MORI HILLS REIT INVESTMENT CORPORATION (CODE:3234) Results of 13th Fiscal Period (Ended January 31, 2013) MORI HILLS REIT INVESTMENT CORPORATION Mori Building Investment Management Co., Ltd. http://www.mori-hills-reit.co.jp/en http://www.morifund.co.jp/english/ 00 Contents 1. Investment highlights 2 2. 13th period financial highlights 16 3. Operation highlights 20 4. Appendix 29 This document has been prepared by MORI HILLS REIT INVESTMENT CORPORATION (“MHR”) for informational purposes only and should not be construed as an offer of any transactions or the solicitation of an offer of any transactions. Please inquire with the various securities companies concerning the purchase of MHR investment units. This document’s content includes forward-looking statements about business performance; however, no guarantees are implied concerning future business performance. Although the data and opinions contained in this document are derived from what we believe are reliable and accurate sources, we do not guarantee their accuracy or completeness. The contents contained herein may change or cease to exist without prior notice. Regardless of the purpose, any reproduction and/or use of this document in any shape or form without the prior written consent from MHR is prohibited. We will send invitations to future financial results briefings to those who participated in the financial results briefing for the thirteenth period based on the personal information they have shared with us; we guarantee that we make every effort to adequately manage and/or use and protect the information in accordance with the private policy posted on the official website of Mori Building Investment Management Co., Ltd. This document contains charts, data, etc. that were prepared by Mori Building Investment Management Co., Ltd. (hereafter, the “asset manager”) based on charts, data, indicators, etc. released by third parties. Furthermore, this document includes statements based on analyses, judgments, and other observations concerning such matters by the asset manager as of the date of preparation. 11 1. Investment highlights 2 1-1 Investment highlights Unit price performance 600,000（ yen)（円） 550,000 （（（ 500,000 Trend since anouncement of management policy 2010 MHR's unit price 181,300yen 586,000yen +223.2% 450,000 TSE REIT Index 906.64 1,420.02 +56.6% （（（ Trend during 13th period 400,000 As of Sep. 14, MHR's unit price 330,500yen 485,000yen +46.7% TSE REIT Index 944.55 1,238.94 +31.2% 350,000 2010 300,000 As of Jul. 31, As of Mar. 12, 2012 2013 Unit price performance 250,000 ））） As of Jan. 31, 200,000 Increase 9 End of 281,000th yen period 2013 150,000 ））） Increase 2010/9/14 2010/9/14 2010/10/14 （ End of Note 1 2010/11/13 9 （ th Note 2 1,115.71period ） 2010/12/13 ） Unless otherwise stated in this document, all amoun 10 End of TSE REIT Index is based to the announcement date of 258,100th yen 202011/1/3111/1/12 period 2011/2/11 From “Turnaround Phase” to “External Growth Phase” 2011/3/13 10 End of 2011/4/12 th 997.89period 2011/5/12 2011/6/11 20112011/7/31/7/11 11 End of 252,200th yen period 2011/8/10 ts of less than a 20unit11/ 9/are9 omitted and all fraction the 8th period results (Sep. 14, 2010) and shows t 2011/10/9 11 End of 12 End of 330,500th yen 2011/11/8 th 850.48period period 2011/12/8 202012/1/3112/1/7 2012/7/31 2012/2/6 3 2012/3/7 13 End of 485,000th yen period 2012/4/6 12 End of th s are rounded up to one digit below decimal point. 2012/5/6 944.55period he relative performance2012/ vs.6/5 MHR’s unit price perfor 2012/7/5 2012/8/4 13 End of th 1,238.94 2012/9/3 森ヒルズリート投資口価格MHR’s unit price period TSE東証 REIT Index 2012/10/3 REIT指数 2012/11/2 2012/12/2 2013/1/1 2013/1/31 2013/1/31 mance. 2013/3/2 Investment highlights 1-2 New Management Policy 2013 and Summary of Public Offering We have completed the “Turnaround Phase” based on the Management Policy announced in September 2010. We will now transition to an “External Growth Phase.” We will continue the basic policy of “Dividend-Driven Management” while aiming to maximize unitholders’ value with the following policies: New Management Policy 2013 Overview of Public Offering Total units 231,520 units Basic policy “Dividend-driven management” outstanding Number of units 23,100 units Policy ①①① Strive for external growth issued （Including third-party allotment: 1,100 units ） Policy ②②② Further strengthening of our financial position Issue price 491,400 yen per unit Policy ③③③ Continued increase of dividend per unit, NAV and market value Offered amount 11,351,340,000 yen (maximum) Purchase price 474,264 yen per unit ・Primarily seek premium properties in central Tokyo Strive for ・Utilization of sponsors’ property pipeline Acquired amount 10,955,498,400 yen (maximum) external growth ・Further increase portfolio NOI yield ・Further improvement of unrealized Acquisition funds for Atago Green Hills Use of funds gains/losses and ARK Mori Building Issuance February 15, 2013 resolution day Further strengthening of Day of our financial position determining February 25, 2013 Debtデット ・Extending the average duration details of loans payable ・Reducing borrowing costs Payment date March 4, 2013 and April 3, 2013 アセットAsset Mizuho Securities and UBS Securities Continued increase of (joint lead managers) エクイティEquity dividend per unit, NAV and Underwriters SMBC Nikko Securities and Mitsubishi UFJ Morgan market value Stanley Securities (collectively as "syndicate of underwriters") 4 1-3 Investment highlights Offering Highlights Resume the expansion of asset size with acquisitions of assets through public offering resulting in increased DPU. After acquisition of th 13 period Assets to be acquired assets to be acquired (ended Jan. 2013) (Forecast of 14 th period) Atago Green Hills ARK Mori Building (DHC) Total assets 211.8 16.49 3.51 20.0 (acquisition ＋ →→→ 230.8 billion yen price basis) billion yen billion yen ＋＋ billion yen billion yen NOI yield (Note 1) 3.8 ％％％ 4.7 ％ 5.8 ％ →→→ 4.9 ％％％ 4.0 ％％％ Unrealized +1.41 ＋＋＋ +0.04 →→→ ＋＋＋1.45 capital gain billion yen billion yen billion yen LTV （Note 4） (appraisal value basis) 52.0 ％％％ 51.3 ％％％ (Note 2) LTV （Note 4） (book value basis) 48.8 ％％％ 48.7 ％％％ (Note 3) NAV per unit 392,170 yen 405,313 円円円（Note 4） 9,400 10,000 Dividend per unit 9,169 yen/unit yen/unit （Forecast of （Forecast of yen/unit 14th period ） 15th period ） (Note 1) Figures for the 13th period and forecast of 14th period are average NOI yields of the entire portfolio. (Note 2) LTV (appraisal value basis) is calculated as [Interest-bearing debt/Appraisal value based total assets （Total assets ＋Total appraisal value －Total book value ）] (Note 3) LTV (book value basis) is calculated as [Interest bearing debt/Total assets] (Note 4) The figures are calculated by adding the total amount of proceeds through the primary offering and maximum proceeds through the third-party allotment of the public offering, acquisition of assets-to-be-acquired and new borrowings of 10 billion yen (scheduled) to the figures as of the end of the 13th period. In addition, NAV per unit is calculated based on 254,620 investment units outstanding on the assumption that the entire issuance of 1,100 investment units through a third-party allotment, which is scheduled to be paid in on April 3, 2013, is conducted. 5 1-4 Investment highlights Assets to be acquired on April 1, 2013 Overview of properties we are acquiring Atago Green Hills ARK Mori Building (District Heating and Cooling) Property No. O-7 Property No. O-1 Location 2-5-1 Atago, Minato-ku, Tokyo, etc. Location 1-12-32 Akasaka, Minato-ku, Tokyo Completion July 2001 (Office ・Retail) ・October (Residential) Completion March 1986 Gross floor area 148,165.61 ㎡ (total of 3 buildings) Gross floor area 177,486.95 ㎡ Type of specified asset Sectional ownership Type of specified asset Sectional ownership Leasable floor area 11,626.48 ㎡ (portion to be acquired) Leasable floor area 3,212.41 ㎡ (portion to be acquired) 〈〈〈MHR ownership stake in Atago 〉〉〉 〈〈〈DHC 〉〉〉 Trust portion of entire office, residential and retail buildings ARK Hills Heating & Cooling Supply (approx. 44.5% of entire property) Co., Ltd. (District Heating and Cooling or DHC) conducts a heat Trust beneficial Trust beneficial supplying business as defined in the interests: interests: 45% Heat Supply Business Act. 29% DHC has been granted rights to Portion acquired Portion to be provide the heating and cooling May 1, 2012 acquired service for ARK Hills and several (approx. 20.0 ％ of (approx. 12.9 ％％％ of adjacent buildings by meeting entire property) entire property) regulatory requirements concerning demand, scale, supply, business operator, etc. MHR interest after the acquisition (approx. 32.9% of entire property) Portion to be acquired Resulting ownership Portion to be acquired Resulting ownership (29 ％ of quasi co-ownership (74 ％ of quasi co-ownership (DHC) (8 floors + DHC) of beneficial interests) of beneficial interests) approx. 13,475.59 ㎡ approx. 34,385.99 ㎡ 3,212.41 ㎡ 24,850.89 ㎡ Occupancy area Occupancy area (approx. 12.9% of total property) (approx. 32.9% of total property) (approx. 2.3 ％) (approx. 17.9 ％) approx. 1,467.32 ㎡ approx. 3,744.20 ㎡ approx. 7.02 ㎡ approx. 4,332.54 ㎡ Land area Land area (approx. 11.3% of total property) (approx. 28.8% of total property) (approx. 0.02 ％) (approx. 10.9 ％) 6 Investment highlights 1-5 Advantage of Mori Hills REIT (1) Upward trend in dividends Change in dividend per unit 8th period 9th period 10th period 11th period 12th period 13th period 14th period 15th period (ended (ended (ended (ended (ended (ended (ending (ending (yen) Jul.