aeon reit investment corporation...aeon reit investment corporation 5th fiscal period ended july...

AEON REIT Investment Corporation

5th Fiscal Period Ended July 2015

Materials for Investor Meeting

September 15, 2015

Asset Manager:

AEON Reit Management Co., Ltd.

Securities Code: 3292

http://www.aeon-jreit.co.jp/en/

Table of Contents

I. Overview of Operations in 5th Fiscal Period Ended July 31, 2015

1. Summary of Financial Results for 5th Fiscal

Period Ended July 31, 2015----- P. 4

2. Trends of Major Indicators ----- P. 5

3. Portfolio Data (5th Fiscal Period) ----- P. 6

4. Appraisal Value (based on 23 properties as of

the end of 5th Fiscal Period)----- P. 7

II. Operation Highlights of 5th Fiscal Period

1. Operation Highlights (1) ----- P. 9

2. Operation Highlights (2) ----- P. 10

3. Acquisition of Third Party-Owned Properties

(Sponsor-Operated)----- P. 11

4. Performance of 23 Properties in Portfolio (1) ----- P. 12



7. Summary of Malaysian Economy ----- P. 15

8. Maintaining of Stable Financial Base (1) ----- P. 16

9. Maintaining of Stable Financial Base (2) ----- P. 17

10. Portfolio Map (based on 23 properties as of July

31, 2015)----- P. 18

11. Portfolio List (based on 23 properties as of July

31, 2015)----- P. 19

12. Trend of Investment Unit Price ----- P. 20

III. Forecasts

1. Forecasts for 6th Fiscal Period Ending January

31, 2016 and 7th Fiscal Period Ending July 31,

2016

----- P. 22

2. Expansion of Asset Size and Capital Investment

Plan----- P. 23

3. Large-scale Renewal of AEON MALL Morioka ----- P. 24

2

IV. AEON REIT’s Investment Strategy

1. Roadmap for Growth ----- P. 26

2. Basic Philosophy and Basic Policy ----- P. 27

3. A Highly Stable Portfolio Centered on the Aeon

Group’s Large-Scale Retail Properties----- P. 28

4. Sponsor Supports from the AEON Group to

utilize its collective strength ----- P. 29

5. Major Large-Scale Shopping Centers Developed

by the AEON Group（Including Properties It

Plans to Develop）----- P. 30

6. Strategic Cash Management and a Stable

Financial Position----- P. 31

7. Framework for Maximizing Unitholder Value ----- P. 32

Appendix.

I. Overview of Operations in 5th Fiscal Period Ended July 31, 2015

Summary of Financial Results for 5th Fiscal Period Ended July 31, 2015

4

January 2015

PeriodJuly 2015 Period July 2015 Period

4th Period

Results

5th Period

Results

vs.

Previous Period

5th Period

Forecast

vs.

Forecast

(A) (B) (B-A) (C) (B-C)

Operating Revenue(millions

of yen)7,422 9,164 1,741 9,165 △ 1

Operating Expenses(millions

of yen)4,612 5,658 1,046 5,719 △ 60

Expenses Related

to Rent Business

(millions

of yen)4,165 5,168 1,002 5,212 △ 43

(Of Which,

Depreciation)

(millions

of yen)2,245 2,659 414 2,687 △ 27

Operating Income(millions

of yen)2,810 3,505 695 3,445 59

Ordinary Income(millions

of yen)2,353 2,978 625 2,918 60

Net Income(millions

of yen)2,349 2,969 619 2,907 61

Distributions per Unit (yen) 2,473 2,724 251 2,665 59

Number of Investment

Units Issued(units) 950,000 1,090,200 140,200 1,090,200 -

Difference in operating revenue

Decrease in real estate rent revenue［-3］

Increase in other real estate rent revenue

［+1］

Difference in operating expenses

Decrease in expenses related to rent

business［-43］

• Increase in repairs and maintenance

expenses［+11］

• Taxes and dues［-26］

• Decrease in depreciation［-27］

• Decrease in commission paid [-6]

• Decrease in investor relations expenses［-

13］

Mainly due to revenues from property

acquisition in 5th period


Increase in real estate rent revenue［+1,741］


Increase in expenses related to rent

business［+1,002］


expenses［+163］

• Taxes and dues［-25］

• Increase in land rent paid［+432］

• Increase in depreciation from capital

expenditures［+414］

Major Reasons for Difference During 5th Period

(vs. Previous Period)

Major Reasons for Difference During 5th Period

(vs. Forecast)

Trends of Major Indicators

5

NOI from leasing activities (millions of yen)Aggregate market value at end of period

(billions of yen)資産規模（取得価額ベース）（億円）

1口当たりNAV （円）（注）

Note: NAV (Net asset value) per unit = (Total unitholders’ capital at end of period + Unrealized profit or loss of the whole portfolio at end of period) / Number of total investment units issued at end of period

Asset size (based on acquisition price)

(billions of yen)

NAV per unit (Note) (yen)Distributions per unit (yen)

686

2,461 2,473 2,724 2,710

2,530

Jan 2014 Period(2nd Period)

July 2014 Period(3rd Period)

Jan 2015 Period(4th Period)

July 2015 Period(5th Period)

Jan 2016 Period(6th PeriodForecast)

July 2016 Period(7th PeriodForecast)

110,457 112,635 115,940 122,059





158.3 158.9 158.9

194.3

Jan 2014Period

(2nd Period)

July 2014Period

(3rd Period)

Jan 2015Period

(4th Period)

July 2015Period

(5th Period)

125.6 128.4

153.1162.4

Jan 2014Period

(2nd Period)

July 2014Period

(3rd Period)

Jan 2015Period

(4th Period)

July 2015Period

(5th Period)

2,445

5,488 5,502

6,655

Jan 2014Period

(2nd Period)

July 2014Period

(3rd Period)

Jan 2015Period

(4th Period)

July 2015Period

(5th Period)

Portfolio Data (5th Fiscal Period)

Notes:

1. Calculated as the weighted average age of the building based on the acquisition price as of Juy 31, 2015

2. The acquisition price is the amount (the sale and purchase price, etc., shown on the sale and purchase agreement, etc.) excluding expenses incurred on the acquisition of each property (commission, taxes and dues, etc.).

3. Remaining lease term as of July 31, 2015

4. Appraisal value as of July 31, 2015

Property

typeRegion Investment

6

23

Portfolio Highlights

Distribution of Portfolio

Portfolio properties

¥194.3bn

Total acquisition price 2 Book value at end of period Appraisal value 4

¥189.6bn ¥206.3bn(+¥0.7bn vs. previous period)

11.1 years

Average building age 1

18.5 years

Average remaining lease term 3Properties with master lease

contracts

Unrealized profit(Appraisal value – book value at end of period)

100% +¥16.6bn(+¥2.8bn vs. previous period)

14.4%

85.6%

11.0%

10.9%

9.2%

8.5%

7.2%

5.8%

5.3%

5.0%

4.5%

4.0%

28.6%

SRSC

RSC

AEON MALL KYOTO

AEON Lake Town mori

AEON MALL Kurashiki

AEON MALL Mitouchihara

AEON MALL Kumamoto

AEON MALL Nogata

AEON Sagamihara SC

AEON MALL Suzuka

AEON MALL Ayagawa

AEON MALL Hiezu

Others

Hokkaido and Tohoku

Kanto

Tokai, Hokuriku and Chubu

Kinki

Chugoku and Shikoku

Kyushu

Malaysia

12.1%

31.7%

10.3%

14.8%

17.7%

13.0%

0.3%

Appraisal Value (based on 23 properties as of the end of 5th Fiscal Period)

7

(Note1) Appraisal value represents the appraisal value as of the valuation date of January 31, 2015 for 4th period and July 31, 2015 for 5th period.

The appraisal values and capitalization rate based on direct capitalization method for AEON MALL Mitouchihara(Land) and properties whose property numbers are RSC-15 to RSC-20 are as of the acquisition date.

(Note2) For AEON LakeTown mori and AEON LakeTown kaze, their appraisal values, price based on direct capitalization method, price based on DCF method, and NOI describe the Investment Corporation’s pro-rata portion of the quasi-co-ownership interest (jun kyōyū-

mochibun) in the beneficiary rights of real estate in trust (40% for each property).

(Note3) Pursuant to the local appraisal methodology, we entrusted the evaluation of the appraisal value of the property to Japan Real Estate Institute. Appraisal value represents the amount equivalent to the Investment Corporation’s pro-rata portion of the rights (18.18%)

similar to the co-ownership right (kyōyū-mochibun) of the trust property pertaining to the trust of the beneficiary rights of real estate in trust, and is based on the appraisal value as indicated on the appraisal report as of the valuation date of January 31, 2015 for 4th

period and July 31, 2015 for 5th period. In addition, the amount in Malaysian Ringgit was converted to Japanese yen based on the exchange rate as of the end of the fiscal period (January 30, 2015; 1 RM = ¥32.57 and July 31, 2015: 1RM=¥32.49; rounded down to the

nearest 100th).

4th Period (note1) 5th Period Difference 4th Period (note1) 5th Period Difference

SRSC-1 AEON LakeTown mori (Note2) The Tanizawa Sōgō Appraisal Co., Ltd. 21,190 23,000 23,000 0 5.0 5.0 0.0

SRSC-2 AEON LakeTown kaze (Note2) The Tanizawa Sōgō Appraisal Co., Ltd. 6,730 7,290 7,660 370 5.4 5.4 0.0

RSC-1 AEON MALL Morioka Japan Real Estate Institute 5,340 5,590 5,590 0 6.9 6.9 0.0

RSC-2 AEON MALL Ishinomaki Japan Real Estate Institute 6,680 7,020 7,020 0 6.3 6.3 0.0

RSC-3 AEON MALL Mitouchihara Japan Real Estate Institute 16,460 17,300 17,300 0 6.3 6.3 0.0

AEON MALL Mitouchihara (Land) Japan Real Estate Institute 105 112 112 0 - - -

RSC-4 AEON MALL Ota Japan Real Estate Institute 6,860 7,820 7,820 0 6.6 6.6 0.0

RSC-5 AEON Sagamihara Shopping Center Japan Real Estate Institute 10,220 10,300 10,500 200 5.5 5.4 ▲ 0.1

RSC-6 AEON MALL Ogaki Japan Real Estate Institute 4,950 5,210 5,160 ▲ 50 6.8 6.9 0.1

RSC-7 AEON MALL Suzuka Japan Real Estate Institute 9,660 10,100 10,100 0 6.3 6.3 0.0

RSC-8 AEON MALL Meiwa The Tanizawa Sōgō Appraisal Co., Ltd. 3,290 3,610 3,620 10 6.7 6.7 0.0

RSC-9 AEON MALL Kasai-Hojo Japan Real Estate Institute 7,230 7,610 7,610 0 6.9 6.9 0.0

RSC-10 AEON MALL Hiezu Japan Real Estate Institute 7,780 8,180 8,320 140 6.9 6.9 0.0

RSC-11 AEON MALL Kurashiki Japan Real Estate Institute 17,890 18,700 18,700 0 6.2 6.2 0.0

RSC-12 AEON MALL Ayagawa Japan Real Estate Institute 8,740 9,190 9,190 0 6.5 6.5 0.0

RSC-13 AEON MALL Nogata Japan Real Estate Institute 11,250 12,800 12,700 ▲ 100 6.4 6.5 0.1

RSC-14 AEON MALL Kumamoto Japan Real Estate Institute 14,060 14,800 14,800 0 6.2 6.2 0.0

RSC-15 AEON MALL KYOTO Japan Real Estate Institute 21,470 21,700 21,800 100 5.0 5.0 0.0

RSC-16 AEON MALL Sapporo-Hiraoka The Tanizawa Sōgō Appraisal Co., Ltd. 5,900 6,210 6,230 20 6.3 6.3 0.0

RSC-17 AEON MALL Kushiro-Showa The Tanizawa Sōgō Appraisal Co., Ltd. 1,780 1,880 1,900 20 6.9 6.9 0.0

RSC-18 AEON MALL Rifu The Tanizawa Sōgō Appraisal Co., Ltd. 2,560 2,710 2,720 10 6.5 6.5 0.0

RSC-19 AEON MALL Yamagata-Minami The Tanizawa Sōgō Appraisal Co., Ltd. 1,350 1,430 1,440 10 6.7 6.7 0.0

RSC-20 AEON MALL Yokkaichi-Kita The Tanizawa Sōgō Appraisal Co., Ltd. 2,210 2,340 2,370 30 6.4 6.4 0.0

M-1 AEON Taman Universiti Shopping Centre (Note3) Japan Real Estate Institute658

(20mil RM)

651

(20mil RM)

649

(20mil RM)▲ 1 - - -

194,363 205,553 206,311 759 - - -　　　　　Total

Property

numberProperty name Appraisal agency

Acquisition price

(Millions of yen)

Appraisal value (Millions of yen) (Note1)Capitalization Rate based on direct capitalization

method (%)

II. Operation Highlights of 5th Fiscal Period

Time of

implementation of

revitalization

Description of revitalization work

Amount of

Revitalization

(millions of yen)

Increase in rent

（annualized）(thousands of yen)

Effect of

revitalization (note)

AEON MALL Nogata January 2014・Rainwater/wastewater counter

measures in underground parking garage109 8,120 7.4％

AEON Sagamihara Shopping

CenterOctober 2014

・Re-covering floor and renovation of rest

rooms20 1,310 6.3％

AEON MALL Kumamoto November 2014 ・Installation of LED lights 53 3,570 6.7％

AEON Lake Town kaze April 2015 ・Large-scale renewal 312 21,260 6.8％

AEON MALL Hiezu March 2015 ・Large-scale renewal 105 8,040 7.7％

Operation Highlights （1）

9

Shopping Center Renewal

Implementing large-scale renewal in Phase1 (autumn in 2014 to April 24, 2015) and

in Phase 2 (autumn in 2015)

A total of 155 stores including 96 newly opened stores, 26 relocated stores, and 33

renovated stores were renewed in Lake Town kaze in Phase1. 183 stores including

85 newly opened stores, 42 relocated stores, and 56 renovated stores were renewed

in Lake Town mori.

Implementing large-scale renewal with rezoning of the mall

Effect of Revitalization

Note: Effect of revitalization = Increase in rent（annualized）/ Amount of revitalization

AEON Lake Town kaze AEON MALL Hiezu

Operation Highlights （2）

10

Taking Inbound Tourism Consumption

AEON MALL KYOTO

“Quantum of the Seas”, one of the world

largest cruise passenger boat with 4,700

Chinese tourists stopped at Sakai-minato

on July 2.

Approximately 100 buses stopped at

AEON MALL Hiezu.

Tourists bought tons of cosmetics and

groceries in AEON MALL Hiezu.

AEON MALL Hiezu

Acquisition price

(millions of yen)105

Appraisal value

（millions of yen ）112

（March 1, 2015）

Acquisition date April 28, 2015

Location 1-198, Uchihara, Mito-shi, Ibaraki

Site area 1,999.83㎡

Seller Mito city, Ibaraki Pref.

External Growth

Acquiring land adjacent to AEON MALL Mitouchihara , which is an asset already held by AEON REIT from Mito City, Ibaraki Prefecture by general competitive bidding

Effort for IR Activities for Individual Investors

Number of tourists in Kyoto city and tourist consumption per

person

Property name LocationAcquisition price

(billions of yen) Appraisal value

AEON MALL KYOTOKyoto City,

Kyoto Pref.21.4 21.7

AEON MALL

Sapporo-Hiraoka

Sapporo City,

Hokkaido5.9 6.2

AEON MALL

Kushiro-Showa

Kushiro City,

Hokkaido1.7 1.8

AEON MALL RifuMiyagi County,

Miyagi Pref.2.5 2.7

AEON MALL

Yamagata-Minami

Yamagata City,

Yamagata Pref.1.3 1.4

AEON MALL

Yokkaichiita

Yokkaichi City,

Mie Pref.2.2 2.3

Total 35.2 36.2

AEON MALL Mitouchihara (additional acquisition of land)

Acquiring properties through follow-on offering in February 2015

Holding AEON group IR seminar in AEON Lake Town kaze

・Holding AEON group IR

seminar at AEON Hall in

AEON Lake Town kaze,

which is an asset already

held by AEON REIT, on

July 20.

・Approximately 130

people participated in the

seminar.

Overview of IR activities for individual investors

5th period（February 2015 to July 2015）

A total of 780 people participated in our IR seminars.

AEON REIT IR seminars arranged by

securities companies （Tokyo, Saitama,

Aichi, Kyoto, Kumamoto, Gifu ）

11 seminars were held.

11

AEON MALL

KYOTO

AEON Lake Town kazeAEON Lake Town mori

AEON Taman UniversitiShopping Centre

AEON MALL

Ishinomaki

AEON MALL

Morioka

AEON MALL

Mitouchihara

AEON MALL

Ogaki

AEONSagamihara SC

AEON MALL

Suzuka

AEON MALL

Kasai-Hojo

AEON MALL

Meiwa

AEON MALL

Hiezu

AEON MALL

Ayagawa

AEON MALL

Kurashiki

AEON MALL

Kumamoto

AEON MALLSapporo-Hiraoka

AEON MALLKushiro-Showa

AEON MALL

Rifu

AEON MALLYamagata-Minami

AEON MALLYokkaichi-Kita

RSC

SRSC

RSC

RSC

RSC

RSC

RSC

RSC

RSC

RSC

RSC

RSC

RSC

RSC

SRSC

AEON MALL

Nogata

AEON MALL

OtaRSC RSC

RSC

RSC

RSC RSC RSC

RSC

4th fiscal period（End of January

2015）

5th fiscal period（End of July

2015）

Number of

properties17

properties

23

properties

Total acquisition

price158.9

billion yen

194.3

billion yen

Average NOI yield 7.0% 6.9%

Average NOI yield

after depreciation4.1% 4.1%

Average remaining

lease term18.8

years

18.5

years

Average building

age11.0

years

11.1

years

Total leasable area1.70

million ㎡2.13

million ㎡

Properties with

master lease

contracts100% 100%

Changes in Portfolio

Acquisition of Third Party-Owned Properties (Sponsor-Operated)

Aggressively acquire third-party-owned properties, in addition to the sponsor-owned properties.

Consider acquisition of external properties which are not operated by our Sponsor, by utilizing the Sponsor and the Asset Manager’s

own channel.

Ope-

rationSeller

Sp

on

sor-O

pera

ted P

rope

rties

Sp

on

sor-O

wn

ed

Pro

pe

rties

Th

ird-P

arty

-Ow

ned

Pro

pe

rties

Our Portfolio as of July 2015

Performance of 23 Properties in Portfolio (1)

Slight increase in sales of end tenants and High occupancy rate in actual end-tenant since fiscal year of 2011

12

YoY Sales Comparison 1 of End Tenants in 23-property Portfolio

Actual End-Tenant Occupancy Rate 2 in 23-property Portfolio

Notes:

1. The total amount of sales of end tenants of the 23 portfolio properties for the four periods of March–May, June–August, September–November and December–February each year as a percentage of sales for the same

periods of the previous year

2. The percentage of total leased area in the 23 portfolio properties that is actually occupied by end tenants (including area in which end tenants have committed to opening stores)

3. Year-on-year sales comparisons and the actual occupancy rates shown above are data based on interviews of master lease companies. The percentage of properties with master lease contracts is 100%.

4. Year-on-year sales comparisons and the actual occupancy rates shown above have been rounded to the nearest tenth of a percent.

99.6% 99.7% 99.7% 99.8% 99.8%99.5%

99.7% 99.7% 99.7% 99.8% 99.6% 99.5%99.7%

95%

96%

97%

98%

99%

100%

May 2012 Aug 2012 Nov 2012 Feb 2013 May 2013 Aug 2013 Nov 2013 Feb 2014 May 2014 Aug 2014 Nov 2014 Feb 2015 May 2015

114.0%

98.2% 98.9% 98.0%100.8%

102.9% 102.0%99.4%

103.1%

97.6% 97.9% 97.2%97.2%

80%

90%

100%

110%

120%

Mar–May2012

Jun–Aug2012

Sep–Nov2012

Dec 2012–Feb 2013

Mar–May2013

Jun–Aug2013

Sep–Nov2013

Dec 2013–Feb 2014

Mar–May2014

Jun–Aug2014

Sep–Nov2014

Dec 2014–Feb 2015

Mar–May2015


13

Rent Revenue at Master Lease Companies1 of 23 Properties in Portfolio

Notes:

1.Revenue such as rent income and income incidental thereto received by the master lease company from end tenants

2.The rent revenue figures above are data based on interviews of master lease companies.

3.The indexed YoY comparison figures above have been rounded to the nearest tenth of a percent.

4.Rent revenue from AEON Taman Universiti Shopping Centre is converted to Japanese yen based on the exchange rate as of the end of January 2015 (1 RM = ¥32.57; rounded down

to the nearest hundredth).

Mar. 2012–Feb. 2013

(12-month period) ¥51.7 billion

(YoY) 104.4%

Mar. 2013–Feb. 2014


(YoY) 107.3%

Mar. 2014–Feb. 2015


(YoY) 101.3%

12.7 12.7 12.4

13.9 13.6 13.7 13.4

14.714.1 13.8 13.5

14.714.2

113.6%

103.0%99.4%

102.7%107.4% 108.0%108.4%105.6%

103.8% 100.5%100.6% 100.2% 100.2%

0%

20%

40%

60%

80%

100%

120%

0

2

4

6

8

10

12

14

16

18

20

Mar–May2012

Jun–Aug2012

Sep–Nov2012

Dec 2012–Feb 2013

Mar–May2013

Jun–Aug2013

Sep–Nov2013

Dec 2013–Feb 2014

Mar–May2014

Jun–Aug2014

Sep–Nov2014

Dec 2014–Feb 2015

Mar–May2015

(Billions of yen)Rent revenue (billions of yen) Indexed YoY comparison

1

4

12

5

1 0

Sales Trends of Individual Properties for December 2014 – May 2015

Percentage of properties with

sales index of 100% or higher: 26.1%

Average of 23Properties in ARI

portfolio

97.2%

Year-on-year

sales index <90% 90%–95% 95%–100% 100%–105% 105%–110% ≥110%

% of total 4.3% 17.4% 52.2% 21.7% 4.3% 0.0%

14


Distribution of YoY Indexed Sales Growth for six months of End Tenants by Property 1

(Reference) Consumer Confidence Index (Households of two or more persons, seasonally adjusted series)

July 201540.3

Notes:

1. Sales of each property for June 2014–Nov. 2014 are expressed as a percentage of sales for the same period a year earlier (June 2013–Nov. 2013).

2. The year-on-year sales index above presents data based on interviews of master lease companies.

3. The figures in the year-on-year sales index above have been rounded to the nearest tenth of a percent. As a result, the total amount may not always total 100.0%.

Source: “Consumer Confidence Survey” by Department of Business Statistics, Economic and Social Research Institute, Cabinet Office of Japan

Note: Changed to the postal survey method starting with the survey for April 2013. Until the survey for March 2013, surveys were carried out by the direct-visit and self-completion questionnaires method

(with telephone surveys at certain times).

20.0

25.0

30.0

35.0

40.0

45.0

50.0

55.0

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

Oct

Dec

Fe

b

Apr

Jun

Aug

CY 2004 CY 2005 CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015

Summary of Malaysian Economy

15

Changes in Malaysian population（Unit：million people） Changes in GDP growth rate in Malaysia

Changes in Malaysian Ringgit/Yen(Monthly)（Note） Changes in rate of increase in CPI

GDP growth rate remain at a high level and CPI remains stable.

Introduction of GST in April 2015 affects retail market in Malaysia.

The decline in crude oil prices lead to weak Malaysian Ringgit.

（Source） IMF World Economic Outlook Database, April 2015 （Source） IMF World Economic Outlook Database, April 2015

（Source） Reuter

（Note） Number of year 2015 is data uo to August.

（Source） IMF World Economic Outlook Database, April 2015

Ministry of Internal Affairs and Communications ：Consumer Price Index

26.526.8 27.1

27.628.1

28.629.1

29.529.9

30.3

2006 2007 2008 2009 2010 2010 2011 2012 2013 2014

5.0%5.6%

6.3%

4.8%

-1.5%

7.4%

5.2%

5.6%

4.7%

6.0%

2006 2007 2008 2009 2010 2010 2011 2012 2013 2014

3.0% 3.6%

2.0%

5.4%

0.6%1.7%

3.2%1.7%

2.1%3.1%

-0.3%

0.3%

0.0%

1.4%

-1.4% -0.7% -0.3% 0.0% 0.3%

2.8%

2006 2007 2008 2009 2010 2010 2011 2012 2013 2014

rate of increase in CPI【Malaysia】

rate of increase in CPI【Japan】

20

25

30

35

40

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Maintainｉｎg of Stable Financial Base(1)

16

2nd Period(January 31, 2014)

3rd Period(July 31, 2014)

4th Period(January 31, 2015)

5th Period(July 31, 2015)

Short-term loans

payable¥4,000 million ¥- million ¥- million ¥2,000 million

Long-term loans payable ¥63,000 million ¥63,000 million ¥63,000 million ¥73,400 million

Tenant leasehold and

security deposits¥7,411 million ¥7,411 million ¥7,411 million ¥8,111 million

Total debt ¥74,411 million ¥70,411 million ¥70,411 million ¥83,512 million

LTV (including leasehold

deposits)43.4％ 41.4％ 41.5％ 41.0％

LTV (excluding leasehold

deposits)39.0％ 37.1％ 37.1％ 37.0％

Long-term debt ratio 94.0％ 100.0％ 100.0％ 97.3％

Fixed interest rate ratio 80.6％ 85.7％ 85.7％ 84.5％

Average remaining

borrowed period5.2 years 5.0 years 4.5 years 4.3 years

Average interest rate on

borrowings0.92％ 0.95％ 0.95％ 0.94％

Trend in Major Financial Indicators

Maintainｉｎg of Stable Financial Base (2)

17

Borrowing amount Borrowing

DateMaturity Interest rate

Breakdown

Short-

term¥2.0bn ¥2.0bn

Feb. 27,

2015Oct 20, 2015

Floating

(base rate 1 +0.25%)

Long-

term

¥73.4

bn

¥9.0bn

Nov. 25,

2013

Oct. 20, 2016Floating


¥27.0bn Oct. 22, 2018Effective fixed rate 2

0.78125%


1.17250%


1.76375%

¥0.7bn

Feb. 27,

2015

Oct 20, 2017Floating


¥1.2bn Oct 21, 2019Effective fixed rate 2

0.61910%


0.88915%

¥4.5bn Oct 21, 2024Effective fixed rate 2

1.40390%

Notes:

1. Refers to the Japanese yen TIBOR released by the Japanese Bankers Association; provided, however, that if there is no

corresponding time period, it refers to the interest rate reasonably set by the agent by the straight-line method.

2. While funds are borrowed at floating rates, the interest rates are fixed in effect by entering into interest rate swap

agreements to hedge interest rate fluctuation risk. The figures are the interest rates calculated after taking into consideration

the effect of interest rate swaps.

AA－（Stable）

Mix of Lenders (as of July 31, 2015)

Distribution of Maturities after the new

debt financing

（billions of yen)

17.0%

15.1%

12.5%

10.7%

7.8%

7.7%

7.3%

4.6%

3.3%

3.1%

3.1%

3.1%

1.7%

1.7%

1.3%

Debt Snapshot

Syndicate of lenders arranged by Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

and Sumitomo Mitsui Trust Bank, Limited

Credit Rating

Japan Credit Rating Agency, Ltd. (JCR)

Mizuho Bank

Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Trust Bank

Bank of Tokyo-Mitsubishi UFJ

The Norinchukin Bank

Mitsubishi UFJ Trust & Banking Corporation

Mizuho Trust & Banking Co.

Resona Bank

Development Bank of Japan

AEON BANK

The Hyakugo Bank

The Mie Bank

The 77 Bank

Hiroshima Bank

The Chiba Bank

9.0

27.0

22.0

5.02.0 0.7 1.2

4.0 4.5

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Portfolio Map (based on 23 properties as of July 31, 2015)

18

Malaysia

Hokkaido and Tohoku

Tokai, Hokuriku and Chubu

Kinki, Chugoku and Shikoku

Kyushu

AEON MALL Morioka

AEON Lake Town mori AEON Lake Town kaze

AEON MALL Ishinomaki

AEON MALL Mitouchihara AEON MALL Ota

AEON Sagamihara Shopping Center

AEON MALL OgakiAEON MALL Suzuka

AEON MALL Meiwa

AEON MALL Kasai-Hojo AEON MALL Hiezu

AEON MALL KurashikiAEON MALL Ayagawa

AEON MALL Nogata AEON MALL Kumamoto

ＡＥＯＮＴａｍａｎＵｎｉｖｅｒｓｉｔｉＳｈｏｐｐｉｎｇ Centre

Prefectures Located on

Domestic Properties

AEON MALL

Sapporo-Hiraoka

AEON MALL

Kushiro-Showa

AEON MALL

Yamagata-Minami

AEON MALL

Yokkaichi-Kita

AEON MALL KYOTO

Currently Held Properties

Kanto

AEON MALL Rifu

Portfolio List (based on 23 properties as of July 31, 2015)

19

Notes: 1. The valuation date of the Appraisal value is July 31, 2015.2. Unrealized profit (loss) = Appraisal value − Book value at end of period3. Capitalization rate using the direct capitalization method.4. NOI = Real estate leasing business revenue − Real estate leasing business expenses + Depreciation5. Each property undergoes a seismic risk analysis to forecast the loss rate related to damage from the recurrence of an earthquake during a 475 year period. The number for Domestic Subtotal is not an average, but rather the PML value for the whole

domestic portfolio.6. Acquisition price, Book value at end of period, Appraisal value, Unrealized profit (loss), and NOI describe AEON REIT’s pro-rata portion of the quasi-co-ownership interest (jun kyōyū-mochibun) in the trust beneficiary rights (40% for each property).7. Acquisition price, Book value at end of period, Appraisal value, Unrealized profit (loss), and NOI describe AEON REIT’s portion of the amount equivalent to the rights (18.18%) similar to the co-ownership interest

(kyōyū-mochibun) of the trust property for which the rights were transferred from AEON CO. (M) BHD., which holds the whole property.

Leasable

area

Acquisition

price

Portfolio

composition

Book value

at end of period

Appraisal

value 1

Unrealized profit

(loss) 2

Capitalization

rate 3 NOI

4PML

5

(m2) (Millions of yen) (%) (Millions of yen) (Millions of yen) (Millions of yen) (%) (Millions of yen) (%)

SRSC-1 AEON LakeTown mori 6 Koshigaya City, Saitama November 2013 160,387.00 21,190 10.9 % 20,628 23,000 2,371 5.0 % 589 2.0 %

SRSC-2 AEON LakeTown kaze 6 Koshigaya City, Saitama November 2013 127,183.81 6,730 3.5 % 6,754 7,660 905 5.4 % 217 1.7 %

RSC-1 AEON MALL Morioka Morioka City, Iwate November 2013 98,968.59 5,340 2.7 % 5,121 5,590 468 6.9 % 222 11.1 %

RSC-2 AEON MALL Ishinomaki Ishinomaki City, Miyagi November 2013 60,682.20 6,680 3.4 % 6,459 7,020 560 6.3 % 231 3.9 %

AEON MALL Mitouchihara November 2013 159,997.49 16,460 8.5 % 15,828 17,300 1,471 6.3 % 549 0.7 %

AEON MALL Mitouchihara (Land) April 2015 - 105 0.1 % 107 112 4 - 1 -

RSC-4 AEON MALL Ota Ota City, Gunma November 2013 93,165.27 6,860 3.5 % 6,610 7,820 1,209 6.6 % 285 4.8 %

RSC-5 AEON Sagamihara Shopping Center Sagamihara City, Kanagawa November 2013 75,056.62 10,220 5.3 % 10,195 10,500 304 5.4 % 328 13.4 %

RSC-6 AEON MALL Ogaki Ogaki City, Gifu November 2013 64,246.26 4,950 2.5 % 4,603 5,160 556 6.9 % 179 9.2 %

RSC-7 AEON MALL Suzuka Suzuka City, Mie November 2013 125,236.10 9,660 5.0 % 9,419 10,100 680 6.3 % 342 7.5 %

RSC-8 AEON MALL Meiwa Taki County, Mie November 2013 44,193.80 3,290 1.7 % 3,245 3,620 374 6.7 % 135 4.6 %

RSC-9 AEON MALL Kasai-Hojo Kasai City, Hyogo November 2013 48,229.25 7,230 3.7 % 6,930 7,610 679 6.9 % 263 10.7 %

RSC-10 AEON MALL Hiezu Saihaku County, Tottori November 2013 102,045.24 7,780 4.0 % 7,481 8,320 838 6.9 % 289 8.0 %

RSC-11 AEON MALL Kurashiki Kurashiki City, Okayama November 2013 157,274.78 17,890 9.2 % 17,372 18,700 1,327 6.2 % 589 0.5 %

RSC-12 AEON MALL Ayagawa Ayauta County, Kagawa November 2013 113,149.07 8,740 4.5 % 8,290 9,190 899 6.5 % 307 0.6 %

RSC-13 AEON MALL Nogata Nogata City, Fukuoka November 2013 151,969.51 11,250 5.8 % 10,794 12,700 1,905 6.5 % 411 0.1 %

RSC-14 AEON MALL Kumamoto Kamimashiki County, Kumamoto November 2013 101,132.38 14,060 7.2 % 13,606 14,800 1,193 6.2 % 468 6.2 %

RSC-15 AEON MALL KYOTO Kyoto City, Kyoto February 2015 136,468.45 21,470 11.0 % 21,559 21,800 240 5.0 % 574 13.5 %

RSC-16 AEON MALL Sapporo-Hiraoka Sapporo City, Hokkaido February 2015 78,360.81 5,900 3.0 % 5,959 6,230 270 6.3 % 234 3.5 %

RSC-17 AEON MALL Kushiro-Showa Kushiro City, Hokkaido February 2015 51,763.05 1,780 0.9 % 1,827 1,900 72 6.9 % 107 7.0 %

RSC-18 AEON MALL Rifu Miyagi Country, Miyagi February 2015 66,385.29 2,560 1.3 % 2,582 2,720 137 6.5 % 121 6.9 %

RSC-19 AEON MALL Yamagata-Minami Yamagata City, Yamagata February 2015 53,487.94 1,350 0.7 % 1,380 1,440 59 6.7 % 65 6.2 %

RSC-20 AEON MALL Yokkaichi-Kita Yokkaichi City, Mie February 2015 41,417.23 2,210 1.1 % 2,235 2,370 134 6.4 % 117 6.0 %

- 2,110,800.14 193,705 99.7% 188,984 205,662 16,667 - 6,633 -

M-1AEON Taman Universiti Shopping

Centre 7

Johor, Malaysia June 2014 22,870.45658

[ 20 million RM ]0.3 %

697

[ 21 million RM ]

649

[ 20 million RM ]

(48)

[ (1 million) RM ]- 21 0.8 %

- 22,870.45 658 0.3 % 697 649 (48) - 21 -

- 2,133,670.59 194,363 100.0 % 189,681 206,311 16,619 - 6,655 1.2%　　　　　　Total

Property

numberProperty name Location

Acquistion

date

　　　　　　Domestic Subtotal

　　　　　　Overseas Subtotal

RSC-3 Mito City, Ibaraki

Comparison between AEON REIT Investment Unit Price, TSE REIT Index and TOPIX

Trend of Investment Unit Price

20

AEON REIT Investment Unit Price and Trading Volume

Note: The AEON REIT investment unit price, the TSE REIT Index and the TOPIX are compared with the closing price on the AEON REIT’s listing date set at 100.

0

10,000

20,000

30,000

40,000

50,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

Nov2013

Dec2013

Jan2014

Feb2014

Mar2014

Apr2014

May2014

Jun2014

Jul2014

Aug2014

Sep2014

Oct2014

Nov2014

Dec2014

Jan2015

Feb2015

Mar2015

Apr2015

May2015

Jun2015

Jul2015

Aug2015

(Units)(Yen)Trading Volume (Right axis)

AEON REIT Investment Unit Price (Left axis)

80

90

100

110

120

130

140

150

160

170

Nov2013

Dec2013

Jan2014

Feb2014

Mar2014

Apr2014

May2014

Jun2014

Jul2014

Aug2014

Sep2014

Oct2014

Nov2014

Dec2014

Jan2015

Feb2015

Mar2015

Apr2015

May2015

Jun2015

Jul2015

Aug2015

AEON REIT TSE REIT Index TOPIX

III. Forecasts


Increase in real estate rent revenue [+15]



business [+233]

• Decrease in repairs and maintenance

expenses [-63]

• Expense of taxes and dues for acquired

properties in 5th period［+263］

• Increase in depreciation［+31］

• Decrease in Administrative service fee

［-14］

22


Increase in real estate rent revenue [+225]



business [+131]


expenses [+56]

• Increase in land rent paid［+49］

• Increase in depreciation［+21］

• Increase in Administrative service fee

［+52］

Major Reasons for Difference During

6th Period (vs.5th period)

July. 2015

PeriodJanuary 2016 Period July 2016 Period

5th Period Results6th Period

Forecasts vs. 5th Period

7th Period

Forecasts vs. 6th Period

(A) (B) (B-A) (C) (C-B)

Operating Revenue(millions of

yen) 9,164 9,387 223 9,403 15

Operating Expenses(millions of

yen) 5,658 5,875 216 6,088 212

Expenses Related to

Rent Business

(millions of

yen) 5,168 5,300 131 5,533 233

(Of Which,

Depreciation)

(millions of

yen) 2,659 2,681 21 2,713 31

Operating Income(millions of

yen) 3,505 3,512 6 3,315 △ 196

Ordinary Income(millions of

yen) 2,978 2,965 △ 12 2,771 △ 194

Net Income(millions of

yen) 2,969 2,957 △ 11 2,763 △ 194

Distributions per Unit (yen) 2,724 2,710 △ 14 2,530 △ 180

Number of Investment

Units Issued(units) 1,090,200 1,090,200 - 1,090,200 -

Major Reasons for Difference During

7th Period (vs.6th period)

Forecasts for 6th Fiscal Period Ending January 31, 2016 and 7th Fiscal Period Ending July 31, 2016*

*based on page 6 of the Assumptions for Forecasts of Performance stated in the Financial Report for the Fiscal Period Ended July 31, 2015

Note: The above performance is an estimation determined based on certain assumptions as of September 11, 2015. The actual performance may vary due to changes in the circumstances surrounding

AEON REIT including acquisition or disposition of properties, the trend of real estate market, etc. in the future. Furthermore, this estimation does not guarantee the amount of distributions.

Expansion of Asset Size and Capital Investment Plan

23

Asset Size (based on acquisition price)

Capital Investment Plan

(billions of yen)

(millions of yen)

17 196 182 346 26289 429

798

935

2,242 1,111

2,230 2,245

2,659 2,681 2,713


Actual


Actual


Actual


Actual

Jan 2016 Period(6th Period)Scheduled

July 2016 Period(7th Period)Scheduled

Repairs and Maintenance Expences Capital Expenditures

Capital Investment Plan Depreciation

158.3 158.9 158.9194.3

300.0





Medium Term

Large-scale renewal of AEON MALL Morioka

24

Renewal of facilities Phase2 renewal

Implementing large-scale renewal in Phase1 (this autumn) and Phase2

(next spring)

46 stores including newly introducing 18 stores will be renewed in Phase1,

and it opens on September 19, 2015.

Together with renewal in Phase1, a total of 110 stores will be renewed in

Phase2.

Implementing renewal of exterior of the SC and restaurants

The first full renewal of exterior and interior of SC since the opening of

SC in August in 2003

Renovating multi-story car park(approximately 6,000㎡） and expanding

sales area as specialty store zone

Implementing renewal in existing mall and planning to renewing

approximately 60 stores

Floor map

IV. AEON REIT’s Investment Strategy

26

Medium- to Long-Term Asset Scale Targets

By realizing a mutually beneficial relationship with our sponsor, we will aim for assets of ¥300 billion in the medium term and ¥500 billion in the long term (Note).

Key Measures

● External growth using the Aeon Group’s pipeline

● Strategic cash management using internal reserves

● Expansion of overseas investment and diversification of types and regions of properties

● Management of leverage with LTV in the 40–50% range

At time of listing Medium Term Long Term

At time of listing

¥158.3 billion

¥300.0 billion

¥500.0 billion

Note: The figures above are targets made as of the date of these materials and there is a possibility that they may not be realized due to future events or the market environment.

Roadmap for Growth

AEON REIT invests primarily in retail and related properties(Note) that are an integral part of the communities in

which they are located. We believe that these properties and facilities form the backbone of the local

communities and their retail business infrastructure.

Our mission is to contribute to the betterment of individual lives and local communities through investment in

retail and related properties. In doing so, we seek to generate stable revenues and achieve the steady growth

of our asset portfolio over the medium to long term.

Note: Refers to retail properties, logistics facilities and related facilities. Retail properties refer to facilities containing retail businesses and other merchandising businesses, entertainment and amusement facilities and other facilities that

attract customers (including parking lots and equipment and systems for logistics). Logistics facilities refer to warehouses and other storage facilities for distribution and transport of merchandise and other goods.

27

Basic Philosophy and Basic Policy

Basic Philosophy

Basic Policy

We will aim to maximize value for unitholders by building a mutually beneficial relationship between AEON REIT and the Aeon Group.

A growth strategy based on a mutually beneficial relationship between AEON REIT and Aeon Group(Note)

Note: Refers to the group comprising the holding company AEON Co., Ltd. and its 263 consolidated subsidiaries and 31 equity-method associates (as of February 28, 2014).

Investment Areas Investment Targets

ASEAN region7, China and other

countries/regions with good

medium- to long-term economic

growth prospects

In principle, retail properties that

are leased in their entirety under

master lease contracts to the Aeon

Group, which manages and

operates the properties

Type

Investment percentage 1

Domestic Overseas

85% or

more

No more than

15%

Reta

il pro

pert

ies, etc

.

Large-scale

retail

property

SRSC

(Super regional shopping center) 2

80% or moreRSC

(Regional shopping center) 3

CSC

(Community shopping center) 4

Other retail

property

NSC

(Neighborhood shopping center) 5

No more than 20%

SM

(Supermarket) 6

Logistics facility No more than 10%

Notes:

1.Calculated based on acquisition price.

2.Larger commercial area than regional shopping centers. A super regional-type shopping center having a number of anchor tenants and a shopping mall forming a complex of over 200 specialty stores.

3.A regional-type shopping center having a general merchandise or other similar store as the anchor tenant and a complex of over 50 specialty stores.

4.A retail property having a general merchandise store, a discount store, a large grocery supermarket or another similar store as the anchor tenant, and a complex of approximately 20–50 specialty stores.

5.A small-scale retail property serving a small commercial area, having a grocery supermarket or another similar store as the anchor tenant and a complex of approximately 10–30 specialty stores generally selling household goods.

6.A grocery supermarket mainly selling high purchase frequency commodities such as food and household goods.

Note 7:

Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar

and Cambodia

Overseas Investment Targets

28

Investment Properties Centered on Large-Scale Retail

Properties and Investment Ratios

A Highly Stable Portfolio Centered on the Aeon Group’s Large-Scale Retail Properties

AEON

REIT

Tenants

Tenants

AEON

Mall

AEON

Retail

AEON Group

Master

Lease

ContractSublease

Contract

20 years8

Fixed-rate

rent

Master

Lease

Contract

Sublease

Contract

Note 8:

The durations of master lease contracts are 20 years, with the exception of AEON Taman

Universiti Shopping Centre, which utilizes a 10 year master lease contract

Rent structure diagram

AEON

Malaysia

AEON Hokkaido

Sponsor Supports from the AEON Group to utilize its collective strength

Utilizing the Aeon Group’s collective strengths,

we expanded the number of companies with which we concluded support agreements

(pipeline support agreements and shopping center management agreements)

to further strengthen external growth

AEON REIT Investment Corporation


Stable growth of our portfolio over the medium to long term

Pipeline support agreement Memorandum of

understanding on

investments in properties in

MalaysiaShopping center

management agreement

Pipeline support companies

Shopping center

management support companies

AEON Retail Co., Ltd.

AEON Mall Co., Ltd.

AEON Hokkaido Corporation

AEON KYUSHU CO., LTD.

AEON RYUKYU CO., LTD.

AEON TOWN Co., Ltd.

Overseas support company

AEON CO. (M) BHD.

Utilize the Aeon Group’s collective strengths

Sponsor support agreement

Trademark license agreement

AEON CO., LTD.

Sponsor

Pipeline Support Agreement

Major support terms

Provision of information on properties owned

Grant of preferential negotiating rights on the retail properties operated by the

support companies

Provision of information on the potential sale of properties owned by third parties

Consideration for having a store or other as a tenant in any of AEON REIT’s

properties

Provision of warehousing services (temporary possession of properties to be

acquired)

Advice on investment strategy and property acquisition by the support

companies

Co-ownership (kyōyū or jun kyōyū) of any property with AEON REIT

Cooperation to ensure the sufficiency of human resources

Shopping Center Management Agreement

Operational provision from the Aeon Group

Research on individual properties

Advice on and backup services for the management of individual properties

Activation and redevelopment of individual properties in the medium to long term

29

Hokkaido and Tohoku AEON MALL Around Asahikawa Station Asahikawa City, Hokkaido

●AEON MALL Tomakomai Tomakomai City, Hokkaido●AEON MALL Shimoda Kamikita County, Aomori●AEON MALL Moriokaminami Morioka City, Iwate●AEON MALL Natori Natori City, Miyagi●AEON MALL Akita Akita City, Akita●AEON MALL Tendo Tendo City, Yamagata●Shopping Mall Festa Koriyama City, Fukushima

Major Large-Scale Shopping Centers Developed by the AEON Group

（Including Properties It Plans to Develop）

30

Kanto and Koushinetsu●AEON MALL Tsukuba Tsukuba City, Ibaraki●AEON MALL Shimotsuma Shimotsuuma City, Ibaraki●AEON MALL Sanoshintoshi Sano City, Tochigi●AEON MALL Takasaki Takasaki City, Gunma●AEON MALL Urawamisono Saitama City, Saitama●AEON MALL Hanyu Hanyu City, Saitama●AEON MALL Kasukabe Kasukabe City, Saitama●AEON MALL Yono Saitama City, Saitama●AEON Iruma Iruma City, Saitama●AEON MALL Makuhari New City Chiba City, Chiba●AEON MALL Kisarazu Kisarazu City, Chiba●AEON MALL Tamadaira Woods Hino City, Tokyo●AEON MALL Hinode Nishitama County, Tokyo●AEON Hadano Shopping Center Hadano City, Kanagawa●AEON MALL Nigataminami Nigata City, Nigata●AEON MALL Koufushowa Nakakoma County, Yamanashi●AEON MALL Sakudaira Saku City, Nagano

Kinki ●AEON MALL Kusatsu Kusatsu City, Shiga●AEON MALL Kyoto Katsuragawa Kyoto City・Mukou City, Kyoto●AEON MALL Kyotogojo Kyoto City,Kyoto●AEON MALL Osaka Dome City Osaka City. Osaka●AEON Kireuriwari Osaka City, Osaka●AEON MALL Dainichi Moriguchi City, Osaka

Kyushu and Okinawa ●AEON MALL Fukuokaito Fukuoka City, Fukuoka●AEON MALL Yahatahigashi Kitakyushu City, Fukuoka●AEON MALL Fukutsu Fuktsu City, Fukuoka●AEON MALL Sagayamato Saga City, Saga●AEON Daito Shopping Center Sasebo City, Nagasaki●AEON Yatsushiro Shopping Center Yatsushiro City, Kumamoto●AEON MALL Sankoh Nakatsu City, Oita●AEON MALL Miyazaki Miyazaki City, Miyazaki●AEON MALL Kagoshima Kagoshima City, Kagoshima

AEON MALL Okinawa Rycom Nakagami County, Okinawa

Chugoku and Shikoku ●AEON MALL Tottorikita Tottori City, Tottori●AEON Matsue Shopping Center Matsue City, Shimane●AEON MALL Okayama Okayama City, Okayama●AEON MALL Hiroshima Gion Hiroshima City, Hiroshima●AEON MALL Hiroshima Fuchu Aki County, Hiroshima●AEON Town Houfu Houfu City, Yamaguchi●AEON MALL Takamatsu Takamatsu City, Takamatsu●AEON MALL Niihama Niihama City, Ehime●AEON MALL Kochi Kochi-City, Kochi

AEON MALL Imabarishintoshi Imabari City, Ehime

Tokai and Hokuriku ●AEON MALL Takaoka Takaoka City, Toyama●AEON MALL Tonami Tonami City, Toyama●AEON MALL Kahoku Kahoku City, Ishikawa●AEON MALL Kakamigahara Kakamigahara City, Gifu●AEON MALL Hamamatsuichino Hamamatsu City, Shizuoka●AEON MALL Odaka Nagoya City, Aichi●AEON MALL Nagoya Chaya Nagoya City, Aichi●AEON MALL Fuso Niwa County, Aichi●AEON MALL Toin Inabe County, Mie●AEON MALL Tokoname Tokoname City, Aichi

●AEON MALL Rinkusennan Sennan City, Osaka●AEON MALL Shijonawate Shijonawate City・Neyagawa

City, Osaka●AEON MALL Itamikoya Itami City, Osaka●AEON MALL Kashihara Kashihara City, Nara●AEON MALL Wakayama Wakayama City, Wakayama

AEON MALL Sakaiteppoucho Sakai City, Osaka

Major Shopping Centers developed by the AEON Group

Major Shopping Centers currently under development by the AEON Group

Note：Shown in the chart are created by the Asset Manager based on information provided by AEON CO., LTD. and AEON Mall Co., Ltd.As of July 2015

AEON MALL Around Asahikawa Station

AEON MALL Tonami

AEON MALL Okayama

AEON MALL Okinawa Rycom

AEON MALL Makuhari New City

Policies

LTV 1 Maintain leverage with an LTV of 40–50% range

Extension of debt maturities &

fixing of interest ratesSet loan terms according to the status of cash flows based on tenant lease terms and content

Mix of lenders Achieve appropriate diversification of different lender financial institutions, primarily megabanks

(1) Investment contributing to

an increase in income

(2) Measures aimed at

stabilizing financial

position

(3) Capital strategies that

protect unitholder

interests

a. Appropriation of funds to acquire new properties

b. Investing in revitalization of property to boost

revenue and competitiveness

c. Reduction in the cost of our debt by repayment of

interest-bearing debt

d. Distributions in excess of retained earnings

e. Increased capital efficiency through unit buy-backs

Growth

driven by

efficient

use of

capital

In the large-scale retail properties that we target for investment, the depreciation expense accounts for a large percentage of the property value.

By deploying internal reserves in an amount equal to the depreciation expense, we plan to increase capital efficiency and stabilize cash flow.

Note 1: LTV = Total interest-bearing debt plus tenant leasehold and security deposits (including tenant leasehold and security deposits in trust) / Total assets that AEON REIT holds × 100

31

Strategic Cash Management

Stable Financial Position

Strategic Cash Management and a Stable Financial Position

Management Fee

StructureCalculation Method

Manage-

ment fee

Manage-

ment fee I

Total assets × 0.3% (maximum rate)× {No. of operating days

/ 365}

Manage-

ment fee II

DPU before deducting Management fee II × NOI1× 0.001%

(maximum rate)

Acquisition fee

Acquisition price × 0.5% (maximum rate)

[Related party transactions: Acquisition price ×0.25%(maximum rate) ]

Disposition feeDisposition price × 0.5% (maximum rate)

[Related party transactions: no disposition fee paid]

• Ownership of investment units by Aeon Group

• Co-ownership of properties with Aeon Group

Ownership interest 19.77% (as of July 31, 2015)

Co-owned properties 3 (as of July 31, 2015)

32

Drafting of

proposal by the

responsible

department

Approval by the

Compliance Officer

Deliberation and

resolution by the

Compliance

Committee*

Report to the Asset

Manager’s board

of directors

* An outside expert must attend the meeting and

agree in order for the resolution to pass.

Returned

Dropped or instructions

given to modify content

Dropped or instructions

given to modify content

Transparent Decision-Making Process

Further Aligning the Interests of Unitholders

and the Aeon Group

Introduction of an Asset Management Fee Structure

Linked to Distributions per Unit

Introduction of Cumulative Investment Unit Purchase Program

• We introduced a program on May 1, 2014, that enables the acquisition of AEON

REIT’s investment units, using the cumulative investment unit purchase program

through securities firms, for directors and employees of AEON REIT and the Asset

Manager.

• The program will help to further raise awareness towards enhancing the value of

AEON REIT’s investment unit price and improving business performance, and

provide greater financial motivation in line with the interests of the unitholders.

Notes:

1. NOI refers to total real estate leasing revenue for the relevant fiscal period less real estate leasing

expenses (excluding depreciation and loss on retirement of non-current assets).

2. Above fee structure is as of September 15, 2015.

Framework for Maximizing Unitholder Value

Disapproved

Deliberation and

resolution by the

Investment

Committee*

Approval by

Investment

Corporation

• Balance Sheet for 5th Fiscal Period (as of July 31, 2015)

• Statement of Income for 4th Fiscal Period (ended July 31, 2015)

• Unitholder Information

• Aeon Group Profile

Appendix.

Balance Sheet for 5th Fiscal Period (as of July 31, 2015) (Assets)

34

Assets

Amount

(thousands of yen)

Percentage

(%)

Amount

(thousands of yen)

Percentage

(%)

Amount

(thousands of yen)

vs.

Previous Period

(%)

I. Current assets 13,368,514 7.9% 13,054,213 6.4% (314,301) (2.4)%

Cash and deposits 9,663,330 5.7% 6,795,562 3.3%

Cash and deposits in trust 3,386,152 2.0% 4,668,783 2.3%

Prepaid expenses 317,875 0.2% 318,094 0.2%

Deferred tax assets 26 0.0% - -

Income taxes receivable 139 0.0% 493 0.0%

Consumption taxes receivable - - 1,270,899 0.6%

Other 989 0.0% 381 0.0%

II. Non-current assets 156,254,743 92.1% 190,604,782 93.5% 34,350,039 22.0%

Property and equipment 137,334,542 80.9% 166,553,598 81.7%

　　Land - - 107,708 0.1%

　　Buildings in trust 85,504,384 50.4% 102,509,551 50.3%

　　Structures in trust 560,228 0.3% 506,244 0.2%

　　Land in trust 51,269,929 30.2% 63,430,093 31.1%

Intangible assets 18,045,526 10.6% 23,137,757 11.4%

　　Leasehold rights in trust 18,045,526 10.6% 23,137,757 11.4%

Investments and other assets 874,674 0.5% 913,427 0.4%

　　Long-term prepaid expenses 864,674 0.5% 903,427 0.4%

　　Lease and guarantee deposits 10,000 0.0% 10,000 0.0%

III. Deferred assets 123,517 0.1% 136,231 0.1% 12,714 10.3%

Investment unit issuance expenses 123,517 0.1% 136,231 0.1%

169,746,775 100.0% 203,795,228 100.0% 34,048,453 20.1%

5th PeriodAs of July 31, 2015

Difference

Total assets

4th PeriodAs of January 31, 2015

Balance Sheet for 5th Fiscal Period (as of July 31, 2015)

(Liabilities and Net Assets)

35

Liabilities

Net Assets

Amount

(thousands of yen)

Percentage

(%)

Amount

(thousands of yen)

Percentage

(%)

Amount

(thousands of yen)

vs.

Previous Period

(%)

I. Current liabilities 634,066 0.4% 2,865,975 1.4% 2,231,909 352.0%

Operating accounts payable 264,248 0.2% 644,234 0.3%

Short-term loans payable - - 2,000,000 1.0%

Accounts payable - other 134,039 0.1% 187,737 0.1%

Accrued expenses 19,589 0.0% 21,472 0.0%

Income taxes payable 682 0.0% 605 0.0%

Accrued consumption taxes 205,608 0.1% - -

Other 9,899 0.0% 11,925 0.0%

II. Non-current liabilities 70,411,389 41.5% 81,512,139 40.0% 11,100,750 -

Long-term loans payable 63,000,000 37.1% 73,400,000 36.0%

Tenant leasehold and security deposits - - 2,628 0.0%

Tenant leasehold and security deposits in trust 7,411,389 4.4% 8,109,511 4.0%

71,045,456 41.9% 84,378,114 41.4% 13,332,658 18.8%

4th PeriodAs of January 31, 2015

5th PeriodAs of July 31, 2015

Difference

Total liabilities

I. Unitholders’ equity 98,701,319 58.1% 119,417,113 58.6% 20,715,794 21.0%

Unitholders’ capital 96,351,350 56.8% 116,447,057 57.1%

Surplus 2,349,969 1.4% 2,970,056 1.5%

Unappropriated retained earnings (unappropriated loss) 2,349,969 1.4% 2,970,056 1.5%

98,701,319 58.1% 119,417,113 58.6% 20,715,794 21.0%

169,746,775 100.0% 203,795,228 100.0% 34,048,453 20.1%

Total net assets

Total liabilities and net assets

Statement of Income for 5th Fiscal Period (ended July 31, 2015)

36

Amount

(thousands of yen)

Percentage

(%)

Amount

(thousands of yen)

Percentage

(%)

Amount

(thousands of yen)

vs.

Previous Period

(%)

Operating revenue 7,422,632 100.0% 9,164,250 100.0% 1,741,618 23.5%

Rent revenue - real estate 7,422,632 100.0% 9,163,638 100.0%

Gain on sales of real estate properties - - 611 0.0%

Operating expenses 4,612,522 62.1% 5,658,990 61.8% 1,046,468 22.7%

Expenses related to rent business 4,165,832 56.1% 5,168,792 56.4%

Asset management fee 330,683 4.5% 360,189 3.9%

Asset custody fee 6,841 0.1% 10,370 0.1%

Administrative service fees 28,572 0.4% 34,440 0.4%

Directors’ compensations 3,600 0.0% 3,600 0.0%

Taxes and dues 98 0.0% 1,398 0.0%

Other operating expenses 76,894 1.0% 80,198 0.9%

I. Operating income 2,810,110 37.9% 3,505,259 38.2% 695,149 24.7%

Non-operating income 2,917 0.0% 4,758 0.1% 1,841 63.1%

Interest income 2,917 0.0% 2,842 0.0%

Compensation income - - 1,852 0.0%

Other - - 62 0.0%

Non-operating expenses 459,917 6.2% 531,789 5.8% 71,872 15.6%

Interest expenses 301,487 4.1% 345,084 3.8%

Amortization of investment unit issuance expenses 35,290 0.5% 44,891 0.5%

Borrowing related expenses 122,957 1.7% 139,218 1.5%

Other 182 0.0% 2,595 0.0%

II. Ordinary income 2,353,109 31.7% 2,978,228 32.5% 625,119 26.6%

III. Income before income taxes 2,353,109 31.7% 2,978,228 32.5% 625,119 26.6%

Income taxes - current 3,375 0.0% 8,765 0.1%

Income taxes - deferred -17 0.0% 26 0.0%

Total Income taxes 3,357 0.0% 8,791 0.1%

IV. Net income 2,349,751 31.7% 2,969,437 32.4% 619,686 26.4%

Retained earnings (deficit) brought forward 217 0.0% 619 0.0%

V. Unappropriated retained earnings (undisposed loss) 2,349,969 31.7% 2,970,056 32.4% 620,087 26.4%

4th PeriodFrom August 1, 2014

to January 31, 2015

5th PeriodFrom February 1, 2015

to July 31, 2015

Difference

Unitholder Information

37

Number of Unitholders and Number of Investment Units by Unitholder Type

Investment Unit Ownership Ratio

by Unitholder Type

Major Unitholders (As of July 31, 2015)

Unitholder NameNumber of

Units% of Total

1 Japan Trustee Services Bank, Ltd. (trust account) 250,154 22.9%

2 AEON Co., Ltd. 215,555 19.8%

3 The Master Trust Bank of Japan, Ltd. (trust account) 76,035 7.0%

4 NOMURA BANK （LUXEMBOURG） S. A. 75,828 7.0%

5 Trust & Custody Services Bank, Ltd. (securities investment trust account) 40,193 3.7%

6 The Nomura Trust & Banking Co., Ltd. (trust account) 34,275 3.1%

7 Sumitomo Mitsui Trust Bank, Limited 27,150 2.5%

8 Mizuho Bank, Ltd. 20,000 1.8%

9 Century Tokyo Leasing Corporation 20,000 1.8%

10 Daiwa Securities Group Inc. 10,902 1.0%

Total 770,092 70.6%Individuals and others

9.7%

Individuals and others

10.5%


14.2%


19.8%

Financial institutions (including financialinstruments firms)

56.5%


54.2%


48.1%


42.6%

Other domestic corporations

24.7%


24.4%


24.6%


25.1%

Foreign corporations

9.1%


10.8%


13.1%


12.5%


Jan. 2015 Period(4th Period)


Jan. 2014 Period(2nd Period)

Number of Units Number of Unitholders

4th Period

(January 31, 2015)

5th Period

(July 31, 2015)

4th Period

(January 31, 2015)

5th Period

(July 31, 2015)

Number of

Investment Units% of total

Number of

Investment Units% of total

Number of

Unitholders% of total

Number of

Unitholders% of total

Individuals and others 99,690 10.5% 105,873 9.7% 13,922 96.4% 15,470 96.4%

Financial institutions (including financial

instruments firms)515,373 54.2% 615,460 56.5% 124 0.9% 129 0.8%

Other domestic corporations 232,267 24.4% 269,805 24.7% 286 2.0% 310 1.9%

Foreign corporations 102,670 10.8% 99,062 9.1% 116 0.8% 131 0.8%

Total 950,000 100.0% 950,000 100.0% 14,448 100.0% 16,040 100.0%

38

2,002

Business spanning

13 countries

18,740 stores/locations

Malaysia

29

8

24

18

54

55

1

Japan

541

1,929

357

121

2,151

3,890

3,347

889

171

155

359

1,460

MyanmarKorea

3

Laos

1India

1

Indonesia

Australia

1

Phillipine454

1

2

China45

18

53

42

30

15

42

80

5

Vietnam

2

17

2

4

4

1

Cambodia

1

1

6

2

Thailand

75

219371

6

8

（*）In addition to SC whose name is AEON

MALL, SC whose total floor area is more than

20,000㎡

618

2,030

381

121

4,683

3,932

3,347

919

207

155

698

1,640

9

※1

※2

※3

¥7,078.5bn

Consolidated

Operating

revenue¥1,926.1bnElectronic Money

「WAON」

trading volume

440,000Number of

Group

employees3.56million

AEON Financial

Service

credit card holder

Aeon Group Profile (note)

Business Operations Spanning 13 Countries Synergy from Multiple Businesses

Note: As of February 28, 2015

The Aeon Group has achieved significant success, operating retail properties encompassing

18,740 stores/locations as of February 28, 2015.

Retail

business

Service

business

Financial

services

business

Synergy

creation

General merchandise

stores

Supermarkets

Discount stores

Drugstores/pharmacies

Strategic retail stores

AEON Mall AEON Town

207 malls in Japan and overseas(*)

AEON DELIGHT AEON Fantasy

AEON CardAEON’s

e-money

(WAON)

AEON Bank

Number of

consolidated

subsidiaries: 284

Number of equity-

method associates:

31

Shopping

center

development

business

Total

GMS (general merchandise store)

SM (supermarket)

DS (discount store)

Home center

Convenience store

Specialty store

Drugstore

Other retail store

RSC

NSC

Financial service

Service business

Other business

※1 includes alliance partners

※2 In addition to SC whose name is AEON MALL, SC whose total floor area is

more than 20,000㎡.

※3 SC whose name is AEON Town

The number of stores and office locations, including consolidated subsidiaries and

equity-method associates

39

Disclaimer

― These materials contain forward-looking statements with respect to the future business results, plans, and management targets and strategies of AEON REIT

Investment Corporation (AEON REIT). These forward-looking statements are based on assumptions made at the present time about future events and the

operating environment. There is no guarantee that these assumptions are correct. Various factors could cause actual future results to differ materially from those

expressed or implied by the forward-looking statements contained herein.

― While all reasonable measures have been taken to ensure that the information presented herein is correct, AEON REIT makes no assurance or guarantee as to the

accuracy or completeness of that information. The contents of the information may be changed or eliminated without notice.

― These materials include analyses, judgments and other views based on information currently available to AEON REIT and AEON Reit Management Co., Ltd. As

such, actual operating results may differ from these views. Furthermore, there are other views that differ from these, and AEON REIT and AEON Reit Management

Co., Ltd. may change these views in the future.

― These materials are provided for the sole purpose of presenting general information and explaining the management strategies of AEON REIT, and are not

intended as a solicitation to purchase AEON REIT’s investment units, nor to enter into any other financial instruments transaction agreement. When making

investments, investors are advised to use their own judgment and discretion.

Disclaimer for Dutch Investors

― The units of AEON REIT Investment Corporation (“AEON REIT”) are being marketed in the Netherlands under Section 1:13b of the Dutch Financial Supervision Act

(Wet op het financieel toezicht, or the “Wft”). In accordance with this provision, AEON Reit Management Co., Ltd. (the “AIFM”) has notified the Dutch Authority for

the Financial Markets of its intention to offer these units in the Netherlands. The units of AEON REIT will not, directly or indirectly, be offered, sold, transferred or

delivered in the Netherlands, except to or by individuals or entities that are qualified investors (gekwalificeerde beleggers) within the meaning of Article 1:1 of the

Wft, and as a consequence neither the AIFM nor AEON REIT is subject to the license requirement pursuant to the Wft. Consequently, neither the AIFM nor AEON

REIT is subject to supervision of the Dutch Central Bank (De Nederlandsche Bank) or the Netherlands Authority for Financial Markets (Autoriteit Financiële

Markten). The AIFM is therefore solely subject to limited ongoing regulatory requirements as referred to in Article 42 of the European Alternative Investment Fund

Managers Directive (European Directive 2011/61/EU) (the “AIFMD”).

Please visit AEON REIT’s home page (www.aeon-jreit.co.jp/en) to access its latest annual report referred to in Article 22(1) of the AIFMD or information provided

under Article 23 of the AIFMD.

Asset Manager: AEON Reit Management Co., Ltd.

(Registration of financial instruments business: Kanto Local Finance Bureau, Director-General (Financial Instruments), No. 2668)

Contact Information

Please direct inquiries to:


Finance and Planning Department

TEL: 03-5283-6360

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