Distribution of rent business revenue 9, ,456 9,231 10, Distribution through new property acquisitions 9,707 1,208 8,539 8,499 *1 Distribution of gain on property sales 1 9, ,909 9,695 9,694 9,695 Distribution of reversal of reserve for reduction entry ,896 Impact on distributions of loss on property sales 9, ,468 10,022 10,022 7, th 20th 21st 22nd 23rd 24th 25th 26th Property sale AEON Hadano Shopping Center Sold 55% Sold 25% Sold 20% (19th) (20th) (21st) Sale price: 11,800 million Gain on sale: 3,800 million Property sale (19th) WV Sakae Sale price: 5,200 million Loss on sale: 1,957 million Property acquisitions (20th) Kohnan Kawasaki (land interest) Acquisition price: 7,000 million LaLaport SHIN-MISATO Annex Acquisition price: 3,930 million Property acquisitions (22nd) Shinsaibashi Square Acquisition price: 8,620 million LaLaport SHIN-MISATO (16% co-ownership) Acquisition price: 4,740 million Costco Wholesale Warehouse Shin-Misato (land interest) Acquisition price: 3,810 million Property acquisition (24th) KOJIMA x BIC CAMERA Naha Store Acquisition price: 1,850 million Property sale (24th) Joyfultown Okayama Sale price: 8,685 million Loss on sale: 469 million Property acquisition (25th) LaLaport SHIN-MISATO (50% co-ownership) Acquisition price: 15,100 million Asset size At end of 18th fiscal period bn Total sales bn Total acquisitions bn At end of 26th fiscal period bn 1.Distribution of gain on property sales = (gain on property sales portion put toward internal reserves) / number of units issued and outstanding 2.The gain on property sales presented for the 19th fiscal period is the net total of the gain on sale of AEON Hadano Shopping Center and loss on sale of WV Sakae. 3.Total sales and total acquisitions are the totals of the prices paid and received for properties acquired and sold, respectively. These figures do not account for the full difference in asset size. 47

49 Growth cycle and property acquisitions Public offerings 公募増資 March 2008 Third-party allotment July 2008 July 2010 July 2012 March 2013 Distribution per unit (yen) 分一配口金当 ( 円た ) り 9,000 4,771 5,622 6,045 8,648 7,218 8,846 8,922 8,980 9,205 9,274 9,368 9,294 9,097 9,239 9,299 9,991 9,191 9,173 9,405 10,211 9,707 9,360 9,695 9,694 9,903 10,022 10,080 Track record of stable distributions LTV 50.0% 40.0% Sound, careful control of LTV Approx. 42% 34.0% 35.2% 35.9% 37.5% 41.0% 45.5% 46.2% 49.6% 45.7% 46.8% 41.0% 46.3% 43.6% 42.5% 41.7% 42.3% 41.6% 41.0% 41.2% 39.2% 39.1% 38.0% 37.6% 9.3% 8.3% 14.3% Seeking to grow FRI s asset size to maintain and improve the stability of the earnings base Asset size (acquisition price basis) 資産規模 ( 取得価格ベース ) 資産規模 Asset size ( 億円 (billion ) yen) Acquisitions スポンサー from からの取得 the sponsor Acquisitions スポンサー外 not からの取得 from the sponsor Property sales ,231 1,596 1,743 1,780 1,780 2,068 2,212 2,212 2,370 2,458 2,716 2,592 2,678 2,659 2,831 2,831 1st 第 1 期 2nd 第 2 期 3rd 第 3 期 4th 第 4 期 5th 第 5 期 6th 第 6 期 7th 第 7 期 8th 第 8 期 9th 第 9 期 10th 第期 11th 第期 12th 第期 13th 第期 14th 第期 15th 第期 16th 第期 17th 第期 18th 第期 19th 第期 20th 第期 21st 第期 22nd 第期 23rd 第期 24th 第期 25th 第期 26th 第期第 27th 期 ( 予想 ) Forecast** (04/12 期 ) (05/6 期 ) (05/12 期 ) (06/6 期 ) (06/12 期 ) (07/6 期 ) (07/12 期 ) (08/6 期 ) (08/12 期 ) (09/6 期 ) (09/12 期 ) (10/6 期 ) (10/12 期 ) (11/6 期 ) (11/12 期 ) (12/6 期 ) (12/12 期 ) (13/6 期 ) (13/12 期 ) (14/6 期 ) (14/12 期 ) (15/6 期 ) (15/12 期 ) (16/6 期 ) (16/12 期 ) (17/6 期 ) (17/12 期 ) Property sale 2,739 2,890 2,890 Dec. 04 Jun. 05 Dec. 05 Jun. 06 Dec. 06 Jun. 07 Dec. 07 Jun. 08 Dec. 08 Jun. 09 Dec. 09 Jun. 10 Dec. 10 Jun. 11 Dec. 11 Jun. 12 Dec. 12 Jun. 13 Dec. 13 Jun. 14 Dec. 14 Jun. 15 Dec. 15 Jun. 16 Dec. 16 Jun. 17 Dec. 17 2,934 Sponsor Japan Tobacco March 2008 onward: Mitsui Fudosan *FRI implemented a two-for-one split of its investment units effective January 1, Distributions before the split have been divided by two and truncated to the nearest yen. ** Distribution per unit (DPU), LTV and asset size forecasts for the 27th period are given as the figures announced in Summary of Financial Results for the 26th Fiscal Period, published August 15,

50 Assets acquired from the sponsor (Mitsui Fudosan) Steady track record of property acquisitions via the sponsorʼs robust pipeline Properties acquired from Mitsui Fudosan 160, , , ,000 80,000 60,000 40,000 20,000 0 Queen s Isetan Suginami-Momoi 3.5 billion Mitsui Outlet Park IRUMA 19.9 billion Costco Wholesale Warehouse Iruma (land interest) 2.6 billion AEON TOWN Tanashi-Shibakubo 3.1 billion 3,100 GINZA GLASSE 13.6 billion Mitsui Shopping Park LaLaport IWATA 15.2 billion 28,800 26,060 26,060 29,160 Mitsui Shopping Park LaLagarden KASUKABE 10.0 billion 10,000 57,960 QANAT Rakuhoku 8.8 billion Cumulative assets acquired from Mitsui Fudosan, etc. Average annual acquisition price: 15,418 million 8,800 67,960 Ikebukuro Square 20.4 billion Mitsui Shopping Park ALPARK (East Building) 5.4 billion 25,800 76,760 Mitsui Shopping Park LaLaport SHIN-MISATO Annex 3.9 billion 3,930 Shinsaibashi Square 8.6 billion Mitsui Shopping Park LaLaport SHIN-MISATO (16%) 4.7 billion Costco Wholesale Warehouse Shinmisato (land interest) 3.8 billion 17, , ,490 Mitsui Shopping Park LaLaport SHIN-MISATO (50%) 15.1 billion Acquisition resources Non-sponsor Mitsui Fudosan, 17.7% etc. 47.3% 9 properties 51.8 bn Japan Tobacco 35.1% th/9th 年 6/12 期 10th/11th 2009 年 6/12 期 th/13th 年 6/12 期 th/15th 年 6/12 期 th/17th 年 6/12 期 th/19th 年 6/12 期 th/21st 年 6/12 期 nd/23rd 年 6/12 期 th/25th 年 6/12 期 th 年 6/12 期 15, ,660 Total acquisition price: billion 10 properties bn 138, properties bn (As of Aug. 15, 2017) 49

51 Mitsui Fudosanʼs retail facility development Breakdown of Mitsui Fudosanʼs inventory of property for sale to investors Overseas rental assets in operation 8% Logistics facilities in operation 8% Rental housing in operation 6% Office buildings in operation 20% Total: Approx billion As of March 31, 2016 Retail facilities in operation 14% Planned & under development 45% Mitsui Fudosan s model for joint value creation with investors Property sales to various investors Buyers commission property management REIT sponsored by the Mitsui Fudosan Group, etc. Institutional investors, corporations, etc. Prepared from data in Mitsui Fudosan s Investor Presentation March 2017 Main retail facility projects under development Opening year Project name Location LaLaterrace Musashikosugi Mitsui Outlet Park Sapporo Kita Hiroshima (Phase 2) Mitsui Outlet Park Kisarazu (Phase 2) LaLaport Kashiwanoha (north building) Akarenga TERRACE Iidabashi Sakura Terrace LaLaport Izumi Shin Kawasaki Square LaLaport Fujimi Mitsui Outlet Park Kuala Lumpur International Airport Sepang (Phase 1) Mitsui Outlet Park Hokuriku Oyabe Mitsui Outlet Park Makuhari (Phase 3) LaLaport Ebina LaLaport EXPOCITY Mitsui Outlet Park LINKOU 2016 LaLaport SHONAN HIRATSUKA TBD MITSUI OUTLET PARK JAZZ DREAM NAGASHIMA (Phase 5) Mitsui Outlet Park Kuala Lumpur International Airport Sepang (Phase 2) Nagoya City Komei Project Mitsui Outlet Park Taichung Port Mitsui Outlet Park Kuala Lumpur International Airport Sepang (Phase 3) LaLaport Kuala Lumpur Retail Facility Development Project in Togocho, Aichi Miyashita Park Project Kawasaki City, Kanagawa Kitahiroshima City, Hokkaido Kisarazu City, Chiba Kashiwa City, Chiba Sapporo City, Hokkaido Chiyoda City, Tokyo Izumi City, Osaka Kawasaki City Kanagawa Fujimi City, Saitama Selangor, Malaysia Oyabe City, Toyama Chiba City, Chiba Ebina City, Kanagawa Suita City, Osaka New Taipei, Taiwan Hiratsuka City, Kanagawa Kuwana City, Mie Selangor, Malaysia Nagoya City, Aichi Taichung, Taiwan Selangor, Malaysia Kuala Lumpur, Malaysia Aichi-gun, Aichi Shibuya City, Tokyo Prepared from data in Mitsui Fudosan s Investor Presentation March

52 Mitsui Fudosanʼs retail facility operation Mitsui Fudosanʼs retail facility operation Mitsui Fudosan owns and operates retail facilities across Japan, mainly in the Tokyo metropolitan and Kansai areas Regional SC Urban retail facilities Mitsui Outlet Park Other Hokkaido Tohoku LaLaport SHONAN HIRATSUKA Takeshita-dori Square LaLaport FUJIMI Chugoku Kansai Chubu Tokyo metropolitan area Kyushu Tokyo Midtown COREDO Muromachi Rental revenue of Mitsui Fudosan s retail facilities (non-consolidated) Number of facilities 109 Total floor space Approx. 5,200,000 m 2 Leased floor space Approx. 2,900,000 m 2 Tenant stores Approx. 7,600 Tenant companies Approx. 2,300 Source: Mitsui Fudosan. As of April 1, Includes properties operated and managed on a consignment basis. 250, , , ,000 50, ,091 45,947 51,716 34,657 36,935 37, , , , , , ,823 87, ,191 Source: Fact books for the years ended March 31, , Mitsui Fudosan 215, , 年 年 年 年 年 年 年 年 年 年 年 年 年 年 年 年 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 3 月期 51