Semi-Annual Report for the 12Th Period from June 1, 2017 to November 30, 2017

Semi-Annual Report for the 12th Period From June 1, 2017 to November 30, 2017

Activia Properties Inc. 1-1 Minami-Aoyama 1-chome, Minato-ku, Tokyo https://www.activia-reit.co.jp/en/ Semi-Annual Report for the 12th Period From June 1, 2017 to November 30, 2017 Cash Distributions (Result)

The 12th Period (November 30, 2017) Cash distributions per unit ¥9,346

Cash Distributions (Forecast)

The 13th Period (May 31, 2018) Cash distributions per unit

¥ 9,400

The 14th Period (November 30, 2018) Cash distributions per unit

¥ 9,410 (Note) Activia Properties Inc. (API) implemented a 2-for-1 investment unit split with October 1, 2015 as the effective date.

Contents

04 Message 58 III Statements of Operations Basic Policy of Activia Properties Inc. 06 Topics 59 IV Statements of Changes in Unitholders’ Equity Focused investment in Urban Retail 12 Financial Situation 60 V Statements of Cash Distributions properties and Tokyo Office properties 13 API’s Basic Policy 61 VI Statements of Cash Flows Activia Properties Inc. aims at proactive 15 Portfolio List 62 VII Notes to Financial Statements management through selecting assets Utilization of the comprehensive support 16 Portfolio Map 76 VIII Schedule of Financial Statements that appeal to retail customers and and capabilities of the Tokyu Fudosan 17 Properties Acquired Before the 11th Period 84 Independent Auditor’s Report office tenants as urban centers and hubs for Holdings Group’s value chain business activity, in order to maximize unitholder 27 Overview of API 85 Overview of the Asset Manager value over the medium to long term. API also Strong governance structure aimed at 29 I Asset Management Report 86 Information on Unitholders takes initiatives to improve its asset management. maximizing unitholder value 56 II Balance Sheets Message

Fifth Public Offering Implemented, the Ministry of Land, Infrastructure, Transport and rent at hotels continued to increase backed by Tourism. As such, demand related to inbound favorable sales. Now We Aim to Enhance the Scale of tourism trended higher. The occupancy rate at the end of the period Assets on a Continuing Basis and The J-REIT market has been showing signs has recorded 100.0% for the first time since listed. of recovery despite episodes of sluggish In December 2017 (the 13th period), we Maximize Our Unitholder Value performance, amid sentiment that yields have conducted a public offering for a fifth consecutive Nariaki Hosoi been relatively undervalued. Moreover, asset year, and related to this offering, we acquired Executive Director sizes have continued to expand in line with three properties (with a total acquisition price Activia Properties Inc. financing activity and property acquisitions of ¥23.6 billion), including two Urban Retail Thank you very much for your continued support of Tokyo (Chiyoda-ku, Minato-ku, Chuo-ku, carried out by J-REITs amid the Bank of Japan’s properties, which are DECKS Tokyo Beach for Activia Properties Inc. Shibuya-ku and Shinjuku-ku) which continues ongoing monetary easing policy and an upbeat (49% co-ownership interest) and A-FLAG Recently we have closed all accounts for the downward trend, meanwhile rent levels have real estate market. KITA SHINSAIBASHI, and one Activia Account 12th period (June 1, 2017 to November 30, 2017). continued its upward trend. In addition, the market Property, which is Commercial Mall Hakata. With We owe this achievement to your understanding has also been firm in major cities outside Tokyo, Under these circumstances, API has achieved these acquisitions, API raised its portfolio to and continuous support, for which we wish to amid an ongoing trend of declining vacancy rates upward rent revisions at lease contract renewal in 42 properties and the total acquisition price to extend our deep appreciation to you. and rising rent levels. Tokyo Office properties for ten consecutive fiscal ¥431.5 billion, and the ratio of focused investment With respect to the environment surrounding periods, from the 4th period ended November to Urban Retail properties and Tokyo Office During this period, the Japanese economy retail properties, consumer sentiment has been 2013 to the 13th period ending May 2018. properties grew to 80.6%. held to a path of recovery. This was partially mounting a firm recovery despite some apparent Given such conditions, as the result of the due to a trend of rising exports associated with signs of weakness, amid an employment 12th period, we recorded operating revenue of From the 13th period and onward, we will seek moderate growth in the global economy, and also environment that shows indications of further ¥12,720 million, operating profit of ¥7,074 million to maximize unitholder value over the medium due to increased robustness in capital investment tightening. Moreover, in the quarter spanning and profit of ¥6,217 million. And we achieved to long term by pursuing external and internal brought about by improvement in corporate July to September 2017, tourism consumption ¥9,346 for distributions per unit (DPU), an increase growth. We will accomplish this by leveraging the earnings and business sentiment. by overseas visitors to Japan increased in both from the initial forecast (¥9,167). expertise and network of TLC REIT Management In the rental office market, favorable conditions the number of overseas visitors to Japan and In particular, in the 12th period, the ratio Inc. as well as by utilizing the value chain of the have persisted. In that regard, supply has per-person travel expenditure, according to the of upward rent revisions achieved to all leases Tokyu Fudosan Holdings Group. continued to tighten relative to demand with the Consumption Trend Survey for Foreigners Visiting subject to revision was 87%, the highest rate We would be most grateful for your continued average vacancy rate of the five central wards Japan released by the Japan Tourism Agency of ever. In Urban Retail properties also, sales-linked support and encouragement. Thank you.

Financial Highlights (Millions of yen)

11th Period 12th Period 11th Period 12th Period

Operating revenue Total assets ¥ 12,107 ¥ 12,720 ¥ 425,977 ¥ 426,838

Operating profit Net assets ¥ 6,980 ¥ 7,074 ¥ 208,451 ¥ 208,523

Unitholders’ equity to total Ordinary profit ¥ 6,152 ¥ 6,218 assets (%) 48.9% 48.9%

Profit Net assets per unit (yen) (Note) ¥ 6,151 ¥ 6,217 ¥ 313,359 ¥ 313,467

(Note) API implemented a 2-for-1 investment unit split with October 1, 2015 as the effective date. 4 5 Topics 3 new assets acquired (¥23.6 bn) External Growth UR-15 DECKS Tokyo Beach (49% co-ownership interest) Acquisition of assets focusing on location and quality n In the 12th period, we decided to acquire three retail properties, and as of January 17, 2018, we have acquired 25 properties with a total acquisition price of ¥263.4 billion, and our AUM has grown by 2.5 times to ¥431.5 billion (acquisition price basis) in 5.5 years since IPO (June 2012).

¥431.5 bn ¥407.9 bn ¥407.9 bn

¥356.9 bn ¥326.7 bn

¥282.6 bn ¥292.9 bn

¥241.7 bn ¥231.0 bn

¥184.3 bn

The deck is lit up throughout the year

21 properties 27 properties 28 properties 30 properties 31 properties 32 properties 35 properties 39 properties 39 properties 42 properties Three attractions of DECKS Tokyo Beach : decks, promenades 4th period 5th period 6th period 7th period 8th period 9th period 10th period 11th period 12th period As of Jan.17, 1. Odaiba, a major sightseeing spot in Tokyo (2013.11) (2014.5) (2014.11) (2015.5) (2015.11) (2016.5) (2016.11) (2017.5) (2017.11) 2018 -minute A major entertainment hub with domestic and international visitors 2walk from Rainbow Bridge the nearest An area in which development and infrastructure improvement projects are under train station Odaiba Marine Park (Battery no.3) way in preparation for the 2020 Olympic and Paralympic Games Daiba turnoﬀ Odaiba Rainbow Park

Metropolitan Expressway New assets acquired Odaiba Marine Park Route No.11 2. Excellent location facing the waterfront (Tokyo Olympic triathlon, marathon swimming venue) Acquisition price Appraisal value Appraisal Occupancy rate Acquisition Bayside shopping mall on the beach with a scenic view of Rainbow Bridge and Category Property name Source Location DECKS Tokyo Beach (¥mn) (¥mn) NOI yield (as of November 30, 2017) date the heart of Tokyo Water-bus stop DECKS Tokyo Beach From Sponsor Minato-ku, January 5, (Odaiba Marine Park) Odaiba Statue of Liberty UR 12,740 12,887 4.4% 100% 3. Rare, hands-on experience based retail tenants Hilton Tokyo Odaiba Aqua City Odaiba (49% co-ownership interest) Group Tokyo 2018 A wide variety of tenants with some being the one and only outlet in Japan or in Shiokaze Park Odaiba-kaihinkoen Sta. (Tokyo Olympic Daiba Sta. Ariake turnoff Fuji Television Metropolitan Expressway A-FLAG KITA Via Asset Osaka-City, December 1, the Tokyo metropolitan area beach volleyball venue) 357 UR 4,725 4,770 4.3% 100% Grand Nikko Bayshore Route SHINSAIBASHI Manager Osaka 2017 Tokyo Daiba Rinkai Line Tokyo Teleport Sta. Via Asset Fukuoka-City, January 5, Location Daiba, Minato-ku, Tokyo Diver City Tokyo Plaza Tokyo Center Promenade Water Science AA Commercial Mall Hakata 6,100 6,270 5.0% 100% kagakukan Sta. Fune-no- Museum Manager Fukuoka 2018 West Promenade A 2-minute walk from Odaiba-kaihinkoen Station Yume-no-ohashi bridge Museum of Palette Town on the Yurikamome Line Maritime Science Anniversaire Tokyo Bay Total / Average 23,565 23,927 4.6% — — Aomi Sta. Nearest station Yurikamome Line A 5-minute walk from Tokyo Teleport Station on New pier for Fuji Television's large cruise ships Wangan Studio the Rinkai Line (planned) National Museum of Acquisition price ¥12,740 million Emerging Science Aomi-Chuo Our portfolio strategy and Innovation Port Park Appraisal value ¥12,887 million TOKYO minatorie Telecom Center Sta. After acquisition of new assets vs. Appraisal value 98.9% Excellent access by car Telecom Center Building 3-min drive from the Daiba exit ramp on Appraisal NOI yield 4.4% Tokyo Odaiba Aomi Urban Sports Venue Metropolitan Expressway Route No.11 Oedo Onsen Monogatari (Tokyo Olympic skateboarding Occupancy rate 100.0% (as of November 30, 2017) / sport climbing venue) 4-min drive from the Rinkai-fukutoshin Tokyo Office (TO) Urban Retail (UR) / Ariake exit ramp on 40.8% 39.7% Metropolitan Expressway Bayshore Route One of the few commercial properties that provide “hands-on” activities such Office Retail as at Tokyo Joypolis (indoor theme park) 50.3% 49.7% LEGOLAND Discovery Tokyo Joypolis Odaiba Takoyaki Museum Center Tokyo Laox Focused Investment AUM: Only one in Tokyo metropolitan area Only one in Tokyo metropolitan area (UR and TO) ¥431.5 billion

Activia Account (AA) 80.6% 19.4%

6 7 UR-14 A-FLAG KITA SHINSAIBASHI AA-12 Commercial Mall Hakata

To Hommachi Sta.

-minute Nanba Shrine 3walk from Midosuji Grand Tower the nearest CORNES Osaka train station Showroom FRANCK MULLER HUBLOT UESHIMA COFFEE Sairoku Heiwa Tower HARRY WINSTON TESLA Subway Midosuji Line Cassina IXC. HERMÈS SUNDRUG A-FLAG KITA SHINSAIBASHI ABC-MART ISSEY BOOKOFF MIYAKE GIORGIO ARMANI 4℃ BRIDAL SARMANI SWAROVSKI ROLEX OMEGA

Midosuji Three attractions of A-FLAG KITA SHINSAIBASHI Vivienne Yofuku-no-Aoyama Three attractions of Commercial Mall Hakata Westwood BOUCHERON Cartier Yotsubashi-suji LOUIS VUITTON Tokyu Hands Max Mara 1. Shinsaibashi, a commercial area with strong ability to SteP UNDER ARMOUR 1. An area with robust population growth Fukuokakuko Nagahori-Tsurumi Ryokuchi Line (Airport) Sta. Yotsubashi Ruins Shinsaibashi Sta. Population growth rate in Hakata-ku exceeds that of other areas in Fukuoka City, attract visitors in western Japan Nagahori Street e n Regal Shoes GaGa which has the largest population growth rate among Government-designated cities Fukuoka Urban i The property enjoys a locational advantage as a retail property, as it faces a popular Q plaza L MILANO Expressway H&M o shopping arcade of the Shinsaibashi-suji kita shopping district SHINSAIBASHI Circle Route k Domestic FENDI UNIQLO u Terminal K Village 2. High ability and ease of access from the roadside GUESS y Vanguard Hakata Sta. a 2. Favorable location along Shinsaibashi-suji Street Hotel Nikko Daimaru The property is highly visible and can be easily accessed as it widely faces Chikushi ㎞ w 2.2 adidas Osaka Shinsaibashi b from This relatively new property (building 9 years old) is able to attract new tenants due North Street, a busy road with two lanes on each side u Fukuoka Yotsubashi Sta. Building S Hakata Sta. to its location at the street with high visibility Higashi-Hie Sta. Airport SHINSAIBASHI Daimaru Onitsuka Tiger Yodobashi Camera Ushikubi River Shinsaibashi Sta. Shinsaibashi OPA Multimedia Hakata Main Building Samantha Thavasa 3. Tenants that attract visitors to spend time at the mall 3. Diversity of tenants (Under BEAUTY & YOUTH A people gathering retail facility with tenants including nationwide businesses, such Higashi-Sumiyoshi construction) UNITED ARROWS International Daimaru Junior High School t This property meets the needs of customers with a diverse tenant structure including Folli Follie as TSUTAYA and UNIQLO e Terminal Shinsaibashi e PUMA Shinsaibashi-suji Shopping Arcade r a cellular phone store, a fitness gym and a live music club South swatch t Apple Store Chikushi Street S Big Step Building Sanno i 3 URBAN RESEARCH m Hanshin Expressway Route 1 Loop Route Park dunhill o NIKE TAG Heuer J Hyakunenbashi iy Dr.Martens R Street K

Burberry POLO by RL Location Tokojimachi, Hakata-ku, Fukuoka City, Fukuoka K Commercial Amerikamura HUGO BOSS Disney store a Location Minami-Senba, Chuo-ku, Osaka City, Osaka g PRADA ABC-MART Matsumotokiyoshi o Mall Hakata s Haruzumi JINS h Elementary Tory Burch GU A 16-minute walk from Takeshita Station on the JR im A 3-minute walk from Shinsaibashi Station on the I-PRIMO Nearest station a School M Nearest station TOMORROWLAND Kagoshima Main Line a Perfect Suit Factory i Osaka Municipal Subway Dolce&Gabbana n adidas L Okigakuen Bus stop jun ashida in Junior High School 553 “Tokoji north” Acquisition price ¥6,100 million e Acquisition price ¥4,725 million CLAN Nakagawa River Okigakuen EMPORIO ARMANI Bershka 385 High School ZARA Appraisal value ¥4,770 million AUDEMARS PIGUET Appraisal value ¥6,270 million ChikushiParking ZARA Street 553 Tommy Hilfiger T Don Quijote akeshita Sta. LUSH vs. Appraisal value 97.3% 505 To 3rd floor vs. Appraisal value 99.1% Matsumotokiyoshi Laox / roof floor H&M H&M Don Quijote Appraisal NOI yield 4.3% Don Quijote Appraisal NOI yield 5.0%

FOREVER21 HONOLULU COFFEE Occupancy rate 100.0% (as of November 30, 2017) Starbucks Coﬀee Tsuruha Drug Occupancy rate 100.0% (as of November 30, 2017)

8 9 Achievement of Internal Growth Trends in DPU

Trend in occupancy rates n In the 12th period, mainly due to external growth from properties acquired in the 11th period that started contributing and consistent and steady internal growth, actual DPU reached ¥9,346, exceeding the initial forecast for the 12th period n Since our listing, we have continuously maintained a high occupancy rate of 99.0% or above at the end of each period (¥9,167), as well as the former forecast for the 13th period (¥9,260). and achieved 100.0%, the highest rate ever, at the end of 12th period. n We aim to reach a DPU level of ¥9,500 in the near future through steady growth. (%) 100 (Yen) Former forecast 12th period DPU / New forecasts Actual DPU Effect from disposition of “icot Kongo” 9,500 UR 100.0% ¥9,346 ¥9,400 ¥9,410 TO 99.9% ¥9,248 ¥9,260 AA 100.0% ¥9,167 95 ¥9,021 9,000 ¥8,820

Total 99.4% 99.4% 99.4% 99.8% 99.9% 99.7% 99.2% 99.8% 99.3% 99.8% 100.0% ¥8,642 ¥8,666 ¥8,651

8,500 ¥310 90 ¥8,267 ¥8,312 2nd Period 3rd Period 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period ¥8,216 (2012.11) (2013.5) (2013.11) (2014.5) (2014.11) (2015.5) (2015.11) (2016.5) (2016.11) (2017.5) (2017.11) ¥8,028 ¥8,332 8,000 ¥7,961 ¥7,885 Upward rent revisions for Tokyo Office properties ¥7,761 ¥7,755 ¥7,575 n In the 12th period, we achieved upward rent revisions in approximately 87% of all lease contract renewals, the highest 7,500 rate ever, and the uptrend in rent revisions has continued for ten consecutive periods from the 4th to the 13th.

Continuous Upward Revision ¥7,075 (m2) (%) 7,000 26,400 87% 90 Upward revision (left axis) 84% 26,800 m2 Downward revision (left axis) 80 16,129 m2 69% 17,927 m2 16,500 Subject to revision (left axis) 67% 70 6,500 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period 13th Period 14th Period Percentage revised upward 58% 60 (2013.11) (2014.5) (2014.11) (2015.5) (2015.11) (2016.5) (2016.11) (2017.5) (2017.11) (2018.5 Forecast) (2018.11 Forecast) 13,200 (right axis) 2 50 2 9,900 15,630 m 15,911 m 40 32% 7,600 m2 2

Upward Revision Upward 6,568 m 6,600 26% 30 4,479 m2 2 20 14% 3,220 m2 7,825 m 3,300 Financial Strategies 1,808 m2 10 2% 1,775 m2 0 0 n 2 2 2 2 The average years remaining to debt maturity was lengthened and the average interest rate was lowered. As of January 228 m 2,069 m 526 m2 129 m 23 m (3,300) 17, 2018, the average interest rate was 0.65% and the average remaining period to maturity was 4.5 years. 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period 13th Period 14th Period (Years) (%) Downward Revision Downward (2013.11) (2014.5) (2014.11) (2015.5) (2015.11) (2016.5) (2016.11) (2017.5) (2017.11) (2018.5 Forecast) (2018.11 Forecast) Average years remaining to maturity (left axis) Average interest rate (right axis) 5.0 1.00 Major upward rent revisions in Urban Retail properties 0.80% 0.79% 0.77% 0.76% 0.77% n 0.75% 0.75% 0.75% Large rent increases achieved due to management leveraging the quality of assets 0.75 0.67% 0.67% 0.65% 0.65% 4.0 Kobe Kyu Kyoryuchi 25Bankan Q plaza SHINSAIBASHI A-FLAG KOTTO DORI UR-7 (acquired in the 5th period (Dec. 2013)) UR-10 (acquired in the 9th period (Dec. 2015)) UR-11 (acquired in the 11th period (Dec. 2016)) 0.50

3.0 4.5 4.1 4.4 4.4 years years years years 0.25 3.5 3.5 3.3 years 3.3 years years 3.1 3.0 2.9 years 2.9 years years years years Major upward rent revisions

in the 12th period and onwards Rent increase % Rent change % Rent increase % 2.0 0.00 +83 +22 +19 2nd Period 3rd Period 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period As of (compared to the rents before tenant replacement or rent revision) (2012.11) (2013.5) (2013.11) (2014.5) (2014.11) (2015.5) (2015.11) (2016.5) (2016.11) (2017.5) (2017.11) January 17, 2018 10 11 API’s Basic Policy Financial Situation Focused Investments in Urban Retail and Tokyo Office properties Portfolio Construction Policy Based on solid bank relationships backed by strong ties with major financial institutions, API will seek to maintain a stable financial base by reducing interest costs and diversifying the maturities of interest-bearing debt. Urban Retail properties Urban Retail properties are easily recognizable and are located n Key financial indicators near major train stations or popular areas in Tokyo, Government- Investment ratio (acquisition price basis) May 2017 Nov. 2017 designated major cities within the three major metropolitan areas As of January 17, 2018 (11th period) (12th period) or other major cities in Japan. Interest-bearing debt outstanding ¥196,150 million ¥196,150 million ¥199,350 million Tokyo Office properties % or more LTV (Note 1) 46.0% 46.0% 44.8% 70 Tokyo Office properties are located within the 23 wards of (Note) The actual investment ratio could differ Long-term borrowing ratio (Note 2) 94.9% (82.2%) 94.9% (82.2%) 92.9% (83.1%) Tokyo in areas with a high concentration of offices and near from the ratio indicated above in the short term depending on the acquisition or major train stations. Fixed interest ratio (Note 3) 92.8% 92.8% 92.9% selling of properties. Average remaining maturity 4.4 years 4.4 years 4.5 years Activia Account properties Average interest rate (Note 3) 0.67% 0.65% 0.65% To enhance the stability and profitability of its portfolio through diversification, API rigorously selects commercial facilities other than Urban Retail properties and office buildings other than Tokyo Office properties, (Note 1) Balance of interest-bearing debt / Total assets × 100 (Note 2) The figures in parentheses are the long-term borrowing ratios excluding the long-term borrowings to be repaid within a year. assessing the attributes and competitiveness of each property. (Note 3) To hedge the risks arising from interest rate fluctuations, API has entered into interest rate swap agreements. Therefore, the figures reflect the effect of interest rate swaps (fixation of interest rate). n Diversification of lenders (as of January 17, 2018) API’s Portfolio Focused on Location and Quality 1.0% Debt Debt 1.1% 0.3% Ratio (%) Ratio (%) Lenders (millions Lenders (millions 1.3% 0.2% (Note) (Note) 1.5% of yen) of yen) High Competitiveness of Location 3.4% ■ Sumitomo Mitsui Trust Bank 37,535 18.8 ■ Shinkin Central Bank 2,500 1.3 Tokyo Office properties offer superior access; 98% of those properties are located within the 6 central wards in 18.8% Mitsubishi UFJ Trust and ■ 32,535 16.3 ■ The Norinchukin Bank 2,200 1.1 Tokyo with an average walking distance from the nearest train station of 4 minutes. 7.3% Banking

7.3% Borrowings ■ Mizuho Bank 32,535 16.3 ■ The Bank of Fukuoka 2,000 1.0 Properties by location Walking distance from the nearest train station ¥ The Bank of Tokyo-Mitsubishi (acquisition price basis) (acquisition price basis) 199,350 16.3% ■ 32,535 16.3 ■ The Gunma Bank 500 0.3 8.0% million UFJ Other wards Less than 1 minute Nippon Life Insurance of Tokyo 4% ■ Investment Corporation Bonds 16,000 8.0 ■ 500 0.3 Company 2% Sumitomo Mitsui Banking Mitsui Sumitomo Insurance 16.3% 16.3% ■ 14,505 7.3 ■ 500 0.3 Corporation Company Ltd. Shinagawa Over 5 minutes Ward 17% ■ Development Bank of Japan 14,505 7.3 ■ Taiyo Life Insurance Company 500 0.3 13% 6 central wards Average Tokio Marine & Nichido Fire ■ Mizuho Trust & Banking 6,700 3.4 ■ 400 0.2 in Tokyo (Note) The figures are rounded to the first Insurance Co., Ltd. 4 minutes 1-5 minutes decimal places. Therefore, the sum of the ■ ■ % 79% ratios may not be 100%. Resona Bank 3,000 1.5 The 77 Bank, Ltd. 400 0.2 98 5 central wards in Tokyo 84% n Maturity ladder (as of January 17, 2018) Borrowings Investment corporation bonds (Billions of yen) 20 All Urban Retail properties are located in the major metropolitan areas with an average walking distance from the Commitment line ¥20 billion + Credit line ¥12 billion nearest station of 2 minutes. 16 Properties by location Walking distance from the nearest train station (acquisition price basis) (acquisition price basis) 4.0 2.0 Other major metropolitan cities 3% 12 5-10 minutes % 2.0 1.0 3 6.0

8 17.0 13.1 13.3 Major 1-5 minutes 12.5 12.5 12.0 12.0 metropolitan Average 10.6 10.5 10.9 Three major 34% 10.0 metropolitan cities 4 9.1 9.0 9.0 7.3 7.0 areas 5 central 2 minutes Less than 6.0 wards in 28% 100% 1 minute 1.0 Tokyo 1.6 63% 0 69% 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 41st Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period

12 13 Portfolio List (As of November 30, 2017) Utilizing the Value Chain of the Tokyu Fudosan Holdings Group Property Acquisition price Investment Total leasable Completion Occupancy Category Property name Location number (In millions of yen) ratio area (m2) (Note 1) rate (Note 2) Tokyu Plaza Omotesando Jingumae, Shibuya-ku, Tokyo 45,000 10.4% 4,904.94 Mar. 2012 100.0% Leverage the Value Chain and Expertise of the Tokyu Fudosan Holdings Group UR-1 Harajuku (Note 3) UR-2 Tokyu Plaza Akasaka (Note 3) Nagatacho, Chiyoda-ku, Tokyo 11,450 2.7% 16,579.26 Sep. 1969 99.7% UR-3 Q plaza EBISU Ebisu, Shibuya-ku, Tokyo 8,430 2.0% 4,024.88 Aug. 2008 100.0% Value Chain UR-4 Shinbashi Place Shinbashi, Minato-ku, Tokyo 20,500 4.8% 9,156.01 Apr. 2008 100.0% Kyoto Karasuma Parking Motohonenjicho, Nakagyo-ku, UR-5 8,860 2.1% 21,616.04 Jul. 2006 100.0% Sponsor Support Agreement Affiliate Support Agreement External Growth Building Kyoto UR-6 A-FLAG AKASAKA Akasaka, Minato-ku, Tokyo 3,000 0.7% 2,280.22 Feb. 2008 100.0% Support Kobe Kyu Kyoryuchi Kyomachi, Chuo-ku, 21,330 4.9% 19,653.90 Jan. 2010 100.0% UR-7 25Bankan Kobe City, Hyogo Minami-Yonjo-Nishi, Chuo-ku, Comprehensive Real Estate Developer A-FLAG SAPPORO 4,410 1.0% 21,229.16 May 1980 100.0% UR-8 Sapporo City, Hokkaido Udagawacho, Shibuya-ku, Comprehensive Real UR-9 A-FLAG SHIBUYA 6,370 1.5% 3,413.80 Jun. 1988 100.0% Property Management Agreement Estate Distribution Tokyo Shinsaibashi-suji, Chuo-ku, Business, Brokerage UR-10 Q plaza SHINSAIBASHI 13,350 3.1% 2,820.23 Nov. 2007 100.0% and Mediation of Land Building Osaka City, Osaka Management Minami-Aoyama, Minato-ku, and Building A-FLAG KOTTO DORI 4,370 1.0% 2,656.53 Jan. 1992 100.0% Comprehensive Real Estate Developer UR-11 Tokyo Minami-Aoyama, Minato-ku, A-FLAG BIJUTSUKAN DORI 4,700 1.1% 2,055.97 Dec. 1998 100.0% Comprehensive support system UR-12 Tokyo Sarugakucho, Shibuya-ku, Commercial Facility Management A-FLAG DAIKANYAMA WEST 2,280 0.5% 2,579.08 Apr. 1992 100.0% of the Tokyu Fudosan UR-13 Tokyo Retailer Holdings Group Minami-Senba, Chuo-ku, Acquired in the 13th period A-FLAG KITA SHINSAIBASHI 4,725 1.1% 2,536.75 Mar. 2008 100.0% UR-14 Osaka City, Osaka Jun. 1996 Hotel Management Acquired in the 13th period UR-15 DECKS Tokyo Beach (Note 3) Daiba, Minato-ku, Tokyo 12,740 3.0% 16,136.88 Nov. 2000 100.0% Building Internal Growth Other (Extension) Management Sports Facilities Support Supports Urban Retail properties 171,515 39.7% 131,643.65 — 100.0% Management TO-1 TLC Ebisu Building Ebisu, Shibuya-ku, Tokyo 7,400 1.7% 7,342.60 Mar. 1993 100.0% Ebisu-Minami, Shibuya-ku, A-PLACE Ebisu Minami 9,640 2.2% 7,950.49 Jan. 1995 100.0% TO-2 Tokyo TO-3 A-PLACE Yoyogi Sendagaya, Shibuya-ku, Tokyo 4,070 0.9% 3,106.17 Feb. 2007 100.0% TO-4 A-PLACE Aoyama Kita-Aoyama, Minato-ku, Tokyo 8,790 2.0% 7,303.69 Sep. 1966 100.0% Higashi-Shinbashi, Minato-ku, Luogo Shiodome 4,540 1.1% 4,476.35 Jul. 2004 100.0% Utilizing the Proprietary Expertise of the Asset Manager TO-5 Tokyo 2,338 TAMACHI SQUARE (Land) Shiba, Minato-ku, Tokyo 0.5% 1,287.96 — 100.0% TO-6 (Note 4) Minami-Ikebukuro, The team is made up primarily of members with A-PLACE Ikebukuro 3,990 0.9% 3,409.73 Oct. 2011 100.0% TO-7 Toshima-ku, Tokyo extensive experience in development, operations TO-8 A-PLACE Shinbashi Shinbashi, Minato-ku, Tokyo 5,650 1.3% 5,052.14 Mar. 1999 100.0% and management of commercial facilities and office Nishi-Gotanda, Shinagawa-ku, A-PLACE Gotanda 5,730 1.3% 4,028.69 Feb. 2012 100.0% buildings in the Tokyu Fudosan Holdings Group. TO-9 Tokyo TO-10 A-PLACE Shinagawa Konan, Minato-ku, Tokyo 3,800 0.9% 2,986.36 Sep. 1991 100.0% TO-11 OSAKI WIZTOWER Osaki, Shinagawa-ku, Tokyo 10,690 2.5% 7,193.28 Jan. 2014 100.0% • External growth leveraging its own expertise on asset acquisitions and the information collection network 30,300 Shiodome Building 20,400 • Constructed proper operation and management framework tailored to individual characteristics of assets Kaigan, Minato-ku, Tokyo 16.6% 28,136.05 Dec. 2007 99.7% TO-12 (Note 5) 20,900 under management Total 71,600 TO-13 A-PLACE Ebisu Higashi Higashi, Shibuya-ku, Tokyo 7,072 1.6% 4,010.69 Jan. 1992 100.0% TO-14 A-PLACE Shibuya Konnoh Shibuya, Shibuya-ku, Tokyo 4,810 1.1% 2,983.36 Mar. 1992 100.0% Nishi-Gotanda, Shinagawa-ku, A-PLACE Gotanda Ekimae 7,280 1.7% 4,316.89 Nov. 1993 100.0% TO-15 Tokyo Aug. 1985 (Main building) A-PLACE Shinagawa Higashi Konan, Minato-ku, Tokyo 18,800 4.4% 14,658.98 100.0% Governance Structure for Maximizing Unitholder Value TO-16 Sep. 1999 (Annex) Tokyo Office properties 176,200 40.8% 108,243.43 — 99.9% AA-1 Amagasaki Q’s MALL (Land) Amagasaki City, Hyogo 12,000 2.8% 27,465.44 — 100.0% Impartiality in Asset Acquisitions AA-2 icot Nakamozu Sakai City, Osaka 8,500 2.0% 28,098.02 Jun. 2007 100.0% API introduced an approval process ensuring impartiality in acquiring assets for the purpose of protecting the AA-4 icot Mizonokuchi Kawasaki City, Kanagawa 2,710 0.6% 14,032.05 Jul. 1998 100.0% AA-5 icot Tama Center Tama City, Tokyo 2,840 0.7% 5,181.58 Mar. 2006 100.0% interests of unitholders, including the avoidance of conflicts of interest. AA-6 A-PLACE Kanayama Nagoya City, Aichi 6,980 1.6% 9,314.91 Feb. 2009 100.0% Nakanoshima, Kita-ku, Osaka Nakanoshima Building 11,100 2.6% 20,229.20 Mar. 1984 100.0% In addition, from November 1, 2014, any buy/sell transactions and some lending transactions of real estate and/or AA-7 Osaka City, Osaka securities with interested parties are subject to the approval of the Board of Directors of API. AA-8 icot Omori Omorikita, Ota-ku, Tokyo 5,790 1.3% 6,209.79 Mar. 2007 100.0% Shimokuzawa, Chuo-ku, Market Square Sagamihara 4,820 1.1% 15,152.42 Jun. 2014 100.0% AA-9 Sagamihara City, Kanagawa Tsurunocho, Kita-ku, Osaka Umeda Gate Tower 19,000 4.4% 13,624.49 Jan. 2010 100.0% Alignment of the Interests of the Unitholders and Sponsor AA-10 City, Osaka Honcho, Naka-ku, Yokohama A-PLACE Bashamichi 3,930 0.9% 9,775.50 May 1975 100.0% Through the sponsor’s contribution to API and co-ownership of part of our properties with the sponsor, API has an AA-11 City, Kanagawa Tokojimachi, Hakata-ku, Acquired in the 13th period Commercial Mall Hakata 6,100 1.4% 9,612.88 Nov. 2015 100.0% established system to align the interests of the unitholders and the sponsor that secures collaborative operations AA-12 Fukuoka City, Fukuoka between API and the sponsor. Activia Account properties 83,770 19.4% 158,696.28 — 100.0% Total 431,485 100.0% 398,583.36 — 100.0% (Note 1) The completion date represents the date of construction of the main building as described in the property registry. For properties with multiple main buildings, the construction date of the oldest building is listed. However, for A-PLACE Shinbashi and A-FLAG SHIBUYA, the date of inspection that confirms the completion of construction written on the certificate of inspection is provided. Distribution-Based Compensation (Note 2) The occupancy rate is the ratio of total leased area to total leasable area on each property as of November 30, 2017. (Note 3) For Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka and DECKS Tokyo Beach, the figures are in proportion to our pro rata share of the trust beneficiary co-ownership interests (75%, A performance-based compensation system linked to distribution per unit for some management fees gives the 50% and 49%, respectively). (Note 4) The acquisition price of TAMACHI SQUARE (Land) is the land acquisition price at the time of the initial acquisition (June 13, 2012). asset manager an incentive to maximize unitholder value. (Note 5) For Shiodome Building, API acquired an additional co-ownership interest (15%, 10% and 10%) on January 9, 2015, December 16, 2015 and December 2, 2016, respectively. The first, the second, and the third row relate to the assets API acquired on January 9, 2015, December 16, 2015 and December 2, 2016, respectively. The fourth row indicates the total acquisition price and the investment ratio based on such total acquisition price. The total leasable area is calculated based on the pro rata share of the co-ownership interest (35%). (Note 6) Data are calculated based on the 42 properties including A-FLAG KITA SHINSAIBASHI acquired on December 1, 2017, DECKS Tokyo Beach and Commercial Mall Hakata on January 5, 2018. 14 15 北区 Central Tokyo Area Portfolio豊島区 Map 荒川区 Properties Acquired Before the 11th Period

Ikebukuro Tokyu Plaza Tokyu Plaza Nippori 1 Omotesando Harajuku 2 Akasaka 7 Taito-ku Bunkyo-ku Takadanobaba Ueno Asakusa 押上

Sumida-ku 中野区 Shinjuku-ku Chiyoda-ku 3 Q plaza EBISU 4 Shinbashi Place Akihabara 杉並区錦糸町 The Imperial Shinjuku 3 Yotsuya Palace Akasaka-mitsuke 2 Shibuya-ku 4 Tokyo Gaienmae 6 江東区 Harajuku 1 Omotesando 8 4 Shibuya 12 Chuo-ku 6 A-FLAG AKASAKA 9 A-FLAG SHIBUYA 11 Shinbashi 9 Minato-ku 5 14 12 13 Tokyo Tower 世田谷区 13 Hamamatsucho UR-1 Fukutoshin Ebisu Tokyu Plaza Omotesando Harajuku Line 3 1 Harajuku Sta. 6 1-minute 2 Tamachi Location: Jingumae, Shibuya-ku, Tokyo Acquisition price: ¥45,000 million walk Meiji Jingumaefrom theSta. nearest Meguro-ku A-FLAG A-FLAG ■■ The property is located on the corner of Omotesando Street and Meiji Street (Jingumae Crossing), train station 11 12 Omotesando KOTTO DORI BIJUTSUKAN DORI a center of fashion and culture in Japan. Fashion outlets can expect significant branding effects Street

Meguro from the location. JR Line Gotanda Shinagawa Chiyoda 15 Line 9 16 15 Osaki 10 11

A-FLAG A-PLACE DECKS Tokyo Beach TLC Ebisu Building A-PLACE Yoyogi A-PLACE Aoyama 13 DAIKANYAMA WEST品川区15 大井町 1 2 Ebisu Minami 3 4

大田区 TAMACHI SQUARE A-PLACE Luogo Shiodome A-PLACE Ikebukuro A-PLACE Shinbashi A-PLACE Gotanda 5 6 (Land) 7 8 9 10 Shinagawa

蒲田

A-PLACE A-PLACE A-PLACE A-PLACE OSAKI WIZTOWER Shiodome Building Hotel New Otani 11 12 13 Ebisu Higashi 14 Shibuya Konnoh 15 Gotanda Ekimae 16 Shinagawa Higashi UR-2 Tokyu Plaza Akasaka Namboku Line

Sta. 川崎 Marunouchi Nagatacho Location: Nagatacho, Chiyoda-ku, Tokyo Acquisition price: ¥11,450 million Line Akasaka-mitsuke Sta. ■■ Adjoining the Nagatacho and Kasumigaseki area, the Akasaka area is home to many embassies and Hanzomon Line Sotobori Street 1-minute foreign firms. The property is located in a business quarter in proximity to restaurants, bars, hotels and walk from the nearest Aoyama train station offices where many office workers gather. Street

Ginza Line

16 17 新横浜

横浜

戸塚 6 UR-3 Q plaza EBISU UR-4 Shinbashi Place UR-7 Kobe Kyu Kyoryuchi 25Bankan UR-8 A-FLAG SAPPORO

Location: Ebisu, Shibuya-ku, Tokyo Location: Shinbashi, Minato-ku, Tokyo Location: Kyomachi, Chuo-ku, Kobe City, Hyogo Location: Minami-Yonjo-Nishi, Chuo-ku, Sapporo City, Hokkaido Acquisition price: ¥8,430 million Acquisition price: ¥20,500 million Acquisition price: ¥21,330 million Acquisition price: ¥4,410 million ■■ The property is located in ■■ The property is located only ■■ In the Kyu Kyoryuchi (the Former Foreign Settlement) area, there Meiji Street Ginza ■■ The property is located in Susukino, the largest amusement Ebisu, a popular area for adults. 1 minute on foot from Shinbashi Line are famous historical spots in the port city Kobe at every turn. As a center of tourism and commerce center in Hokkaido and one of ■■ Facing the front of Ebisu Station, one of Japan’s leading Shinbashi Sta. JR Line the most popular tourist spots Souseigawa Sapporo Sta. Street in western Japan, it enjoys Sta. JR Yamanote Sannomiya Subway Namboku Line Station, the property enjoys Line terminal stations with good -minute Shinbashi Sta. 1 a prominent ability to attract Port Liner in Japan. -minute walk 1 Tokaido ■■ high visibility with a fancy, walk traffic access. from the nearest tourists and customers. Main Line SAPPORO TOKYU REI HOTEL, Crock Kitaichijyo from the nearest train station Asakusa Tower kariki Street well-lit façade made of Ebisu Sta. ■■ The property can also be used Line ■■ The property faces the main opened in 1980, is one of the Bank of Japan City Office Komazawa train station Street Ebisu Sta. street, Nakamachi Street, with Sapporo TV Tower terracotta bars and glass. as an office building, offering largest hotels in Sapporo, with Subway Tozai Line high demand for its favorable Motomachi Sta.Kyu Kyoryuchi-Daimarumae Sta. Hibiya Line JR a total of 575 guest rooms. Susukino good flexibility and availability Line 5-minute Sapporo Sta. location near Daimaru Kobe, the Subway Kaigan Line walk Chuo Streetcar Line to satisfy a variety of tenants. Shinbashi Sta. from the nearest kuyakusho 2-minute Bank of Japan Kobe Branch and train station mae Sta. walk Susukino Route 3 Kobe Line from the nearest the Kobe City Museum. area train station Sapporo Streetcar Line

UR-5 Kyoto Karasuma Parking Building UR-6 A-FLAG AKASAKA UR-9 A-FLAG SHIBUYA UR-10 Q plaza SHINSAIBASHI Location: Motohonenjicho, Nakagyo-ku, Kyoto Location: Akasaka, Minato-ku, Tokyo Location: Udagawacho, Shibuya-ku, Tokyo Location: Shinsaibashi-suji, Chuo-ku, Osaka City, Osaka Acquisition price: ¥8,860 million Acquisition price: ¥3,000 million Acquisition price: ¥6,370 million Acquisition price: ¥13,350 million

■■ The property is located in the ■■ ■■ The property is located in ■■ Located in Shinsaibashi, a Cartier Located a 3-minute walk from mitsuke Sta. Tokyu Plaza Akasaka- LOUIS VUITTON Akasaka Tokyu Hands Nishiki-koji Aoyama Vivienne Westwood Shijo Karasuma area, Kyoto’s Street Shibuya, a major commercial Fukutoshin popular place for both domestic Street Akasaka Station and a 5-minute Tokyu Hands Line Shinbashi Hanzomon Line Shinsaibashi Sta. Nagahori-Tsurumi Ryokuchi Subway Line most prominent city center. Hitotsugi Street district that is also known as a and international tourists to Nagahori St. 1-minute walk from Akasaka-mitsuke JR Line walk Ginza Line Marunouchi Shibuya BEAM Sotobori ■■ As a tie-up parking lot for the Street Line center for younger generations experience there the uniqueness from the nearest Station H&M train station FENDI Daimaru Kyoto department store ■■ and the forefront of Japanese of the city of Osaka 1-minute UNIQLO Subway Karasuma Line The property is a highly visible -minute 3 -minute Shibuya Sta. walk 4 Shibuya Center-Gai HOTEL walk Daimaru HIMIKO walk ■■ Nikko from the nearest and the Takashimaya Kyoto Karasuma Sta. commercial building facing from the nearest fashion and cultural trends. The building located near the North Ginza Line from the nearest Osaka Sta. Shinsaibashi train station train station Shibuya Sta. Building department store, the property Hankyu Shijo Street Hitotsugi Street, the busiest ■■ Further growth is expected, train station entrance of Shinsaibashi-suji Kyoto Line Tokyu Den-en-toshi Shinsaibashi Chiyoda Line Opa Daimaru Longchamp also serves as an important service street with the heaviest foot akasaka Sacas Line reflected by large-scale shopping street is a prominent (Under construction)

Shijo Sta. Shijo Tokyu Plaza Shibuya Subway Midosuji Line facility for neighboring retail stores. traffic in the Akasaka area. AkasakaSta. redevelopment plans in the area. landmark. Sinsaibashi-suji shopping district Daimaru South Building 18 19 Midosuji Suomachi Sta. UR-11 A-FLAG KOTTO DORI UR-12 A-FLAG BIJUTSUKAN DORI ↑至外苑前 Location: Minami-Aoyama, Minato-ku, Tokyo Location: Minami-Aoyama, Minato-ku, Tokyo

Acquisition price: ¥4,370 million Acquisition price: ¥4,700 million ↑To Gaienmae Shin-Aoyama Tokyu Building ■■ A rare property located ■■ A rare property located along TO-1 TLC Ebisu Building TO-2 A-PLACE Ebisu Minami

along Kotto Street in the Ginza Line Museum Street in Omotesando Omotesando Chiyoda Line Museum Street

Omotesando and Minami- and Minami-Aoyama area with Hanzomon Line Location: Ebisu, Shibuya-ku, Tokyo Location: Ebisu-Minami, Shibuya-ku, Tokyo Street Ginza Line

Omotesando Chiyoda Line Aoyama area with a luxurious a famous jazz club as one of Nezu Acquisition price: ¥7,400 million Acquisition price: ¥9,640 million Exit A5 From 1st Museum Omotesando Sta. 4-minute and high-design façade tenants Omotesando Sta. ■■ The surroundings are well ■■ The property is conveniently walk from 7-minute finished with granite the nearest ■■ The building facing a walk from located a 4-minute walk from train station known, as the area has a Ebisu Sta. 246 246 SPIRAL the nearest A-FLAG GLASSAREA train station Komazawa AOYAMA Street Meiji Street ■■ A high versatile space able boulevard美術館通り has a high visibility Exit B1 Ebisu Station. Exit B1 Ao A-FLAG Taro large concentration of office （BLUE Okamoto Hibiya Komazawa Ebisu Sta. Hanzomon Line KOTTO DORI Memorial ■■ Thanks to its traffic to meet various commercial and NOTE offers a spacious Line Street

Aoyama Street Kotto Street Museum buildings around Ebisu. To Shibuya TOKYO） Ebisu Sta. Kotto Street To Shibuya convenience, the Ebisu area needs atmosphere. ■■ The property is superior in Hibiya 4-minute attracts numerous tenants, Line Ebisu Sta. walk terms of scale compared with -minute particularly IT companies such from the nearest 4 train station other office buildings in the walk as software development JR Line from the nearest JR Line vicinity, with a standard floor train station companies, apparel companies area of approximately 805 m2. and foreign firms.

UR-13 A-FLAG DAIKANYAMA WEST Location: Sarugakucho, Shibuya-ku, Tokyo TO-3 TO-4 Acquisition price: ¥2,280 million A-PLACE Yoyogi A-PLACE Aoyama ■■ An area full of individuality with Location: Sendagaya, Shibuya-ku, Tokyo Location: Kita-Aoyama, Minato-ku, Tokyo

a concentration with highly Hachiman Acquisition price: ¥4,070 million Meiji Street Acquisition price: ¥8,790 million Street sensitive shops -minute ■■ Shinjuku ■■ 4 The property is located within Gyoen The property is superior in ■■ walk from Jingu Kyujo Located in Daikanyama, an Yoyogi Sta. the nearest walking distance of Shinjuku Yoyogi Sta. terms of scale compared to -minute train station 4 area recently expanding its Station and is situated on Meiji other office buildings located walk Chichibunomiya 3-minute from the nearest Rugby Stadium ability to draw customers, the Street with good visibility. walk in the vicinity. train station from the nearest Daikanyama Address Gaiennishi Street Ginza property is equipped with a ■■ Tenants can efficiently use train station ■■ Large-scale renovations, Line Tokyu Oedo

courtyard and a corridor that TENOHA Toyoko Line Line DAIKANYAMA a column-free space of including anti-earthquake elaborates appeals to tenants 2 Gaienmae Sta. approximately 346 m per floor. JR Line Fukutoshin Line reinforcement, were completed

who prefer the area. 旧山手通り Daikanyama Sta. in 2008.

20 21 TO-5 Luogo Shiodome TO-6 TAMACHI SQUARE (Land) TO-9 A-PLACE Gotanda TO-10 A-PLACE Shinagawa Location: Higashi-Shinbashi, Minato-ku, Tokyo Location: Shiba, Minato-ku, Tokyo Acquisition price: ¥2,338 million (Note) Location: Nishi-Gotanda, Shinagawa-ku, Tokyo Location: Konan, Minato-ku, Tokyo Acquisition price: ¥4,540 million ■■ A 2-minute walk from Mita Station and a 4-minute walk from Acquisition price: ¥5,730 million Acquisition price: ¥3,800 million ■■ The property is located on the Tamachi Station ■■ Conveniently located a ■■ A 4-minute walk from JR Shinbashi Sta. Gotanda Sta.

north side of the west district ■■ The area offers close proximity 3-minute walk from Gotanda Shinagawa Station Shinbashi Sta. Shinbashi

of “Shiodome Sio-Site,” which to central Tokyo with good Sakurada Street Asakusa Station on the Toei Subway ■■ It provides easy access to JR Line Mita Line Line is known as “Italia Gai (Italy 3-minute Toei Subway traffic access, as several JR Asakusa Line and a 4-minute walk Asakusa Line major areas in Tokyo, including Oedo Line Kyu-kaigan Street Town),” and boasts good traffic from the nearest 4-minute lines and Toei subway lines can JR walk from Gotanda Station on train station direct access to Haneda Airport walk -minute Shinagawa Sta. access. 4 Mita Sta. Line from the nearest walk be used. 2-minute JR Line with the Keikyu Line, as well train station ■■ Equipped with an earthquake- from the nearest walk train station (Note) The land acquisition price stated is at from the nearest TamachiShibaura Sta. ■■ The property offers good as connections to the Tokaido atré Shinagawa resistant structure, it is highly the time of the initial acquisition (June train station Institute of Yurikamome Technology access to major areas in Tokyo Yamate Street Shinkansen (bullet train). JR Line competitive with surrounding Shiodome Sta. 13, 2012). via several railway lines. Sakurada Street office buildings.

TO-7 A-PLACE Ikebukuro TO-8 A-PLACE Shinbashi TO-11 OSAKI WIZTOWER TO-12 Shiodome Building Location: Minami-Ikebukuro, Toshima-ku, Tokyo Location: Shinbashi, Minato-ku, Tokyo Acquisition price: ¥5,650 million Location: Osaki, Shinagawa-ku, Tokyo Location: Kaigan, Minato-ku, Tokyo Acquisition price: ¥71,600 million ■■ Acquisition price: ¥3,990 million ■■ A 3-minute walk from Shinbashi Station, where seven lines Acquisition price: ¥10,690 million A high-spec building able都営浅草線 to第一京浜 respond flexibly to a wide Hama-rikyu ■■ The property offers good converge, including the JR ■■ A 4-minute walk with a direct Yamate Street SL 3-minute Gardens Square range of needs walk from visibility, as it is located along Yurakucho Marunouchi Yamanote Line and the Tokyo connection through the the nearest Line Line Osaki Sta. ■■ Meiji Street. A 6-minute walk Metro Ginza Line 3-minute pedestrian deck from Osaki Accessible from two train train station

walk Shinbashi Sta. Shinbashi Sta. Shinbashi stations serviced by five ■■ from the nearest from Ikebukuro Station that In addition to a spacious office Station, a terminal station 大門通り (Tentative name) JR Yamanote Line/ train station Gate City Osaki Keihin Tohoku Line Ikebukuro Sta. lines, the property also has大門駅 Takeshiba Waterfront Ikebukuro Sta. JR Line enjoys high potential as a space with a ceiling height serviced by four railway lines Oedo Line Development Project Think Park direct access to Haneda ■■ Tower 浜松町二丁目 terminal station. of 2,700 mm, the property The property has good access JR Line Airport. Further development -minute 4-minute 4地区 6 walk 再開発事業 offers quality facilities such as The Loop Road No. 2 to Yokohama and Saitama as Urban Regeneration JR Line walk Daiichi from the nearest of the area is expected in Kyu-Shibarikyu from the nearest Keihin Shiodome train station Onshi Garden Step Up Project Seibu individual air conditioning. well as the Tokyo Metropolitan NBF Osaki Bldg. (Takeshiba District) train station Sta. line with large-scale urban Hamamatsucho Sta. Ikebukuro Yurikamome Line area. redevelopment projects.

竹芝駅ゆりかもめ 22 東京モノレール 23

首都高速都心環状線

芝浦一丁目再開発計画 TO-13 TO-14 副都心線 A-PLACE Ebisu Higashi A-PLACE Shibuya Konnoh青山通り

半蔵門線 Location: Higashi, Shibuya-ku, Tokyo Location: Shibuya, Shibuya-ku, Tokyo Acquisition price: ¥4,810 million AA-1 Amagasaki Q’s MALL (Land) AA-2 Acquisition price: ¥7,072 million ■■ A 4-minute walk from Shibuya Station, serviced銀座線 by nine icot Nakamozu ■■ Located a 6-minute walk railway lines 渋谷駅 Shibuya Sta. Location: Shioe, Amagasaki City, Hyogo Location: Nakamozucho, Kita-ku, Sakai City, Osaka ■■ Shibuya Hikarie from Ebisu Station and on -minute In the area of Shibuya Station’s Acquisition price: ¥12,000 million Acquisition price: ¥8,500 million 6walk a corner along Meiji Street, from the nearest south exit, further development train station 4-minute Roppongi St. the property has excellent and advancement of walk Konnoh from the nearest Hachimangu lighting and visibility. accessibility are expected,246 with train station Shrine ■■ A comprehensive renovation several urban improvement of facilities in the entire and redevelopment plans Shibuya Sta. building has enhanced its including the installation of Tokyu Toyoko Line appeal to tenants. new pedestrian decks and JR Line escalators. Namikibashi 明治通り

AA-4 icot Mizonokuchi AA-5 icot Tama Center Location: Mizonokuchi, Takatsu-ku, Kawasaki City, Kanagawa Location: Ochiai, Tama City, Tokyo Acquisition price: ¥2,710 million Acquisition price: ¥2,840 million

TO-15 A-PLACE Gotanda Ekimae TO-16 A-PLACE Shinagawa Higashi

Location: Nishi-Gotanda, Shinagawa-ku, Tokyo Location: Konan, Minato-ku, Tokyo Acquisition price: ¥7,280 million Acquisition price: ¥18,800 million ■■ Located a short 1-minute ■■ Shinagawa Station is serviced Yamanote Line walk from the west exit of by the Tokaido Shinkansen Shinagawa Season 7-minute Terrace walk from Gotanda Station Gotanda Sta. (bullet train) and has direct the nearest ■■ Having good visibility from train station 1-minute JR Gotanda Sta. access to Haneda Airport by Gotanda Station and excellent walk Sony Shinagawa from the nearest the Keikyu Line. NTT Shinagawa Headquarters Crystal convenience, the property can train station TWINS Square ■■ Further development of the Shinagawa Sta. Shinagawa East fulfill an advertising role and A-PLACE Shinagawa RIVAGE station is expected in line SHINAGAWA attract demand for various Shinagawa Toei Asakusa Line Tokyu Building AA-6 AA-7 Osaka Nakanoshima Building with the opening of Linear Street Kyu-kaigan A-PLACE Kanayama tenants, such as stores where Sakurada Street 高輪口 people shop in person. Shinkansen. Konan Exit Location: Kanayama, Naka-ku, Nagoya City, Aichi Location: Nakanoshima, Kita-ku, Osaka City, Osaka Acquisition price: ¥6,980 million Acquisition price: ¥11,100 million リニア新幹線東海道新幹線（建設中）品川インターシティ

東急池上線五反田駅 24 25 Overview of API

Structure

The Sponsor The REIT Custodian Transfer Agent 2 3 4 General Administrator of Institutionally Managed Assets Sumitomo Mitsui Trust Bank, Limited 6 General Meeting of Unitholders AA-8 AA-9 Market Square Sagamihara General Administrator icot Omori for Investment Location: Omorikita, Ota-ku, Tokyo Location: Shimokuzawa, Chuo-ku, Sagamihara City, Kanagawa The Asset Manager 1 5 Corporation Bonds Acquisition price: ¥5,790 million Acquisition price: ¥4,820 million Mitsubishi UFJ Trust and Banking Corporation Board of Directors Sumitomo Mitsui Trust Bank, Limited Executive Director: Nariaki Hosoi 7 Supervisory Director: Yonosuke Yamada Supervisory Director: Yoshinori Ariga 1 Asset management agreement 2 Asset custody agreement Support Companies 3 Transfer agency agreement Tokyu Livable Inc. 4 General administration agreement Tokyu Community Corp. Independent Auditor Tokyu Hands Inc. 5 Fiscal agency agreement Ernst & Young 6 Tokyu Sports Oasis, Inc. ShinNihon LLC Sponsor support agreement, Tokyu Stay Co., Ltd. outsourcing agreement 7 Afﬁliate support agreements AA-10 Umeda Gate Tower AA-11 A-PLACE Bashamichi Location: Tsurunocho, Kita-ku, Osaka City, Osaka Location: Honcho, Naka-ku, Yokohama City, Kanagawa Acquisition price: ¥19,000 million Acquisition price: ¥3,930 million

Profile History

Name Activia Properties Inc. Registration of incorporation, and foundation under Article 166 of the Act Sep. 7, 2011 Executive on Investment Trusts and Investment Nariaki Hosoi Director Corporations Implementation of registration by Shin-Aoyama Building East 9F, the prime minister under Article 189 Address 1-1 Minami-Aoyama 1-chome, of the Act on Investment Trusts and Sep. 20, 2011 Minato-ku, Tokyo, Japan Investment Corporations (registration number: Director of Kanto Local TLC REIT Management Inc. Finance Bureau No. 73) Contact Tel. +81-3-6804-5671 Listed on the J-REIT section of the Jun. 13, 2012 Tokyo Stock Exchange (securities Closing dates May 31 and November 30 code: 3279)

26 27 I. Asset Management Report 1. Review of Asset Management (1) Investment Performance of the Investment Corporation Asset Management Report for the 12th Fiscal Period Fiscal period 8th period 9th period 10th period 11th period 12th period Business period From June 1, 2015 From December 1, 2015 to From June 1, 2016 From December 1, 2016 From June 1, 2017 (Semi-Annual Report) to November 30, 2015 May 31, 2016 to November 30, 2016 to May 31, 2017 to November 30, 2017 From June 1, 2017 to November 30, 2017 Operating revenue (In millions of yen) 9,701 10,175 10,917 12,107 12,720 [Lease business revenue] (In millions of yen) [8,780] [9,528] [10,175] [11,370] [11,861]

Operating expenses (In millions of yen) 4,241 4,249 4,755 5,127 5,645 [Expenses related to rent business] (In millions of yen) [3,422] [3,399] [3,833] [4,097] [4,509] Operating profit (In millions of yen) 5,460 5,926 6,161 6,980 7,074 Ordinary profit (In millions of yen) 4,790 5,197 5,410 6,152 6,218 Profit (In millions of yen) 4,789 5,196 5,409 6,151 6,217 Net assets (In millions of yen) 155,560 176,729 177,018 208,451 208,523

[Change from the previous period] (%) [0.1] [13.6] [0.2] [17.8] [0.0] Total assets (In millions of yen) 307,746 339,894 371,680 425,977 426,838 [Change from the previous period] (%) [3.5] [10.4] [9.4] [14.6] [0.2] Unitholders’ capital (In millions of yen) 150,770 171,532 171,532 202,233 202,233 Number of units issued and outstanding (Units) 554,264 599,654 599,654 665,214 665,214 Net assets per unit (Note 1) (Yen) 280,661 294,719 295,200 313,359 313,467

Total distributions (In millions of yen) 4,789 5,196 5,409 6,151 6,217 (Note 1) I. Asset Management Report Basic earnings per unit (Yen) 8,642 8,722 9,021 9,252 9,346 (Note 2) II. Balance Sheets Cash distributions per unit

III. Statements of Operations [Earnings distributions per unit] (Yen) [8,642] [8,666] [9,021] [9,248] [9,346] [Distributions per unit in excess of Activia Properties Inc. (Yen) [—] [—] [—] [—] [—] I V. Statements of Changes in Unitholders’ Equity earnings] 1-1 Minami-Aoyama 1-chome, V. Statements of Cash Distributions Ordinary profit to total assets (Note 3) (%) 1.6 1.6 1.5 1.5 1.5 Minato-ku, Tokyo VI. Statements of Cash Flows Return on unitholders’ equity (Note 3) (%) 3.1 3.1 3.1 3.2 3.0 Unitholders’ equity to total 50.5 52.0 47.6 48.9 48.9 VII. Notes to Financial Statements assets (Note 3) (%) [Change from the previous VIII. Schedule of Financial Statements [–1.7] [1.5] [–4.4] [1.3] [—] period] Independent Auditor’s Report Payout ratio (Note 3) (%) 99.9 99.9 99.9 100.0 99.9

. [Other reference]

Number of properties (Properties) 31 32 35 39 39

Total leasable area (Note 4) (m2) 301,802.03 312,572.42 340,271.66 370,194.77 370,296.85

Occupancy rate at end of period (%) 99.2 99.8 99.3 99.8 100.0 Depreciation (In millions of yen) 925 989 1,051 1,175 1,189 Capital expenditure (In millions of yen) 272 244 502 147 303

NOI (Note 3) (In millions of yen) 7,006 7,766 8,135 9,185 9,400

(Note 1) API implemented a 2-for-1 investment unit split with September 30, 2015 as the record date and October 1, 2015 as the effective date. Net assets per unit and basic earnings per unit are calculated on the assumption that the investment unit split was implemented at the beginning of the 7th fiscal period. (Note 2) Basic earnings per unit is calculated by dividing profit by the daily weighted average number of investment units issued and outstanding (554,264 units, 595,758 units, 599,654 units, 664,866 units and 665,214 units for the 8th, 9th, 10th, 11th, and 12th fiscal periods, respectively). (Note 3) The indicators are calculated as follows: Ordinary profit to total assets: Ordinary profit ÷ Average total assets × 100; Average total assets = (Total assets at beginning of period + Total assets at end of period) ÷ 2 Return on unitholders’ equity: Profit ÷ Average net assets × 100; Average net assets = (Net assets at beginning of period + Net assets at end of period) ÷ 2 Unitholders’ equity to total assets: Net assets at end of period ÷ Total assets at end of period × 100 Payout ratio: Total distribution amount ÷ Profit × 100 (rounded down to the first decimal place) NOI: Rental operating income (Lease business revenue + Other lease business revenue – Expenses related to rental business) + Depreciation + Loss on retirement of non-current assets (Note 4) The total leasable area is equal to the gross floor area of leasable space in each property excluding properties for which we acquire land only, based on the lease agreements for building or floor plans as of the end of each fiscal period. Total leasable area for properties for which only land is acquired is based on the lease agreement for land or land plans as of the end of each fiscal period. As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka and Shiodome Building, the figures are in proportion to a pro rata share of co-ownership interests of each property (75%, 50% and 15% (the 8th fiscal period) or 25% (from the 9th fiscal period to the 10th fiscal period) or 35% (from the 11th fiscal period to the 12th fiscal period), respectively).

28 29 (2) Asset Management during the Fiscal Period under Review 3) Initiatives Regarding Sustainability 1) Transition of Investment Corporation In aiming to build a portfolio consisting of “real estate capable of sustaining customer demand,” the Investment Corporation deems that efforts to achieve “lower environmental loads” while acting to Activia Properties Inc. (hereinafter referred to as the “Investment Corporation”) was established on “contribute to our nearby surroundings and local communities” also constitute an important portfolio September 7, 2011, with unitholders’ capital of ¥200 million (400 units) and TLC Township Inc. (on consideration. This involves daily effort to achieve our basic objective of cutting unit energy April 1, 2017, an absorption-type merger took place with current TLC REIT Management Inc. consumption by an annual average of 1% over the medium to long term. Measures carried out in the (hereinafter referred to as the “Asset Manager”) as a surviving company and TLC Activia Investment fiscal year under review include upgrading to LED lighting at some private areas at Luogo Shiodome, Management Inc. (its trade name was changed from TLC Township Inc. on April 1, 2012) as an timed in conjunction with change of tenants at that facility, and some common areas of A-FLAG absorbed company) as the organizer under the Act on Investment Trusts and Investment Corporations SAPPORO, A-FLAG BIJUTSUKAN DORI, and A-FLAG DAIKANYAMA WEST. Moreover, we (Act No. 198 of 1951, including subsequent revisions), and completed its registration in the Kanto continue to engage in annual initiatives geared to acquiring green building certifications, and during the Local Finance Bureau on September 20, 2011 (Director-General of the Kanto Local Finance Bureau fiscal period under review have accordingly been granted BELS certifications, which evaluate the No. 73). performances in energy-saving measures, for four properties including A-PLACE Ikebukuro (two After that, the Investment Corporation was listed on the real estate investment trust securities market of stars), A-PLACE Gotanda (two stars), A-PLACE Shinagawa (one star), and A-PLACE Ebisu Higashi Tokyo Stock Exchange, Inc. (Securities code 3279) on June 13, 2012. On December 1, 2016, the (three stars). As such, a total of 22 of our properties have acquired green building certification, which Investment Corporation carried out a publicly offered capital increase for the fourth consecutive year, amounted to 59.5% of our holdings calculated on the basis of gross floor area (as of November 30, and on December 15, 2016, it carried out a third-party allotment. 2017). “Activia” of “Activia Properties,” the name of the Investment Corporation, has been coined from the In addition to holding an exhibition displaying photos of the Omotesando district as a fifth anniversary words “activate” and “ia,” a suffix meaning “place.” By investing in and managing real estate event at Tokyu Plaza Omotesando Harajuku, we cooperated in community activities to coexist with appropriate to its name, the Investment Corporation seeks to become an entity capable of broadly nearby businesses, residents and cities as initiatives for local society, which included our participation energizing society. The Investment Corporation will also select real estate capable of sustaining in summer festivals in the Shiodome area and clean-up campaigns in various areas where our properties customer demand as a location for both corporate activities and urban recreation in popular areas, with are located. The Investment Corporation will contribute to achieving a sustainable society by engaging the aim of maximizing the medium- and long-term value of unitholders, supported by its proactive in such initiatives geared to the environment and society. management (management to improve the circumstances by taking initiatives and acting for the future). 4) Overview of Financing Moreover, the Investment Corporation has continued to carefully select investment assets with a focus In the fiscal period under review, the Investment Corporation refinanced borrowings amounting to on location and quality since having concluded its IPO, and consequently held 39 properties (with the ¥12,000 million and ¥5,000 million in June and September 2017, respectively, in order to cover total acquisition price of ¥407,920 million) at the end of the fiscal period under review. repayment of loans payable that had come due, and worked to otherwise maintain a stable financial base 2) Investment Environment and Investment Performance through ongoing moves that have included reducing interest costs and diversifying repayment dates on interest-bearing debt. As of the end of the fiscal period under review, the balance of interest-bearing In the fiscal period under review, the Japanese economy held to a path of recovery. This was partially debt was ¥196,150 million (borrowings of ¥180,150 million and investment corporation bonds of due to a trend of rising exports associated with moderate growth in the global economy, and also due to ¥16,000 million). The ratio of interest-bearing debt to total assets (LTV = Balance of interest-bearing increased robustness in capital investment brought about by improvement in corporate earnings and debt / Total assets x 100) was 46.0% as of the end of the fiscal period under review. The ratio of long- business sentiment. term debt and fixed-interest debt to total interest-bearing debt were 94.9% and 92.8%, respectively. With respect to the environment surrounding retail properties, consumer sentiment has been mounting a The credit rating the Investment Corporation has obtained as of the end of the fiscal period under firm recovery despite some apparent signs of weakness, amid an employment environment that shows review is as follows. This investment unit does not have a credit rating provided or made available for indications of further tightening, according to the Monthly Consumer Confidence Survey released by inspection by a credit rating agency or one scheduled to be provided or made available for inspection by the Economic and Social Research Institute, Cabinet Office, Government of Japan. Moreover, in the a credit rating agency at the Investment Corporation’s request. quarter spanning July to September 2017, tourism consumption by overseas visitors to Japan increased by 26.7% year on year amid gains in both the number of foreign overseas visitors to Japan and per- Credit Rating Agency Rating Outlook person travel expenditure, according to the Consumption Trend Survey for Foreigners Visiting Japan released by the Japan Tourism Agency of the Ministry of Land, Infrastructure, Transport and Tourism. Japan Credit Rating Agency (JCR) Long-term issuer rating: AA Stable As such, demand related to inbound tourism trended higher. 5) Overview of Financial Results and Distributions In the rental office market, favorable conditions have persisted. In that regard, supply has continued to tighten relative to demand with the average vacancy rate of the five central wards of Tokyo (Chiyoda- As a result of the above-mentioned investments, operating revenue, operating profit, and ordinary profit ku, Minato-ku, Chuo-ku, Shibuya-ku and Shinjuku-ku) hovering in the 3% range since July 2016, were ¥12,720 million, ¥7,074 million, and ¥6,218 million, respectively, for the fiscal period under having decreased to 3.03% as of November 30, 2017. Meanwhile, rent levels have increased for 47 review, and profit was ¥6,217 million. consecutive months running up to November 2017, according to data published by Miki Shoji Co., Ltd. In addition, the market has also been firm in major cities outside Tokyo, amid an ongoing trend of In accordance with the distribution policy set forth by the Investment Corporation (Article 35 of the declining vacancy rates and rising rent levels. Articles of Incorporation), it was decided that the all amount of unappropriated retained earnings would be distributed except a fraction of less than ¥1 of distributions per investment unit, with the aim that as The J-REIT market has been showing signs of recovery despite episodes of sluggish performance, amid greatest as possible distributions of profits would be included in tax deductible expenses under Article sentiment that yields have been relatively undervalued. Moreover, asset sizes have continued to expand 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957, including subsequent with ongoing financing activity and property acquisitions carried out by J-REITs amid the Bank of revisions; hereinafter referred to as the “Special Taxation Measures Act”). Consequently, distributions Japan’s ongoing monetary easing policy and an upbeat real estate market. per investment unit resulted in ¥9,346. The Investment Corporation has continued to maintain and improve its portfolio. Consequently, total assets held by the Investment Corporation at the end of the fiscal period under review were 39 properties (with the total acquisition price of ¥407,920 million) with the total leasable area of 370,296 m2 (112,013 tsubo).

30 31 (3) Capital Increase, etc. (4) Distributions, etc. The Investment Corporation decided to distribute the entire unappropriated retained earnings at the end of A summary of capital increases until the fiscal period under review is as follows: the fiscal period under review excluding fractions of the distribution amount per unit that are less than ¥1 to Number of total Total unitholders’ capital ensure that the maximum amount of profit distribution would be included in tax deductible expenses with Date Summary investment units issued (In millions of yen) Remarks the application of a special provision of taxation (Article 67-15 of the Act on Special Measures Concerning Increase Total Increase Total Taxation). Accordingly, distributions per investment unit were ¥9,346. Establishment through private September 7, 2011 400 400 200 200 (Note 1) Fiscal period 8th period 9th period 10th period 11th period 12th period placement From June 1, 2015 From December 1, 2015 From June 1, 2016 From December 1, 2016 From June 1, 2017 Capital increase through public Business period June 12, 2012 204,100 204,500 90,834 91,034 (Note 2) to November 30, 2015 to May 31, 2016 to November 30, 2016 to May 31, 2017 to November 30, 2017 offering Unappropriated retained earnings Capital increase through third- ¥4,790,093 thousand ¥5,196,849 thousand ¥5,409,874 thousand ¥6,152,150 thousand ¥6,217,532 thousand July 10, 2012 762 205,262 339 91,373 (Note 3) (undisposed loss) party allotment Capital increase through public Retained earnings ¥143 thousand ¥247 thousand ¥395 thousand ¥251 thousand ¥442 thousand December 16, 2013 43,100 248,362 32,636 124,010 (Note 4) offering Total distribution payments ¥4,789,949 thousand ¥5,196,601 thousand ¥5,409,478 thousand ¥6,151,899 thousand ¥6,217,090 thousand Capital increase through third- January 15, 2014 2,700 251,062 2,044 126,054 (Note 5) [Distributions per unit] [¥8,642] [¥8,666] [¥9,021] [¥9,248] [¥9,346] party allotment Of which, total distributions of profits were ¥4,789,949 thousand ¥5,196,601 thousand ¥5,409,478 thousand ¥6,151,899 thousand ¥6,217,090 thousand Capital increase through public December 17, 2014 24,050 275,112 22,800 148,855 (Note 6) [Distributions of profits per unit] [¥8,642] [¥8,666] [¥9,021] [¥9,248] [¥9,346] offering Of which, total return on unitholders’ capital Capital increase through third- ¥― thousand ¥― thousand ¥― thousand ¥― thousand ¥― thousand January 8, 2015 2,020 277,132 1,915 150,770 (Note 7) was party allotment [Return on unitholders’ capital per unit] [¥―] [¥―] [¥―] [¥―] [¥―] October 1, 2015 Investment unit split 277,132 554,264 — 150,770 (Note 8) Of the total return on unitholders’ capital, the total distribution payments from the Capital increase through public ¥― thousand ¥― thousand ¥― thousand ¥― thousand ¥― thousand December 15, 2015 41,870 596,134 19,152 169,922 (Note 9) allowance for temporary difference offering adjustment Capital increase through third- January 6, 2016 3,520 599,654 1,610 171,532 (Note 10) [Of the return on unitholders’ capital per unit, party allotment the distribution payment from the allowance [¥―] [¥―] [¥―] [¥―] [¥―] Capital increase through public for temporary difference adjustment per unit] December 1, 2016 61,040 660,694 28,583 200,116 (Note 11) offering Of the total return on unitholders’ capital, the Capital increase through third- total distribution payments from investments December 15, 2016 4,520 665,214 2,116 202,233 (Note 12) ¥― thousand ¥― thousand ¥― thousand ¥― thousand ¥― thousand party allotment and other decreased distribution under tax (Note 1) The Investment Corporation was established through an investment of Tokyu Land Corporation, which underwrote the investment units with an offer price per laws unit of ¥500,000. [Of the return on unitholders’ capital per unit, (Note 2) API issued new investment units through a public offering at a price of ¥460,000 per unit (issue price of ¥445,050 per unit) to raise funds for the acquisition of the distribution payments from investments [¥―] [¥―] [¥―] [¥―] [¥―] new properties, etc. and other decreased distribution under tax (Note 3) Following the public offering on June 12, 2012, API issued new investment units through a third-party allotment at a price of ¥445,050 per unit. laws] (Note 4) API issued new investment units through a public offering at a price of ¥782,925 per unit (issue price of ¥757,229 per unit) to raise funds for the acquisition of new properties, etc. (Note 5) Following the public offering on December 16, 2013, API issued new investment units through a third-party allotment at a price of ¥757,229 per unit. (5) Future Investment Policy and Issues to Address (Note 6) API issued new investment units through a public offering at a price of ¥979,020 per unit (issue price of ¥948,051 per unit) to raise funds for the acquisition of In the Japanese economy going forward, we expect the trend of modest recovery to continue, fueled by new properties. (Note 7) Following the public offering on December 17, 2014, API issued new investment units through a third-party allotment at a price of ¥948,051 per unit. positive effects of factors that include rising exports brought about by steady growth of the global economy, (Note 8) A 2-for-1 investment unit split was implemented with September 30, 2015 as the record date and October 1, 2015 as the effective date. and increasing capital investment and personal consumption underpinned by an accommodative financial (Note 9) API issued new investment units through a public offering at a price of ¥472,360 per unit (issue price of ¥457,418 per unit) to raise funds for the acquisition of environment and fiscal stimulus driven by various economic measures. Nevertheless, we will need to new properties, etc. (Note 10) Following the public offering on December 15, 2015, API issued new investment units through a third-party allotment at a price of ¥457,418 per unit. monitor the situation with respect to mounting uncertainties in overseas economies and potential adverse (Note 11) API issued new investment units through a public offering at a price of ¥483,326 per unit (issue price of ¥468,283 per unit) to raise funds for the acquisition of effects of financial market volatility, brought about by developments involving monetary and economic new properties. policy in Europe and the U.S. as well as geopolitical risks. (Note 12) Following the public offering on December 1, 2016, API issued new investment units through a third-party allotment at a price of ¥468,283 per unit. In the rental office market, we expect business conditions to remain favorable backed by a likelihood of

Fluctuation in Market Price of the Investment Securities office occupancy rates persisting at high levels along with robust appetite for upgrading locations of Changes in prices of the Investment Corporation’s investment units listed on the Tokyo Stock Exchange business and office expansion amid ongoing improvement in the employment environment and higher REIT Market are as follows. corporate earnings. With respect to the environment surrounding retail properties, we expect consumer sentiment to gradually become more upbeat due to a steadily improving employment and income (Yen) environment. Despite concerns with respect to potentially deteriorating supply-demand fundamentals, we Fiscal period 8th period 9th period 10th period 11th period 12th period expect the J-REIT market to hold firm backed by the likelihood of the Bank of Japan maintaining its From June 1, 2015 From December 1, 2015 From June 1, 2016 From December 1, 2016 From June 1, 2017 Business period monetary easing policy for the time being along with that of relatively high yields and robust financial to November 30, 2015 to May 31, 2016 to November 30, 2016 to May 31, 2017 to November 30, 2017 results among J-REITs. Amid this environment, the Investment Corporation will promote both external Highest price 537,000 609,000 580,000 560,000 518,000 growth in part by continuing to leverage its sponsor support, and also internal growth by leveraging the competitiveness of its assets under management, with the aim of improving unitholder value while Lowest price 421,500 481,500 488,500 490,000 437,500 constantly expanding the size of its assets by making careful investment decisions. (Note) A 2-for-1 investment unit split was implemented with October 1, 2015 as the effective date. The figures for the 8th period are calculated based on the assumption that the investment unit split was implemented at the beginning of the 8th period. 1) Basic Policy

The Investment Corporation’s basic policies are to invest in assets, with targeted investments in Urban Retail and Tokyo Office properties; utilize the Tokyu Fudosan Holdings Group’s value chain based on the comprehensive support system; and maintain a governance structure that maximizes investor value.

32 33 2) External Growth Strategy (6) Significant Matters after Book Closing The Investment Corporation will invest in Urban Retail and Tokyo Office properties as a main target. It 1) Issuance of New Investment Units will make its investment decisions carefully, concentrating on selecting properties in excellent At meetings of the board of directors held on November 28, 2017 and December 6, 2017, we resolved locations, including surrounding areas, and thoroughly considering individual factors such as use, size, to issue new investment units as described below, and issued these per the terms below once payment quality, specifications, and tenants in order to construct a competitive portfolio in the medium to long was completed on December 13, 2017 and December 26, 2017. As a result, unitholders’ capital term. amounted to ¥217,091,520,300, and the total number of investment units issued came to 698,704 units. To acquire these competitive assets on an ongoing basis, the Investment Corporation will work to maintain and improve the quality of its portfolio and will seek to expand the size of its assets by carefully selecting investment assets based on the information it receives under its sponsor support (i) Issuance of new investment units through the public offering (Public placement) agreement with Tokyu Land Corporation regarding the Investment Corporation and its support Number of new investment units issued 31,090 units agreement with five group companies in the Tokyu Fudosan Holdings Group. It will also acquire Offering price ¥458,150 per unit properties through the exclusive know-how and information-gathering network of the asset Total offering price ¥14,243,883,500 management company. Paid-in amount ¥443,657 per unit 3) Internal Growth Strategy Total paid-in amount ¥13,793,296,130 The Investment Corporation will operate, manage, and refurbish its portfolio to maintain and improve Payment date December 13, 2017 the competitiveness of its facilities through a comprehensive understanding of the features of its overall portfolio and its individual assets under management, based on the unique expertise of its Asset Manager. The Investment Corporation will also seek to manage its portfolio in a stable manner and (ii) Issuance of new investment units through third-party allotment strengthen its earnings by establishing appropriate operational and management systems tailored to the Number of new investment units issued 2,400 units specific characteristics of the assets it has invested in, and through regular and non-regular inspections Paid-in amount ¥443,657 per unit by the property management company that has considerable experience in the operation and management of real estate. Total paid-in amount ¥1,064,776,800 Payment date December 26, 2017 The Investment Corporation will also maintain and improve the value of its assets through its expertise in internal growth through operating and managing properties. It will maximize the competitiveness of Allottee Nomura Securities Co., Ltd. its assets through the ongoing assistance of Tokyu Land Corporation and other support companies, which, through their face-to-face business with consumers, have rich information regarding consumer needs and developments in industries such as retail and services. 2) Borrowing of Funds With respect to the property management business for the assets under management, leasing support The Investment Corporation borrowed funds as follows. has been provided from Tokyu Land Corporation, Tokyu Land SC Management Corporation or Tokyu Borrowing and Community Corporation. Total Cate- Interest Drawdown Due date repayment methods, Lender amount gory rate date (Note) security, and 4) Financial Strategy borrowed guarantee Having the sound financial strategy in an effort to conservatively control LTV as well as make stable Sumitomo Mitsui Trust Bank, long-term loans and diversify maturities (diversifying repayment dates), the Investment Corporation Limited will endeavor to build stable financial base with solid bank formation. In addition, with the aim of Mitsubishi UFJ Trust and diversifying means of raising funds, the Investment Corporation will issue investment corporation Banking Corporation bonds while paying close attention to trends in financial markets. The Investment Corporation will also Mizuho Bank, Ltd. ¥1,600 January 5, December continue to flexibly issue new investment units while paying appropriate attention to dilution of 0.41931% The Bank of Tokyo- million 2018 28, 2021 investment units with the aim of achieving long-term and stable growth. Mitsubishi UFJ, Ltd. Borrowing Sumitomo Mitsui Banking based on Corporation a borrowing agreement Development Bank of Japan with the lender Long- Inc. shown at left term Sumitomo Mitsui Trust Bank, as the creditor, Limited lump-sum Mitsubishi UFJ Trust and repayment, Banking Corporation unsecured, and Mizuho Bank, Ltd. ¥1,600 January 5, July 5, unguaranteed 0.74869% The Bank of Tokyo- million 2018 2027 Mitsubishi UFJ, Ltd. Sumitomo Mitsui Banking Corporation Development Bank of Japan Inc. ¥3,200 Total million (Note) If the due date is a non-business day, the due date shall be the following business day. If such day comes in the following month, the due date shall be the immediately preceding business day.

34 35

3) Acquisition of Properties 2. Overview of the Investment Corporation The Investment Corporation acquired properties listed below with proceeds from the issuance of new investment units through the public offering (public placement) and third-party allotment and (1) Unitholders’ Capital borrowings, etc. in accordance with the basic asset management policy set forth in the Articles of 8th period 9th period 10th period 11th period 12th period Incorporation. As of November As of May 31, As of November As of May 31, As of November 30, 2015 2016 30, 2016 2017 30, 2017 Total number of authorized investment (Units) 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 (UR-14) A-FLAG KITA SHINSAIBASHI units Total number of Type of assets Trust beneficiary interest (Units) 554,264 599,654 599,654 665,214 665,214 investment units issued Acquisition price ¥4,725 million (In millions Unitholders’ capital ¥150,770 ¥171,532 ¥171,532 ¥202,233 ¥202,233 Acquisition date December 1, 2017 of yen) Location 10-11, Minami Senba 3-chome, Chuo-ku, Osaka City, Osaka Number of unitholders (Persons) 6,526 6,502 6,359 6,656 6,871 Use Retail, office and parking Land area 627.13 m2 (2) Matters Relating to Investment Units Gross floor area 3,096.18 m2 The top 10 unitholders as of the end of the fiscal period under review are as follows: Number of units Percentage of total units issued (%) Structure SRC, steel framed / 7 floors above and 1 floor underground Name owned (Note) Month and year of March 2008 Japan Trustee Services Bank, Ltd. (Trust accounts) 156,980 23.59 completion Ownership Land: Owned The Master Trust Bank of Japan, Ltd. (Trust accounts) 90,637 13.62 Building: Owned Tokyu Land Corporation 61,913 9.30

Trust & Custody Services Bank, Ltd. (UR-15) DECKS Tokyo Beach (acquisition of 49% co-ownership interest) 27,343 4.11 Type of assets Trust beneficiary interest (Securities investment trust accounts) The Nomura Trust and Banking Co., Ltd. Acquisition price ¥12,740 million 25,716 3.86 (Investment accounts) Acquisition date January 5, 2018 STATE STREET BANK AND TRUST COMPANY 505012 Location 6-1, Daiba 1-chome, Minato-ku, Tokyo (Standing proxy: The Hongkong and Shanghai Banking 11,720 1.76 Use Retail, amusement place, factory and parking Corporation Limited. Tokyo office) 2 Land area 18,703.45 m State Street Bank & Trust Company Gross floor area 67,506.91 m2 (Standing proxy: The Hongkong and Shanghai Banking 7,955 1.19 Structure Steel framed / 8 floors above Corporation Limited. Tokyo office) THE BANK OF NEW YORK 133970 Month and year of June 1996 (Extended in November 2000) 7,016 1.05 completion (Standing proxy: Mizuho Bank, Ltd.) Ownership Land: Owned (49% co-ownership interest) STATE STREET BANK WEST CLIENT - TREATY 505234 6,944 1.04 Building: Owned (49% co-ownership interest) (Standing proxy: Mizuho Bank, Ltd.) DFA INTERNATIONAL REAL ESTATE SECURITIES (AA-12) Commercial Mall Hakata PORTFOLIO 6,675 1.00 Type of assets Trust beneficiary interest (Standing proxy: Citibank, N.A., Tokyo Branch) Acquisition price ¥6,100 million Total 402,899 60.56

Acquisition date January 5, 2018 (Note) The percentage of total units issued is calculated by rounding down to the second decimal place. Location 6-40, Tokojimachi 2-chome, Hakata-ku, Fukuoka City, Fukuoka

Use Department store and parking

Land area 10,686.42 m2 Gross floor area 13,848.76 m2 Structure Steel framed / 3 floors above Month and year of November 2005 completion Ownership Land: Owned Building: Owned

36 37 (3) Matters Relating to Officers, etc. (4) Asset Manager, Custodian Company, and Administrative Agent 1) Executive Director, Supervisory Directors, and Independent Auditor during the Fiscal Period under Review Total amount of compensation Consignment classification Name for each position during the Title Name of officer, etc. Major concurrent post, etc. business period under review Asset manager TLC REIT Management Inc. (In thousands of yen) Asset custodian Sumitomo Mitsui Trust Bank, Limited Executive TLC REIT Management Inc., Director Nariaki Hosoi Managing Director, Chief Division Officer ― General administrator (administration of the unitholders’ registry, etc.) Sumitomo Mitsui Trust Bank, Limited (Note 1) of Activia Management Division General administrator (accounting data processing, etc.) Sumitomo Mitsui Trust Bank, Limited Yamada, Goya and Suzuki Law Office Yonosuke Yamada Supervisory Managing Partner General administrator (administration related to the operation of Sumitomo Mitsui Trust Bank, Limited Directors 3,300 administrative instruments) (Note 1) Ariga Yoshinori Accounting Office Yoshinori Ariga Mitsubishi UFJ Trust and Banking Managing Partner General administrator (administration related to investment corporation Corporation bonds) Independent Ernst & Young ShinNihon 12,500 Sumitomo Mitsui Trust Bank, Limited ― Auditor LLC (Note 2) (Note 1) Executive Directors or Supervisory Directors do not hold any investment units of the Investment Corporation under their or another person’s name. Supervisory Directors may serve as directors of companies other than those mentioned above, but there are no mutual business interests whatsoever between such companies and the Investment Corporation. (Note 2) Compensation for the Independent Auditor includes the audit fees for financial statements prepared in English.

2) Policy Regarding the Dismissal of or Refusal to Reappoint the Accounting Auditor The Investment Corporation will dismiss the accounting auditor in conformity with the provisions of the Investment Trust Act and determine not to reappoint the accounting auditor through a resolution of a general meeting of unitholders while comprehensively considering various factors.

3) Disciplinary Action Ordering a Suspension of Operations to Which the Independent Auditor was Subject the past two years Details of the disciplinary action announced by the Financial Services Agency as of December 22, 2015 are as follows: (i) Target of the disciplinary action Ernst & Young ShinNihon LLC

(ii) Contents of the disciplinary action - Suspension from accepting new engagements for three months (from January 1, 2016 to March 31, 2016) - Ordered to improve its operations (Improvement of audit management systems) Note: In addition, commencement of trial procedures for the administrative monetary penalty payment order of approximately ¥2.1 billion was decided on the same day.

(iii) Reasons for the action - Seven certified public accountants from Ernst & Young ShinNihon LLC (“the firm”) had, in negligence of due care, attested to financial statements of TOSHIBA CORPORATION for fiscal 2009, fiscal 2011 and fiscal 2012 (for the years ended March 31, 2010, 2012 and 2013) that contained material misstatements. - The firm’s operations were deemed significantly inappropriate.

38 39 3. Assets of the Investment Corporation (3) Details of Assets, such as Real Estate, Incorporated into the Portfolio (1) Composition of Assets of the Investment Corporation A summary of properties owned and under management by the Investment Corporation as of the end of the 11th period 12th period fiscal period under review is as follows: As of May 31, 2017 As of November 30, 2017 Assessed value at Book value at end Total leasable area end of period of period Type of assets Category Total amount of Total amount of Property name Location Asset type (m2) (In millions of (Note 1) yen) (In millions of yen) assets owned Ratio to total assets assets owned Ratio to total assets (Note 3) (In millions of yen) (%) (In millions of yen) (%) (Note 2) Tokyu Plaza Omotesando Trust beneficiary (Note 1) (Note 1) 30-3 Jingu-mae 4-chome, Shibuya-ku, Tokyo 4,904.94 58,200 44,836 Harajuku (Note 4) interests 14-3 Nagatacho 2-chome, Chiyoda-ku, Trust beneficiary Urban Retail Properties ― ― ― ― Tokyu Plaza Akasaka (Note 4) 16,579.26 15,000 11,787 Tokyo interests Trust beneficiary Tokyo Office Properties ― ― ― ― Q plaza EBISU 8-12 Ebisu 1-chome, Shibuya-ku, Tokyo 4,024.88 11,100 8,288 Real estate interests Trust beneficiary Activia Account Properties ― ― ― ― Shinbashi Place 12-9 Shinbashi 1-chome, Minato-ku, Tokyo 9,156.01 20,500 20,283 interests Kyoto Karasuma Parking 678 Motohonenjicho, Nakagyo-ku, Kyoto Trust beneficiary Subtotal ― ― ― ― 21,616.04 11,100 8,767

Building City, Kyoto interests Trust beneficiary A-FLAG AKASAKA 3-6 Akasaka 4-chome, Minato-ku, Tokyo 2,280.22 3,730 3,085 Urban Retail Properties 154,110 36.2 153,842 36.0 interests Kobe Kyu Kyoryuchi Trust beneficiary 25 Kyomachi, Chuo-ku, Kobe City, Hyogo 19,653.90 26,800 20,964 Tokyo Office Properties 176,243 41.4 175,846 41.2 25Bankan interests Real estate in trust 1, Minami-Yonjo-Nishi 5-chome, Chuo-ku, Trust beneficiary A-FLAG SAPPORO 21,229.16 6,880 4,561 Activia Account Properties 77,476 18.2 77,256 18.1 Sapporo City, Hokkaido interests Trust beneficiary A-FLAG SHIBUYA 32-13, Udagawa-cho, Shibuya-ku, Tokyo 3,413.80 7,400 6,358 Subtotal 407,830 95.7 406,945 95.3 Urban Retail Properties interests 1-10 Shinsaibashi-suji 1-chome, Chuo-ku, Trust beneficiary Q plaza SHINSAIBASHI 2,820.23 14,400 13,460 Osaka City, Osaka interests Total real estate, etc. 407,830 95.7 406,945 95.3 4-40, Minami-Aoyama 5-chome, Minato- Trust beneficiary A-FLAG KOTTO DORI 2,656.53 4,780 4,408 ku, Tokyo interests Deposits and other assets 18,146 4.3 19,893 4.7 3-16, Minami-Aoyama 6-chome, Minato- Trust beneficiary A-FLAG BIJUTSUKAN DORI 2,055.97 4,760 4,717 ku, Tokyo interests A-FLAG DAIKANYAMA Trust beneficiary 425,977 100.0 426,838 100.0 11-6, Sarugakucho, Shibuya-ku, Tokyo 2,579.08 2,400 2,323 Total assets (Note 2) WEST interests (407,830) (95.7) (406,945) (95.3) Subtotal 112,970.02 187,050 153,842 Trust beneficiary (Note 1) The total amount of assets owned is based on the amounts on the balance sheets as of the end of each fiscal period (for real estate and real estate in trust, book value TLC Ebisu Building 18-18 Ebisu 1-chome, Shibuya-ku, Tokyo 7,342.60 9,860 7,355 less depreciation expenses), in accordance with the asset valuation method set forth in the Articles of Incorporation of the Investment Corporation. interests 15-1 Ebisu-minami 1-chome, Shibuya-ku, Trust beneficiary (Note 2) Total assets represent the amounts recorded on the balance sheets as of the end of each fiscal period. The figures in parentheses represent portions that practically A-PLACE Ebisu Minami 7,950.49 13,600 9,463 correspond to real estate owned in the object assets. Tokyo interests 23-15 Sendagaya 5-chome, Shibuya-ku, Trust beneficiary A-PLACE Yoyogi 3,106.17 4,610 3,938 Tokyo interests 11-3 Kita-Aoyama 2-chome, Minato-ku, Trust beneficiary (2) Major Assets Owned A-PLACE Aoyama 7,303.69 9,680 8,648 Tokyo interests Major assets owned by the Investment Corporation (the 10 largest properties by book value) as of the end 3-3 Higashi-Shinbashi 2-chome, Minato-ku, Trust beneficiary Luogo Shiodome 4,476.35 6,220 4,306 of the fiscal period under review are as follows: Tokyo interests Trust beneficiary Ratio of rental TAMACHI SQUARE (Land) 26-24 Shiba 5-chome, Minato-ku, Tokyo 1,287.96 2,770 2,362 Book value at end of Leasable area Leased area Occupancy rate interests

revenue to total 16-22 Minami Ikebukuro 1-chome, Trust beneficiary Property name period (m2) (m2) (%) Major use A-PLACE Ikebukuro 3,409.73 5,010 3,798 rental revenues Toshima-ku, Tokyo interests (In millions of yen) (Note 1) (Note 2) (Note 3) Trust beneficiary (%) A-PLACE Shinbashi 11-1 Shinbashi 4-chome, Minato-ku, Tokyo 5,052.14 6,670 5,732 interests 27-3, Nishigotanda 2-chome, Shinagawa-ku, Trust beneficiary Shiodome Building (Note 4) 71,427 28,136.05 28,044.75 99.7 12.0 Office A-PLACE Gotanda 4,028.69 6,930 5,583 Tokyo interests Tokyu Plaza Omotesando Trust beneficiary 44,836 4,904.94 4,904.94 100.0 8.5 Retail A-PLACE Shinagawa 8-40, Konan 1-chome, Minato-ku, Tokyo 2,986.36 4,300 3,795 Harajuku (Note 4) interests

Tokyo Office Properties Office Tokyo Trust beneficiary OSAKI WIZTOWER 11-1 Osaki 2-chome, Shinagawa-ku, Tokyo 7,193.28 14,500 10,809 Kobe Kyu Kyoryuchi 25Bankan 20,964 19,653.90 19,653.90 100.0 5.8 Retail interests Trust beneficiary Shiodome Building (Note 4) 2-20 Kaigan 1-chome, Minato-ku, Tokyo 28,136.05 74,550 71,427 20,283 9,156.01 9,156.01 100.0 (Note 5) interests Shinbashi Place Retail A-PLACE Ebisu Higashi Trust beneficiary 13-11 Higashi 3-chome, Shibuya-ku, Tokyo 4,010.69 7,680 7,150 (Note 5) interests Umeda Gate Tower 19,566 13,624.49 13,624.49 100.0 3.4 Office A-PLACE Shibuya Konnoh Trust beneficiary 3-1 Shibuya 3-chome, Shibuya-ku, Tokyo 2,983.36 5,340 4,981 (Note 5) interests 18,931 14,658.98 14,658.98 100.0 3.9 5-1 Nishigotanda 1-chome, Shinagawa-ku, Trust beneficiary A-PLACE Shinagawa Higashi Office A-PLACE Gotanda Ekimae 4,316.89 7,650 7,560 Tokyo interests Trust beneficiary Q plaza SHINSAIBASHI 13,460 2,820.23 2,820.23 100.0 2.5 Retail A-PLACE Shinagawa Higashi 7-18 Konan 1-chome, Minato-ku, Tokyo 14,658.98 19,500 18,931 interests Amagasaki Q’s MALL (Land) 12,113 27,465.44 27,465.44 100.0 2.8 Retail Subtotal 108,243.43 198,870 175,846

Tokyu Plaza Akasaka (Note 4) 11,787 16,579.26 16,526.52 99.7 5.1 Retail

Osaka Nakanoshima Building 11,052 20,229.20 20,229.20 100.0 4.1 Office

Total 244,423 157,228.50 157,084.46 99.9 — (Note 1) Total leasable area refers to leasable space for each property excluding properties for which we acquire only land, based on lease agreements for building or floor plans as of November 30, 2017 and leasable space for properties for which we acquire only land, based on lease agreements for land or land plans as of November 30, 2017. (Note 2) Leased area refers to the leased area of each property based on lease agreements as of November 30, 2017. For properties with master lease agreements, leased area refers to leased areas of each property and is actually leased based on sublease agreements with end-tenants. (Note 3) Occupancy rate refers to the percentage of total leased area for each property to total leasable area for each property as of November 30, 2017, rounding down to the first decimal place. (Note 4) As for Shiodome Building, Tokyu Plaza Omotesando Harajuku, and Tokyu Plaza Akasaka, the figures are in proportion to a pro rata share of our trust beneficiary co-ownership interest of each property (35%, 75% and 50%, respectively). (Note 5) Ratio of rental revenue to total rental revenues is not disclosed, as consent from tenants has not been obtained.

40 41 3-1 Shioe 1-chome, Amagasaki City, Hyogo Changes in key figures in the rental business (figures by property owned and under management by the Investment (main building) Trust beneficiary Amagasaki Q’s MALL (Land) 27,465.44 13,900 12,113 Corporation) 2-3 Shioe 1-chome, Amagasaki City, Hyogo interests (sports club) 11th period 12th period 428-2 Nakamozucho 3-cho, Kita-ku, Sakai Trust beneficiary icot Nakamozu 28,098.02 10,200 8,204 (From December 1, 2016 to May 31, 2017) (From June 1, 2017 to November 30, 2017) City, Osaka interests Number Occupancy Revenues related to Ratio of rental Number Occupancy Revenues related to Ratio of rental 11-1 Mizonokuchi 6-chome, Takatsu-ku, Trust beneficiary Property name

icot Mizonokuchi 14,032.05 3,250 2,646 of rate rent business revenue to total of rate rent business revenue to total Kawasaki City, Kanagawa interests Trust beneficiary tenants (%) (In millions of yen) rental revenues tenants (%) (In millions of yen) rental revenues icot Tama Center 35 Ochiai 1-chome, Tama City, Tokyo 5,181.58 3,810 2,681 interests (Note 1) (Note 2) (Note 3) (%) (Note 1) (Note 2) (Note 3) (%) 14-18 Kanayama 1-chome, Naka-ku, Trust beneficiary A-PLACE Kanayama 9,314.91 7,900 6,479 Tokyu Plaza Nagoya City, Aichi interests 2-2 Nakanoshima 2-chome, Kita-ku, Osaka Trust beneficiary Omotesando Harajuku 28 100.0 1,089 9.0 29 100.0 1,077 8.5 Osaka Nakanoshima Building 20,229.20 13,800 11,052 City, Osaka interests (Note 4) Trust beneficiary 6,209.79 icot Omori 8-2, Omorikita 1-chome, Ota-ku, Tokyo 6,590 5,694 Tokyu Plaza Akasaka interests (Note 5) 96 100.0 609 5.0 96 99.7 654 5.1 Activia Account Properties 777-2 Shimokuzawa, Chuo-ku, Sagamihara Trust beneficiary (Note 4) Market Square Sagamihara 15,152.42 5,020 4,757 City, Kanagawa interests Q plaza EBISU 4 100.0 268 2.2 4 100.0 273 2.2 1-9, Tsurunocho, Kita-ku, Osaka City, Trust beneficiary Umeda Gate Tower 13,624.49 21,000 19,566 Osaka interests Shinbashi Place 1 100.0 (Note 5) (Note 5) 1 100.0 (Note 5) (Note 5) 43 Honcho 4-chome, Naka-ku,Yokohama Trust beneficiary A-PLACE Bashamichi 9,775.50 4,500 4,060 Kyoto Karasuma City, Kanagawa interests 2 100.0 (Note 5) (Note 5) 2 100.0 (Note 5) (Note 5) Parking Building

Subtotal 149,083.40 89,970 77,256 A-FLAG AKASAKA 7 90.0 93 0.8 8 100.0 97 0.8 Total 370,296.85 475,890 406,945 Kobe Kyu Kyoryuchi 7 100.0 787 6.5 7 100.0 731 5.8 (Note 1) Total leasable area refers to leasable space for each property excluding properties for which we acquire only land, based on lease agreements for building or floor 25Bankan plans as of November 30, 2017 and leasable space for properties for which we acquire only land, based on lease agreements for land or land plans as of November 30, 2017. A-FLAG SAPPORO 18 100.0 437 3.6 18 100.0 629 4.9 (Note 2) The appraisal of each property is commissioned to the Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd., The Tanizawa Sogo Appraisal Co., Ltd., A-FLAG SHIBUYA 2 100.0 205 1.7 2 100.0 207 1.6 Japan Valuers Co., Ltd. or Morii Appraisal & Investment Consulting, Inc. Assessed value at end of period stands for the appraised value described in each real estate

appraisal report, with November 30, 2017 taken as the point of evaluation. Urban Retail Properties Q plaza (Note 3) Book value at end of period stands for the book value minus depreciation as of November 30, 2017, rounded down to the nearest ¥ million. 6 100.0 310 2.6 6 100.0 314 2.5 (Note 4) As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, and Shiodome Building, the figures are in proportion to a pro rata share of our trust beneficiary co- SHINSAIBASHI ownership interest of each property (75%, 50% and 35%, respectively). A-FLAG KOTTO (Note 5) The calculation of total leasable area for icot Omori includes part of an external bicycle parking lot (approximately 21 m2) and part of a common area on the second 7 100.0 94 0.8 7 100.0 106 0.8 floor (approximately 28 m2). DORI A-FLAG 3 100.0 122 1.0 3 100.0 125 1.0 BIJUTSUKAN DORI A-FLAG DAIKANYAMA 1 100.0 (Note 5) (Note 5) 1 100.0 (Note 5) (Note 5) WEST Subtotal 182 99.8 — — 184 100.0 — — TLC Ebisu Building 12 100.0 295 2.4 12 100.0 291 2.3 A-PLACE Ebisu 11 100.0 350 2.9 11 100.0 356 2.8 Minami A-PLACE Yoyogi 4 100.0 122 1.0 4 100.0 128 1.0 A-PLACE Aoyama 8 100.0 287 2.4 8 100.0 296 2.3 Luogo Shiodome 6 100.0 168 1.4 7 100.0 167 1.3 TAMACHI SQUARE 1 100.0 62 0.5 1 100.0 62 0.5 (Land) A-PLACE Ikebukuro 1 100.0 (Note 5) (Note 5) 1 100.0 (Note 5) (Note 5)

A-PLACE Shinbashi 10 100.0 189 1.6 10 100.0 197 1.6 A-PLACE Gotanda 11 100.0 166 1.4 11 100.0 177 1.4 A-PLACE Shinagawa 8 100.0 113 0.9 7 100.0 113 0.9 OSAKI WIZTOWER 5 100.0 332 2.7 5 100.0 339 2.7 Shiodome Building 38 99.9 1,525 12.6 38 99.7 1,522 12.0

Tokyo Office Properties Office Tokyo (Note 4) A-PLACE Ebisu 9 100.0 164 1.4 9 100.0 166 1.3 Higashi A-PLACE Shibuya 3 100.0 (Note 5) (Note 5) 3 100.0 (Note 5) (Note 5) Konnoh A-PLACE Gotanda 10 100.0 172 1.4 10 100.0 181 1.4 Ekimae A-PLACE Shinagawa 9 100.0 203 1.7 9 100.0 495 3.9 Higashi Subtotal 146 100.0 — — 146 99.9 — —

42 43 Amagasaki Q’s 1 100.0 350 2.9 1 100.0 353 2.8 4. Capital Expenditure for Assets under Management MALL (Land) icot Nakamozu 2 100.0 310 2.6 2 100.0 310 2.4 (1) Scheduled Capital Expenditure

icot Mizonokuchi 1 100.0 (Note 5) (Note 5) 1 100.0 (Note 5) (Note 5) The following table shows major capital expenditure for renovation works, etc., scheduled for icot Tama Center 9 100.0 146 1.2 9 100.0 147 1.2 the properties owned by the Investment Corporation at the end of the fiscal period under A-PLACE Kanayama 20 100.0 283 2.3 20 100.0 288 2.3 review. The estimated construction cost below includes the portion expensed for accounting Osaka Nakanoshima purposes. 40 96.9 517 4.3 40 100.0 515 4.1 Building Estimated construction cost icot Omori 9 100.0 231 1.9 9 100.0 238 1.9 (Millions of yen) Market Square Name of real property Activia Account Properties 3 100.0 (Note 5) (Note 5) 3 100.0 (Note 5) (Note 5) Purpose Scheduled period Payment Total Sagamihara (Location) Total for the amount Umeda Gate Tower 11 100.0 414 3.4 13 100.0 436 3.4 amount period paid A-PLACE Bashamichi 32 100.0 174 1.4 33 100.0 191 1.5 Shinbashi Place Office From January 2018 Subtotal 128 99.6 — — 131 100.0 — — – – (Minato, Tokyo) commercialization to May 2018 700 Total 456 99.8 12,107 100.0 461 100.0 12,720 100.0 A-FLAG SAPPORO Replacement of From November 2017 (Note 1) The number of tenants refers to the total number of tenants for each property at the end of each fiscal period, based on each lease agreement. In the case where a master 64 – – lease agreement is in place, the number of end tenants is counted. In the case of a property for which only land is acquired, the total number of tenants on the land is (Sapporo, Hokkaido) customer elevators to May 2018 counted. Repair and replacement (Note 2) Occupancy rate refers to the percentage of leased area to leasable area for each property as of the end of each fiscal period, rounding down to the first decimal Osaka Nakanoshima of substation equipment From December 2016 place. Building – – (control equipment, etc.) to March 2018 29 (Note 3) Rental revenue includes other rental revenue. (Osaka, Osaka) (Third period) (Note 4) As for Tokyu Plaza Omotesando Harajuku, Tokyu Plaza Akasaka, and Shiodome Building, the figures are in proportion to a pro rata share of our trust beneficiary co-ownership interest of each property (75%, 50% and 25% (to December 1, 2016 in 11th period) or 35% (from December 2, 2016 to May 31, 2017 in 11th period Replacement of air and 12th period), respectively). A-FLAG SAPPORO conditioning units of From April 2018 – – (Note 5) Rental revenue and the ratio of rental revenue to total rental revenues are not disclosed, as consent from tenants has not been obtained. (Sapporo, Hokkaido) new annex guest room to May 2018 23 systems

(4) Details of Specified Transaction Replacement of total A-FLAG SAPPORO From April 2018 heat exchangers in new – – The outstanding contract amount and fair value of specified transactions as of the end of the fiscal (Sapporo, Hokkaido) to May 2018 20 annex period under review are as follows: Replacement of heater (In thousands of yen) A-FLAG SAPPORO From April 2018 units in parking lot – – (Sapporo, Hokkaido) to May 2018 19 Notional contract amount (Note 1) Fair value systems Classification Transaction A-FLAG Over 1 year (Note 2) (Note 3) Replacement of DAIKANYAMA From April 2018 automatic fire alarm – – WEST to May 2018 17 Interest rate swaps equipment Over-the-counter 24,400,000 19,400,000 72,117 (Shibuya, Tokyo) (Receive floating pay fixed) A-FLAG SAPPORO Replacement of boiler From April 2018 17 – – Total 24,400,000 19,400,000 72,117 (Sapporo, Hokkaido) room heater units to May 2018 A-PLACE Shibuya Installation of air (Note 1) The contract amount of interest rate swaps is presented based on its notional principal. From January 2018 Konnoh conditioning units in – – (Note 2) The statement of the fair value is omitted for those transactions that satisfy requirements for special treatment based on accounting standards for financial to May 2018 13 instruments. (Shibuya, Tokyo) common area (Note 3) Fair value is based on prices, etc. indicated by partner financial institutions. Osaka Nakanoshima Exchange of electrical From September 2017 Building switchboards (Second – – to March 2018 13 (Osaka, Osaka) period) (5) Other Assets Tokyu Plaza Construction work There are no major incorporations of other specified assets that are the principal investment targets From January 2018 12 Omotesando Harajuku involving pop-up store – – to February 2018 of the Investment Corporation as of the end of the fiscal period under review. (Shibuya, Tokyo) zone (Note)

A-PLACE Ebisu Restroom appearance From November 2017 Minami enhancement (Second – – to December 2017 11 (Shibuya, Tokyo) period) (Note) The shown construction cost with regard to Tokyu Plaza Omotesando Harajuku is the amount equivalent to the ratio of the Investment Corporation’s co- ownership interests of real estate trust beneficiary (75%).

44 45 (2) Capital Expenditure during the Period 5. Expenses and Liabilities The following table shows major construction works for owned assets conducted by the Investment Corporation that falls into capital expenditure during the fiscal period under review. Capital (1) Details of Expenses Related to Asset Management, etc. expenditure amounted to ¥303 million for the fiscal period, and repair and maintenance expenses that (In thousands of yen) were accounted for as expense in the period came to ¥304 million. On aggregate, construction work of 11th period 12th period ¥608 million was carried out during the fiscal period. Item (From December 1, 2016 (From June 1, 2017 to May 31, 2017) to November 30, 2017) Name of real property Construction cost (a) Asset management fees (Note) 915,853 1,013,473 Purpose Period (Location) (Millions of yen) (b) Asset custody fees 11,446 11,947 Osaka Nakanoshima Repair and replacement of From March 2017 Building 50 (c) Administrative service fees 29,098 31,652 air conditioning units to October 2017 (Osaka, Osaka) (d) Directors’ compensation 3,300 3,300

Restroom appearance (e) Other operating expenses 69,516 76,091 A-PLACE Ebisu Minami From May 2017 enhancement 17 (Shibuya, Tokyo) to November 2017 (Second period) Total 1,029,214 1,136,464 (Note) Asset management fees contain acquisition fees that were included in the book value of acquired properties (11th fiscal period: ¥263,990 thousand). Replacement of air A-FLAG SAPPORO From October 2017 conditioning units of main 17 (Sapporo, Hokkaido) to November 2017 building systems

Exchange work of total heat TLC Ebisu Building From September 2017 exchanger rotors for air 12 (Shibuya, Tokyo) to October 2017 conditioning

Replacement work of main A-FLAG SAPPORO horizontal drainage piping in From June 2017 11 (Sapporo, Hokkaido) the lowest floor of the new to September 2017 annex Replacement of air A-FLAG SAPPORO conditioning units of From November 2017 11 (Sapporo, Hokkaido) electrical room systems in to November 2017 main building

Other 184

Total 303

(3) Money Accumulated for Long-Term Repair Plan Not applicable

46 47 Category Average interest rate Balance as of May 31, 2017 Balance as of November 30, 2017 Repayment Use of Drawdo wn dat e (%) Maturity date Remarks (2) Borrowings Lender (In millions of yen) (In millions of yen) method funds (Note 1) The status of borrowings from financial institutions as of November 30, 2017 is as follows: June 13, 2012 3,000 － 0.953 June 13, 2017 Category Average interest rate Balance as of May 31, 2017 Balance as of November 30, 2017 Repayment Use of Drawdo wn dat e (%) Maturity date Remarks June 13, 2012 3,000 3,000 1.063 June 13, 2018 Lender (In millions of yen) (In millions of yen) method funds (Note 1) April 19, 2013 800 800 0.919 April 19, 2019 March 16, 2017 1,250 － 0.160 September 29, 2017 (Note 3) Sumitomo Mitsui Trust Bank, (Note 3) December 19, 2013 1,060 1,060 1.080 December 19, 2020 March 16, 2017 1,250 1,250 0.163 March 16, 2018 Limited January 10, 2014 160 160 0.938 January 10, 2020 September 29, 2017 － 1,250 0.170 June 1, 2018 (Note 4) January 10, 2014 1,340 1,340 1.079 January 10, 2021 March 16, 2017 1,250 － 0.160 September 29, 2017 Mitsubishi UFJ Trust and (Note 3) July 9, 2014 600 600 0.725 January 10, 2020 (Note 4) March 16, 2017 1,250 1,250 0.163 March 16, 2018 Banking Corporation January 9, 2015 780 780 0.498 January 9, 2018 － September 29, 2017 1,250 0.170 June 1, 2018 Lump-sum (Note 4) Unsecured, January 9, 2015 500 500 0.523 January 9, 2019 repayment non-guaranteed March 16, 2017 1,250 － 0.160 September 29, 2017 (Note 3) (Note 3) January 9, 2015 340 340 0.544 July 9, 2019 Mizuho Bank, Ltd. March 16, 2017 1,250 1,250 0.163 March 16, 2018

Short-term loans payable January 9, 2015 840 840 0.737 January 9, 2022 September 29, 2017 － 1,250 0.170 June 1, 2018 (Note 4) June 15, 2015 1,500 1,500 0.947 June 15, 2022 March 16, 2017 1,250 － 0.160 September 29, 2017 The Bank of Tokyo-Mitsubishi (Note 3) Mitsubishi UFJ Trust and June 15, 2015 1,500 1,500 1.063 June 15, 2023 (Note 4) March 16, 2017 1,250 1,250 0.163 March 16, 2018 UFJ, Ltd. Banking Corporation 0.613 September 30, 2015 1,250 1,250 March 30, 2023 September 29, 2017 － 1,250 0.170 June 1, 2018 (Note 4) (Note 5)

Subtotal 10,000 10,000 December 16, 2015 200 200 0.657 June 15, 2022 (Note 3) April 19, 2013 400 400 0.919 April 19, 2019 December 16, 2015 1,200 1,200 0.854 June 17, 2024

December 19, 2013 530 530 1.080 December 19, 2020 January 12, 2016 1,400 1,400 0.784 January 12, 2024 (Note 3) 0.332 January 10, 2014 80 80 0.938 January 10, 2020 June 13, 2016 1,500 1,500 June 17, 2024 （Note 5） (Note 4) January 10, 2014 670 670 1.079 January 10, 2021 0.369 June 13, 2016 1,500 1,500 December 13, 2024 （Note 5） July 9, 2014 300 300 0.725 January 10, 2020 (Note 4) September 21, 2016 1,200 1,200 0.541 March 21, 2025 January 9, 2015 390 390 0.498 January 9, 2018 September 21, 2016 2,100 2,100 0.619 March 19, 2026 January 9, 2015 250 250 0.523 January 9, 2019 (Note 3) October 6, 2016 800 800 0.385 April 6, 2023 January 9, 2015 170 170 0.544 July 9, 2019 March 16, 2017 1,800 1,800 0.702 September 16, 2025 Sumitomo Mitsui Banking January 9, 2015 420 420 0.737 January 9, 2022 (Note 3) － Corporation June 13, 2017 1,250 0.464 June 15, 2023 December 16, 2015 100 100 0.657 June 15, 2022 (Note 4) June 13, 2017 － 1,750 0.710 December 14, 2026 December 16, 2015 625 625 0.754 June 15, 2023 June 13, 2012 3,000 － 0.953 June 13, 2017 December 16, 2015 600 600 0.854 June 17, 2024 June 13, 2012 3,000 3,000 1.063 June 13, 2018 January 12, 2016 700 700 0.784 January 12, 2024 (Note 4) April 19, 2013 800 800 0.919 April 19, 2019 September 21, 2016 600 600 0.541 March 21, 2025 (Note 3) December 19, 2013 1,060 1,060 1.080 December 19, 2020 September 21, 2016 1,050 1,050 0.619 March 19, 2026 (Note 3) January 10, 2014 160 160 0.938 January 10, 2020 October 6, 2016 400 400 0.385 April 6, 2023 January 10, 2014 1,340 1,340 1.079 January 10, 2021 December 13, 2016 6,000 6,000 0.698 June 12, 2026 (Note 4) July 9, 2014 600 600 0.725 January 10, 2020 (Note 4) March 16, 2017 900 900 0.702 September 16, 2025 January 9, 2015 780 780 0.498 January 9, 2018 June 13, 2012 3,000 － 0.953 June 13, 2017 (Note 3) January 9, 2015 500 500 0.523 January 9, 2019 June 13, 2012 3,000 3,000 1.063 June 13, 2018 (Note 3) 0.683 January 9, 2015 340 340 0.544 July 9, 2019 March 29, 2013 5,000 5,000 March 31, 2018 (Note 4) (Note 5) January 9, 2015 840 840 0.737 January 9, 2022 April 19, 2013 800 800 0.919 April 19, 2019 June 15, 2015 1,500 1,500 0.947 June 15, 2022 December 19, 2013 1,060 1,060 1.080 December 19, 2020 Lump-sum Unsecured, repayment (Note 3) non-guaranteed June 15, 2015 1,500 1,500 1.063 June 15, 2023 Lump-sum (Note 4) Unsecured, January 10, 2014 160 160 0.938 January 10, 2020 Mizuho Bank, Ltd. 0.613 repayment non-guaranteed September 30, 2015 1,250 1,250 March 30, 2023 Long-term loans payable (Note 2) (Note payable loans Long-term January 10, 2014 1,340 1,340 1.079 January 10, 2021 (Note 5) December 16, 2015 200 200 0.657 June 15, 2022 July 9, 2014 600 600 0.725 January 10, 2020 (Note 4) (Note 3)

Long-term loans payable (Note 2) (Note payable loans Long-term December 16, 2015 1,200 1,200 0.854 June 17, 2024 January 9, 2015 780 780 0.498 January 9, 2018 January 12, 2016 1,400 1,400 0.784 January 12, 2024 January 9, 2015 500 500 0.523 January 9, 2019 (Note 3) 0.332 June 13, 2016 1,500 1,500 June 17, 2024 January 9, 2015 340 340 0.544 July 9, 2019 （Note 5） (Note 4) 0.369 January 9, 2015 840 840 0.737 January 9, 2022 June 13, 2016 1,500 1,500 December 13, 2024 （Note 5） June 15, 2015 1,500 1,500 0.947 June 15, 2022 September 21, 2016 1,200 1,200 0.541 March 21, 2025 Sumitomo Mitsui Trust Bank, June 15, 2015 1,500 1,500 1.063 June 15, 2023 (Note 4) September 21, 2016 2,100 2,100 0.619 March 19, 2026 Limited 0.613 (Note 3) September 30, 2015 1,250 1,250 March 30, 2023 (Note 5) October 6, 2016 800 800 0.385 April 6, 2023 December 16, 2015 200 200 0.657 June 15, 2022 March 16, 2017 1,800 1,800 0.702 September 16, 2025 (Note 3) December 16, 2015 1,200 1,200 0.854 June 17, 2024 June 13, 2017 － 1,250 0.464 June 15, 2023 (Note 4) January 12, 2016 1,400 1,400 0.784 January 12, 2024 June 13, 2017 － 1,750 0.710 December 14, 2026 0.332 June 13, 2016 1,500 1,500 June 17, 2024 June 13, 2012 3,000 － 0.953 June 13, 2017 （Note 5） (Note 4) 0.369 June 13, 2012 3,000 3,000 1.063 June 13, 2018 June 13, 2016 1,500 1,500 December 13, 2024 （Note 5） April 19, 2013 800 800 0.919 April 19, 2019 July 1, 2016 4,100 4,100 0.168 January 9, 2018 (Note 3) December 19, 2013 1,060 1,060 1.080 December 19, 2020 September 21, 2016 1,200 1,200 0.541 March 21, 2025 January 10, 2014 160 160 0.938 January 10, 2020 September 21, 2016 2,100 2,100 0.619 March 19, 2026 (Note 3) January 10, 2014 1,340 1,340 1.079 January 10, 2021 October 6, 2016 800 800 0.385 April 6, 2023 July 9, 2014 600 600 0.725 January 10, 2020 (Note 4) March 16, 2017 1,800 1,800 0.702 September 16, 2025 January 9, 2015 780 780 0.498 January 9, 2018 June 13, 2017 － 1,250 0.464 June 15, 2023 (Note 4) January 9, 2015 500 500 0.523 January 9, 2019 June 13, 2017 － 1,750 0.710 December 14, 2026 (Note 3) January 9, 2015 340 340 0.544 July 9, 2019 January 9, 2015 840 840 0.737 January 9, 2022

June 15, 2015 1,500 1,500 0.947 June 15, 2022

The Bank of Tokyo-Mitsubishi June 15, 2015 1,500 1,500 1.063 June 15, 2023 (Note 4) UFJ, Ltd. 0.613 September 30, 2015 1,250 1,250 March 30, 2023 (Note 5) December 16, 2015 200 200 0.657 June 15, 2022 (Note 3) December 16, 2015 1,200 1,200 0.854 June 17, 2024

January 12, 2016 1,400 1,400 0.784 January 12, 2024 0.332 June 13, 2016 1,500 1,500 June 17, 2024 （Note 5） (Note 4) 0.369 June 13, 2016 1,500 1,500 December 13, 2024 （Note 5） September 21, 2016 1,200 1,200 0.541 March 21, 2025

September 21, 2016 2,100 2,100 0.619 March 19, 2026 (Note 3) October 6, 2016 800 800 0.385 April 6, 2023

March 16, 2017 1,800 1,800 0.702 September 16, 2025

June 13, 2017 － 1,250 0.464 June 15, 2023 (Note 4) June 13, 2017 － 1,750 0.710 December 14, 2026 22

48 49

Category Average interest rate Balance as of May 31, 2017 Balance as of November 30, 2017 Repayment Use of Investment Corporation Bonds Drawdo wn dat e (%) Maturity date Remarks Lender (In millions of yen) (In millions of yen) method funds (Note 1) Balance as of Balance as of June 13, 2012 6,000 6,000 1.191 June 13, 2019 May 31, November Interest Maturity Repayment Name of bonds Issuance date 2017 30, 2017 rate Use of proceeds Remarks April 19, 2013 400 400 0.919 April 19, 2019 date method (In millions (In millions (%) December 19, 2013 530 530 1.080 December 19, 2020 (Note 3) of yen) of yen) January 10, 2014 80 80 0.938 January 10, 2020 Repayment of Unsecured The 1st Unsecured Investment April 25, April 25, Lump sum January 10, 2014 670 670 1.079 January 10, 2021 4,000 4,000 0.370 outstanding and Corporation Bond 2014 2019 (Note) July 9, 2014 300 300 0.725 January 10, 2020 (Note 4) loans payable unguaranteed Repayment of Unsecured January 9, 2015 390 390 0.498 January 9, 2018 The 2nd Unsecured April 21, April 21, Lump sum 2,000 2,000 0.297 outstanding and January 9, 2015 250 250 0.523 January 9, 2019 Investment Corporation Bond 2015 2020 (Note) loans payable unguaranteed January 9, 2015 170 170 0.544 July 9, 2019 Development Bank of Japan Inc. Repayment of Unsecured The 3rd Unsecured April 21, April 21, Lump sum January 9, 2015 420 420 0.737 January 9, 2022 (Note 3) 2,000 2,000 0.726 outstanding and Investment Corporation Bond 2015 2025 (Note) December 16, 2015 100 100 0.657 June 15, 2022 loans payable unguaranteed December 16, 2015 625 625 0.754 June 15, 2023 Repayment of Unsecured The 4th Unsecured Investment February 3, February 3, Lump sum 2,000 2,000 0.770 outstanding and December 16, 2015 600 600 0.854 June 17, 2024 Corporation Bond 2016 2026 (Note) loans payable unguaranteed January 12, 2016 700 700 0.784 January 12, 2024 (Note 4) Repayment of Unsecured The 5th Unsecured Investment February 2, January 31, Lump sum September 21, 2016 600 600 0.541 March 21, 2025 4,000 4,000 0.001 outstanding and Corporation Bond 2017 2020 (Note) September 21, 2016 1,050 1,050 0.619 March 19, 2026 loans payable unguaranteed (Note 3) October 6, 2016 400 400 0.385 April 6, 2023 Repayment of Unsecured The 6th Unsecured Investment February 2, February 2, Lump sum 1,000 1,000 0.480 outstanding and March 16, 2017 900 900 0.702 September 16, 2025 Corporation Bond 2017 2027 (Note) loans payable unguaranteed August 29, 2014 1,500 1,500 0.510 August 29, 2019 Repayment of Unsecured March 31, 2015 2,000 2,000 0.685 March 31, 2022 The 7th Unsecured Investment February 2, February 2, Lump sum Mizuho Trust & Banking Lump-sum Unsecured, 1,000 1,000 0.810 outstanding and Co., Ltd. 0.029 repayment non-guaranteed Corporation Bond 2017 2032 (Note) June 30, 2016 1,200 1,200 June 28, 2019 loans payable unguaranteed （Note 5） March 31, 2017 2,000 2,000 0.414 March 29, 2024 Total 16,000 16,000 March 31, 2015 1,500 1,500 0.525 March 31, 2020 Resona Bank, Limited. Long-term loans payable (Note 2) (Note payable loans Long-term (Note) The Investment Corporation may repurchase and cancel bonds at any time after the date of payment unless otherwise specified by the Japan Securities Depository Center, Inc. March 31, 2017 1,500 1,500 0.414 March 29, 2024

March 31, 2015 1,000 1,000 0.525 March 31, 2020 The Bank of Fukuoka, Ltd. March 31, 2017 1,000 1,000 0.414 March 29, 2024 (3) Short-Term Investment Corporation Bonds The Gunma Bank, Ltd. March 31, 2015 500 500 0.525 March 31, 2020 Not applicable August 29, 2014 1,500 1,500 0.510 August 29, 2019 Shinkin Central Bank March 31, 2015 500 500 0.685 March 31, 2022 (Note 4) March 31, 2017 500 500 0.414 March 29, 2024 (4) Subscription Rights for New Investment Units March 31, 2015 500 500 0.525 March 31, 2020 Not applicable 0.029 The Norinchukin Bank June 30, 2016 1,200 1,200 June 28, 2019 （Note 5） March 31, 2017 500 500 0.414 March 29, 2024 6. Buying and Selling during the Period Nippon Life Insurance Company March 31, 2017 500 500 0.250 March 31, 2021

Tokio Marine & Nichido Fire March 31, 2017 400 400 0.306 March 31, 2022 Insurance Co., Ltd. (1) Buying and Selling, etc., of Real Estate and Asset-Backed Securities, etc., Infrastructure Assets, etc. The 77 Bank, Ltd. March 31, 2017 400 400 0.306 March 31, 2022 and Infrastructure-Related Assets Taiyo Life Insurance Company March 31, 2017 500 500 0.360 September 29, 2023 Not applicable Mitsui Sumitomo Insurance March 31, 2017 500 500 0.360 September 29, 2023 Company, Limited Subtotal 170,150 170,150 (2) Buying and Selling, etc. of Other Assets Total 180,150 180,150 (Note 1) The average interest rate of borrowings with floating interest rates is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest third Not applicable. In addition, the Investment Corporation’s assets other than the above-mentioned real decimal place. estate and asset-backed securities are mostly comprised of direct bank deposits and bank deposits in (Note 2) Long-term loans payable includes long-term borrowings to be repaid within a year. trust. (Note 3) Proceeds from the borrowings are used to acquire real estate trust beneficiary interests and pay for their related expenses. (Note 4) Proceeds from borrowings are used to repay existing loans payable. (Note 5) To hedge the risks arising from interest rate fluctuations, API has entered into interest rate swap agreements. Therefore, the figures reflect the effect of interest rate swaps (3) Survey of Prices, etc. of Specified Assets (fixation of interest rates). 1) Real Estate Not applicable

2) Others Not applicable

(4) Transactions between Interested Parties Not applicable

50 51 Commissions Paid 7. Accounting Status Breakdown of transactions with interested parties Total amount (A) (B) / (A) Category Amount (B) (In thousands of yen) Paid to (%) (In thousands of yen) (1) Assets, Liabilities, Principal, and Profit and Loss Tokyu Community Corp. 157,401 42.1 Please refer to “II. Balance Sheets,” “III. Statements of Operations,” “IV. Statements of Changes in Tokyu Land SC Management Property management fee 374,287 105,563 28.2 Corporation Unitholders’ Equity,” “V. Statements of Cash Distributions” and “VII. Notes to Financial Statements.” Tokyu Land Corporation 70,371 18.8 Building management fee 615,205 Tokyu Community Corp. 510,696 83.0 Tokyu Community Corp. 5,748 49.3 (2) Changes in the Calculation Method of Depreciation Expenses Tokyu Land SC Management Construction management fee 11,669 4,136 35.4 Corporation Not applicable Tokyu Land Corporation 1,073 9.2 Tokyu Community Corp. 4,417 7.2 Other management operation 61,563 Tokyu Land SC Management expenses 3,375 5.5 (3) Changes in the Evaluation Method of Real Estate, etc. and Infrastructure Assets, etc. Corporation Tokyu Community Corp. 63,961 24.2 Not applicable Tokyu Land SC Management Other lease business expenses 264,192 2,556 1.0 Corporation HANDS LAB INC. 821 0.3

(Note 1) The term “Interested parties” refers to interested parties of Asset Management Companies as stipulated by Article 201, Paragraph 1 of the Investment Trust Act, Article 123 of the Enforcement Ordinances of the Act on Investment Trust and Investment Corporation of Japan and Article 26, Paragraph 1, Item 27 of the Regulations Concerning Investment Reports of Investment Trusts and Investment Corporations, issued by The Investment Trusts Association, Japan. (Note 2) Other than commission paid as referred to above, construction works ordered to interested parties are as follows: Tokyu Community Corp. ¥80,850 thousand Tokyu Homes Corporation ¥12,137 thousand Tokyu Re・design Corporation ¥8,522 thousand Tokyu Land SC Management Corporation ¥3,248 thousand Ishikatsu Exterior Inc. ¥1,750 thousand Tokyu Land Corporation ¥1,099 thousand

(5) Transactions between the Asset Manager in Other Businesses of the Asset Manager No relevant matter exists under this subject as the asset manager (TLC REIT Management Inc.) does not engage in any other business such as the first- or second-type financial instruments businesses under the Financial Instruments and Exchange Act (or the securities business under the former Securities and Exchange Act), the building lots and buildings transaction business, or the real estate joint enterprise.

52 53 8. Other

(1) Beneficiary Certificates of Investment Trusts, etc. Set Up by the Company Not applicable

(2) Announcements 1) The fourth unitholders’ meeting was held on August 10, 2017. The main summary of matters that were approved at the unitholders’ meeting was as follows: Agenda Summary Agendum 1: Partial Amendment to the Articles The Articles of Incorporation were amended with regard to the of Incorporation following matters as per the original proposal: • In connection with the payment of remuneration for the independent auditor, a necessary change was made to reflect that the term in respect of the deadline for the said payment shall be commenced upon the request of the independent auditor, and a formal revision was made to the wording. • In addition to the above, a revision was made to clarify the provision and the Supplementary Provision that was no longer necessary was deleted. Agendum 2: Election of One Executive Nariaki Hosoi was elected as Executive Director as per the original Director proposal. Agendum 3: Election of One Alternate Kazuyuki Murayama was elected as Alternate Executive Director as Executive Director per the original proposal. Agendum 4: Election of Two Supervisory Yonosuke Yamada and Yoshinori Ariga were elected as Supervisory Directors Directors as per the original proposal.

2) Here is an outline of major agreements that the Board of Directors of the Investment Corporation approved to conclude and modify for the fiscal period under review. Date of approval Item Summary We entrusted the underwriters (Note) with general Conclusion of an underwriting administration related to the issuance of new investment units November 28, 2017 agreement for new investment and the secondary offering of investment units, which was units approved by the Board of Directors of the Investment Corporation on the same day (Note) The underwriters in Japan are Nomura Securities Co., Ltd., Daiwa Securities Co., Ltd., Mizuho Securities Co., Ltd., Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., SMBC Nikko Securities Inc., and Tokai Tokyo Securities Co., Ltd. The underwriters overseas are Nomura International plc, Morgan Stanley & Co. International plc, Daiwa Capital Markets Europe Limited and Citigroup Global Markets Limited.

(3) Status of Companies Owing Real Estate Overseas Not applicable

(4) Status of Real Estate Owned by Companies Owning Real Estate Overseas Not applicable

(5) Other For the purpose of this report, the numbers for amounts below unit and percentages are rounded to units, unless otherwise mentioned specifically.

54 55 Financial Statements (Unit: Thousands of yen) II. Balance Sheets As of May 31, 2017 As of November 30, 2017 (Unit: Thousands of yen) Liabilities As of May 31, 2017 As of November 30, 2017 Current liabilities Assets Operating accounts payable 668,243 764,214 Current assets Short-term loans payable 10,000,000 10,000,000 Cash and deposits 12,959,519 15,165,946 Current portion of long-term loans payable 25,000,000 25,000,000 Cash and deposits in trust 2,881,469 2,723,436 Accounts payable - other 103,682 65,580 Operating accounts receivable 645,163 486,257 Accrued expenses 720,452 822,039 Prepaid expenses 449,641 292,870 Income taxes payable 784 972 Deferred tax assets 10 18 Accrued consumption taxes 232,885 494,431 Other 2,241 2,230 Advances received 428,034 434,216 Total current assets 16,938,046 18,670,759 Deposits received 23,755 1,190 Non-current assets Other 4,076 – Property, plant and equipment Total current liabilities 37,181,916 37,582,644 Buildings in trust 79,082,209 79,354,657 Non-current liabilities Accumulated depreciation (7,373,381) (8,503,434) Investment corporation bond 16,000,000 16,000,000 Buildings in trust, net 71,708,828 70,851,222 Long-term loans payable 145,150,000 145,150,000 Structures in trust 637,056 638,231 Tenant leasehold and security deposits in trust 19,194,160 19,582,816 Accumulated depreciation (116,034) (132,712) Other 51 23 Structures in trust, net 521,022 505,519 Total non-current liabilities 180,344,211 180,732,839 Machinery and equipment in trust 1,352,828 1,364,809 Total liabilities 217,526,128 218,315,484 Accumulated depreciation (241,957) (271,072) Net assets Machinery and equipment in trust, net 1,110,871 1,093,736 Unitholders’ equity Tools, furniture and fixtures in trust 131,955 150,520 Unitholders’ capital 202,233,447 202,233,447 Accumulated depreciation (54,665) (68,153) Surplus Tools, furniture and fixtures in trust, net 77,290 82,367 Unappropriated retained earnings 6,152,150 6,217,532 Land in trust 325,281,819 325,281,819 (undisposed loss) Construction in progress in trust – 1,126 Total surplus 6,152,150 6,217,532 Total property, plant and equipment 398,699,831 397,815,791 Total unitholders’ equity 208,385,598 208,450,980 Intangible assets Valuation and translation adjustments Leasehold rights in trust 9,130,097 9,130,097 Deferred gains or losses on hedges 65,673 72,117 Other 784 3,032 Total valuation and translation adjustments 65,673 72,117 Total intangible assets 9,130,881 9,133,130 Total net assets *2 208,451,272 *2 208,523,097 Investments and other assets Total liabilities and net assets 425,977,400 426,838,582 Long-term prepaid expenses 1,052,097 1,064,673 Derivatives 65,673 72,117 Other 15,217 15,217 Total investments and other assets 1,132,989 1,152,009 Total non-current assets 408,963,702 408,100,931 Deferred assets Investment corporation bond issuance costs 75,651 66,891 Total deferred assets 75,651 66,891 Total assets 425,977,400 426,838,582

56 1 2 57 III. Statements of Operations IV. Statements of Changes in Unitholders’ Equity

(Unit: Thousands of yen)

Previous fiscal period Current fiscal period Previous fiscal period (From December 1, 2016 to May 31, 2017) (From December 1, 2016 (From June 1, 2017 (Unit: Thousands of yen) Valuation and translation Unitholders’ equity to May 31, 2017) to November 30, 2017) adjustments Surplus Total Operating revenue Deferred Total net Total valuation Unitholders’ gains or assets Unappropriated unitholders’ and Lease business revenue *1 11,370,770 *1 11,861,072 capital losses on retained earnings Total surplus equity translation hedges Other lease business revenue *1 736,582 *1 859,517 (undisposed loss) adjustments

Total operating revenue 12,107,352 12,720,589 Balance at beginning 171,532,813 5,409,874 5,409,874 176,942,688 75,684 75,684 177,018,373 Operating expenses of current period Changes of items Expenses related to rent business *1 4,097,908 *1 4,509,419 during period Asset management fee 915,853 1,013,473 Issuance of new 30,700,633 30,700,633 30,700,633 Asset custody fee 11,446 11,947 investment units Dividends of Administrative service fees 29,098 31,652 (5,409,478) (5,409,478) (5,409,478) (5,409,478) surplus Directors’ compensations 3,300 3,300 Profit 6,151,755 6,151,755 6,151,755 6,151,755 Other operating expenses 69,516 76,091 Net changes of Total operating expenses 5,127,122 5,645,884 items other than (10,010) (10,010) (10,010) Operating profit 6,980,230 7,074,704 unitholders’ equity Total changes of Non-operating income 30,700,633 742,276 742,276 31,442,909 (10,010) (10,010) 31,432,898 items during period Interest income 60 68 Balance at end *1 6,152,150 6,152,150 208,385,598 65,673 65,673 208,451,272 Interest on securities 113 – of current period 202,233,447 Reversal of distribution payable 1,768 1,456

Interest on refund 1,076 – Current fiscal period (From June 1, 2017 to November 30, 2017) Insurance income – 177 (Unit: Thousands of yen) Valuation and translation Total non-operating income 3,019 1,702 Unitholders’ equity adjustments Non-operating expenses Surplus Total Deferred Total net Total valuation Interest expenses 598,109 609,206 Unitholders’ gains or assets Unappropriated unitholders’ and capital losses on Interest expenses on investment corporation bonds 29,422 31,863 retained earnings Total surplus equity translation hedges (undisposed loss) adjustments Amortization of investment corporation bond issuance costs 7,524 8,760 Balance at beginning Investment unit issuance expenses 48,191 55,185 202,233,447 6,152,150 6,152,150 208,385,598 65,673 65,673 208,451,272 of current period Borrowing related expenses 146,928 152,635 Changes of items

Other 500 500 during period Total non-operating expenses 830,676 858,151 Dividends of (6,151,899) (6,151,899) (6,151,899) (6,151,899) surplus Ordinary Profit 6,152,573 6,218,255 Profit 6,217,281 6,217,281 6,217,281 6,217,281 Profit before income taxes 6,152,573 6,218,255 Net changes of Income taxes - current 811 982 items other than 6,443 6,443 6,443 Income taxes - deferred 7 (8) unitholders’ equity Total changes of Total income taxes 818 974 – 65,381 65,381 65,381 6,443 6,443 71,825 items during period Profit 6,151,755 6,217,281 Balance at end *1 6,217,532 6,217,532 208,450,980 72,117 72,117 208,523,097 Retained earnings brought forward 395 251 of current period 202,233,447 Unappropriated retained earnings (undisposed loss) 6,152,150 6,217,532

58 3 4 59 V. Statements of Cash Distributions VI. Statements of Cash Flows

Fiscal periods (Unit: Thousands of yen) Previous fiscal period Current fiscal period Previous fiscal period Current fiscal period (From December 1, 2016 (From June1, 2017 (From December 1, 2016 (From June 1, 2017 to May 31, 2017) to November 30, 2017) to May 31, 2017) to November 30, 2017) Amount Amount Cash flows from operating activities I Unappropriated retained ¥6,152,150,774 ¥6,217,532,741 Profit before income taxes 6,152,573 6,218,255 earnings (Undisposed loss) Depreciation 1,176,077 1,189,628 II Distributions ¥6,151,899,072 ¥6,217,090,044 Loss on retirement of non-current assets 0 – Amortization of investment corporation bond issuance costs 7,524 8,760 [Cash distribution per unit] ¥[9,248] ¥[9,346] Interest income and interest on securities (174) (68) III Earnings carried forward ¥251,702 ¥442,697 Interest expenses 627,531 641,070 Investment unit issuance expenses 48,191 55,185 Borrowing related expenses 146,928 152,635 Decrease (increase) in operating accounts receivable (134,894) 158,906 Calculation method for Based on the distribution policy Based on the distribution policy set forth in Article 35, Paragraph set forth in Article 35, Paragraph Decrease (increase) in consumption taxes refund receivable 240,810 – distributions 1 of the Articles of Incorporation 1 of the Articles of Incorporation Increase (decrease) in accrued consumption taxes 232,885 261,545 of the Investment Corporation, of the Investment Corporation, Decrease (increase) in prepaid expenses (160,833) 154,892 distributions shall be limited to distributions shall be limited to Increase (decrease) in operating accounts payable 94,699 18,149 the amount of net profit in excess the amount of net profit in excess Increase (decrease) in accrued expenses 63,227 17,528 of an amount equivalent to ninety of an amount equivalent to ninety Increase (decrease) in advances received 111,220 6,181 hundredths (90/100) of hundredths (90/100) of Decrease (increase) in long-term prepaid expenses 15,594 11,381 distributable profits, as stipulated distributable profits, as stipulated Other, net 23,628 (30,436) in Article 67-15, Paragraph 1 of in Article 67-15, Paragraph 1 of Subtotal 8,644,992 8,863,616 the Act on Special Measures the Act on Special Measures Interest income received 174 68 Concerning Taxation. In Concerning Taxation. In Interest expenses paid (592,201) (609,261) consideration of this policy, we consideration of this policy, we Income taxes paid (972) (795) will pay distributions at the total will pay distributions at the total Net cash provided by (used in) operating activities 8,051,992 8,253,629 amount of ¥6,151,899,072, which amount of ¥6,217,090,044, which Cash flows from investing activities is the amount that does not is the amount that does not Purchase of property, plant and equipment in trust (47,344,411) (264,927) exceed the unappropriated exceed the unappropriated Purchase of intangible assets – (2,536) retained earnings and is the retained earnings and is the Purchase of intangible assets in trust (4,304,399) – greatest value among integral greatest value among integral Repayments of tenant leasehold and security deposits in trust (427,568) (417,990) multiples of 665,214, which is the multiples of 665,214, which is the Proceeds from tenant leasehold and security deposits in trust 3,831,129 808,786 total number of investment units total number of investment units Other, net (426) – issued; provided, however, that issued; provided, however, that Net cash provided by (used in) investing activities (48,245,675) 123,332 we will not pay the portion of we will not pay the portion of Cash flows from financing activities amount that exceeds the net profit amount that exceeds the net profit Increase in short-term loans payable 12,396,074 4,998,489 defined in Article 35, Paragraph 2 defined in Article 35, Paragraph 2 Decrease in short-term loans payable (7,800,000) (5,000,000) of the Articles of Incorporation of of the Articles of Incorporation of Proceeds from long-term loans payable 22,519,387 11,849,238 the Investment Corporation. the Investment Corporation. Repayments of long-term loans payable (14,400,000) (12,000,000) Proceeds from issuance of investment corporation bonds 5,962,843 – Proceeds from issuance of investment units 30,597,876 – Dividends paid (5,410,632) (6,150,128) Other, net (15,326) (26,167) Net cash provided by (used in) financing activities 43,850,222 (6,328,568) Net increase (decrease) in cash and cash equivalents 3,656,538 2,048,393 Cash and cash equivalents at beginning of period 12,184,450 15,840,989 Cash and cash equivalents at end of period *1 15,840,989 *1 17,889,382

60 5 6 61 VII. Notes to Financial Statements 6. Other important (1) Accounting method for trust beneficiary right with real estate, etc. as trust asset matters related to the With regard to trust beneficiary right with real estate, etc. in holding as trust Notes on Assumption of Going Concern preparation of asset, all assets and liabilities as well as all revenue and expense items Not applicable financial statements associated with all trust assets are accounted for under the respective account items of the balance sheets and statements of operations. Of the trust assets accounted for under the respective account items, the Notes on Important Accounting Policies following items with significance are separately indicated on the balance sheets. i) Cash and deposits in trust 1. Method of (1) Property, plant and equipment (including trust assets) ii) Buildings in trust; structures in trust; machinery and equipment in trust; depreciation of non- The straight-line method is used. current assets tools, furniture and fixtures in trust; land in trust; construction in progress The useful lives of major property, plant and equipment are listed below. in trust; and leasehold rights in trust Buildings 2 to 70 years iii) Tenant leasehold and security deposits in trust Structures 2 to 60 years (2) Accounting method for consumption tax and local consumption tax Machinery and equipment 2 to 33 years Consumption tax and local consumption tax are accounted for by the tax- Tools, furniture and fixtures 2 to 15 years exclusion method. Consumption taxes unqualified for deduction for tax (2) Intangible assets purposes for non-current assets, etc. are included in acquisition cost for each Internal use software is amortized by the straight-line method over the expected asset. useful life (5 years). (3) Long-term prepaid expenses The straight-line method is used. Notes to Balance Sheets 1. Commitment Line Contracts 2. Accounting method (1) Investment unit issuance expenses The Investment Corporation has the commitment line contracts with four of the banks. for deferred assets The full amount is recorded as expenses at the time of expenditure. (2) Investment corporation bond issuance costs 㻌 As of May 31, 2017 As of November 30, 2017 Amortized by the straight-line method over the period until maturity. Total amount specified in the ¥20,000,000 thousand ¥20,000,000 thousand 3. Accounting for Property-related taxes commitment line contracts income and expenses For property tax, city planning tax, depreciable asset tax for real properties held, Loan balance – – the amount of tax levied corresponding to the calculation period is recorded as expenses related to rent business. Net balance ¥20,000,000 thousand ¥20,000,000 thousand The settlement money for property tax that is paid to the transferor for acquisition of real properties (so-called “amount equivalent to property tax”) is not recorded as expenses related to rent business but included in the acquisition *2. Minimum Net Assets Stipulated in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment costs for the related properties. There is no amount equivalent to property tax Corporations included in acquisition cost for properties for the current fiscal period. As of May 31, 2017 As of November 30, 2017 4. Method of hedge (1) Method of hedge accounting ¥50,000 thousand ¥50,000 thousand accounting Deferred hedge accounting is applied. For interest rate swaps that satisfy the requirements for special treatment, special treatment is applied. (2) Hedging instruments and hedged items Hedging instruments: Interest rate swaps transactions Hedged items: Long-term loans payable (3) Hedging policy Based on the management policy of financial market risks, the Investment Corporation makes interest rate swaps for the purpose to hedge risks set forth in the Articles of Incorporation of the Investment Corporation. (4) Method of assessing hedge effectiveness The Investment Corporation assesses hedge effectiveness by comparing the cumulative total changes in the cash flows of the hedged items with those of the hedging instruments, and then verifying the ratio of the changes in both amounts. However, hedge effectiveness is deemed to have been ensured with respect to interest rate swaps that satisfy the requirements for special treatment.

5. Scope of cash (cash Cash and cash equivalents include cash on hand, cash in trust, demand deposits, and cash equivalents) deposits in trust, and highly liquid short-term investments that are readily in the statements of convertible, bear little risk in price fluctuations, and mature within three months of cash flows the date of acquisition.

62 7 8 63 Notes to Statements of Operations Notes to Statements of Changes in Unitholders’ Equity *1. Breakdown of Income from Real Estate Leasing Business *1. Total number of authorized investment units and total number of investment units issued are as follows: (Unit: Thousands of yen) Previous fiscal period Current fiscal period

Previous fiscal period Current fiscal period (From December 1, 2016 (From June 1, 2017

(From December 1, 2016 (From June 1, 2017 to May 31, 2017) to November 30, 2017) to May 31, 2017) to November 30, 2017) Total number of authorized investment units 4,000,000 units 4,000,000 units Real estate leasing business A. revenues Total number of investment units issued 665,214 units 665,214 units Lease business revenue Rent 10,233,375 10,738,149 Notes to Statements of Cash Flows Common service fees 845,780 830,944 *1. Reconciliation between Cash and Cash Equivalents at End of Period and the Amount on the Balance Sheets Parking lot fees 206,124 209,935 Previous fiscal period Current fiscal period Other rent revenue 85,490 11,370,770 82,041 11,861,072 (From December 1, 2016 (From June 1, 2017 Other lease business revenue 736,582 859,517 to May 31, 2017) to November 30, 2017) Total real estate leasing business 12,107,352 12,720,589 ¥15,165,946 thousand revenues Cash and deposits ¥12,959,519 thousand Real estate leasing business Cash and deposits in trust ¥2,881,469 thousand ¥2,723,436 thousand B. expenses Cash and cash equivalents ¥15,840,989 thousand ¥17,889,382 thousand Expenses related to rent business

Management operation expenses 1,037,552 1,062,726 Notes to Lease Rental Revenues Utilities expenses 682,073 791,991 The Investment Corporation leases properties on which rental revenues are earned. As of May 31, 2017 and Tax and public dues 778,702 887,699 November 30, 2017, future lease revenues under non-cancelable operating leases are summarized as follows: Insurance 8,854 9,090 㻌 As of May 31, 2017 As of November 30, 2017 Repair and maintenance 197,447 304,182 expenses Due within one year ¥11,661,077 thousand ¥10,224,608 thousand Depreciation 1,175,819 1,189,537 Due after one year ¥46,131,225 thousand ¥42,873,522 thousand Loss on retirement of non- 0 – Total ¥57,792,302 thousand ¥53,098,130 thousand current assets

Other expenses related to rent 217,457 4,097,908 264,192 4,509,419 business Total real estate leasing business 4,097,908 4,509,419 expenses Income from real estate leasing C. 8,009,444 8,211,169 business (A – B)

64 9 10 65 Notes on Financial Instruments Carrying amounts, fair values, and the differences between the two values as of November 30, 2017, are as shown below. Financial instruments whose fair value is considered to be extremely difficult to determine are not included 1. Matters Regarding Financial Instruments in this table (please refer to (Note 2)). (1) Policy for Financial Instruments (Unit: Thousands of yen) The Investment Corporation raises funds by borrowing, issuing investment corporation bonds, or issuing 㻌 Carrying amount Fair value Difference investment units for the purpose of acquiring real estate-related assets and repaying interest-bearing debt. (1) Cash and deposits 15,165,946 15,165,946 – When raising funds, the Investment Corporation aims to sustain stable financing capability for a long time at low cost by enhancing its capital adequacy and maintaining conservative interest-bearing debt, looking for attributes (2) Cash and deposits in trust 2,723,436 2,723,436 – such as extended borrowing periods for interest-bearing debt, fixed interest rates, and diversified due dates to ensure financial stability and avoid the risk of interest-rate hikes. Total assets 17,889,382 17,889,382 – The Investment Corporation also invests temporary excess funds in deposits in general, taking safety and (1) Short-term loans payable 10,000,000 10,000,000 – liquidity, etc. into account and considering the interest-rate environment and its cash management. (2) Current portion of long-term loans payable 25,000,000 25,075,199 75,199 The Investment Corporation may carry out derivatives transactions for the purpose of hedging the interest-rate (3) Investment corporation bonds 16,000,000 16,195,996 195,996 risk of borrowings and other risks, but does not engage in speculative transactions. (4) Long-term loans payable 145,150,000 146,708,543 1,558,543 (2) Content and Risks of Financial Instruments and Risk Management System As the excess funds of the Investment Corporation are invested in deposits, they are exposed to credit risks such Total liabilities 196,150,000 197,979,740 1,829,740 as the insolvency of the financial institutions in which the excess funds are deposited. However, the Investment Derivative transactions 72,117 72,117 – Corporation deposits excess funds carefully by limiting the period of deposits to the short term, taking safety and liquidity, etc. into account and considering the financial environment and its cash management. (Note 1) Measurement Methods for Fair Values of Financial Instruments Borrowings and investment corporation bond are received mainly for the purpose of acquiring real estate and refinancing of existing borrowings. Tenant leasehold and security deposits are deposits provided by tenants. Assets Borrowings, investment corporation bond, tenant leasehold and security deposits are exposed to liquidity risks at (1) Cash and deposits, (2) Cash and deposits in trust the time of repayments. However, these risks are managed through management of liquidity in hand by preparing The book value is used as the fair value of these assets, given that the fair value is almost the same as the book value, as it is a monthly funding plan, efforts to reduce liquidity risk on loans payable and investment corporation bond by settled in a short time. diversifying repayment periods, etc., and other means. Liabilities Floating-rate loans payable are also exposed to the risk of fluctuations in interest-rates. However, these risks are (1) Short-term loans payable managed through derivative transactions (interest rate swaps) as hedging instruments in certain floating-rate The book value is used as the fair value of these liabilities, given that the fair value is almost the same as the book value, as loans payable. it is settled in a short time. (2) Current portion of long-term loans payable, (4) Long-term loans payable (3) Supplemental Remarks on the Fair Value of Financial Instruments These fair values are determined by discounting the total of principal and interest at the rate assumed when a new loan is The fair value of financial instruments is based on market prices or reasonably calculated value if it has no made corresponding to the remaining period. The book value is used as the fair value of those loans payable with floating market price. As certain assumptions are made in calculating these values, if different assumptions, etc. are used, interest rates, given that the fair value is almost the same as the book value, as their interest rates are reviewed on a short- term interval to reflect market interest rates (however, for long-term loans payable with floating interest rates to which these values could vary. special treatment for interest rate swaps is applied, the fair value is the value calculated by discounting the sum of principal and interest, which are treated in combination with the said interest rate swap, at a reasonable rate estimated for a similar 2. Matters Regarding Fair Values of Financial Instruments new loan). (3) Investment corporation bonds Carrying amounts, fair values, and the differences between the two values as of May 31, 2017, are as shown below. The fair value is determined by discounting the total of principal and interest at a rate taking into account the remaining Financial instruments whose fair value is considered to be extremely difficult to determine are not included in this period and credit risk of the said investment corporation bonds. table (please refer to (Note 2)). Derivative transactions (Unit: Thousands of yen) Please refer to “Notes on Derivative Transactions.” 㻌 Carrying amount Fair value Difference (1) Cash and deposits 12,959,519 12,959,519 – (Note 2) Carrying Amounts of Financial Instruments Where Fair Value Is Considered to Be Extremely Difficult to Determine (Unit: Thousands of yen) (2) Cash and deposits in trust 2,881,469 2,881,469 – Category As of May 31, 2017 As of November 30, 2017 Total assets 15,840,989 15,840,989 – Tenant leasehold and security deposits in trust *1 19,194,160 19,582,816 (1) Short-term loans payable 10,000,000 10,000,000 – *1 As there are no market prices for tenant leasehold and security deposits in trust from tenants for leasehold properties and 25,000,000 25,038,580 38,580 the actual period of deposit from move-in of the tenant to move-out is difficult to determine, it is extremely difficult to (2) Current portion of long-term loans payable reasonably estimate the cash flow. Therefore, the fair value for tenant leasehold and security deposits in trust is not (3) Investment corporation bonds 16,000,000 16,201,572 201,572 subject to the disclosure of fair value.

(4) Long-term loans payable 145,150,000 147,457,012 2,307,012 Total liabilities 196,150,000 198,697,165 2,547,165 Derivative transactions 65,673 65,673 –

66 11 12 67 (Note 3) Expected Amounts of Repayment of Monetary Claims after the Account Closing Date (May 31, 2017) Notes on Derivative Transactions (Unit: Thousands of yen) 1. Derivative transaction to which hedge accounting is not applied Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Over 5 years (As of May 31, 2017) Deposits 12,959,519 – – – – – Not applicable Deposits in trust 2,881,469 – – – – – (As of November 30, 2017) Total 15,840,989 – – – – – Not applicable

Expected Amounts of Repayment of Monetary Claims after the Account Closing Date (November 30, 2017) 2. Derivative transaction to which hedge accounting is applied (Unit: Thousands of yen) (As of May 31, 2017) Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Over 5 years The following table shows contract amount or principal amount, etc. set forth in the contract as of the account Deposits 15,165,946 – – – – – closing date by method of hedge accounting.

(Unit: Thousands of yen) Deposits in trust 2,723,436 – – – – – Type of derivative Major hedged Calculation method Hedge accounting Amount of contract Fair value transactions items for fair value Total 17,889,382 – – – – – Portion due after one year

Interest rate swaps Based on prices, etc. Deferred hedge Long-term (Note 4) Expected Amounts of Repayment of Loans Payable and Investment Corporation Bonds after the Account Closing Date 14,400,000 14,400,000 65,673 indicated by partner accounting Receive floating loans payable (May 31, 2017) Pay fixed financial institutions Special treatment Interest rate swaps (Unit: Thousands of yen) Long-term for interest rate Receive floating 10,000,000 5,000,000 * – Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Over 5 years loans payable swaps Pay fixed * Interest rate swap transactions to which special treatment is applied are accounted for as an integral part of long-term Short-term loans payable 10,000,000 – – – – – loans payable, a hedged item. Thus, their fair values are included in the fair value of long-term loans payable. (Please refer to “(Note 1) Liabilities (4), 2. Matters Regarding Fair Values of Financial Instruments, Notes on Financial Investment corporation bonds – 4,000,000 6,000,000 – – 6,000,000 Instruments.”)

Long-term loans payable 25,000,000 18,500,000 20,400,000 12,500,000 7,500,000 86,250,000 (As of November 30, 2017) The following table shows contract amount or principal amount, etc. set forth in the contract as of the account Total 35,000,000 22,500,000 26,400,000 12,500,000 7,500,000 92,250,000 closing date by method of hedge accounting.

(Unit: Thousands of yen) Expected Amounts of Repayment of Loans Payable and Investment Corporation Bonds after the Account Closing Date Type of derivative Major hedged Calculation method Hedge accounting Amount of contract Fair value (November 30, 2017)) transactions items for fair value

Portion due after (Unit: Thousands of yen) one year Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Over 5 years Interest rate swaps Based on prices, etc. Deferred hedge Long-term Receive floating 14,400,000 14,400,000 72,117 indicated by partner Short-term loans payable 10,000,000 – – – – – accounting loans payable Pay fixed financial institutions Special treatment Interest rate swaps Long-term Investment corporation bonds – 4,000,000 6,000,000 – – 6,000,000 for interest rate 10,000,000 5,000,000 * – Receive floating loans payable swaps Pay fixed Long-term loans payable 25,000,000 19,600,000 7,300,000 12,500,000 14,500,000 91,250,000 * Interest rate swap transactions to which special treatment is applied are accounted for as an integral part of long-term loans payable, a hedged item. Thus, their fair values are included in the fair value of long-term loans payable. (Please refer to “(Note 1) Liabilities (4), 2. Matters Regarding Fair Values of Financial Instruments, Notes on Financial Total 35,000,000 23,600,000 13,300,000 12,500,000 14,500,000 97,250,000 Instruments.”)

68 13 14 69 Notes on Deferred Tax Accounting 2. Affiliates, etc. 1. Components of Deferred Tax Assets and Deferred Tax Liabilities Previous fiscal period (From December 1, 2016 to May 31, 2017) Not applicable As of May 31, 2017 As of November 30, 2017

Deferred tax assets Current fiscal period (From June 1, 2017 to November 30, 2017) Non-deductible amount for tax purposes ¥10 thousand ¥18 thousand of enterprise tax payable Not applicable

Total deferred tax assets ¥10 thousand ¥18 thousand 3. Sister companies, etc. Net deferred tax assets ¥10 thousand ¥18 thousand Previous fiscal period (From December 1, 2016 to May 31, 2017)

Capital Relationship stock or Percentage Transaction Ending 2. Reconciliation of Significant Difference between Effective Statutory Tax Rate and Effective Income Tax investment Business or of voting amount balance Rate after Application of Deferred Tax Accounting Attribute Name Address in capital occupation rights Interlocking Business Transaction (Thousands Account title (Thousands (Millions of owning officers, etc. relation of yen) of yen) yen) (owned) As of May 31, 2017 As of November 30, 2017

Tenant leasehold Effective statutory tax rate 31.74% 31.74% 2-2 and security 5,382,707 Tokyu Land deposits in trust Subsidiary SC Dogenzaka Real estate Subsidiary of major 1-chome, 100 management – None of major – – (Adjustments) unitholder Management Shibuya-ku, business Corporation unitholder Tokyo Operating accounts Distributions paid included in deductibles (31.74)% (31.73)% receivable 147,261 Advances received 1,083 Other 0.01% 0.01% Operations 1-1, related to TLC Activia management Effective income tax rate after application of Subsidiary Minami- One 0.01% 0.02% Investment Aoyama 1- of the Asset Other accrued tax effect accounting of major 300 Investment – interlocking – – 335,504 unitholder Management chome, officer manager expenses Inc. Minato-ku, Corporation’s Tokyo portfolio assets Notes on Transactions with Related Parties (Note 1) The amount of Payment of fees for asset management above is in accordance with the terms set forth in the Articles of Incorporation of the Investment Corporation. (Note 2) Of the amounts above, the transaction amount does not include consumption taxes, and the ending balance includes consumption taxes. 1. Parent Company and Major Corporate Unitholders (Note 3) The transaction terms are based on current market practices. (Note 4) As a result of Tokyu Land Corporation no longer qualifying as a related party due to the Investment Corporation’s issuance of new investment units through public Previous fiscal period (From December 1, 2016 to May 31, 2017) offering that was conducted on December 1, 2016 (first day of the fiscal period), Tokyu Land Corporation’s subsidiaries Tokyu Land SC Management Corporation, and TLC Activia Investment Management Inc. no longer qualify as related parties. Consequently, the percentage of voting rights owning (owned) and the ending balance Capital Percentage Relationship stated above, are for the percentage and amount as of the start of the fiscal period when the two companies ceased to qualify as related parties. Transaction Ending stock or of voting balance amount Attribute Name Address investment Business or rights Transaction Account title (Thousands in capital occupation owning Interlocking Business (Thousands of (Millions of officers, etc. relationship of yen) Current fiscal period (From June 1, 2017 to November 30, 2017) (owned) yen) (Note 3) yen) (Note 3) Not applicable

Tenant leasehold and security 2,485,408 21-2, Major deposits in trust Dogenzaka unitholder, 4. Directors and major individual unitholders Major Tokyu Land Real estate 1-chome, 57,551 10.32% None and rent and unitholder Corporation business – – Shibuya-ku, management Previous fiscal period (From December 1, 2016 to May 31, 2017) Tokyo of properties Operating accounts 68,012 receivable Not applicable

Advances received 104,270 (Note 1) Of the amounts above, the transaction amount does not include consumption taxes, and the ending balance includes consumption taxes. Current fiscal period (From June 1, 2017 to November 30, 2017) (Note 2) The transaction terms are based on current market practices. (Note 3) Due to the Investment Corporation’s issuance of new investment units through public offering that was conducted on December 1, 2016 (first day of the fiscal period), Not applicable Tokyu Land Corporation no longer qualifies as a related party. Consequently, the percentage of voting rights owning (owned) and the ending balance stated above, are for the percentage and amount as of the start of the fiscal period when that company ceased to qualify as a related party.

Current fiscal period (From June 1, 2017 to November 30, 2017) Not applicable

70 15 16 71 Notes on Investment and Rental Properties Segment Information The Investment Corporation holds Urban Retail and Tokyo Office properties, etc. in Tokyo and other regions Segment Information for the fiscal periods ended May 31, 2017 and November 30, 2017 is as follows: for rental revenue. The carrying amounts on the balance sheet, changes during the fiscal period, and fair values 1. Operating Segment Information of investment and rental properties are as follows. Disclosure is omitted as the Investment Corporation is comprised of a single reportable segment engaged in the (Unit: Thousands of yen) property rental business. Previous fiscal period Current fiscal period Use (From December 1, 2016 (From June 1, 2017 to 2. Enterprise-wide Disclosures to May 31, 2017) November 30, 2017) (1) Information about Products and Services Carrying amount on the balance sheets Disclosure is not required as revenues from external customers for the single segment is in excess of 90% of total 㻌 Balance at beginning of period 142,972,944 154,110,630 revenues. Urban Retail 㻌 Changes during period 11,137,686 (267,998) (2) Information about Geographic Areas Properties Revenues from Overseas Customers: 㻌 Balance at end of period 154,110,630 153,842,632 Disclosure is not required as revenues from external customers attributed to Japan are in excess of 90% of total Fair value at end of period 186,965,000 187,050,000 revenues. Carrying amount on the balance sheets Property, plant and equipment:

㻌 Balance at beginning of period 136,678,436 176,243,083 Disclosure is not required as Property, plant and equipment located in Japan are in excess of 90% of total Tokyo Property, plant and equipment. 㻌 Office Changes during period 39,564,647 (396,664) Properties 㻌 Balance at end of period 176,243,083 175,846,419 3. Information about Major Customers Fair value at end of period 196,020,000 198,870,000 Previous fiscal period (From December 1, 2016 to May 31, 2017) (Unit: Thousands of yen) Carrying amount on the balance sheets Name of Customer Revenues Related Segment 㻌 Balance at beginning of period 77,755,251 77,476,991 Activia Tokyu Land SC Management Corporation 3,979,976 Property rental business Account 㻌 Changes during period (278,260) (220,705) Properties Tokyu Community Corporation 3,874,279 Property rental business 㻌 Balance at end of period 77,476,991 77,256,285 Tokyu Land Corporation 2,112,048 Property rental business Fair value at end of period 88,570,000 89,970,000

Carrying amount on the balance sheets Current fiscal period (From June 1, 2017 to November 30, 2017) 㻌 Balance at beginning of period 357,406,633 407,830,705 (Unit: Thousands of yen) Name of Customer Revenues Related Segment Total 㻌 Changes during period 50,424,072 (885,368) Tokyu Community Corporation 4,252,600 Property rental business 㻌 Balance at end of period 407,830,705 406,945,337 Tokyu Land SC Management Corporation 4,161,768 Property rental business Fair value at end of period 471,555,000 475,890,000 (Note 1) The carrying amount on the balance sheets is the acquisition cost less accumulated depreciation. Tokyu Land Corporation 2,148,014 Property rental business (Note 2) The main reason for the decrease in the current fiscal period is the provision of depreciation worth ¥1,189,537 thousand. (Note 3) The fair value at end of period is the appraisal value provided by an independent real estate appraiser. The income/loss concerning investment and rental properties is indicated under “Notes to Statements of Operations.”

72 17 18 73 Per Unit Information 2. Borrowing of Funds

Previous fiscal period Current fiscal period In order to cover the acquisition costs for beneficiary interests of real estate in trust to two properties and related costs, the Investment Corporation borrowed funds of ¥3,200 million on January 5, 2018. For the (From December 1, 2016 to May 31, 2017) (From June 1, 2017 to November 30, 2017) details, please refer to the preceding “2. Asset Management Policies and Status, (2) Asset Management Net assets per unit ¥313,359 ¥313,467 Status, ii) Outlook for the Next Fiscal Period, (C) Significant Subsequent Events, b. Borrowing of Funds”.

Basic earnings per unit ¥9,252 ¥9,346 3. Acquisition of Properties (Note 1) Basic earnings per unit is calculated by dividing profit by the day-weighted average number of investment units for the period (previous fiscal period 664,866 units; current fiscal period 665,214 units). Diluted earnings per unit is not stated, The Investment Corporation acquired beneficiary interests of real estate in trust to one property for ¥4,725 as there is no potential investment unit. million on December 1, 2017 and two properties for ¥18,840 million on January 5, 2018, with proceeds (Note 2) The basis for calculating basic earnings per unit is as follows: from the issuance of new investment units through public offering (public placement) and third-party Previous fiscal period Current fiscal period allotment and from borrowings, etc. in accordance with the basic asset management policy set forth in the Articles of Incorporation. For the details, please refer to the preceding “2. Asset Management Policies and (From December 1, 2016 (From June 1, 2017 Status, (2) Asset Management Status, ii) Outlook for the Next Fiscal Period, (C) Significant Subsequent to May 31, 2017) to November 30, 2017) Events, c. Acquisition of Properties” . Profit (Thousands of yen) 6,151,755 6,217,281 Amount not attributable to common – – Omission of Disclosure unitholders (Thousands of yen) As the need for disclosing notes on securities, retirement benefits, equity in earnings of affiliates, and asset retirement Profit attributable to common obligations in this financial report is not material or applicable, the disclosure of these items is omitted. 6,151,755 6,217,281 investment units (Thousands of yen) Average number of investment units 664,866 665,214 for the period (Units)

Significant Subsequent Events 1. Issuance of New Investment Units At meetings of the board of directors held on November 28, 2017 and December 6, 2017, we resolved to issue new investment units as described below, and issued these per the terms below once payment was completed on December 13, 2017 and December 26, 2017. As a result, unitholders’ capital amounted to ¥217,091,520,300, and the total number of investment units issued came to 698,704 units.

(i) Issuance of new investment units through the public offering (Public placement) i) Number of new investment units issued 31,090 units ii) Offering price ¥458,150 per unit iii) Total offering price ¥14,243,883,500 iv) Paid-in amount ¥443,657 per unit v) Total paid-in amount ¥13,793,296,130 vi) Payment date December 13, 2017 vii) Initial date of reckoning distributions December 1, 2017

(ii) Issuance of new investment units through third-party allotment i) Number of new investment units issued 2,400 units ii) Paid-in amount ¥443,657 per unit iii) Total paid-in amount ¥1,064,776,800 iv) Payment date December 26, 2017 v) Initial date of reckoning distributions December 1, 2017 vi) Allottee Nomura Securities Co., Ltd.

74 19 20 75 VIII. Schedule of Financial Statements Other Specified Assets Not applicable Securities 1. Shares Not applicable Investment Corporation Bonds (Unit: Thousands of yen) Issue Beginning Ending Interest Redemption Use of Issue Decrease Remarks 2. Securities Other Than Shares Date balance balance Rate Date funds

Not applicable 1st unsecured bonds Partial (with pari passu conditions repayment April 25, April 25, Unsecured, 4,000,000 – 4,000,000 0.370% of the among specified 2014 2019 non-guaranteed investment corporation long-term Derivative Transactions bonds) borrowings (Unit: Thousands of yen) 2nd unsecured bonds Partial (with pari passu conditions repayment Amount of contract (Note 1) April 21, April 21, Unsecured, 2,000,000 – 2,000,000 0.297% of the Fair value among specified 2015 2020 non-guaranteed Classification Type of derivative transactions Portion due investment corporation long-term 㻌 (Note 2) (Note 3) after one year bonds) borrowings Interest rate swaps 3rd unsecured bonds Partial Over-the-counter 24,400,000 19,400,000 72,117 (with pari passu conditions repayment Receive floating Pay fixed April 21, April 21, Unsecured, 2,000,000 – 2,000,000 0.726% of the among specified 2015 2025 non-guaranteed Total 24,400,000 19,400,000 72,117 investment corporation long-term bonds) borrowings (Note 1) The amounts of contract do not represent the market risk exposure associated with the derivative instruments. 4th unsecured bonds (Note 2) The interest rate swaps which qualify for hedge accounting and meet specific criteria are not measured at fair value in Partial (with pari passu conditions repayment the balance sheets and the interest received or paid under the interest rate swap contracts is recognized on an accrual February February 3, Unsecured, among specified 2,000,000 – 2,000,000 0.770% of the basis. 3, 2016 2026 non-guaranteed investment corporation long-term (Note 3) Fair value is based on prices, etc. indicated by partner financial institutions. bonds) borrowings

5th unsecured bonds Partial (with pari passu conditions repayment Property and Equipment February January 31, Unsecured, 4,000,000 – 4,000,000 0.001% of the among specified 2, 2017 2020 non-guaranteed The following tables show the summary of movement in property and equipment. investment corporation long-term borrowings (Unit: Thousands of yen) bonds) Net property, 6th unsecured bonds Beginning Ending Accumulated Depreciation Partial 㻌 Increase Decrease plant and (with pari passu conditions repayment balance Balance depreciation for the period February February 2, Unsecured, equipment 1,000,000 – 1,000,000 0.480% of the among specified 2, 2017 2027 non-guaranteed investment corporation long-term Buildings in trust – 79,082,209 272,447 79,354,657 8,503,434 1,130,053 70,851,222 bonds) borrowings Structures in trust 637,056 1,174 – 638,231 132,712 16,677 505,519 7th unsecured bonds Partial (with pari passu conditions repayment Machinery and February February 2, Unsecured, 1,000,000 – 1,000,000 0.810% of the equipment in 1,352,828 11,980 – 1,364,809 271,072 29,115 1,093,736 among specified 2, 2017 2032 non-guaranteed trust investment corporation long-term bonds) borrowings Tangible Tools, furniture Assets and fixtures in 131,955 18,565 – 150,520 68,153 13,488 82,367 Total – 16,000,000 – 16,000,000 – – – – trust (Note) Annual redemptions of investment corporation bonds scheduled for next five years after each balance sheet date were as Land in trust 325,281,819 – – 325,281,819 – – 325,281,819 follows: (Unit: Thousands of yen) Construction in – progress in trust – 1,126 1,126 – – 1,126 㻌 Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years

Subtotal 406,485,869 305,295 – 406,791,164 8,975,372 1,189,334 397,815,791 Unsecured bonds (with pari passu conditions among – 4,000,000 6,000,000 – – Leasehold rights specified investment corporation bonds) – in trust 9,130,097 – 9,130,097 – – 9,130,097 Intangible Assets Other (Note) 4,610 2,543 – 7,153 4,120 294 3,032

Subtotal 9,134,708 2,543 – 9,137,251 4,120 294 9,133,130

Total 415,620,577 307,838 – 415,928,415 415,928,415 1,189,628 406,948,922 (Note) “Other” is software (non-real estate asset).

76 21 22 77 Loans Payable (Unit: Thousands of yen) Category Average Beginning Ending Maturity Use of The following tables show the details of loans payable. Increase Decrease interest rate Remarks balance balance date funds 㻌 Lender (Note 1) (Unit: Thousands of yen) January 9, Unsecured, Category Average Mizuho Bank, Ltd. 500,000 – – 500,000 0.52304% (Note 3) Beginning Ending Maturity Use of 2019 non-guaranteed Increase Decrease interest rate Remarks balance balance date funds 㻌 Lender (Note 1) The Bank of Tokyo- January 9, Unsecured, 500,000 – – 500,000 0.52304% (Note 3) Mitsubishi UFJ, Ltd. 2019 non-guaranteed Sumitomo Mitsui Trust – 1,250,000 – 1,250,000 Bank, Limited Sumitomo Mitsui Banking January 9, Unsecured, 250,000 – – 250,000 0.52304% (Note 3) Corporation 2019 non-guaranteed Mitsubishi UFJ Trust and – 1,250,000 – 1,250,000 Banking Corporation September 29, Unsecured, Development Bank of Japan January 9, Unsecured, 0.16000% (Note 3) 250,000 – – 250,000 0.52304% (Note 3) 2017 non-guaranteed Inc. 2019 non-guaranteed Mizuho Bank, Ltd. 1,250,000 – 1,250,000 – Sumitomo Mitsui Trust April 19, Unsecured, The Bank of Tokyo- – 800,000 – – 800,000 0.91941% (Note 3) 1,250,000 – 1,250,000 Bank, Limited 2019 non-guaranteed Mitsubishi UFJ, Ltd. Mitsubishi UFJ Trust and April 19, Unsecured, Sumitomo Mitsui Trust 800,000 – – 800,000 0.91941% (Note 3) 1,250,000 – – 1,250,000 Banking Corporation 2019 non-guaranteed Bank, Limited April 19, Unsecured, Mizuho Bank, Ltd. 800,000 – – 800,000 0.91941% (Note 3) Short-term Mitsubishi UFJ Trust and 2019 non-guaranteed 1,250,000 – – 1,250,000 March 16, Unsecured, loans Banking Corporation 0.16326% (Note 3) 2018 non-guaranteed The Bank of Tokyo- April 19, Unsecured, payable 800,000 – – 800,000 0.91941% (Note 3) Mizuho Bank, Ltd. 1,250,000 – – 1,250,000 Mitsubishi UFJ, Ltd. 2019 non-guaranteed

The Bank of Tokyo- Sumitomo Mitsui Banking April 19, Unsecured, 1,250,000 – – 1,250,000 400,000 – – 400,000 0.91941% (Note 3) Mitsubishi UFJ, Ltd. Corporation 2019 non-guaranteed

Sumitomo Mitsui Trust Development Bank of Japan April 19, Unsecured, – 1,250,000 – 1,250,000 400,000 – – 400,000 0.91941% (Note 3) Bank, Limited Inc. 2019 non-guaranteed

Mitsubishi UFJ Trust and Development Bank of Japan June 13, Unsecured, – 1,250,000 – 1,250,000 June 1, Unsecured, 6,000,000 – – 6,000,000 1.19051% (Note 3) Banking Corporation 0.16966% (Note 4) Inc. 2019 non-guaranteed 2018 non-guaranteed Mizuho Bank, Ltd. – 1,250,000 – 1,250,000 Mizuho Trust & Banking 1,200,000 – – 1,200,000 0.02875% June 28, Unsecured, The Bank of Tokyo- Co.,LTD. (Note 4) – 1,250,000 – 1,250,000 (Note 5) 2019 non-guaranteed Mitsubishi UFJ, Ltd. The Norinchukin Bank 1,200,000 – – 1,200,000

Total 10,000,000 5,000,000 5,000,000 10,000,000 㻌㻌㻌 Sumitomo Mitsui Trust July 9, Unsecured, 340,000 – – 340,000 0.54352% (Note 3) Bank, Limited 2019 non-guaranteed The Bank of Tokyo- 3,000,000 – 3,000,000 – Mitsubishi UFJ, Ltd. Mitsubishi UFJ Trust and July 9, Unsecured, Long-term 340,000 – – 340,000 0.54352% (Note 3) Banking Corporation 2019 non-guaranteed Sumitomo Mitsui Trust loans 3,000,000 – 3,000,000 – Bank, Limited June 13, Unsecured, payable July 9, Unsecured, 0.95315% (Note 3) Mizuho Bank, Ltd. 340,000 – – 340,000 0.54352% (Note 3) 2017 non-guaranteed (Note 2) 2019 non-guaranteed Mitsubishi UFJ Trust and 3,000,000 – 3,000,000 – Banking Corporation The Bank of Tokyo- July 9, Unsecured, 340,000 – – 340,000 0.54352% (Note 3) Mitsubishi UFJ, Ltd. 2019 non-guaranteed Mizuho Bank, Ltd. 3,000,000 – 3,000,000 – Sumitomo Mitsui Banking July 9, Unsecured, Sumitomo Mitsui Trust January 9, Unsecured, 170,000 – – 170,000 0.54352% (Note 3) 780,000 – – 780,000 0.49815% (Note 3) Corporation 2019 non-guaranteed Bank, Limited 2018 non-guaranteed Development Bank of Japan July 9, Unsecured, Mitsubishi UFJ Trust and January 9, Unsecured, 170,000 – – 170,000 0.54352% (Note 3) 780,000 – – 780,000 0.49815% (Note 3) Inc. 2019 non-guaranteed Banking Corporation 2018 non-guaranteed Mizuho Trust & Banking January 9, Unsecured, 1,500,000 – – 1,500,000 August 29, Unsecured, Mizuho Bank, Ltd. 780,000 – – 780,000 0.49815% (Note 3) Co.,LTD. 0.51000% (Note 4) 2018 non-guaranteed 2019 non-guaranteed Shinkin Central Bank 1,500,000 – – 1,500,000 The Bank of Tokyo- January 9, Unsecured, 780,000 – – 780,000 0.49815% (Note 3) Mitsubishi UFJ, Ltd. 2018 non-guaranteed Sumitomo Mitsui Trust January 10, Unsecured, 160,000 – – 160,000 0.93846% (Note 3) Bank, Limited 2020 non-guaranteed Sumitomo Mitsui Banking January 9, Unsecured, Long-term 390,000 – – 390,000 0.49815% (Note 3) Corporation 2018 non-guaranteed Mitsubishi UFJ Trust and January 10, Unsecured, loans 160,000 – – 160,000 0.93846% (Note 3) Banking Corporation 2020 non-guaranteed payable Development Bank of Japan January 9, Unsecured, 390,000 – – 390,000 0.49815% (Note 3) (Note 2) Inc. 2018 non-guaranteed January 10, Unsecured, Mizuho Bank, Ltd. 160,000 – – 160,000 0.93846% (Note 3) 2020 non-guaranteed Sumitomo Mitsui Trust January 9, Unsecured, 4,100,000 – – 4,100,000 0.16500% (Note 3) Bank, Limited 2018 non-guaranteed The Bank of Tokyo- January 10, Unsecured, 160,000 – – 160,000 0.93846% (Note 3) Mitsubishi UFJ, Ltd. 2020 non-guaranteed Sumitomo Mitsui Trust 0.68315% March 31, Unsecured, 5,000,000 – – 5,000,000 (Note 4) Bank, Limited (Note 5) 2018 non-guaranteed Sumitomo Mitsui Banking January 10, Unsecured, 80,000 – – 80,000 0.93846% (Note 3) Corporation 2020 non-guaranteed Mizuho Bank, Ltd. 3,000,000 – – 3,000,000 Development Bank of Japan January 10, Unsecured, Sumitomo Mitsui Trust 80,000 – – 80,000 0.93846% (Note 3) 3,000,000 – – 3,000,000 Inc. 2020 non-guaranteed Bank, Limited June 13, Unsecured, Sumitomo Mitsui Trust January 10, Unsecured, Mitsubishi UFJ Trust and 1.06309% (Note 3) 600,000 – – 600,000 0.72546% (Note 4) 3,000,000 – – 3,000,000 2018 non-guaranteed Bank, Limited 2020 non-guaranteed Banking Corporation Mitsubishi UFJ Trust and January 10, Unsecured, The Bank of Tokyo- 600,000 – – 600,000 0.72546% (Note 4) 3,000,000 – – 3,000,000 Banking Corporation 2020 non-guaranteed Mitsubishi UFJ, Ltd. January 10, Unsecured, Sumitomo Mitsui Trust January 9, Unsecured, Mizuho Bank, Ltd. 600,000 – – 600,000 0.72546% (Note 4) 500,000 – – 500,000 0.52304% (Note 3) 2020 non-guaranteed Bank, Limited 2019 non-guaranteed

Mitsubishi UFJ Trust and January 9, Unsecured, 500,000 – – 500,000 0.52304% (Note 3) Banking Corporation 2019 non-guaranteed

78 23 24 79 (Unit: Thousands of yen) (Unit: Thousands of yen) Category Average Category Average Beginning Ending Maturity Use of Beginning Ending Maturity Use of Increase Decrease interest rate Remarks Increase Decrease interest rate Remarks balance balance date funds balance balance date funds 㻌 Lender (Note 1) 㻌 Lender (Note 1)

The Bank of Tokyo- January 10, Unsecured, Mitsubishi UFJ Trust and June 15, Unsecured, 600,000 – – 600,000 0.72546% (Note 4) 1,500,000 – – 1,500,000 0.94688% (Note 4) Mitsubishi UFJ, Ltd. 2020 non-guaranteed Banking Corporation 2022 non-guaranteed

Sumitomo Mitsui Banking January 10, Unsecured, June 15, Unsecured, 300,000 – – 300,000 0.72546% (Note 4) Mizuho Bank, Ltd. 1,500,000 – – 1,500,000 0.94688% (Note 4) Corporation 2020 non-guaranteed 2022 non-guaranteed

Development Bank of Japan January 10, Unsecured, The Bank of Tokyo- June 15, Unsecured, 300,000 – – 300,000 0.72546% (Note 4) 1,500,000 – – 1,500,000 0.94688% (Note 4) Inc. 2020 non-guaranteed Mitsubishi UFJ, Ltd. 2022 non-guaranteed

Resona Bank, Limited. 1,500,000 – – 1,500,000 Sumitomo Mitsui Trust June 15, Unsecured, 200,000 – – 200,000 0.65691% (Note 3) Bank, Limited 2022 non-guaranteed The Bank of Fukuoka, Ltd. 1,000,000 – – 1,000,000 March 31, Unsecured, 0.52500% (Note 4) Mitsubishi UFJ Trust and June 15, Unsecured, 2020 non-guaranteed 200,000 – – 200,000 0.65691% (Note 3) The Gunma Bank, Ltd. 500,000 – – 500,000 Banking Corporation 2022 non-guaranteed

The Norinchukin Bank 500,000 – – 500,000 June 15, Unsecured, Mizuho Bank, Ltd. 200,000 – – 200,000 0.65691% (Note 3) 2022 non-guaranteed Sumitomo Mitsui Trust December 19, Unsecured, 1,060,000 – – 1,060,000 1.07980% (Note 3) Bank, Limited 2020 non-guaranteed The Bank of Tokyo- June 15, Unsecured, 200,000 – – 200,000 0.65691% (Note 3) Mitsubishi UFJ, Ltd. 2022 non-guaranteed Mitsubishi UFJ Trust and December 19, Unsecured, 1,060,000 – – 1,060,000 1.07980% (Note 3) Banking Corporation 2020 non-guaranteed Sumitomo Mitsui Banking June 15, Unsecured, 100,000 – – 100,000 0.65691% (Note 3) Corporation 2022 non-guaranteed December 19, Unsecured, Mizuho Bank, Ltd. 1,060,000 – – 1,060,000 1.07980% (Note 3) 2020 non-guaranteed Development Bank of Japan June 15, Unsecured, 100,000 – – 100,000 0.65691% (Note 3) Inc. 2022 non-guaranteed The Bank of Tokyo- December 19, Unsecured, 1,060,000 – – 1,060,000 1.07980% (Note 3) Mitsubishi UFJ, Ltd. 2020 non-guaranteed Sumitomo Mitsui Trust 0.61330% March 30, Unsecured, 1,250,000 – – 1,250,000 (Note 4) Bank, Limited (Note 5) 2023 non-guaranteed Sumitomo Mitsui Banking December 19, Unsecured, 530,000 – – 530,000 1.07980% (Note 3) Corporation 2020 non-guaranteed Mitsubishi UFJ Trust and 0.61330% March 30, Unsecured, 1,250,000 – – 1,250,000 (Note 4) Banking Corporation (Note 5) 2023 non-guaranteed Development Bank of Japan December 19, Unsecured, 530,000 – – 530,000 1.07980% (Note 3) Inc. 2020 non-guaranteed 0.61330% March 30, Unsecured, Mizuho Bank, Ltd. 1,250,000 – – 1,250,000 (Note 4) (Note 5) 2023 non-guaranteed Sumitomo Mitsui Trust January 10, Unsecured, 1,340,000 – – 1,340,000 1.07856% (Note 3) Bank, Limited 2021 non-guaranteed The Bank of Tokyo- 0.61330% March 30, Unsecured, 1,250,000 – – 1,250,000 (Note 4) Mitsubishi UFJ, Ltd. (Note 5) 2023 non-guaranteed Mitsubishi UFJ Trust and January 10, Unsecured, 1,340,000 – – 1,340,000 1.07856% (Note 3) Banking Corporation 2021 non-guaranteed Sumitomo Mitsui Trust 800,000 – – 800,000 Bank, Limited Long-term January 10, Unsecured, Mizuho Bank, Ltd. 1,340,000 – – 1,340,000 1.07856% (Note 3) loans 2021 non-guaranteed Mitsubishi UFJ Trust and 800,000 – – 800,000 payable Long-term Banking Corporation The Bank of Tokyo- January 10, Unsecured, (Note 2) 1,340,000 – – 1,340,000 1.07856% (Note 3) loans Mitsubishi UFJ, Ltd. 2021 non-guaranteed payable Mizuho Bank, Ltd. 800,000 – – 800,000 (Note 2) April 6, Unsecured, Sumitomo Mitsui Banking January 10, Unsecured, The Bank of Tokyo- 0.38472% (Note 3) 670,000 – – 670,000 1.07856% (Note 3) 800,000 – – 800,000 2023 non-guaranteed Corporation 2021 non-guaranteed Mitsubishi UFJ, Ltd.

Development Bank of Japan January 10, Unsecured, Sumitomo Mitsui Banking 670,000 – – 670,000 1.07856% (Note 3) 400,000 – – 400,000 Inc. 2021 non-guaranteed Corporation

Nippon Life Insurance March 31, Unsecured, Development Bank of Japan 500,000 – – 500,000 0.25000% (Note 4) 400,000 – – 400,000 Company 2021 non-guaranteed Inc.

Sumitomo Mitsui Trust January 9, Unsecured, Sumitomo Mitsui Trust June 15, Unsecured, 840,000 – – 840,000 0.73690% (Note 3) 1,500,000 – – 1,500,000 1.06316% (Note 4) Bank, Limited 2022 non-guaranteed Bank, Limited 2023 non-guaranteed

Mitsubishi UFJ Trust and January 9, Unsecured, Mitsubishi UFJ Trust and June 15, Unsecured, 840,000 – – 840,000 0.73690% (Note 3) 1,500,000 – – 1,500,000 1.06316% (Note 4) Banking Corporation 2022 non-guaranteed Banking Corporation 2023 non-guaranteed

January 9, Unsecured, June 15, Unsecured, Mizuho Bank, Ltd. 840,000 – – 840,000 0.73690% (Note 3) Mizuho Bank, Ltd. 1,500,000 – – 1,500,000 1.06316% (Note 4) 2022 non-guaranteed 2023 non-guaranteed

The Bank of Tokyo- January 9, Unsecured, The Bank of Tokyo- June 15, Unsecured, 840,000 – – 840,000 0.73690% (Note 3) 1,500,000 – – 1,500,000 1.06316% (Note 4) Mitsubishi UFJ, Ltd. 2022 non-guaranteed Mitsubishi UFJ, Ltd. 2023 non-guaranteed

Sumitomo Mitsui Banking January 9, Unsecured, Sumitomo Mitsui Banking June 15, Unsecured, 420,000 – – 420,000 0.73690% (Note 3) 625,000 – – 625,000 0.75387% (Note 3) Corporation 2022 non-guaranteed Corporation 2023 non-guaranteed

Development Bank of Japan January 9, Unsecured, Development Bank of Japan June 15, Unsecured, 420,000 – – 420,000 0.73690% (Note 3) 625,000 – – 625,000 0.75387% (Note 3) Inc. 2022 non-guaranteed Inc. 2023 non-guaranteed

Mizuho Trust & Banking Sumitomo Mitsui Trust 2,000,000 – – 2,000,000 March 31, Unsecured, – 1,250,000 – 1,250,000 Co.,LTD. 0.68500% (Note 4) Bank, Limited 2022 non-guaranteed Shinkin Central Bank 500,000 – – 500,000 Mitsubishi UFJ Trust and – 1,250,000 – 1,250,000 June 15, Unsecured, Banking Corporation 0.46400% (Note 4) Tokio Marine & Nichido – 2023 non-guaranteed 400,000 – 400,000 March 31, Unsecured, Fire Insurance Co., Ltd. 0.30630% (Note 4) Mizuho Bank, Ltd. – 1,250,000 – 1,250,000 2022 non-guaranteed The 77 Bank, Ltd. 400,000 – – 400,000 The Bank of Tokyo- – 1,250,000 – 1,250,000 Mitsubishi UFJ, Ltd. Sumitomo Mitsui Trust June 15, Unsecured, 1,500,000 – – 1,500,000 0.94688% (Note 4) Bank, Limited 2022 non-guaranteed Taiyo Life Insurance 500,000 – – 500,000 Company September 29, Unsecured, 0.35998% (Note 4) Mitsui Sumitomo Insurance 2023 non-guaranteed 500,000 – – 500,000 Company, Limited

80 25 26 81 (Unit: Thousands of yen) (Unit: Thousands of yen) Category Average Category Average Beginning Ending Maturity Use of Beginning Ending Maturity Use of Increase Decrease interest rate Remarks Increase Decrease interest rate Remarks balance balance date funds balance balance date funds 㻌 Lender (Note 1) 㻌 Lender (Note 1)

Sumitomo Mitsui Trust January 12, Unsecured, Sumitomo Mitsui Trust 1,400,000 – – 1,400,000 0.78362% (Note 4) 1,800,000 – – 1,800,000 Bank, Limited 2024 non-guaranteed Bank, Limited

Mitsubishi UFJ Trust and January 12, Unsecured, Mitsubishi UFJ Trust and 1,400,000 – – 1,400,000 0.78362% (Note 4) 1,800,000 – – 1,800,000 Banking Corporation 2024 non-guaranteed Banking Corporation

January 12, Unsecured, Mizuho Bank, Ltd. 1,800,000 – – 1,800,000 Mizuho Bank, Ltd. 1,400,000 – – 1,400,000 0.78362% (Note 4) 2024 non-guaranteed September 16, Unsecured, The Bank of Tokyo- 0.70169% (Note 3) 1,800,000 – – 1,800,000 2025 non-guaranteed The Bank of Tokyo- January 12, Unsecured, Mitsubishi UFJ, Ltd. 1,400,000 – – 1,400,000 0.78362% (Note 4) Mitsubishi UFJ, Ltd. 2024 non-guaranteed Sumitomo Mitsui Banking 900,000 – – 900,000 Sumitomo Mitsui Banking January 12, Unsecured, Corporation 700,000 – – 700,000 0.78362% (Note 4) Corporation 2024 non-guaranteed Development Bank of Japan 900,000 – – 900,000 Development Bank of Japan January 12, Unsecured, Inc. 700,000 – – 700,000 0.78362% (Note 4) Inc. 2024 non-guaranteed Sumitomo Mitsui Trust 2,100,000 – – 2,100,000 Mizuho Trust & Banking Bank, Limited 2,000,000 – – 2,000,000 Co.,LTD. Mitsubishi UFJ Trust and 2,100,000 – – 2,100,000 Resona Bank, Limited. 1,500,000 – – 1,500,000 Long-term Banking Corporation March 29, Unsecured, 0.41380% (Note 4) loans The Bank of Fukuoka, Ltd. 1,000,000 – – 1,000,000 2024 non-guaranteed Mizuho Bank, Ltd. 2,100,000 – – 2,100,000 payable March 19, Unsecured, Shinkin Central Bank 500,000 – – 500,000 (Note 2) The Bank of Tokyo- 0.61942% (Note 3) 2,100,000 – – 2,100,000 2026 non-guaranteed Mitsubishi UFJ, Ltd. The Norinchukin Bank 500,000 – – 500,000 Sumitomo Mitsui Banking Sumitomo Mitsui Trust June 17, Unsecured, 1,050,000 – – 1,050,000 1,200,000 – – 1,200,000 0.85377% (Note 3) Corporation Bank, Limited 2024 non-guaranteed Development Bank of Japan Mitsubishi UFJ Trust and June 17, Unsecured, 1,050,000 – – 1,050,000 1,200,000 – – 1,200,000 0.85377% (Note 3) Inc. Banking Corporation 2024 non-guaranteed Sumitomo Mitsui Banking June 12, Unsecured, June 17, Unsecured, 6,000,000 – – 6,000,000 0.69796% (Note 4) Mizuho Bank, Ltd. 1,200,000 – – 1,200,000 0.85377% (Note 3) Corporation 2026 non-guaranteed 2024 non-guaranteed Sumitomo Mitsui Trust The Bank of Tokyo- June 17, Unsecured, – 1,750,000 – 1,750,000 1,200,000 – – 1,200,000 0.85377% (Note 3) Bank, Limited Mitsubishi UFJ, Ltd. 2024 non-guaranteed Long-term Mitsubishi UFJ Trust and Sumitomo Mitsui Banking June 17, Unsecured, – 1,750,000 – 1,750,000 loans 600,000 – – 600,000 0.85377% (Note 3) Banking Corporation December 14, Unsecured, Corporation 2024 non-guaranteed 0.71015% (Note 4) payable 2026 non-guaranteed Mizuho Bank, Ltd. – 1,750,000 – 1,750,000 (Note 2) Development Bank of Japan June 17, Unsecured, 600,000 – – 600,000 0.85377% (Note 3) Inc. 2024 non-guaranteed The Bank of Tokyo- – 1,750,000 – 1,750,000 Mitsubishi UFJ, Ltd. Sumitomo Mitsui Trust 1,500,000 – – 1,500,000 Bank, Limited Total 170,150,000 12,000,000 12,000,000 170,150,000 㻌㻌㻌㻌 Mitsubishi UFJ Trust and (Note 1) Weighted average rate, rounding to the sixth decimal place. 1,500,000 – – 1,500,000 0.33150% June 17, Unsecured, Banking Corporation (Note 4) (Note 5) 2024 non-guaranteed (Note 2) Long-term loans payable include current portion. Mizuho Bank, Ltd. 1,500,000 – – 1,500,000 (Note 3) Use of the borrowings is acquisition of the real estate trust beneficiary interests. The Bank of Tokyo- 1,500,000 – – 1,500,000 (Note 4) Use of the borrowings is appropriated to repayment of outstanding loans payable. Mitsubishi UFJ, Ltd. (Note 5) This long-term loans payable is hedged by interest rate swap contract. The average interest rate reflects the effectiveness Sumitomo Mitsui Trust 1,500,000 – – 1,500,000 of this hedging instrument. Bank, Limited (Note 6) Annual repayments of long-term loans payable scheduled for next five years after each balance sheet date were as Mitsubishi UFJ Trust and 1,500,000 – – 1,500,000 follows: Banking Corporation 0.36900% December 13, Unsecured, (Note 4) (Unit: Thousands of yen) (Note 5) 2024 non-guaranteed Mizuho Bank, Ltd. 1,500,000 – – 1,500,000 㻌 Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years The Bank of Tokyo- 1,500,000 – – 1,500,000 Long-term loans payable 25,000,000 19,600,000 7,300,000 12,500,000 14,500,000 Mitsubishi UFJ, Ltd.

Sumitomo Mitsui Trust 1,200,000 – – 1,200,000 Bank, Limited Mitsubishi UFJ Trust and 1,200,000 – – 1,200,000 Banking Corporation Mizuho Bank, Ltd. 1,200,000 – – 1,200,000 March 21, Unsecured, The Bank of Tokyo- 0.54094% (Note 3) 1,200,000 – – 1,200,000 2025 non-guaranteed Mitsubishi UFJ, Ltd.

Sumitomo Mitsui Banking 600,000 – – 600,000 Corporation

Development Bank of Japan 600,000 – – 600,000 Inc.

82 27 28 83 Independent Auditor’s Report Overview of the Asset Manager Overview of the Asset Manager

Corporate TLC REIT Management Inc. Financial Instruments Business Firm, granted by the Director name of the Kanto Regional Finance Bureau (Financial Instruments) Registration No. 2370 Registration & Discretionary Transaction Agent granted by the Minister of Established October 6, 2009 License Land, Infrastructure, Transport and Tourism, Registration No. 65 Building Lots and Building Transactions Business License, Capital ¥200 million granted by the Governor of Tokyo (2) No. 91139

Tokyu Land Corporation President and Shareholder Hiroyuki Tohmata 100% CEO

DNA of Tokyu Land Corporation The Tokyu Fudosan Holdings Group generally carries on the frontier spirit and development capabilities of Tokyo Land Corporation in undertaking development mainly in the Tokyo metropolitan area and major cities nationwide. The Group has built up a strong track record as a pioneer in creating businesses ahead of the times in anticipation of customer demands, for example by opening Tokyu Plaza as the forefront of a building complex near the station and Tokyu Hands as a specialty store for daily-life materials. API’s staff, with abundant experience in many fields of the Tokyu Fudosan Holdings Group, engage in J-REIT operations to meet the needs of unitholders.

Proactive Behavior As an asset manager, API’s staff is required to work proactively (take initiative, foresee and make improvements). API aims at a stable asset management over medium to long term, through not only management and good care of individual properties, but also by closely observing and responding early to the changing market environment (real estate transaction, leasing and finance markets).

Organizational Chart

Shareholders’ Meeting Corporate Auditor Board of Directors Investment Committee Compliance Committee President & CEO Acquisition Priority Review Meeting

Internal Audit Dept. Compliance Dept.

Activia Comforia Broadia Management Div. Management Div. Management Div.

Finance & Asset Asset Asset Asset Corporate Planning Strategy Strategy Strategy & Administration Accounting Investment Management Management Management Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept.

84 85 Information on Unitholders Trends in Unit Prices Unitholder Memo API (left axis) TSE REIT index Trading volume (right axis) 2nd Period 3rd Period 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period (Unit) Account closing dates May 31 and November 30 650,000 30,000 Unitholders’ meeting To be held at least once every two years (Note 1) Nov. 30: ¥465,500 600,000 TSE REIT index Jun. 12: 904.38 Record date for A record date based on Article 15, Section 1 of the Articles of Incorporation unitholders’ meeting 550,000 (Note 2) API: ¥230,000 (IPO offering price) Dates for determining cash 500,000 20,000 May 31 and November 30 distribution payments 450,000 Administrator of Sumitomo Mitsui Trust Bank, Limited 400,000 unitholders’ registry 4-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo 168-0063, Japan

350,000 Nov. 30: 10,000 Stock Transfer Agency Business Planning Department of Sumitomo Mitsui Trust Bank, Limited Address of administrator of 1,671.62 4-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo 168-0063, Japan 300,000 unitholders’ registry Tel: 0120-782-031 (toll-free, available within Japan only) 250,000 URL: http://www.smtb.jp/personal/agency/ (Japanese page)

200,000 0 Stock exchange J-REIT section of the Tokyo Stock Exchange (securities code: 3279) Jun. 13, 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2012 End of Nov. End of May End of Nov. End of May End of Nov. End of May End of Nov. End of May End of Nov. End of May End of Nov. Newspaper to provide public notice Nihon Keizai Shimbun (Note 1) The performance of TSE REIT Index is indexed to API unit price as of June 13, 2012. (Note 2) API implemented a 2-for-1 investment unit split with October 1, 2015 as the effective date. To reflect the split, the issue price is indicated as ¥230,000 (half of ¥460,000).

Distribution of Unitholders ■■ Change of registered address, name or seal, etc., or designation or change of Other domestic Foreign Securities Individuals, account for receipt of dividends: companies unitholders companies other Please contact the securities company. 145 (2.1%) 246 (3.6%) 7,959 (1.2%) 27,117 (4.1%) Foreign ■■ Dividends unitholders Number of Securities Number of You can receive dividends by presenting a dividend receipt to the nearest head office/branch/office of unitholders companies 151,170 investment units by holder type 13 (0.2%) (22.7%) by holder type Japan Post Bank (bank agency). If the period for receipt has already expired, please specify how you wish 6,871 665,214 to receive dividends on the back of the dividend receipt, and then mail it to the Stock Transfer Agency Other domestic Financial Individuals, companies Financial Department, Sumitomo Mitsui Trust Bank, or receive dividends directly at the service counter of the head institutions other 68,468 institutions 156 (2.3%) 6,311 (91.8%) office/branch of the bank. (10.3%) 410,500 (61.7%) In addition, with respect to future dividends, if you wish to receive dividends through transfer to a bank (Note) API implemented a 2-for-1 investment unit split, with October 1, 2015 as the effective date. account, etc., please take the necessary procedures at your securities company.

Stock Transfer Agency Department, Sumitomo Mitsui Trust Bank, Limited Annual Schedule Telephone inquiries Tel: 0120-782-031 (toll-free, available within Japan only) Closing month Closing month Announcement Commencement Release of the Announcement Release of the for the fiscal for the fiscal Commencement of of financial of payment of Semi-Annual of financial Semi-Annual period ending period ending payment of dividends results dividends Report results Report in May in November ■■ Dividend statement Pursuant to the provisions of the Act on Special Measures concerning Taxation, with regard to dividends paid by API, API will send to each unitholder a payment notification describing the amount of the dividend, May July August September November January February March withholding tax and so forth. However, the dividend statement sent along with the dividend payment also API Website functions as the payment notification. We provide all relevant information on our website in a timely and reliable manner. Please note that each unitholder may use the payment notification as an attachment for a tax return. (If you select the method of allocation in proportion to the number of shares held, please ask your securities URL https://www.activia-reit.co.jp/en/ company for further information.)

Accessible from smartphone as well. 86 87 Information on Unitholders Withholding tax rate on dividends of listed investment corporations

Commencement date of the From January 1, 2014 through December 31, 2037 From January 1, 2038 dividend payment

20.315% 20% Dividend tax rate Income tax of listed investment Income tax 15% + Reconstruction special income tax 0.315% (Note) 15% corporations Breakdown Breakdown Residence tax Residence tax 5% 5%

(Note) 15% × reconstruction special income tax rate 2.1% = 0.315%.

During the period from January 1, 2013 through December 31, 2037 (25 years), the Act on Special Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake (2011 Law No. 117) is in force. As a result, there is a reconstruction special income tax of 2.1%.

This reconstruction special income tax will be imposed together when income tax is withheld at the source on dividends paid by listed investment corporations.

Additional issues to be aware of are as follows.

■■ Matters to be noted regarding the withholding tax on dividends of listed investment corporations • In the case of an individual unitholder who holds 3% or more of the outstanding investment, the income tax rate is 20.42% (income tax 20% + reconstruction special income tax 0.42% (Note)). However, with regard to residence tax, a separate procedure is required. • If a corporate unitholder receives dividends, no residence tax will be imposed. (Note) 20% × reconstruction special income tax rate 2.1% = 0.42%.

■■ Matters to be noted regarding the Reconstruction Special Income Tax • In cases where income tax is non-taxable or exempt, or where the income tax rate is less than the rate provided by domestic laws due to the application of a tax treaty, the reconstruction special income tax will not be imposed. • With regard to taxes in the case where you have selected the method of allocation in proportion to the number of shares held, please ask your securities company.

For more details, please ask the tax office with jurisdiction over the place of tax payment.

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