Mitsubishi Property Logistics REIT Funding : Abstract of Monetary Outcomes for the Fiscal Interval Ended February 28, 2022 (REIT)

Abstract of Monetary Outcomes for the Fiscal Interval Ended February 28, 2022 (REIT)

April 15, 2022

Title of Issuer:

Mitsubishi Property Logistics REIT

Funding Company (“MEL”)

Inventory Trade Itemizing:

Tokyo Inventory Trade

Securities Code:

3481

Web site:

https://mel-reit.co.jp/en/

Consultant:

Ken Takanashi, Government Director

Asset Administration Firm:

Mitsubishi Jisho Funding Advisors, Inc.

Consultant:

Tetsuya Masuda, President & CEO

Inquiries:

Ken Takanashi, Government Officer, Normal Supervisor,

Logistics REIT Administration Division

Tel. +81-3-3218-0030

Scheduled Date of Submitting of Securities Report:

Might. 30, 2022

Scheduled Date of Graduation of Distributions Funds:

Might. 20, 2022

Supplementary Supplies for Monetary Outcomes:

Sure

Traders and Analysts Assembly:

Sure

(Values are rounded right down to the closest million yen)

1. Monetary Outcomes for the Fiscal Interval Ended February 28, 2022 (eleventh Fiscal Interval) (from Sept. 1, 2021 to Feb. 28, 2022)

(1) Working Outcomes

(Percentages point out change from the earlier interval)

Working revenues

Working earnings

Bizarre earnings

Web earnings

Fiscal interval ended

Hundreds of thousands of yen

Hundreds of thousands of yen

%

Hundreds of thousands of yen

%

Hundreds of thousands of yen

%

Feb. 28, 2022

5,028

2,640

3.3

2,541

6.7

2,540

6.7

Aug. 31, 2021

2,555

15.9

2,382

14.9

2,381

14.9

% 1.5 17.8

4,953

Web earnings per unit

Return on unitholders’

Fairness

Ratio of peculiar earnings to complete property

Ratio of peculiar earnings to working revenues

Fiscal interval ended

Feb. 28, 2022 Aug. 31, 2021

Yen 6,495 6,108

% 2.2 2.2

% 1.4 1.4

% 50.5 48.1

Word: MEL issued new funding items of 41,000 items and 1,898 items on Mar. 5, 2021 and Apr. 6, 2021, respectively. For the fiscal interval ended Aug. 31, 2021, web earnings per unit is calculated by dividing web earnings by the day-weighted common variety of funding items excellent in the course of the interval 389,872 items.

(2) Distributions

Distributions per unit (excluding surplus money distributions

(“SCD”))

Complete quantity of distributions (excluding SCD)

SCD per unit

Complete quantity of

SCD

Distributions per unit (together with

SCD)

Complete quantity of distributions (together with SCD)

Payout ratio

Ratio of distributions to web property

Fiscal interval ended

Feb. 28, 2022 Aug. 31, 2021

Yen 6,495 6,089

Hundreds of thousands of yen 2,540 2,381

Yen 679 675

Hundreds of thousands of yen 265 264

Yen 7,174 6,764

Hundreds of thousands of yen 2,806 2,645

% 100.0 100.0

% 2.2 2.1

Notes:

  • 1. Complete quantity of SCD are the refund of funding, which falls beneath the distributions via discount in unitholders’ capital beneath taxation legislation.

  • 2. The ratio of web asset worth attributable to a discount in unitholders’ paid-in capital for the fiscal intervals ended Aug. 31, 2021 and Feb. 28, 2022, is 0.003 and 0.002, respectively. The cost of SCD is deemed a return of capital. This calculation methodology is pursuant to Article 23, Paragraph 1, Merchandise 4 of the Act on Particular Measures Regarding Taxation.

  • 3. With the issuance of recent funding items carried out within the fiscal interval ended Aug. 31, 2021, the payout ratio is calculated utilizing the next system.

Payout ratio = Complete quantity of distributions (excluding SCD)/Web earnings ×100

(3) Monetary Position

Complete property

Web property

Unitholders’ fairness to complete property

Web property per unit

Fiscal interval ended

Feb. 28, 2022 Aug. 31, 2021

Hundreds of thousands of yen 180,403 181,206

Hundreds of thousands of yen 116,305 116,410

% 64.5 64.2

Yen 297,352 297,621

(4) Money Flows

Money flows from working actions

Money flows from investing actions

Money flows from financing actions

Money and money equivalents

Fiscal interval ended

Feb. 28, 2022 Aug. 31, 2021

Hundreds of thousands of yen 4,273 4,252

Hundreds of thousands of yen

(154) (28,171)

Hundreds of thousands of yen

(3,545) 26,090

Hundreds of thousands of yen 12,217 11,643

2. Forecasts for the Fiscal Intervals Ending Aug. 31, 2022 (from Mar. 1, 2022 to Aug. 31, 2022) and Feb. 28, 2023 (from

Sept. 1, 2022 to Feb. 28, 2023)

(Percentages point out change from the earlier interval)

Dsisptreirbuutniiotn Distributions

Working revenues Working earnings Bizarre earnings

Web earnings

(together withper unit (excluding

SCD

SCD)

SCD)Fiscal interval ending

Aug. 31, 2022

Feb. 28, 2023

Hundreds of thousands of yen 6,198 6,224

%

23.3 0.4

Hundreds of thousands of yen 3,332 3,279

%

26.2 (1.6)

Hundreds of thousands of yen 2,958 3,101

%

16.4 4.8

Hundreds of thousands of yen 2,957 3,100

%Yen

YenYen

16.4 4.8

7,307 7,628

6,574 6,890

733 738

(Reference) Forecasted web earnings per unit for the fiscal interval ending Aug. 31, 2022: 6,574 yen

Forecasted web earnings per unit for the fiscal interval ending Feb. 28, 2023: 6,890 yen

*Different

(1) Modifications in accounting insurance policies, accounting estimates, or restatements

(a) Modifications in accounting insurance policies attributable to revisions to accounting requirements and different rules:

Sure

(b) Modifications in accounting insurance policies attributable to different causes:

None

(c) Modifications in accounting estimates:

None

(d) Restatements:

None

(2) Complete variety of funding items issued and excellent

  • (a) Complete variety of items issued and excellent on the finish of the fiscal interval (together with treasury items)

    As of Feb. 28, 2022 391,135 items As of Aug. 31, 2021 391,135 items

  • (b) Variety of treasury items on the finish of the fiscal interval

As of Feb. 28, 2022

0 items As of Aug. 31, 2021

0 items

Word: Please confer with “Notes Regarding Per Unit Data” on web page 23 for the primarily based calculation for the forecasted web earnings per unit.

*Implementation Standing of Statutory Audit

On the time of this monetary report, the audit procedures for the monetary statements pursuant to the Monetary Devices and Trade Act haven’t been accomplished.

*Rationalization on the Applicable Use of the Forecast of Monetary Outcomes and Different Issues of Particular Consideration

The forward-looking statements on this materials are primarily based on info at present out there to us and on sure assumptions that we consider are cheap. Precise working efficiency might differ considerably attributable to numerous elements. Moreover, these statements shall not be deemed a assure or any dedication of the quantity of future distributions and SCD. Please confer with “Forecast Assumptions for the Fiscal Intervals Ending Aug. 31, 2022 and Feb. 28, 2023” on web page 7 for assumptions concerning forward-looking statements.

Word: This doc has been translated from part of the Japanese authentic for reference functions solely. Within the occasion of any discrepancy between this translated doc and the Japanese authentic, the unique shall prevail.

Index

  • 1. Outcomes of Operations

    (1) Outcomes of Operations …………………………………………………………………………………………………………………………………………………. 2

    (A)Overview of the Present Fiscal Interval … ……………………………………………………………………………………………………………………… 2

    (i) Main Operational Outcomes of MEL …………………………………………………………………………………………………………………………. 2

    (ii) Funding Atmosphere and Operational Outcomes of the Present Fiscal Interval …………………………………………………………….. 2

    (iii) Overview of Financing ………………………………………………………………………………………………………………………………………… 3

    (iv) ESG Initiatives ……………………………………………………………………………………………………………………………………….. 3

    (v) Overview of Monetary Outcomes and Distributions …………………………………………………………………………………………………….. 4

    (B) Outlook for the Subsequent Fiscal Interval ………………………………………………………………………………………………………………………. 4

    (i) Future Administration Insurance policies ………………………………………………………………………………………………………………………………….. 4

    (ii) Important Subsequent Occasions ……………………………………………………………………………………………………………………………… 5

    (iii) Earnings Forecast ………………………………………………………………………………………………………………………………………………. 6

    (2) Danger Elements …….. …………………………………………………………………………………………………………………………………………………………. 9

  • 2. Monetary Statements

    (1) Steadiness Sheet ……………………………………………………………………………………………………………………………………………………………. 10

    (2) Assertion of Revenue and Retained Earnings …………………………………………………………………………………………………………………. 12

    (3) Assertion of Modifications in Web Belongings ……………………………………………………………………………………………………………………………… 13

    (4) Assertion of Money Distributions …………………………………………………………………………………………………………………………………… 14

    (5) Assertion of Money Flows …………………………………………………………………………………………………………………………………………….. 15

    (6) Notes Regarding Going Issues Assumption ……………………………………………………………………………………………………………… 15

    (7) Notes Regarding Important Accounting Insurance policies … ……………………………………………………………………………………………………….. 16

    (8) Notes on Modifications in Accounting Insurance policies ………………………………………………………………………………………………………………………… 17

    (9) Notes on Modifications in Show technique …… ……………………………………………………………………………………………………………………….. 17

    (10) Notes Regarding Monetary Statements ………………………………………………………………………………………………………………………. 17

    (11) Change in Variety of Funding Items Issued and Excellent …………………………………………………………………………………….. 25

  • 3. Reference Data

    (1) Composition of MEL’s Belongings ………………………………………………………………………………………………………………………………………. 27

    (2) Funding Belongings ………………………………………………………………………………………………………………………………………………………. 27

    (A) Main Elements of Funding Securities ………………………………… .. …………………………………………………………………………………… 27

    (B) Funding Properties ………………………………… . ………………………………… .. …………………………………………………………………………………… 27

    (C) Different Main Funding Belongings ……………………………………………………… .. …………………………………………………………………………………… 27

    (i) Overview of Portfolio …………………………………………………………………………………………………………………………………………….. 28

    (ii) Overview of Properties ……………………………… . ……………………………………………………………………………………………………………………. 30

(iii) Overview of Tenant Agreements ……………… ..……. ………………………………………………………………………………………………………… 32

(iv) Overview of Appraisal Studies …… ………………………………………………………………………………………………………………………… 34

(v) Data Relating to Main Actual Property Properties ……… …………………………………………………………………………………………. 36

(vi) Data Relating to Main Tenants …………………………………………………………………………………………………………………………… 36

(vii) Property Distribution ……………………………………………………………………………………………………………………………………………………. 37

(viii) Particulars of Collateral ……… ……………………………………………………………………………………………………………………………………………. 39

(ix) Capital Expenditure for Owned Properties……….. …………………………………………………………………………………………………………… 39

(x) Overview of Property Leasing and Standing of Working Revenue ….. …………………………………………………………………………………. 40

-1-

1. Outcomes of Operations (1) Outcomes of Operations

(A)Overview of the Present Fiscal Interval (i) Main Operational Outcomes of MEL

Mitsubishi Property Logistics REIT Funding Company (“MEL”) was established on July 14, 2016 beneath the “Act on Funding Belief and Funding Company” (“Funding Belief Regulation”), and was listed on the REIT Securities Market of the Tokyo Inventory Trade on September 14, 2017 (securities code: 3481).

Mitsubishi Property Co., Ltd. (“MEC”), one of many largest complete builders in Japan, performing as a sponsor. MEL focuses on investing in logistics services. MEL’s asset administration firm, Mitsubishi Jisho Funding Advisors, Inc. (“Asset Administration Firm” or “MJIA”) has boasting an intensive observe file in actual property fund administration since its institution in 2001. By way of “HYBRID” (Word) utilization of the strengths of each corporations, MEL goals for maximization of unitholder worth by striving for the constructing of a high-quality portfolio and regular and secure asset administration as a listed actual property funding company investing primarily in logistics services. Specializing in “location”, “constructing options” and “stability,” we goal to construct a long-term and secure portfolio via selective investments in extremely aggressive logistics services that meet tenant wants.

Moreover, MEL introduced its administration coverage primarily based on the “Three Pillars” on April 17, 2019, as a administration plan designed to maximise unitholder worth within the medium- to long-term. The administration coverage is meant to assemble your complete MEC Group to work collectively and enhance unitholder worth of MEL, specializing in the next three pillars: Alignment (align curiosity with unitholders), Self-discipline (disciplined progress) and Hybrid (improve MEL’s distinctive technique, the hybrid mannequin).

MEL owned 22 properties (mixture acquisition value: 170,404 million yen), on the finish of the reporting fiscal interval (Feb. 28, 2022).

Word: “HYBRID,” as within the English time period “hybrid” which means a mix of two issues, is used within the context of utilization of the strengths of MEC and MJIA to confer with the strengths of each corporations being utilized creatively and at occasions mixed relying on the state of affairs and thereby benefiting from these within the administration of MEL.

(ii) Funding Atmosphere and Operational Outcomes of the Present Fiscal Interval

In the course of the reporting fiscal interval ended February 2022, the Japanese economic system started to recuperate from the total cancellation of the state of emergency for COVID-19 on the finish of September 2021. Nonetheless, the financial restoration stored getting higher after which worse once more because of rising useful resource costs, anticipation of upper rate of interest and a speedy growth of extremely infectious variant: “Omicron”. Though the economic system is predicted to slowly recuperate as financial actions are resuming with the progress in COVID-19 vaccination, it’s essential to carefully monitor traits in geopolitical dangers such because the state of affairs in Ukraine and traits within the monetary and capital markets going ahead. The precise GDP (gross home product) for the fourth quarter of 2021 (from Oct. to Dec.) recorded a constructive progress for the primary time in two quarters with 4.6% improve on an annualized foundation backed by the rise in private consumption and company capital funding, and many others.

In the actual property transaction market, home and abroad buyers stay keen to take a position attributable to elements reminiscent of the scale of one of many largest markets in Asia and decrease funding charges in comparison with different nations, and transactions are additionally lively even within the COVID-19 pandemic. As well as, we might want to carefully monitor the rate of interest traits. Nonetheless, buyers proceed to search for potential funding alternatives and cap charges of logistics services stay low attributable to secure money circulate. Lately, long-term bond yields have been fluctuated with a short lived decline associated to geopolitical dangers such because the state of affairs in Ukraine. Nonetheless, consideration ought to proceed to be paid to long-term curiosity traits related to inflation and uncertainty concerning the outlook for the economic system as a complete.

Though J-REIT market remained weak attributable to considerations concerning the deterioration of the credit score market because of the China Evergrande liquidity disaster and rising home long-term rates of interest from September to November 2021, it recovered in a constructive response to long-term rates of interest that is still regular at a low stage in December 2021. Because the starting of 2022, the market has continued to point out heavy upward strain because of the unfold of the Omicron variant and considerations over an increase in home and abroad rates of interest. Inside 2021, the development of TSE REIT Index was from 2,000 factors to round 2,100 factors. From the start of 2022, nevertheless, it quickly fell beneath 1,800 factors attributable to considerations concerning the quantitative tightening of U.S. funds. Since February of this yr, volatility has been rising because of the deterioration of the state of affairs in Ukraine. Though the adjustment for the reason that starting of 2022 has come to a pause just lately, we consider will probably be essential to proceed to carefully monitor the rise in volatility related to the deterioration of the actual property leasing market, risk-off attributable to geopolitical dangers, and modifications within the rate of interest setting.

Within the logistics services market, a speedy improve of e-commerce use has drawn consideration and additional improve in demand for logistics services is predicted, pushed by the elevated online-based consumption and inventories. Beneath these circumstances, the demand for logistics services continues to be sturdy and emptiness charges staylow, regardless of a big quantity of recent provide. Though the development of recent provide is predicted to proceed, tenant leasing actions for properties beneath growth are continuing nicely, and no important impression is predicted on MEL’s portfolio.

As of the tip of the reporting fiscal interval (Feb. 28, 2022), MEL owned 22 properties (mixture acquisition value: 170,404 million yen) and the occupancy price remained excessive, at 99.6%.

(iii) Overview of Financing

In the course of the reporting fiscal interval (Feb. 28, 2022), MEL efficiently refinanced short-term mortgage of 500 million yen with a compensation date of Sept. 1, 2021 and long-term mortgage of two,211 million yen with a compensation date of Sept. 14, 2021. Furthermore, MEL pay as you go short-term mortgage of 900 million yen with money available together with consumption tax refund for the properties acquired throughout fiscal interval ended Aug. 31, 2021 on Dec. 9, 2021.

As of the tip of the reporting fiscal interval (Feb. 28, 2022), the stability of MEL’s interest-bearing debt was 58,374 million yen and MEL’s loan-to-value ratio (the ratio of mixture stability of interest-bearing debt to MEL’s complete property, hereinafter “LTV”) was 32.4%.

MEL’s credit standing as of the tip of the reporting fiscal interval (Feb. 28, 2022) was as follows:

Ranking Company

Ranking Object

Ranking

Outlook

Japan Credit score Ranking Company, Ltd.

Lengthy-term issuer ranking

AA-

Constructive

(iv) ESG Initiatives

MEL is dedicated to endeavoring to reinforce consideration in the direction of the setting, social contributions and company governance to enhance the sustainability of society. We acknowledge that this is a crucial social duty for a listed enterprise to imagine, and in addition consider that it’s important for maximizing our unitholder worth. As well as, MJIA established the Sustainability Committee in February 2019 with the goal of enhancing sustainability and enhancing unitholder worth on a company-wide foundation. In January 2022, it was raised to a proper committee, and in April 2022, the Sustainability Administration Workplace was established to nominate individual in cost. In these methods, our dedication to sustainability has been enhanced and clarified additional.

In December 2021, MJIA expressed help for the suggestions of the Job Power on Local weather-Associated Monetary Disclosures (TCFD) (Word 1) and joined the TCFD Consortium, a bunch of home corporations that help TCFD suggestions. MEL will proceed to share the sustainability aims, and continues to embed sustainability into our enterprise with MJIA.

In December 2021, MEL recognized vital points (materiality) associated to ESG that should be addressed in sustaining its enterprise mannequin with a view to obtain sustainable progress and improve company worth over the medium to long run, and established insurance policies, targets, and key efficiency indicators (KPIs) for every materiality. MEL acknowledges that dangers and alternatives associated to local weather change are of paramount significance to its enterprise, and is selling efforts to scale back carbon emissions and additional info disclosure. In January 2022, we revealed our first Sustainability Report. MEL’s predominant KPIs and targets in key materiality and the progress is as follows.

Targets (by FY 2030)

Achievement standing

CO2 emissions depth (t-CO2/m2)

30% discount (primarily based on FY 2017)

21.3% discount (FY2020)

Power consumption depth (kWh/m2)

15% discount (primarily based on FY 2017)

9.7% discount (FY2020)

Water consumption depth (m3/m2)

No improve (primarily based on FY 2017)

18.9% discount (FY2020)

Waste recycling price

70% or extra

63.4% discount (FY2020)

Inexperienced constructing certification (Word 2) acquisition price (Word 3)

100%

87.6% (As of March 4, 2022)

Our efforts for sustainability have been extremely evaluated within the 2021 survey of the World Actual Property Sustainability Benchmark (GRESB) Actual Property Evaluation (Word 4), and it acquired the best “5 Stars” for the second consecutive yr and the “Inexperienced Star” for the third consecutive yr. Moreover, within the 2021 GRESB Disclosure Evaluation, which measures the extent of enhancement of ESG info disclosure, we acquired an “A” ranking, the best stage for 2 consecutive years, in recognition of our excellence in disclosing info on environmental issues and sustainability initiatives.

Notes: 1. “TCFD(Job Power on Local weather-related Monetary Disclosures” is a world initiative established by the Monetary Stability