contents · neighborhood scs store community scs urban retail facilities community shopping centers...
TRANSCRIPT
1
Contents
1. Overview of FRI
Overview of FRI ・・・・ 3
Management strategy ・・・・ 4
Portfolio map ・・・・ 5
Portfolio asset categories ・・・・ 6
2. Financial results and forecasts
Summary ・・・・ 9
Steady distribution growth ・・・・ 10
26th period results ・・・・ 11
27th period forecast ・・・・ 12
3. Management highlights
Management highlights— Large-scale shopping centers (regional SCs, outlet malls)
・・・・ 15
Management highlights— Community shopping centers (GMSs)
・・・・ 16
Management highlights— Medium-scale shopping centers (neighborhood SCs, supermarkets)
・・・・ 17
Management highlights— Urban retail facilities
・・・・ 18
Management highlights— Land interests and other properties
・・・・ 19
FRI and the retail market ・・・・ 20
Sound balance sheet ・・・・ 21
Internal growth—financial ・・・・ 22
Sustainability initiatives ・・・・ 23
4. Portfolio overview
Portfolio summary ・・・・ 27
FRI’s portfolio in graphs ・・・・ 29
Rent revision and lease maturity schedules ・・・・ 30
5. Appendix
All content in this document is provided solely for informational purposes with regard to Frontier Real Estate Investment Corporation (FRI) and is not intended to serve as an inducement or solicitation to trade in any product offered by FRI.
Investment units issued by FRI are subject to price fluctuations due to various factors, including: (1) volatility in the J-REIT market, interest rates and the real estate market; (2) fluctuations in rental revenues from properties; and (3) the occurrence of unexpected losses due to natural disasters. Accordingly, investment in FRI entails the risk of incurring a loss. Investment decisions are made at the investors’ discretion and risk. FRI disclaims any responsibility or liability for the consequences of investing in FRI.
Information provided in this document contains such forward-looking statements as business forecasts, which should not be construed as commitment to or guarantee of future performance. The information provided in this document was originally published in Japanese language form and has been translated for reference purposes only. FRI guarantees neither the completeness nor the accuracy of
this English translation. Please be advised that all information provided herein may be subject to change without prior notice. Duplication or reproduction of any content presented herein without the prior consent of FRI or its authorized representative is strictly prohibited.
Translation Purpose Only
1. Overview of FRI
3
Overview of FRI
Corporate profile
Name Frontier Real Estate Investment Corporation ("FRI")
TSE Listing August 9, 2004 Securities code: 8964
Sponsor Mitsui Fudosan Co., Ltd. Changed from Japan Tobacco Inc. as of March 2008
Investment target Retail facilities
Fiscal period ends June 30, December 31
Investment units issued 496,000
Asset management company Mitsui Fudosan Frontier REIT Management Inc. (Wholly owned subsidiary of Mitsui Fudosan)
Portfolio
Asset size1 ¥293.4 billion; 33 properties
Geographic distribution Urban areas: 51.9%; Other: 48.1%
Occupancy rate 100%
Total leasable floor space1 1,433,781 m2
Financial indicators
LTV 41.6%
Interest-bearing debt ratio
28.8%
Ratings JCR: AA Stable; R&I: AA- Stable; S&P: A+ Stable
Distributions
26th period (June 2017) ¥10,022 per unit
27th period (Dec. 2017) forecast1
¥10,080 per unit
1. As of August 15, 2017. All other figures are as of June 30, 2017.
2. Calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, 2017. Variable rent is not taken into account.
AEON MALL NAGOYADOME-Mae
Mitsui Outlet Park IRUMA
Mitsui Shopping Park LaLaport SHIN-MISATO
GINZA GLASSE
Key properties
Area2
Property type2
Tokyo metropolitan area 51.9%
Chubu 14.4%
Kansai 13.7%
Chugoku 10.6%
Kyushu/ Okinawa 9.4%
Regional SC 40.2%
Outlet Mall 6.7%
Community SC 11.6%
Neighborhood SC 8.9%
Supermarket 6.5%
Urban retail facility 18.4%
Other 7.7%
4
Management strategy
Turning fluctuating real estate revenue into steady distribution growth over the long term
External growth
Fully utilize the sponsor’s pipeline to continue acquiring excellent properties
Selectively invest in non-sponsor properties utilizing the Asset Management Company’s unique network, keeping a close eye on risk
Carefully select properties for investment considering the certainty of cash flows and growth potential of the surrounding retail zone
Make acquisitions with an eye to maintaining the whole portfolio’s ratio of asset value to yield after depreciation
Internal growth
Secure a foundation for stable earnings based on long-term fixed rent
Adjust to changes in the environments surrounding properties, maintaining and enhancing competitiveness through such measures as additional investment and tenant replacement
Consider replacing properties that pose future uncertainties in order to further enhance portfolio quality
Financial strategy
Maintain sound financial standing through LTV control
Execute capital procurement flexibly and strategically based on careful monitoring of the procurement environment
Leveling out repayment periods and amounts to increase financial stability
5
1411
7
41
19
20
1615
JR山手線25
2813 12
2722
21
3031
8
6
18
17
3 23
9
5
24
2 26 29
6
18
2
5
29
24
32
10
33
31 30 28
Omiya
Tachikawa
Yokohama
Portfolio map
33 properties
Asset size: ¥293.4 billion (as of August 15, 2017)
Yamanote Line
Kansai area
Chubu area
Chugoku area
Tokyo metropolitan area
QANAT Rakuhoku
AEON MALL Ibaraki
Belltown Tambaguchi Eki-Mae Store
Shinsaibashi Square
AEON MALL NAGOYADOME-Mae
Mitsui Shopping Park LaLaport IWATA
(Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest)
Mitsui Shopping Park ALPARK (East Building)
You Me Town Hiroshima
26 10
8
Regional SC: A large-scale shopping center that houses multiple specialty stores.
Outlet mall: A large-scale shopping center in which multiple outlet stores are concentrated.
Community SC: A medium-scale shopping center (GMS) where the main tenant typically stocks general merchandise and groceries.
Neighborhood SC: A medium- or small-scale shopping center where the main tenant is typically a supermarket.
Supermarket: A supermarket that mainly sells food products.
Urban retail facilities: A store facing a main street or specialty store building in a prime urban location.
Other: Land interests, etc.
Kyushu/ Okinawa area
Papillon Plaza
Frespo Tosu (land interest)
TSUTAYA BOOK STORE TENJIN
VIORO
32 KOJIMA x BIC CAMERA Naha Store
3
23
17
9 AEON Shinagawa Seaside Shopping Center
Kamiikedai Tokyu Store
Summit Store Takinogawa Momiji-Bashi
Queen’s Isetan Suginami-Momoi
Mitsui Outlet Park IRUMA
Costco Wholesale Warehouse Iruma (land interest)
Desigual Harajuku
Ito-Yokado Higashi-Yamato
AEON TOWN Tanashi-Shibakubo
GINZA GLASSE
Shimura Shopping Center
14
15
4
19
12
11
16
7
13
1
20
Mitsui Shopping Park LaLaport SHIN-MISATO Annex
Mitsui Shopping Park LaLagarden KASUKABE
Mitsui Shopping Park LaLaport SHIN-MISATO
Summit Store Yokohama Okano (land interest)
Costco Wholesale Warehouse Shin-Misato (land interest)
Ikebukuro Square
Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest)
Kohnan Kawasaki-Odasakae Mall (land interest)
22
25
21
27
30
28
31
33
6
Portfolio asset categories
9 properties Average acquisition price: ¥4.6 bn
NOI yield: 5.7% NOI yield after depreciation: 4.1%
6 properties Average acquisition price: ¥9.9 bn
NOI yield: 4.8% NOI yield after depreciation: 3.9%
8 properties Average acquisition price: ¥3.7 bn
NOI yield: 5.2% NOI yield after depreciation: 5.1%
2 properties Average acquisition price: ¥15.8 bn
NOI yield: 5.8% NOI yield after depreciation: 3.8%
Large-scale shopping centers (regional SCs, outlet malls)
Medium-scale shopping centers (neighborhood SCs, supermarkets)
Urban retail facilities
Land interests and other properties
Outlet malls
AEON MALL NAGOYADOME-Mae
You Me Town Hiroshima
AEON MALL Ibaraki Mitsui Shopping Park LaLaport IWATA
Mitsui Shopping Park ALPARK (East Building)
Mitsui Shopping Park LaLaport SHIN-MISATO
Mitsui Outlet Park IRUMA
Kohnan Kawasaki-Odasakae Mall (land interest)
Summit Store Yokohama Okano (land interest)
Costco Wholesale Warehouse Shin-Misato (land interest)
Frespo Tosu (land interest)
Costco Wholesale Warehouse
Iruma (land interest)
(Provisional name) Home Center Kohnan Hiroshima-Shi
Minami-Machi (land interest)
KOJIMA x BIC CAMERA Naha Store
TSUTAYA BOOK STORE TENJIN
VIORO Ikebukuro Square GINZA GLASSE Shinsaibashi Square Desigual Harajuku
AEON Shinagawa Seaside Shopping Center
Ito-Yokado Higashi-Yamato
Papillon Plaza Mitsui Shopping Park LaLagarden KASUKABE
QANAT Rakuhoku Shimura Shopping Center Queen’s Isetan Suginami-Momoi
Summit Store Takinogawa Momiji-Bashi
AEON TOWN Tanashi-Shibakubo
Belltown Tambaguchi Eki-Mae Store
Kamiikedai Tokyu Store Neighborhood SCs
Community SCs
Urban retail facilities
Other properties
Community shopping centers (GMS)
NOI yield and NOI yield after depreciation are calculated using figures as of June 30, 2017 (those for Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) are the forecast yields at the date of acquisition)
Super Viva Home Zama and Super Sanwa Zama
Higashihara (land interest)
Supermarkets
NOI yield: 5.9% NOI yield after depreciation: 4.1%
8 properties Average acquisition price: ¥16.2 bn
Regional SCs
¥30.3 billion
¥59.5 billion
¥41.4 billion
¥31.7 billion
Total acquisition price: ¥130.3 billion
2. Financial results and forecasts
9
Summary
Conservative financial operations
3
Agreement reached with new tenant, Don Quijote, for TSUTAYA BOOK STORE TENJIN(20-year contract)
Property to be renamed (provisional name) Don Quijote Tenjin (from August 24, 2017)
Acquired Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) using the Asset Management Companyʼs unique network
Acquisition price: ¥4,320 million
Appraisal value: ¥4,550 million
Assumed NOI yield: 3.7%
Acquisition date: July 31, 2017
(Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest), formerly Sports Club Renaissance Hiroshima, began generating revenue again
3 Initiatives to strengthen the portfolio
2 26th period
27th period
Steady distribution growth
1 Aiming for a distribution per unit (DPU) of over ¥10,000 for two consecutive periods for the first time ever
DPU ¥10,022 (up ¥119 from the 25th period; ¥222 above forecast)
¥10,080 (forecast)
26th period
27th period
Maintained strong financial standing through conservative operations
LTV 26th period end: 41.6% (including leasehold and security deposits)
Interest-bearing debt ratio 26th period end: 28.8% (excluding leasehold and security deposits)
Reduced debt cost 26th period end: 0.69% (-0.03 pt from the 25th period end)
10
8,648
8,846.5
8,922.5
8,980
9,205.5
9,274
9,368.5
9,294
9,097.5
9,239
9,299.5
9,991
9,191
9,173.5
9,405
10,211
9,707
9,360
9,695 9,694
9,903 10,022
10,080
8,000
8,500
9,000
9,500
10,000
Distribution per unit
1,985
2,511 2,610 3,067
3,470 3,587 3,667
4,303
5,658
6,168 6,233 6,364
7,407 7,801
8,023 8,472
9,026
9,676 9,960
10,633 10,390
9,853 10,037 10,051
10,022 10,011
10,107
1,053 1,241 1,334 1,593
1,909 1,953 1,970 2,245
2,950 2,967 2,997 2,974
3,532 3,584 3,608 3,876
4,273 4,550 4,664
5,307 5,007
4,642 4,808 4,467
4,911 4,970
5,003
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
2,000
4,000
6,000
8,000
10,000
第1期
04/12月
第2期
05/6月
第3期
05/12月
第4期
06/6月
第5期
06/12月
第6期
07/6月
第7期
07/12月
第8期
08/6月
第9期
08/12月
第10期
09/6月
第11期
09/12月
第12期
10/6月
第13期
10/12月
第14期
11/6月
第15期
11/12月
第16期
12/6月
第17期
12/12月
第18期
13/6月
第19期
13/12月
第20期
14/6月
第21期
14/12月
第22期
15/6月
第23期
15/12月
第24期
16/6月
第25期
16/12月
第26期
17/6月
7,218.5
6,045
5,622
4,771.5
Steady distribution growth
July 2008 1st public offering
March 2008 Third-party allotment
July 2010 2nd public offering
July 2012 3rd public offering
March 2013 4th public offering
DPU*
(Forecast)
Operating revenue, net income and asset size
(yen)
(million yen)
(billion yen)
350
300
250
200
150
100
50
0 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th
Forecast**
Dec.‘04 Jun.’05 Dec.‘05 Jun.’06 Dec.’06 Jun.’07 Dec.’07 Jun.’08 Dec.‘08 Jun.’09 Dec.’09 Jun.’10 Dec.’10 Jun.’11 Dec.’11 Jun.’12 Dec.’12 Jun.‘13 Dec.’13 Jun. ’14 Dec.‘14 Jun.‘15 Dec.’15 Jun.’16 Dec. ‘16 Jun.‘17 Dec.’17
Operating revenue (left axis)
Net income (left axis)
Asset size (right axis)
* FRI implemented a two-for-one split of its investment units effective January 1, 2014. Distributions before the split have been divided by two.
** Distribution per unit (DPU), operating revenue and net income forecasts for the 27th period are given as the figures announced in “Summary of Financial Results for the 26th Fiscal Period,” published August 15, 2017.
11
26th period results
25th period (July 1, 2016 to
December 31, 2016)
26th period (January 1, 2017 to
June 30, 2017) Change
Operating revenue 10,022 10,011 -11 -0.1%
Expenses related to rent business (excluding depreciation)
1,927 1,974 +46
NOI 8,095 8,037 -58
Depreciation 2,156 2,117 -39
Property leasing operating income
5,939 5,920 -19
Selling, general and administrative expenses
560 619 +59
Operating income 5,379 5,300 -79 -1.5%
Non-operating income 3 6 +2
Non-operating expenses 332 334 +1
Ordinary income 5,050 4,971 -78 -1.6%
Extraordinary losses 137 - -137
Net income 4,911 4,970 +59 +1.2%
Distribution per unit (yen) 9,903 10,022 +119 +1.2%
Investment units issued and outstanding (units)
496,000 496,000 — pt
LTV at period-end 42.3% 41.6% -0.7 pt
Interest-bearing debt ratio 29.6% 28.8% -0.8
Number of properties 32 32 —
(b)
(d)
(e)
(f) (c)
(a)
(million yen) (million yen)
Note 1
Note 2
Note 3
Note 2
Note 2
Major factors in changes
Note 1. Operating revenue Full-period operation of 25th period acquisition
(50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO) +95
Sales-linked rent +10
Income from utilities expenses -22
Absence of lump-sum payments received due to tenant change at Sports Club Renaissance Hiroshima (former name) -91
Absence of rent due to reconstruction at Sports Club Renaissance Hiroshima (former name) -11
Note 2. Expenses related to rent business/Selling, general and administrative expenses Property and city planning taxes for properties
acquired in the 24th and 25 periods (KOJIMA x BIC CAMERA Naha Store and a 50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO, respectively) +50
Utilities expenses -12
Depreciation -39
Change in asset management fee rates +70
Note 3. Extraordinary losses Absence of loss on retirement of building for Sports
Club Renaissance Hiroshima (former name) -137
Reference: Financial indicators FFO per unit (d) ¥14,291 NAV per unit (e) ¥415,987 Interest coverage ratio
(f) 23.0 times
a. Selling, general and administrative expenses = Asset custody fee + Administrative service fees + Directors’ compensations + Other operating expenses
b. Loan-to-value ratio = (Borrowings and bonds + Leasehold and security deposits – Unrestricted cash and deposits†) / (Balance of total assets – Unrestricted cash and deposits)
c. Interest-bearing debt ratio = (Borrowings and bonds – Unrestricted cash and deposits) / (Balance of total assets – Unrestricted cash and deposits)
d. Funds from operations per unit = (Net income + Depreciation) / Investment units issued and outstanding
e. Net asset value per unit = (Net assets + Unrealized gain or loss) / Investment units issued and outstanding
f. Interest coverage ratio = EBITDA / Interest expenses
† Unrestricted cash and deposits = Cash and cash equivalents – distributions for the period
12
27th period forecast
26th period results (January 1, 2017 to
June 30, 2017)
27th period forecast (a)
(July 1, 2017 to December 31, 2017)
Change
Operating revenue 10,011 10,107 +96 +1.0%
Operating income 5,300 5,313 +13 +0.3%
Ordinary income 4,971 5,004 +32 +0.7%
Net income 4,970 5,003 +32 +0.7%
Distribution per unit (yen)
10,022 10,080 +58 +0.6%
(単位:百万円)
Investment units issued and outstanding (units)
496,000 496,000
LTV at period-end 41.6% Approx. 42%
Number of properties
32 33 Major expenses
26th period results
27th period
forecast
Property tax, city planning tax 1,043 1,043
Depreciation 2,117 2,066
Non-operating expenses 334 310
(b)
a. Forward-looking figures given here are as announced in “Summary of Financial Results for the 26th Fiscal Period,” published August 15, 2017.
b. Loan-to-value ratio = (Borrowings and bonds + Leasehold and security deposits – Unrestricted cash and deposits) / (Balance of total assets – Unrestricted cash and deposits)
Note 1
Note 2
Major factors in changes
Note 1. Operating revenue Rent from 27th period acquisition (Super Viva
Home Zama and Super Sanwa Zama Higashihara (land interest) and full-period operation of (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest) +147
Sales-linked rent -17
Income from utilities expenses +23
Rent due to tenant change at TSUTAYA BOOK STORE TENJIN -24
Decrease due to contract termination at VIORO during the 27th period -41
Note 2. Operating income (excluding difference in operating revenue)
Repairs and maintenance -77
Utilities expenses -18
Depreciation +50
Selling, general and administrative expenses -36
(million yen) (million yen)
3. Management highlights
15
Introduced sales-linked rent after large-scale renovations in 2015. →Continued to generate sales-linked rent in the 26th period
Ritsumeikan University
Osaka-Ibaraki Campus now open →Major increase in daytime population
JR line underpass to open in spring 2018
→Will expand the retail zone
Repairs of exterior walls planned
Reinforced revenue base due to full-period operation starting in the 26th period
FRI’s greatest investment area Total acquisition price of ¥27.5 billion together with LaLaport SHIN-MISATO Annex and Costco Wholesale Warehouse Shin-Misato (land interest)
Mitsui Shopping Park LaLaport SHIN-MISATO (regional SC)
AEON MALL Ibaraki (regional SC)
JR武蔵野線
AEON MALL Ibaraki
Underpass
7 min. on foot
FRI properties
Logistics zone
Commercial zone
Residential zone
Adjacent to a station
Over 7: 27.7%
Under 7: 72.3%
Excellent locations near train stations
Over 70% adjacent to a station
Minutes on foot to nearest train station1
Percentage of total annual rent
46.9%
Portion under master leases
100%
Stable revenue base
Features of FRIʼs large-scale shopping centers
1. Calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, 2017. Variable rent is not taken into account.
Among the largest outlet malls in the Tokyo metropolitan area, attracting customers from a broad area, with synergies with the neighboring Costco Wholesale Warehouse Iruma
Generates sales-linked rent every period
Mitsui Outlet Park IRUMA (outlet mall)
大宮
さいたま
所沢
東京 新宿
渋谷
品川
立川
国分寺
八王子
Just off the Iruma IC
Management highlights— Large-scale shopping centers (regional SCs, outlet malls)
Shin-Misato Sta.
LaLaport SHIN-MISATO Costco
Shin-Misato
Connected to station
IKEA Annex
JR Musashino Line
Mitsui Shopping Park LaLaport IWATA
Mitsui Outlet Park IRUMA
16
Features of FRIʼs community shopping centers
Higashiyamato ranked first among Tokyo municipalities in 2015 birthrate
survey Forms the leading retail area in
Higashiyamato City with neighboring retail facilities
Nojima store newly opened on the second floor on June 2017
In discussions regarding rent revisions (November 2012 and November 2015)
Ito-Yokado Higashi-Yamato (community SC)
Percentage of total annual rent accounted for by community shopping centers
Flagship central Tokyo AEON Group retail facility
Located in the Shinagawa Seaside Forest, a mixed-use facility with office,
retail and hotel space, enabling the capture of office workers’ weekday dining and other consumption
Approximately 1,800 condominiums under construction within a 500 m radius
AEON Shinagawa Seaside Shopping Center (community SC)
Radius Population 2010–2015
growth
1 km 40,000 +7.5%
3 km 267,000 +8.3%
5 km 793,000 +9.1%
Ito-Yokado Higashi-Yamato
YAOKO
Management highlights— Community shopping centers (GMSs)
Further growth expected
23.2% 16.4% 11.6%
0.0%
10.0%
20.0%
30.0%
第16期 第21期 第26期 16th 21st 26th
FRI owns only community SCs in excellent locations in Tokyo with growing populations
500 m
Shinagawa Seaside Sta. Aomono-Yokocho Sta.
Seaside Forest
AEON Shinagawa To be completed
Nov. 2019 687 units
To be completed Feb. 2019 817 units
To be completed Oct. 2018 335 units
Planned development near AEON Shinagawa
Approx. 1,800 condominiums
to be completed by 2020
17
Renovated by master lessee (Mitsui Fudosan) in anticipation of the facility’s 10-year anniversary in November 2017
Mitsui Shopping Park LaLagarden KASUKABE (neighborhood SC)
H2O Retail Group, the main tenant, has acquired an adjacent lot
Now looking into future internal growth opportunities
In discussions regarding rent revisions (January 2015 )
QANAT Rakuhoku (neighborhood SC)
カナート 洛北
高野川
Local retail zone population growing due to neighboring condominium development
Contract to reach maturity in April 2019 Now looking into future internal
growth opportunities
Papillon Plaza (neighborhood SC)
More accommodating and enjoyable for visitors of all ages, from older adults to families with children
Five new stores, including Wakuwaku Hiroba, a store offering vegetables and other foods direct from producers, and seven renovated stores
Papillon Plaza
Takano River
Hakata Sta.
Yoshizuka Sta.
Radius Population
2010–2015
growth
1 km 33,000 +15.3%
3 km 210,000 +15.3%
5 km 512,000 +11.9%
Management highlights— Medium-scale shopping centers (neighborhood SCs, supermarkets)
Adjacent lot (approx, 6,300 m2)
(approx. 13,000 m2 )
QANAT Rakuhoku
Nearby housing
development
3 min. to Hakata station
Renovated baby care room, kids’ restrooms, community room and
employee break room *Concept images
18
GINZA GLASSE roadside land price
0
5,000
10,000
15,000
20,000
25,000
1980 1985 1990 1995 2000 2005 2010 2015
Features of FRIʼs urban retail facilities
FRI owns stores with street level access and buildings that house specialty
stores in prime urban locations with high liquidity
These properties account for a growing portion of overall portfolio rent FRI maintains a good balance of acquisitions from the sponsor (sponsor-
developed properties) and from third parties
Percentage of total annual rent accounted for by urban retail facilities
12.5%
18.4%
Successor to TSUTAYA, Don Quijote, to rent the entire property from
August 24, 2017, achieving tenant change with no downtime
To be renamed (provisional name) Don Quijote Tenjin (Aug. 24th, 2017)
The lengthening of the Nanakuma subway line (to be completed in 2020) will improve access to Hakata Station
TSUTAYA BOOK STORE TENJIN / (Provisional name) Don Quijote Tenjin
VIORO
26th (Jan.–Jun.)
27th (Jul.–Dec.)
Jul. Aug. Sep. Oct. Nov. Dec.
Previous tenant:
TSUTAYA
New tenant: Don Quijote
Aug. 23—contract cancellation
November Facility opening
Aug. 24—new contract begins
Rent payments begin
Original maturity
Tenant Don Quijote Co., Ltd.
Contract type
Fixed-term building lease
Contract period
Aug. 2017–Mar. 2038 (just under 21 years)
Leased floor space
4,532.38 m2
Original contract
start
Source: National Tax Agency
●Brooks Brothers
Don Quijote
●Sony Store
H&M●
●DIESEL
Muji●
Apple Store●
●ZARA
Ikebukuro Tenjin Harajuku Ginza
Acquired from the sponsor Acquired from third parties
Shinsaibashi
Management highlights— Urban retail facilities
At 16th period-end
At 26th period-end
(year)
(Thousand yen/m2)
Nishitetsu Fukuoka (Tenjin) Sta.
19
Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest)
27th period acquisition
Easy access via Yamato-Atsugi Bypass (National Route 246)
Offers synergy with neighboring Costco Wholesale Zama Warehouse
商圏 人口 2012/ 2007比
1km 2.5万人 102.8%
3km 24.7万人 102.1%
5km 57.3万人 102.3%
Viva Home/ Super Sanwa
Costco
Demolished the Sports Club Renaissance Hiroshima building, and will now
operate the property as a land interest Began generating rent (for the land) July 1, 2017, contributing to revenue
from the 27th period onward Synergies with the nearby You Me Town Hiroshima expected after the new
facility opens
Management highlights— Land interests and other properties
(Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest)
Radius Population 2007–2012
growth
1 km 25,000 +2.8%
3 km 247,000 +2.1%
5 km 573,000 +2.3%
25th (Jul.–Dec.) 26th (Jan.–Jun.) 27th (Jul.–Dec.)
New tenant: Kohnan Shoji
New contract begins Aug. 1
Demolition of existing building (completed)
New construction Operations begin autumn 2017
Rent payments begin
Location 2 Minami-machi, Minami-ku, Hiroshima City, Hiroshima
Period-end book value (assumed NOI yield)
¥1,754 million (7.6%)
Contract period Aug. 2016–Jul. 2037 (21 years) (fixed-term business-use land lease contract)
Leased floor space 6,055.14 m2
Location 1 Higashihara, Zama City, Kanagawa
Acquisition price (assumed NOI yield)
¥4,320 million (3.7%)
Appraisal value ¥4,550 million
Acquisition date July 31, 2017
Contract period Jul. 2014–Jul. 2044 (30 years) (fixed-term business-use lease contract)
Leased floor space 28,926.76 m2
20
(trillion yen)
5.8%
4.8%
39.6%
10.8%
17.9%
6.0%
3.1%
12.0%
Year-on-year comparison of monthly sales at FRI properties
-30%
-20%
-10%
0%
10%
20%
30%
2016/0
4
2016/0
5
2016/0
6
2016/0
7
2016/0
8
2016/0
9
2016/1
0
2016/1
1
2016/1
2
2017/0
1
2017/0
2
2017/0
3
2017/0
4
2017/0
5
2017/0
6
SC FRI
Source: SC sales statistics report, Japan Council of Shopping Centers
* Calculated based on sales at properties for which comparisons with the previous year are possible
FRI and the retail market
1.1 1.4 2.0 3.5 3.7
0
1
2
3
4
5
6
2012 2013 2014 2015 2016 2017 2020 Source: Consumption Trend Survey for Foreigners Visiting Japan, Japan Tourism Agency
(trillion yen)
BtoC E-commerce market size and e-commerce adoption rate (product sales)
Source: Ministry of Economy, Trade and Industry FY2016 E-Commerce Market Survey
5.99 6.80 7.24 8.00
3.85%
4.37% 4.75%
5.43%
0%
1%
2%
3%
4%
5%
6%
7%
0
3
6
9
2013 2014 2015 2016
EC市場規模(左目盛) EC化率(右目盛)
Annual retail product sales by region
Annual retail
product sales by region
Distribution of FRI
properties*
* Calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, 2017. Variable rent is not taken into account.
■Hokkaido ■Tohoku ■Tokyo metropolitan area ■Chubu ■Kansai ■Chugoku ■Shikoku ■Kyushu/Okinawa
51.9%
14.4%
13.7%
10.6%
9.4%
Source: Data on 2016 retail sales volumes by regional Bureau of Economy, Trade and Industry, Ministry of Economy, Trade and Industry
Consumption by overseas tourists visiting Japan
E-commerce adoption rate (right axis)
E-commerce market size (left axis)
Government target:
¥8 trillion
21
LTV ratio2 42.3% 41.6%
Interest-bearing debt ratio3 29.6% 28.8%
Long-term debt ratio 88.4% 84.6%
25th (December 31, 2016)
26th (June 30, 2017)
Balance of borrowings and bonds ¥86,400 million ¥86,400 million
Balance of leasehold and security deposits1 ¥34,032 million ¥33,951 million
Total balance of liabilities ¥120,432 million ¥120,351 million
Sound balance sheet
Key financial indicators
Unrealized gain based on appraisal value NAV
NAV growth +30.5% over five years
Cash and deposits, etc. ¥ 16 billion
Book value of assets under management ¥258.7 billion
Net assets ¥151.7 billion
Borrowings and bonds ¥86.4 billion
Leasehold and security deposits ¥33.9 billion
Unrealized gain ¥54.5 billion
¥206.3 billion (NAV)
Other liabilities ¥2.7 billion
¥ 120.3 billion
Total assets: ¥274.8 billion (as of June 30, 2017)
1. For an overview of leasehold and security deposits, please see p. 46 2. LTV = (Borrowings and bonds + Leasehold and security deposits – Unrestricted cash and deposits) /
(Balance of total assets – Unrestricted cash and deposits) 3. Interest-bearing debt ratio = (Borrowings and bonds – Unrestricted cash and deposits) /
(Balance of total assets – Unrestricted cash and deposits)
¥313.3 billion (Appraisal value)
¥54.5 billion (billion yen)
17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th
250
200
150
100
50
0
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
20th
21st
22nd
23rd
24th
25th
26th
(billion yen)
60
50
40
30
20
10
0
Unrealized gain based on appraisal value and NAV
22
Internal growth—financial
0
50
100
150
第27期
第28期
第29期
第30期
第31期
第32期
第33期
第34期
第35期
第36期
第37期
第38期
第39期
第40期
第41期
第42期
第43期
第44期
第45期
第46期
第47期
第48期
第49期
第50期
第51期
第54期
第55期
長期借入金 保証金
381 400
385 376 381 369 358 339
303 307
30,000
40,000
50,000
60,000
70,000
80,000
90,000
第17期 第18期 第19期 第20期 第21期 第22期 第23期 第24期 第25期 第26期
200
250
300
350
400
450
500
Investment corporation bonds
Distribution of maturity dates
Refinancing to reduce debt cost(excluding short-term loans) Average remaining loan/bond period and debt cost (at each period end)
Balance of borrowings and bonds and interest paid
2.98
3.58 3.70 3.64 3.70 3.93 4.04
4.32
4.84 4.83
1.11% 1.08% 1.09% 1.07% 1.05% 0.98%
0.92% 0.84%
0.69%
-0.20%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
2
3
4
5
6
7
8
第17期 第18期 第19期 第20期 第21期 第22期 第23期 第24期 第25期 第26期
残存年数(左軸) 調達コスト(右軸) (%)
Average including leasehold and security
deposits:
0.52%
0.72%
17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th
Debt cost (right axis)
Years remaining (left axis)
(years)
Average including leasehold and security
deposits:
6.04
(million yen) (million yen) ■ Balance of borrowings and bonds (left axis) ■ Interest paid
(right axis) (as of August 15, 2017) Commitment line
(billion yen)
15
10
5
0
27th
28th
29th
30th
31st
32nd
33rd
34th
35th
36th
37th
38th
39th
40th
41st
42nd
43rd
44th
45th
46th
47th
48th
49th
50th
55th
Long-term borrowings
Security deposits
Long-term borrowings in 26th
Long-term borrowings in 27th
(%)
0.91
0.51%
1.06
0.36%
1.07
0.27%
1.98
0.43%
1.41
0.35%
1.23
0.98 1.04
0.78
0.20
0.80
1.40
2.00
3.9 4.5 5.0
7.0 6.0 5.6 6.1
7.0 6.3
8.8
5.9
9.8 11.6
8.0
0
4
8
12
第22期 第23期 第24期 第25期 第26期 第27期 第28期 第29期 第30期 (years) 22nd 23rd 24th 25th 26th 27th 28th 29th 30th
Average interest rate of repayments in each period
Average interest rate of new loans/bonds in each period
Average period of repayments in each period
Average period of new loans/bonds in each period
Impact on DPU:
+¥148
17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th
23
Sustainability initiatives
12%reduction 14%reduction 26%reduction
Reducing environmental burden Contributing to society
Per-unit reductions in fiscal 2016 (compared with fiscal 2013 levels)
*Fiscal 2013 levels as 100%
Energy Water Waste
4% average annual reduction
5% average annual reduction
9% average annual reduction
Wind power turbines
Quick chargers for electric vehicles
Green walls Wind power turbines with small solar panels
LaLaport SHIN-MISATO LaLaport IWATA
Facility Participants Clothing collected
Additional donations
LaLagarden KASUKABE 480 2,568 kg ¥10,810
LaLaport SHIN-MISATO 315 1,363 kg ¥17,534
LaLaport IWATA 389 1,947 kg ¥13,987
ALPARK (Hiroshima) 418 1,781 kg ¥27,391
Results of events at FRI properties (May–June 2017)
1,602 7,659 kg ¥69,722 participants of clothing collected in additional donations
17th &EARTH Clothing Support Project
& EARTH Clothing Support Project Carried out twice annually since 2008, this project is organized by the Mitsui Fudosan Group and invites people to donate unneeded clothing at retail facilities. This clothing is then distributed to people in need through the NPO Japan Relief Clothing Center.
Coverage ratio: More than 90% of the overall portfolio (floor space basis)
24
Sustainability initiatives
Four FRI properties newly certified
DBJ Green Building Certification A comprehensive evaluation system for real estate properties demonstrating high environmental and social awareness. Based on a proprietary scoring model developed by Development Bank of Japan Inc. (DBJ), certified properties receive a rank of one to five stars.
★★★★★
★★★
GRESB (Global Real Estate Sustainability Benchmark)
GRESB assesses the sustainability of real estate companies and operators, and is used by leading global institutional investors to help select investment targets.
External certification
(22nd period) ★★★★★ ★★★★
★★★
DBJ Green Building Certification
GRESB Real Estate Assessment
Rank ★★★★★:Property with the best class environmental & social awareness ★★★:Property with excellent environmental & social awareness
26th period certifications Previously certified properties
★★★★
★★★
★★★
★★★
Recognized for providing superior convenience that meets the needs of diverse consumers, through such means as offering ample facilities for children and installing charging points for electric vehicles.
Mitsui Shopping Park LaLaport SHIN-MISATO
Mitsui Shopping Park LaLagarden KASUKABE
GINZA GLASSE Ikebukuro Square
VIORO AEON MALL
Ibaraki
Mitsui Shopping Park LaLaport IWATA
AEON MALL NAGOYADOME-Mae
Mitsui Outlet Park IRUMA
(22nd period)
(24th period) (24th period)
(24th period)
■ East Asia / Retail / Listed 1st (of 6 entities)
■Global
101st (of 733 entities)
4. Portfolio overview
27
Portfolio summary
No. Property name Acquisition
date Seller1 Acquisition
price Total leasable floor space2
Occupancy rate2
Appraisal value
Age (years)
Main tenants3 PML4
1 AEON Shinagawa Seaside Shopping Center Aug. 2004 JT 20,100 77,547 m2 100% 19,100 14.7 AEON Retail 14%
2 AEON MALL Ibaraki Aug. 2004 JT 18,100 151,092 m2 100% 23,800 16.6 AEON Retail 13%
3 Papillon Plaza Aug. 2004 JT 4,810 17,095 m2 100% 5,330 23.6 Royal Home Center 1%
4 Kamiikedai Tokyu Store Aug. 2004 JT 1,490 6,640 m2 100% 1,820 15.3 Tokyu Store 11%
5 Belltown Tambaguchi Eki-Mae Store Aug. 2005 JT 2,130 11,176 m2 100% 2,820 11.9 Matsumoto 9%
6 AEON MALL NAGOYADOME-Mae Mar. 2006 JT 24,800 154,766 m2 100% 25,200 11.3 AEON Retail 13%
7 Summit Store Takinogawa Momiji-Bashi Sep. 2006 JT 3,100 6,455 m2 100% 3,630 10.8 Summit 12%
8 (Provisional name) Home Center Kohnan Hiroshima- -Shi Minami-Machi (land interest) 5 Apr. 2007 JT 1,940 6,055 m2 100% 2,540 — Kohnan Shoji —
9 Frespo Tosu (land interest) Nov. 2007 JT 3,178 79,447 m2 100% 3,060 — Daiwa Lease —
10 You Me Town Hiroshima Feb. 2008 JT 23,200 122,169 m2 100% 21,600 9.4 Izumi 10%
11 Queen’s Isetan Suginami-Momoi Jul. 2008 MF, etc. 3,560 5,212 m2 100% 4,110 12.6 Isetan Mitsukoshi Food Service 12%
12 Mitsui Outlet Park IRUMA Jul. 2008 MF, etc. 19,900 98,714 m2 100% 22,600 9.3 Mitsui Fudosan 14%
13 Costco Wholesale Warehouse Iruma (land interest) Jul. 2008 MF, etc. 2,600 24,019 m2 100% 2,750 — Costco —
14 Desigual Harajuku6 Oct. 2008 Non-sponsor 3,100 1,149 m2 100% 3,400 18.7 INTS 14%
15 Ito-Yokado Higashi-Yamato Jan. 2009 Non-sponsor 11,600 53,374 m2 100% 11,100 13.6 Ito-Yokado 12%
16 AEON TOWN Tanashi-Shibakubo Feb. 2009 MF, etc. 3,100 8,785 m2 100% 3,300 12.3 AEON Town 11%
17 TSUTAYA BOOK STORE TENJIN7 Dec. 2009 Non-sponsor 3,700 4,532 m2 100% 4,180 10.0 TSUTAYA 2%
18 Mitsui Shopping Park LaLaport IWATA Jul. 2010 MF, etc. 15,200 136,136 m2 100% 15,400 8.1 Mitsui Fudosan 16%
19 GINZA GLASSE Jul. 2010 MF, etc. 13,600 5,174 m2 100% 15,100 9.2 — 11%
20 Shimura Shopping Center Jan. 2011 Non-sponsor 4,430 17,126 m2 100% 5,690 16.6 Summit 14%
21 Mitsui Shopping Park LaLagarden KASUKABE Feb. 2011 MF, etc. 10,000 63,415 m2 100% 11,000 9.7 Mitsui Fudosan 13%
22 Summit Store Yokohama Okano (land interest) Feb. 2012 Non-sponsor 5,700 14,394 m2 100% 6,630 — Summit —
23 VIORO Feb. 2012 Non-sponsor 10,100 5,834 m2 98.8% 11,900 10.8 — 1%
24 QANAT Rakuhoku Jul. 2012 MF, etc. 8,800 48,303 m2 100% 9,010 16.6 H2O Asset Management 9%
25 Ikebukuro Square Feb. 2013 MF, etc. 20,400 8,863 m2 100% 24,400 4.6 Round One 14%
(million yen)
28
Portfolio summary
No. Property name Acquisition
date Seller1 Acquisition
price Total leasable floor space2
Occupancy rate2
Appraisal value
Age (years)
Main tenants3 PML4
26 Mitsui Shopping Park ALPARK (East Building) Feb. 2013 MF, etc. 5,400 65,603 m2 100% 5,520 27.2 Mitsui Fudosan 12%
27 Kohnan Kawasaki-Odasakae Mall (land interest) Jan. 2014 Non-sponsor 7,000 23,393 m2 100% 8,710 — Kohnan Shoji —
28 Mitsui Shopping Park LaLaport SHIN-MISATO Annex
Mar. 2014 MF, etc. 3,930 6,714 m2 100% 3,980 5.2 FOREVER21 12%
29 Shinsaibashi Square Mar. 2015 MF, etc. 8,620 1,750 m2 100% 9,010 2.8 Burberry Japan 7%
30 Mitsui Shopping Park LaLaport SHIN-MISATO8 Apr. 2015 Aug. 2016
MF, etc. 19,840 142,315 m2 100% 20,300 7.9 Mitsui Fudosan 11%
31 Costco Wholesale Warehouse Shin-Misato (land interest)
Apr. 2015 MF, etc. 3,810 30,292 m2 100% 3,950 — Costco —
32 KOJIMA x BIC CAMERA Naha Store Jan. 2016 Non-sponsor 1,850 7,301 m2 100% 2,410 11.3 Kojima 6%
Total (32 properties, as of Jun. 30, 2017) 289,088 1,404,855 m2 100% 313,350 11.1 7.67%
33 Super Viva Home Zama and Super Sanwa Zama Higashihara (land interest) 9
Jul. 2017 Non-sponsor 4,320 28,926 m2 100% 4,550 — Sumitomo Mitsui Finance and Leasing
—
Total (33 properties, as of Aug. 15, 2017) 293,408 1,433,781 m2 100%
(million yen)
1. “MF, etc.” represents Mitsui Fudosan and its consolidated subsidiaries as well as special purpose companies in which Mitsui Fudosan has invested.
2. For properties for which pass-through type master lease contracts are concluded, the figures are as at June 30, 2017, calculated on an end tenant basis.
3. For multi-tenant properties and properties for which pass-through type master lease contracts are concluded, the end tenant that leases the largest portion of leasable floor space is shown if they lease
more than 30% of the total.
4. PML represents the probable maximum loss in earthquake risk analysis. The values stated for AEON MALL Ibaraki and Mitsui Outlet Park IRUMA are for the store buildings. The figure for Desigual Harajuku includes the portion of the building that was demolished as of October 29, 2012. The figure for Shinsaibashi Square is for the north tower. The value listed under Total represents the PML value at June 30, 2017 of the entire portfolio (properties from No. 1 to No. 32) as a whole, not the average value of the properties in the portfolio.
5. The acquisition price is as at the time of acquisition and includes the price of the building on the property at the time (¥208 million). Said building was demolished as of December 2016.
6. The acquisition price is as at the time of acquisition and includes a portion of the site sold on July 30, 2012 (cost of sales: ¥259 million).
7. FRI and TSUTAYA Co., Ltd. have reached an agreement to terminate the lease contract for the property effective August 23, 2017. FRI entered a fixed-term building lease with the new tenant, Don
Quijote Co., Ltd., on July 31, 2017.
8. FRI acquired a 16% co-ownership stake on April 1, 2015, and an addition 50% co-ownership stake on August 10, 2016, but the total leasable floor space presented here is that for the entire property.
The acquisition price presented is the total after the additional acquisition.
9. This property’s appraisal value is as at the date of acquisition.
29
Average contract term: 18.8 years
FRIʼs portfolio in graphs
1. All figures are calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 30, 2017. Variable rent is not taken into account. The ratio of fixed rent and sales-linked rent is that of the 26th fiscal period
2. Based on acquisition price, excluding properties operated as land interests.
3. Balance of time remaining until the next rent revision date or contract maturity date, whichever is earlier.
Sales-linked rent 1.3%
Fixed rent 98.7%
Over 10 years 22.6%
5 to 10 years 39.6%
3 to 5 years 12.8%
3 years or less 25.0%
Over 10 years 52.4%
5 to 10 years 32.1%
5 years or less 15.5%
Over 10 years 88.0%
5 to 10 years 8.9%
5 years or less 3.1%
Tokyo metropolitan area 51.9%
Chubu 14.4%
Kansai 13.7%
Chugoku 10.6%
Kyushu/ Okinawa 9.4%
AEON Group 25.4%
Mitsui Fudosan 25.8%
Izumi 7.8%
Summit 4.3%
Round One 4.1%
Other 32.7%
Regional SC 40.2%
Outlet Mall 6.7%
Community SC 11.6%
Neighborhood SC 8.9%
Supermarket 6.5%
Urban retail facility 18.4%
Other 7.7%
Building age2
5 years or less 11.0%
5 to 10 years 39.9%
Over 20 years 3.9%
10 to 20 years 45.3%
Area Property
type Tenants
Contract term
Remaining contract
term
Period remaining until rent revision3
Ratio of fixed rent and sales-linked rent
Average remaining contract term: 11.0 years
Average building age: 11.1 years
30
Rent revision and lease maturity schedules
1. For multi-tenant properties and properties for which pass-through type master lease contracts are concluded, the end tenant that leases the largest leased floor space is shown if they lease over 30% of the total. 2. ML: Master lease contract; P: Pass-through type master lease contract (in which the amount of rent that the master lessee pays FRI is the same as the amount of rent that end tenants are contracted to pay the master lessee); S: Contract with a single tenant;
M: Contract with multiple tenants; T: Traditional lease; F: Fixed-term lease 3. Figures are calculated based on the annualized fixed rent (excluding common area maintenance charges) of lease contracts valid as of June 31, 2017. 4. FRI has a direct lease contract with Royal Home Center and pass-through type master lease contracts with the other end tenants. 5. FRI and TSUTAYA Co., Ltd. have reached an agreement to terminate the lease contract for the property effective August 23, 2017. FRI entered a fixed-term building lease with the new tenant, Don Quijote Co., Ltd., on July 31, 2017. 6. The main tenant and the rent revision and lease maturity schedules are not disclosed as the status of contracts with end tenants varies significantly.
Property name Main tenant1 Contract
type2
Sales-linked rent
Percentage of total annual rent3
2017 2018 2019 2020 2021
Lease maturity 26th 27th 28th 29th 30th 31th 32th 33th 34th 35th
1 AEON Shinagawa Seaside Shopping Center AEON Retail ML T 7.7% Oct-22
2 AEON MALL Ibaraki AEON Retail ML F ○ 7.9% Apr-35
3 Papillon Plaza Royal Home Center M/P4 F/T 2.1% Apr-19
4 Kamiikedai Tokyu Store Tokyu Store ML F 0.6% Mar-22
5 Belltown Tambaguchi Eki-Mae Store Matsumoto ML F 0.9% Aug-25
6 AEON MALL NAGOYADOME-Mae AEON Retail ML F 8.1% Mar-26
7 Summit Store Takinogawa Momiji-Bashi Summit S F 1.0% Sep-26
8 (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest)
Kohnan Shoji S F Undisclosed Jul-37
9 Frespo Tosu (land interest) Daiwa Lease S F 1.2% Nov-27
10 You Me Town Hiroshima Izumi ML F 7.8% Feb-28
11 Queen’s Isetan Suginami-Momoi Isetan Mitsukoshi Food Service
ML F ○ 1.2% Dec-24
12 Mitsui Outlet Park IRUMA Mitsui Fudosan ML F ○ 6.7% Jul-38
13 Costco Wholesale Warehouse Iruma (land interest)
Costco S F 0.8% Apr-38
14 Desigual Harajuku INTS S F ○ 0.7% Sep-22
15 Ito-Yokado Higashi-Yamato Ito-Yokado ML T 4.0% Nov-23
16 AEON TOWN Tanashi-Shibakubo AEON Town ML T ○ 1.2% Mar-25
17 TSUTAYA BOOK STORE TENJIN 5 TSUTAYA S F 1.5% Mar-38
18 Mitsui Shopping Park LaLaport IWATA Mitsui Fudosan ML F ○ 6.3% Jun-30
19 GINZA GLASSE6 — P F/T 3.7% -
20 Shimura Shopping Center Summit ML T 1.7% Nov-20
21 Mitsui Shopping Park LaLagarden KASUKABE Mitsui Fudosan ML T ○ 3.9% Feb-31
22 Summit Store Yokohama Okano (land interest) Summit S F 1.6% Nov-31
23 VIORO6 — P F ○ 3.8% -
24 QANAT Rakuhoku H2O Asset Management ML T ○ 2.9% Nov-20
25 Ikebukuro Square Round One M F 6.7% Dec-32
26 Mitsui Shopping Park ALPARK (East Building) Mitsui Fudosan ML T ○ 2.8% Feb-33
27 Kohnan Kawasaki-Odasakae Mall (land interest) Kohnan Shoji S F 2.2% Jan-36
28 Mitsui Shopping Park LaLaport SHIN-MISATO Annex
FOREVER21 P F/T ○ 1.2% Apr-22
29 Shinsaibashi Square Burberry Japan M F Undisclosed Undisclosed
30 Mitsui Shopping Park LaLaport SHIN-MISATO Mitsui Fudosan ML T ○ 6.1% Mar-35
31 Costco Wholesale Warehouse Shin-Misato (land interest)
Costco S F Undisclosed Undisclosed
32 KOJIMA x BIC CAMERA Naha Store Kojima S F Undisclosed May-27
Revision
Maturity
Revision Revision
Revision
Revision Maturity
Maturity Revision
New Contract
Recontracting
5. Appendix
33
25th period (July 1, 2016 to
December 31, 2016)
26th period (January 1, 2017 to
June 30, 2017) Change Major factors in changes
Amount % of total Amount % of total Amount % change
Operating revenue 10,022 100.0% 10,011 100.0% -11 -0.1%
Rent revenue–real estate1 9,893 9,947 54 Rent revenue–other2 129 63 -65
Operating expenses 4,643 46.3% 4,711 47.1% 67 1.5%
Expenses related to rent business
4,083 4,091 7
Property management expenses3 471 495 23
Property and other taxes4 997 1,043 45
Casualty insurance 13 13 0
Repairs and maintenance 200 218 17
Depreciation5 2,156 2,117 -39
Other expenses6 243 203 -40 Selling, general and administrative expenses7
560 619 59
Asset management fee 428 498 69
Asset custody fee 13 13 0
Administrative service fees 22 21 -0
Directors' compensations 6 6 -
Other 89 79 -9
Operating income 5,379 53.7% 5,300 52.9% -79 -1.5%
Non-operating income 3 6 2
Non-operating expenses 332 334 1
Interest expenses 320 321 1
Other 12 12 -0
Ordinary income 5,050 50.4% 4,971 49.7% -78 -1.6%
Extraordinary losses8 137 - -137
Income before income taxes 4,912 49.0% 4,971 49.7% 59 1.2%
Income taxes (after net adjustment) 0 0 0
Net income 4,911 49.0% 4,970 49.7% 59 1.2%
Unappropriated retained earnings 4,912 49.0% 4,971 49.7% 59 1.2%
Statement of income
(million yen)
1
Full-period operation of 25th period acquisition (50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO)
+95
Sales-linked rent Income from utilities expenses Absence of rent due to reconstruction at Sports Club Renaissance Hiroshima (former name)
+10 -22 -11
VIORO: Rent -14
2
Absence of lump sum income from tenant change at Sports Club Renaissance Hiroshima (former name)
-91
VIORO: Penalty payment income, etc. +25
3
AEON Shinagawa Seaside Shopping Center, VIORO, others: Building management expenses
+24
4
Property and city planning taxes for properties acquired in the 24th and 25 periods (KOJIMA x BIC CAMERA Naha Store and a 50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO, respectively)
+50
5
25th period acquisition (50% stake in Mitsui Shopping Park LaLaport SHIN-MISATO)
+17
Completion of amortization of properties’ attached facilities, etc. (AEON MALL Ibaraki, Shimura Shopping Center, etc.)
-56
6
Utilities expenses -12
VIORO: Absence of 10th anniversary sales promotion expenses
-32
7
Change in asset management fee rates +70
Promotional expenses -6
8
Absence of loss on retirement of building for Sports Club Renaissance Hiroshima (former name)
-137
34
Balance sheet (assets)
25th Period (as of Dec. 31, 2016)
26th Period (as of June 30, 2017)
Change Major factors in changes
Amount % of total Amount % of total Amount % change
Current assets 13,441 4.9% 15,998 5.8% 2,557 19.0%
Cash and deposits1 9,411 11,800 2,389
Cash and deposits in trust1 3,487 4,031 544
Other2 542 165 -376
Non-current assets (including deferred assets)
260,822 95.1% 258,828 94.2% -1,994 -0.8%
Property, plant and equipment3 260,751 258,770 -1,980
Buildings 39,009 37,995 -1,013
Structures 425 393 -32
Tools, furniture and fixtures 33 32 -0
Land 72,924 72,924 -
Buildings in trust 34,295 33,405 -889
Structures in trust 409 383 -26
Machinery and equipment in trust
256 222 -33
Tools, furniture and fixtures in trust
35 41 5
Land in trust 113,359 113,359 -
Construction in progress in trust
1 12 10
Intangible assets 1 1 -0
Investments and other assets4 69 56 -13
Total assets 274,263 100.0% 274,826 100.0% 563 0.2%
(million yen)
1.
Cash and deposits matching depreciation +2,117
Payments for construction at properties -142
Partial return of security deposits -276
Leasehold deposits received due to tenant change
+202
Consumption taxes payable +317
Consumption taxes receivable +364
2.
Consumption taxes receivable -364
3.
26th period capital expenses +125
Depreciation -2,117
4.
Amortization of insurance payments -12
35
25th Period (as of Dec. 31, 2016)
26th Period (as of June 30, 2017)
Change Major factors in changes
Amount % of total Amount % of total Amount % change
Current liabilities 16,120 5.9% 21,208 7.7% 5,088 31.6%
Short-term loans payable1 14,000 18,500 4,500
Operating accounts payable 646 870 223
Accrued expenses 248 257 9
Advances received 1,048 1,098 50
Other3 177 482 305
Non-current liabilities 106,451 38.8% 101,867 37.1% -4,584 -4.3%
Long-term loans payable2 69,400 64,900 -4,500
Investment corporation bonds 3,000 3,000 -
Tenant leasehold and security deposits3 17,950 17,672 -277
Tenant leasehold and security deposits in trust3 16,082 16,278 196
Other 19 15 -3
Total liabilities 122,571 44.7% 123,075 44.8% 503 0.4%
Unitholders’ capital 146,590 53.4% 146,590 53.3% -
Total surplus 5,100 1.9% 5,159 1.9% 59
Reserve for reduction entry 188 188 -
Unappropriated retained earnings
4,912 4,971 59
Total net assets4 151,691 55.3% 151,750 55.2% 59 0.0%
Total liabilities and net assets 274,263 100.0% 274,826 100.0% 563 0.2%
Balance sheet (liabilities and net assets)
(million yen)
1.
Extension of short-term loans -5,000
Current portion of long-term loans payable +9,500
2.
Extension of short-term loans +5,000
Current portion of long-term loans payable -9,500
3.
Partial return of security deposits -276
Leasehold deposits received due to tenant change
+202
4.
Net assets per unit (yen):
At the end of 25th period 305,829円
At the end of 26th period 305,948円
36
Item 25th period
(July 1, 2016 to December 31, 2016)
26th period (January 1, 2017 to
June 30, 2017)
Cash flows from operating activities
Income before income taxes 4,912 4,971
Depreciation and amortization 2,156 2,117
Other (757) 980
Net cash provided by (used in) operating activities 6,311 8,069
Cash flows from investing activities
Purchase of property, plant and equipment (17) (39)
Purchase of property, plant and equipment in trust (15,229) (103)
Repayments of tenant leasehold and security deposits (297) (278)
Proceeds from tenant leasehold and security deposits 71 1
Repayments of tenant leasehold and security deposits in trust (517) (43)
Proceeds from tenant leasehold and security deposits in trust 462 239
Payments of restricted bank deposits in trust (9) (201)
Net cash provided by (used in) investment activities (15,537) (424)
Cash flows from financing activities
Proceeds from short-term loans payable 65,000 25,000
Repayment of short-term loans payable (63,000) (27,000)
Proceeds from long-term loans payable 7,000 5,000
Repayment of long-term loans payable (4,440) (3,000)
Proceeds from issuance of investment corporation bonds 3,000 —
Redemption of investment corporation bonds (22) (0)
Payments for investment corporation bond issuance costs (4,808) (4,911)
Net cash provided by (used in) financing activities 2,729 (4,911)
Net increase (decrease) in cash and cash equivalents (6,495) 2,732
Cash and cash equivalents at beginning of period 18,958 12,462
Cash and cash equivalents at end of period 12,462 15,194
(million yen)
Statement of cash flows
37
6.2% 6.2% 6.3% 6.2% 6.3%
5.6% 5.6% 5.7% 5.6% 5.6%
5.4% 5.3% 5.2% 5.2% 5.2%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
第22期
(15/6月)
第23期
(15/12月)
第24期
(16/6月)
第25期
(16/12月)
第26期
(17/6月)
帳簿価額ベース 取得価格ベース 鑑定価額ベース
4.5% 4.5% 4.6% 4.5% 4.6%
4.1% 4.1% 4.2% 4.1% 4.1%
3.9% 3.8% 3.8% 3.8% 3.8%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
第22期
(15/6月)
第23期
(15/12月)
第24期
(16/6月)
第25期
(16/12月)
第26期
(17/6月)
帳簿価額ベース 取得価格ベース 鑑定価額ベース
(yen)
41.7% 41.2% 39.1%
42.3% 41.6%
27.5% 27.2% 25.5%
29.6% 28.8%
0%
10%
20%
30%
40%
50%
第22期
(15/6月)
第23期
(15/12月)
第24期
(16/6月)
第25期
(16/12月)
第26期
(17/6月)
LTV
有利子負債比率
383,309 393,714
404,873 409,596 415,987
305,972 306,307 305,620 305,829 305,948
200,000
250,000
300,000
350,000
400,000
450,000
第22期
(15/6月)
第23期
(15/12月)
第24期
(16/6月)
第25期
(16/12月)
第26期
(17/6月)
一口当たりNAV
一口当たりBPS
NOI yield* Yield after depreciation*
LTV / Interest-bearing debt ratio NAV per unit / BPS per unit
Key indicators
22nd (June ‘15)
23rd (Dec. ’15)
24th (June ‘16)
25th (Dec. ’16)
26th (June. ’17)
22nd (June ‘15)
23rd (Dec. ’15)
24th (June ‘16)
25th (Dec. ’16)
26th (June. ’17)
22nd (June ‘15)
23rd (Dec. ’15)
24th (June ‘16)
25th (Dec. ’16)
26th (June. ’17)
22nd (June ‘15)
23rd (Dec. ’15)
24th (June ‘16)
25th (Dec. ’16)
26th (June. ’17)
Book value basis
Appraisal value basis
Acquisition price basis
Book value basis
Appraisal value basis
Acquisition price basis
NAV per unit
BPS per unit
LTV Interest-bearing debt ratio
* The above figures are calculated excluding extraordinary factors.
38
1. NOI = Property leasing operating income + Depreciation 2. Part of the land of AEON MALL Ibaraki was sold to Ibaraki City on October 12, 2010 (area of 118.86 m2 and book value of ¥15 million) for ¥19 million. However, the figure given here is calculated using the price
at the time of acquisition. 3. FRI’s contract with RENAISSANCE INC. reached maturity on July 31, 2016. FRI entered a new fixed-term business-use land lease contract with Kohnan Shoji Co., Ltd. on August 1, 2016. FRI received lump-sum
payments totaling ¥91 million as a result of this tenant change and the reconstruction of the building on the property. 4. Only NOI is disclosed, as FRI has not obtained the permission of the lessee to disclose other information
Real estate rent revenue Expenses related to rent business Property leasing
operating income
NOI1
NOI yield
Total Rent
revenue – real estate
Rent revenue –
other Total
Property and other
taxes
Property management
expenses
Casualty insurance
Repairs and maintenance
Depreciation Other
expenses (to acquisition
price)2 (to book value)
AEON Shinagawa Seaside Shopping Center
25th 742 737 4 359 88 37 1 12 214 5 383 597 5.9% 7.6%
26th 742 737 4 359 87 46 1 4 214 4 383 598 6.0% 7.7%
AEON MALL Ibaraki 25th 779 773 5 347 96 17 0 30 201 1 431 632 7.0% 8.7%
26th 774 768 5 296 96 16 0 17 162 1 478 640 7.1% 8.9%
Papillon Plaza 25th 222 222 0 96 32 37 0 3 21 1 125 146 6.1% 6.5%
26th 222 222 0 90 32 37 0 0 18 1 132 150 6.3% 6.7%
Kamiikedai Tokyu Store 25th 53 53 - 44 5 2 0 26 10 0 8 18 2.5% 3.0%
26th 53 53 - 17 5 1 0 - 10 0 35 46 6.2% 7.4%
Belltown Tambaguchi Eki-Mae Store
25th 84 84 - 21 9 1 0 0 10 - 63 73 6.9% 7.8%
26th 84 84 - 21 9 1 0 0 10 - 63 73 6.9% 7.9%
AEON MALL NAGOYADOME-Mae
25th 773 773 - 260 91 15 0 3 148 - 513 662 5.3% 6.3%
26th 773 773 - 254 91 15 0 0 146 - 519 665 5.4% 6.3%
Summit Store Takinogawa Momiji-Bashi
25th 99 99 - 20 6 1 0 - 12 - 78 90 5.9% 6.3%
26th 99 99 - 20 6 1 0 0 12 - 78 90 5.8% 6.3%
(Provisional name) Home Center Kohnan Hiroshima-
Shi Minami-Machi (land interest)3
25th 103 11 91 8 7 0 0 - 0 0 94 95 - -
26th Not disclosed4 -5 - -
Frespo Tosu (land interest)
25th 118 118 0 16 16 - - - - 0 101 101 6.4% 6.2%
26th 118 118 0 16 16 - - - - 0 101 101 6.4% 6.2%
You Me Town Hiroshima 25th 745 745 0 247 89 14 0 - 142 - 497 640 5.5% 6.3%
26th 745 745 0 247 89 14 0 - 142 - 497 640 5.5% 6.4%
Queen’s Isetan Suginami-Momoi
25th 112 112 - 22 8 2 0 - 11 0 89 101 5.7% 6.0%
26th 112 112 - 23 8 2 0 0 11 0 89 100 5.7% 6.0%
Mitsui Outlet Park IRUMA 25th 694 694 0 289 47 14 1 14 211 0 404 616 6.2% 7.4%
26th 714 714 0 319 47 16 1 42 211 0 395 606 6.1% 7.4%
(million yen)
Leasing income and expenses by property
39
Leasing income and expenses by property
Real estate rent revenue Expenses related to rent business Property leasing
operating income
NOI1
NOI yield
Total Rent
revenue – real estate
Rent revenue –
other Total
Property and other
taxes
Property management
expenses
Casualty insurance
Repairs and maintenance
Depreciation Other
expenses (to acquisition
price)2 (to book value)
Costco Wholesale Warehouse Iruma
(land interest)
25th 78 78 0 7 4 - - 2 - - 70 70 5.5% 5.4%
26th 78 78 0 4 4 - - - - - 73 73 5.7% 5.6%
Desigual Harajuku 25th 66 66 - 12 7 1 0 - 3 0 53 57 3.7% 3.9%
26th 66 66 - 12 7 1 0 - 3 0 53 57 3.7% 3.9%
Ito-Yokado Higashi-Yamato
25th 380 380 - 167 41 8 0 2 115 0 212 327 5.6% 6.5%
26th 380 380 - 168 41 8 0 2 115 0 211 327 5.6% 6.6%
AEON TOWN Tanashi-Shibakubo
25th 114 114 - 32 11 2 0 1 17 0 82 99 6.4% 6.9%
26th 114 114 - 31 11 2 0 - 17 0 83 100 6.5% 7.1%
TSUTAYA BOOKSTORE TENJIN3
25th 147 147 - 49 8 6 0 1 32 0 97 130 7.1% 7.7%
26th 147 147 - 54 8 4 0 2 32 5 92 125 6.8% 7.5%
Mitsui Shopping Park LaLaport IWATA
25th 600 600 0 364 71 12 0 13 265 0 236 501 6.6% 8.3%
26th 601 601 0 369 71 13 0 18 265 0 231 496 6.5% 8.4%
GINZA GLASSE 25th 423 423 - 222 42 65 0 6 54 52 200 255 3.8% 3.9%
26th 415 415 - 219 42 65 0 8 55 47 196 252 3.7% 3.9%
Shimura Shopping Center 25th 158 158 0 63 15 3 0 0 43 0 94 138 6.3% 6.5%
26th 158 158 0 46 15 3 0 0 27 0 111 138 6.3% 6.6%
Mitsui Shopping Park LaLagarden KASUKABE
25th 370 370 - 162 37 7 0 3 112 0 208 320 6.4% 7.2%
26th 370 370 - 177 37 8 0 16 114 0 192 307 6.1% 7.0%
Summit Store Yokohama Okano (land interest)
25th 154 147 7 10 10 - - - - - 144 144 5.1% 4.9%
26th 154 147 7 10 10 - - - - - 144 144 5.1% 4.9%
VIORO 25th 543 524 18 332 39 106 0 12 52 121 210 262 5.2% 5.4%
26th 540 495 44 315 39 122 0 14 52 86 224 276 5.5% 5.7%
QANAT Rakuhoku 25th 276 276 - 166 38 7 0 27 92 0 109 202 4.6% 5.0%
26th 276 276 - 206 38 8 0 66 93 0 69 163 3.7% 4.1%
(million yen)
1. NOI = Property leasing operating income + Depreciation 2. Part of the land of Desigual Harajuku was sold to the Tokyo Metropolitan Government on July 30, 2012 (area of 26.86 m2 and book value of ¥259 million) for ¥333 million and compensation for transfer of
property, etc. (approx. ¥55 million) was received due to the removal of part of the building, etc. However, the figure given here is calculated using the price at the time of acquisition. 3. FRI and TSUTAYA Co., Ltd. have reached an agreement to terminate the lease contract for the property effective August 23, 2017. FRI entered a fixed-term building lease with the new tenant, Don Quijote Co.,
Ltd., on July 31, 2017.
40
Leasing income and expenses by property
Real estate rent revenue Expenses related to rent business Property leasing
operating income
NOI1
NOI yield
Total Rent
revenue – real estate
Rent revenue –
other Total
Property and other
taxes
Property management
expenses
Casualty insurance
Repairs and maintenance
Depreciation Other
expenses (to acquisition
price)2 (to book value)
Ikebukuro Square 25th 694 694 - 266 40 63 0 0 120 41 427 548 5.4% 5.6%
26th 690 690 0 261 40 61 0 0 120 38 429 550 5.4% 5.6%
Mitsui Shopping Park ALPARK (East Building)
25th 264 264 - 176 56 6 2 25 85 - 87 173 6.4% 6.8%
26th 264 264 - 152 56 5 2 2 85 - 111 197 7.3% 7.9%
Kohnan Kawasaki-Odasakae Mall (land interest)
25th 208 208 0 20 20 0 - - - 0 187 187 5.4% 5.3%
26th 208 208 0 20 20 0 - - - 0 187 187 5.4% 5.3%
Mitsui Shopping Park LaLaport SHIN-MISATO
Annex
25th 145 145 0 74 7 13 0 0 34 18 71 105 5.4% 5.6%
26th 140 140 0 72 7 13 0 2 34 15 67 101 5.2% 5.4%
Shinsaibashi Square
25th Not disclosed3
174 4.1% 4.0%
26th Not disclosed3
174 4.0% 4.0%
Mitsui Shopping Park LaLaport SHIN-MISATO4
25th 490 490 - 157 14 10 1 6 124 0 333 457 - -
26th 586 586 - 231 60 12 1 14 142 0 354 496 5.0% 5.1%
Costco Wholesale Warehouse Shin-Misato
(land interest)
25th Not disclosed3 86 4.5% 4.5%
26th Not disclosed3 86 4.5% 4.5%
KOJIMA x BIC CAMERA Naha Store
25th Not disclosed3 71 7.8% 7.4%
26th Not disclosed3 68 7.4% 7.1%
Total 25th 10,022 9,893 129 4,083 997 471 13 200 2,156 243 5,939 8,095 5.6% 6.2%
26th 10,011 9,947 63 4,091 1,043 495 13 218 2,117 203 5,920 8,037 5.6% 6.3%
(million yen)
1. NOI = Property leasing operating income + Depreciation 2. NOI yield is not shown for the property acquired in the 25th period. 3. Only NOI is disclosed, as FRI has not obtained the permission of the lessee to disclose other information. 4. FRI acquired an additional 50% co-ownership stake in Mitsui Shopping Park LaLaport SHIN-MISATO on August 10, 2016.
41
1. CR = Cap rate determined by the direct reduction approach 2. The values shown are for FRI’s 66% co-ownership stake. 3. Acquisition price includes the portion for the building demolished as of December 2016. The value given for book value at end of 26th period is that after the building’s demolition. 4. Based on the assumption that TSUTAYA Co., Ltd. will move out on October 27, 2017, and the fixed-term building lease contract signed with Don Quijote Co., Ltd. on March 30, 2017 (to take effect December 1,
2017).
Area Property name Acquisition
date Acquisition
price
Book value at end of
26th period
26th period (June 30, 2017)
25th period (December 31, 2016)
Changes Major factor
in increase/
decrease
Appraisal value CR1
Appraisal value CR1
Appraisal
value CR1 CR1 Other
Tokyo m
etro
polita
n a
rea
AEON Shinagawa Seaside Shopping Center Aug. 2004 20,100 15,446 19,100 5.7% 19,200 5.7% -100 0.0% ○
Kamiikedai Tokyu Store Aug. 2004 1,490 1,250 1,820 4.8% 1,780 4.9% +40 -0.1% ○
Summit Store Takinogawa Momiji-Bashi Sep. 2006 3,100 2,860 3,630 5.0% 3,560 5.1% +70 -0.1% ○
Queen’s Isetan Suginami-Momoi Jul. 2008 3,560 3,378 4,110 4.9% 4,040 5.0% +70 -0.1% ○
Mitsui Outlet Park IRUMA Jul. 2008 19,900 16,367 22,600 5.4% 22,600 5.4% 0 0.0%
Costco Wholesale Warehouse Iruma (land interest) Jul. 2008 2,600 2,626 2,750 5.4% 2,750 5.4% 0 0.0%
Desigual Harajuku Oct. 2008 3,100 2,903 3,400 3.2% 3,340 3.3% +60 -0.1% ○
Ito-Yokado Higashi-Yamato Jan. 2009 11,600 9,947 11,100 5.5% 11,100 5.5% 0 0.0%
AEON TOWN Tanashi-Shibakubo Feb. 2009 3,100 2,848 3,300 5.6% 3,240 5.7% +60 -0.1% ○
GINZA GLASSE Jul. 2010 13,600 12,953 15,100 3.0% 15,000 3.1% +100 -0.1% ○
Shimura Shopping Center Jan. 2011 4,430 4,236 5,690 4.6% 5,550 4.7% +140 -0.1% ○
Mitsui Shopping Park LaLagarden KASUKABE Feb. 2011 10,000 8,830 11,000 5.4% 11,000 5.4% 0 0.0%
Summit Store Yokohama Okano (land interest) Feb. 2012 5,700 5,945 6,630 4.7% 6,470 4.8% +160 -0.1% ○
Ikebukuro Square Feb. 2013 20,400 19,476 24,400 4.4% 24,000 4.5% +400 -0.1% ○
Kohnan Kawasaki-Odasakae Mall (land interest) Jan. 2014 7,000 7,069 8,710 4.6% 8,490 4.7% +220 -0.1% ○
Mitsui Shopping Park LaLaport SHIN-MISATO Annex Mar. 2014 3,930 3,751 3,980 5.2% 4,000 5.2% -20 0.0% ○
Mitsui Shopping Park LaLaport SHIN-MISATO2 Apr. 2015 Aug. 2016
19,840 19,648 20,300 4.8% 20,200 4.8% +100 0.0%
Costco Wholesale Warehouse Shin-Misato (land interest) Apr. 2015 3,810 3,854 3,950 4.4% 3,860 4.5% +90 -0.1% ○
Chubu AEON MALL NAGOYADOME-Mae Mar. 2006 24,800 20,966 25,200 5.2% 25,200 5.2% 0 0.0%
Mitsui Shopping Park LaLaport IWATA Jul. 2010 15,200 11,795 15,400 6.1% 15,300 6.1% +100 0.0% Kansai AEON MALL Ibaraki Aug. 2004 18,100 14,361 23,800 5.2% 23,800 5.2% 0 0.0%
Belltown Tambaguchi Eki-Mae Store Aug. 2005 2,130 1,883 2,820 5.1% 2,800 5.2% +20 -0.1% ○
QANAT Rakuhoku Jul. 2012 8,800 8,018 9,010 4.9% 9,050 5.0% -40 -0.1% ○ ○
Shinsaibashi Square Mar. 2015 8,620 8,664 9,010 3.7% 8,910 3.8% +100 -0.1% ○
Chugoku (Provisional name) Home Center Kohnan Hiroshima-Shi Minami-Machi (land interest)3 Apr. 2007 1,940 1,754 2,540 5.2% 2,450 5.4% +90 -0.2% ○
You Me Town Hiroshima Feb.2008 23,200 20,143 21,600 6.2% 21,600 6.2% 0 0.0%
Mitsui Shopping Park ALPARK (East Building) Feb.2013 5,400 4,998 5,520 6.4% 5,520 6.4% 0 0.0% Kyushu/ Okinawa
Papillon Plaza Aug. 2004 4,810 4,521 5,330 5.0% 5,260 5.1% +70 -0.1% ○
Frespo Tosu (land interest) Nov. 2007 3,178 3,256 3,060 6.6% 3,050 6.6% +10 0.0%
TSUTAYA BOOK STORE TENJIN4 Dec. 2009 3,700 3,343 4,180 4.3% 4,730 4.4% -550 -0.1% ○ ○
VIORO Feb. 2012 10,100 9,726 11,900 3.9% 12,000 4.0% -100 -0.1% ○ ○
KOJIMA x BIC CAMERA Naha Store Jan. 2016 1,850 1,929 2,410 5.7% 2,370 5.8% +40 -0.1% ○
Total 289,088 258,758 313,350 312,220 +1,130
Appraisal value
Unrealized gain: ¥54.5 billion (up ¥3.1 billion from 25th period)
(million yen)
42
1. CR = Cap rate determined by the direct reduction approach 2. DR = Discount rate determined by the discounted cash flow approach 3. TCR = Terminal cap rate determined by the discounted cash flow approach 4. The appraisal values are for FRI’s 66% co-ownership stake. 5. Based on the assumption that TSUTAYA Co., Ltd. will move out on October 27, 2017, and the fixed-term building lease contract signed with Don Quijote Co., Ltd. on March 30, 2017 (to take effect December 1, 2017).
Area Property name
26th period (June 30, 2017) 25th period (December 31, 2016)
Appraisal value
(million yen)
Direct
reduction
approach
Discounted cash flow approach
Appraisal value
(million yen)
Direct
reduction
approach
Discounted cash flow approach
CR1 DR2 TCR3 CR1 DR2 TCR3
Tokyo m
etro
polita
n a
rea
AEON Shinagawa Seaside Shopping Center 19,100 5.7% 5.6% 6.1% 19,200 5.7% 5.6% 6.1%
Kamiikedai Tokyu Store 1,820 4.8% 4.5% 4.9% 1,780 4.9% 4.6% 5.0%
Summit Store Takinogawa Momiji-Bashi 3,630 5.0% 4.6% 5.1% 3,560 5.1% 4.7% 5.2%
Queen’s Isetan Suginami-Momoi 4,110 4.9% 4.6% 5.0% 4,040 5.0% 4.7% 5.1%
Mitsui Outlet Park IRUMA 22,600 5.4% 5.2% 5.6% 22,600 5.4% 5.2% 5.6%
Costco Wholesale Warehouse Iruma (land interest) 2,750 5.4% 4.8% 5.7% 2,750 5.4% 4.8% 5.7%
Desigual Harajuku 3,400 3.2% 3.0% 3.4% 3,340 3.3% 3.1% 3.5%
Ito-Yokado Higashi-Yamato 11,100 5.5% 5.3% 5.7% 11,100 5.5% 5.3% 5.7%
AEON TOWN Tanashi-Shibakubo 3,300 5.6% 5.3% 5.7% 3,240 5.7% 5.4% 5.8%
GINZA GLASSE 15,100 3.0% 2.8% 3.2% 15,000 3.1% 2.9% 3.3%
Shimura Shopping Center 5,690 4.6% 4.7% 4.8% 5,550 4.7% 4.8% 4.9%
Mitsui Shopping Park LaLagarden KASUKABE 11,000 5.4% 5.2% 5.6% 11,000 5.4% 5.2% 5.6%
Summit Store Yokohama Okano (land interest) 6,630 4.7% 4.5% — 6,470 4.8% 4.6% —
Ikebukuro Square 24,400 4.4% 4.2% 4.6% 24,000 4.5% 4.3% 4.7%
Kohnan Kawasaki-Odasakae Mall (land interest) 8,710 4.6% 4.4% — 8,490 4.7% 4.5% —
Mitsui Shopping Park LaLaport SHIN-MISATO Annex 3,980 5.2% 5.0% 5.4% 4,000 5.2% 5.0% 5.4%
Mitsui Shopping Park LaLaport SHIN-MISATO4 20,300 4.8% 4.5% 4.9% 20,200 4.8% 4.5% 4.9%
Costco Wholesale Warehouse Shin-Misato (land interest) 3,950 4.4% 4.5% 4.3% 3,860 4.5% 4.6% 4.4% Chubu AEON MALL NAGOYADOME-Mae 25,200 5.2% 4.9% 5.3% 25,200 5.2% 4.9% 5.3%
Mitsui Shopping Park LaLaport IWATA 15,400 6.1% 5.9% 6.3% 15,300 6.1% 5.9% 6.3% Kansai AEON MALL Ibaraki 23,800 5.2% 5.0% 5.4% 23,800 5.2% 5.0% 5.4%
Belltown Tambaguchi Eki-Mae Store 2,820 5.1% 4.7% 5.1% 2,800 5.2% 4.8% 5.2%
QANAT Rakuhoku 9,010 4.9% 4.6% 5.0% 9,050 5.0% 4.7% 5.1%
Shinsaibashi Square 9,010 3.7% 3.5% 3.9% 8,910 3.8% 3.6% 4.0% Chugoku (Provisional name) Home Center Kohnan Hiroshima-Shi
Minami-Machi (land interest) 2,540 5.2% 4.8% — 2,450 5.4% 4.8% —
You Me Town Hiroshima 21,600 6.2% 5.9% 6.3% 21,600 6.2% 5.9% 6.3%
Mitsui Shopping Park ALPARK (East Building) 5,520 6.4% 6.2% 6.7% 5,520 6.4% 6.2% 6.7% Kyushu/ Okinawa
Papillon Plaza 5,330 5.0% 4.7% 5.1% 5,260 5.1% 4.8% 5.2%
Frespo Tosu (land interest) 3,060 6.6% 7.3% — 3,050 6.6% 7.3% —
TSUTAYA BOOK STORE TENJIN5 4,180 4.3% 4.1% 4.5% 4,730 4.4% 4.2% 4.7%
VIORO 11,900 3.9% 4.0% 4.1% 12,000 4.0% 4.1% 4.2%
KOJIMA x BIC CAMERA Naha Store 2,410 5.7% 5.5% 5.9% 2,370 5.8% 5.6% 6.0%
Appraisal value (supplement)
43
Total
amount (million yen)
Lender No. Amount
(million yen) Interest rate Drawdown
date Maturity date1 Loan period
(approximate) Remarks
Long-term borrowings2
15,500 Sumitomo Mitsui Banking Corporation
1 2,000 1.27750% 6/20/2011 6/20/2018 7.0 years
Unsecured/ Unguaranteed
2 3,000 1.16875% 2/20/2012 2/20/2020 8.0 years
3 1,000 1.01125% 8/20/2012 8/20/2020 8.0 years
4 3,000 1.15625% 2/1/2013 2/1/2023 10.0 years
5 1,500 0.60848% 5/19/2014 11/19/2020 6.5 years
6 1,000 0.28125% 8/29/2014 8/29/2017 3.0 years
7 2,000 0.27500% 7/2/2015 7/2/2019 4.0 years
8 2,000 0.16830% 6/20/2017 6/21/2021 4.0 years
13,000 Mitsubishi UFJ Trust and Banking Corporation
9 1,500 1.74007% 2/21/2011 8/21/2017 6.5 years
10 2,000 1.27750% 6/20/2011 6/20/2018 7.0 years
11 2,500 0.82000% 2/1/2013 2/1/2021 8.0 years
12 2,000 0.68500% 2/19/2015 2/19/2025 10.0 years
13 1,500 0.54400% 3/2/2015 3/4/2024 9.0 years
14 1,500 0.62000% 3/2/2015 3/3/2025 10.0 years
15 1,000 Note 3 0.88600% 7/2/2015 7/2/2027 12.0 years
16 1,000 0.46130% 3/9/2016 3/9/2028 12.0 years
10,500 Development Bank of Japan Inc. 17 2,000 1.20875% 8/19/2013 8/21/2023 10.0 years
18 1,500 1.17000% 3/17/2014 5/19/2025 11.2 years
19 2,000 0.35880% 3/9/2016 3/9/2027 11.0 years
20 1,000 0.37190% 4/19/2016 7/20/2027 11.3 years
21 4,000 0.33415% 8/9/2016 2/9/2028 11.5 years
5,800 Mizuho Bank, Ltd. 22 1,500 1.30750% 5/19/2011 5/21/2018 7.0 years
23 1,500 0.90500% 3/15/2013 3/15/2022 9.0 years
24 1,300 Note 3 0.59750% 7/22/2014 7/19/2022 8.0 years
25 1,500 0.21076% 7/19/2017 1/19/2022 4.5 years
Total amount
(million yen)
Lender No. Amount
(million yen) Interest rate Drawdown
date Maturity date1 Loan period
(approximate) Remarks
Short-term borrowings
3,000 Mizuho Bank, Ltd. 1 3,000 0.06000% 7/19/2017 8/21/2017 1 month Unsecured/ Unguaranteed 1,000 The 77 Bank, Ltd. 2 1,000 0.06000% 7/19/2017 8/21/2017 1 month
Total short-term borrowings 4,000
Short-term borrowings
Long-term borrowings
1. Repayment method is lump-sum repayment for all borrowings.
(as of August 15, 2017)
(as of August 15, 2017)
1. Repayment method is lump-sum repayment for all borrowings. 2. All interest rates on long-term borrowings (except for those covered by note 3) are fixed rates. 3. These borrowings have been swapped into fixed rates to avoid the risk of interest rate fluctuations. The rates indicated are those at the time the rate swap contracts were formed.
Borrowings and bonds
44
Total
amount (million yen)
Lender No. Amount
(million yen) Interest rate Drawdown
date Maturity date1 Loan period
(approximate) Remarks
Long-term borrowings2
5,700 Sumitomo Mitsui Trust Bank, Limited
26 2,200 1.04125% 12/16/2011 12/14/2018 7.0 years
Unsecured/ Unguaranteed
27 1,500 0.27500% 7/2/2015 7/2/2019 4.0 years
28 2,000 0.30874% 11/30/2015 11/30/2021 6.0 years
4,400 Mizuho Trust & Banking Co., Ltd. 29 2,500 0.69000% 2/1/2013 2/3/2020 7.0 years
30 1,900 0.15380% 3/9/2016 3/11/2024 8.0 years
4,000 The Norinchukin Bank 31 2,000 0.77250% 7/18/2013 7/18/2019 6.0 years
32 1,000 Note 3 0.08890% 1/7/2015 1/23/2018 3.0 years
33 1,000 Note 3 0.33300% 1/7/2015 1/23/2023 8.0 years
4,000 The Bank of Fukuoka, Ltd. 34 1,000 0.47125% 2/1/2013 2/1/2018 5.0 years
35 1,000 0.33500% 11/21/2016 11/24/2026 10.0 years
36 2,000 0.42500% 2/24/2017 2/24/2027 10.0 years
3,500 The Bank of Tokyo-Mitsubishi UFJ, Ltd.
37 1,000 1.28625% 8/19/2011 8/19/2019 8.0 years
38 1,500 0.99000% 2/24/2012 2/22/2019 7.0 years
39 1,000 0.47125% 2/1/2013 2/1/2018 5.0 years
2,000 Resona Bank, Limited 40 1,000 1.20673% 6/3/2011 2/5/2018 6.7 years
41 1,000 Note 3 0.46490% 3/2/2015 3/4/2024 9.0 years
2,000 The Daishi Bank, Ltd 42 1,000 Note 3 0.04805% 2/10/2016 2/10/2023 7.0 years
43 1,000 0.29785% 8/1/2017 2/19/2025 7.5 years
2,000 The Iyo Bank, Ltd. 44 1,000 Note 3 0.61150% 4/1/2015 5/14/2025 10.1 years
45 1,000 0.09000% 11/21/2016 11/22/2021 5.0 years
2,000 The Yamaguchi Bank, Ltd. 46 1,000 0.81125% 8/18/2014 8/19/2024 10.0 years
47 1,000 0.56000% 6/19/2017 6/19/2029 12.0years
1,000 The Hiroshima Bank, Ltd. 48 1,000 Note 3 0.40250% 11/25/2014 11/25/2021 7.0 years
1,000 The Gunma Bank, Ltd. 49 1,000 Note 3 0.27100% 12/16/2014 12/16/2020 6.0 years
1,000 The Hachijuni Bank, Ltd. 50 1,000 Note 3 0.25190% 11/19/2015 5/19/2022 6.5 years
1,000 The Musashino Bank, Ltd. 51 1,000 0.45333% 3/25/2014 5/27/2019 5.2 years
1,000 The 77 Bank, Ltd. 52 1,000 0.41130% 12/22/2016 12/22/2026 10.0 years
Total long-term borrowings 79,400
Investment corporation bonds
Total amount
(million yen)
Issue No. Amount
(million yen) Interest rate Issue date Maturity date Period Remarks
Investment corporation
bonds 3,000 2nd Investment corporation bonds 1 3,000 0.708% 11/25/2016 11/25/2031 15.0 years
Unsecured/ Unguaranteed
Total Investment corporation bonds 3,000
Borrowings and bonds
(as of August 15, 2017)
1. Repayment method is lump-sum repayment for all borrowings. 2. All interest rates on long-term borrowings (except for those covered by note 3) are fixed rates. 3. These borrowings have been swapped into fixed rates to avoid the risk of interest rate fluctuations. The rates indicated are those at the time the rate swap contracts were formed.
(as of August 15, 2017)
45
FRI maintains top-level ratings among J-REITs, making its investment units eligible for purchase by the Bank of Japan.
Ratings and indices
Rating Firm Category Rating Outlook
JCR Long-term issuer AA Stable
R&I Issuer AA- Stable
S&P
Long-term A+ Stable
Short-term A-1 Stable
Inclusion in global REIT indices Ratings
Indices
FTSE EPRA/NAREIT Global Real Estate Index
Dow Jones Global Select REIT Index
S&P Global REIT Index/S&P Developed REIT Index
GPR 250 Index/GPR 250 REIT Index
(as of June 30, 2017)
46
0億円
10億円
20億円
2017年 2019年 2021年 2023年 2025年 2027年
Within 5 years
29.5%
Over 5 years, up
to 10 years
30.4%
Over 10 years,
up to 15 years
15.1%
Over 15 years,
up to 20 years
21.2%
(As of June 30, 2017)
Average remaining years until full repayment of leasehold and security deposits: 9.1 years
Over 20 years
3.8%
(百万円)
2016 2015 2014 2013 2012 2017
1,011 508 1,011 516 1,003 516 1,003 1,637 763 276 779
92
96
92
83
32
114
122
33
87
125
198
411
657
992
1,636
1,161
1,608
712 879
1,072
487
1,306
1,715
1,089
0
500
1,000
1,500
2,000
第17期 第18期 第19期 第20期 第21期 第22期 第23期 第24期 第25期 第26期 第27期 (予想)
Leasehold and security deposits and depreciation
2.0
1.0
0
(billion yen)
2017 2019 2021 2023 2025 2027
Repayment ends at You Me Town
Hiroshima
Repayment starts at You Me Town
Hiroshima Repayment ends at AEON Shinagawa
Repayment ends at NAGOYADOME-Mae
Remaining period until full repayment
Leasehold and security deposit features
Schedule of security deposit repayment
Since FRI contracts long-term leases, it can use leasehold and security deposits to procure significant long-term funding.
Since FRI holds many security deposits at zero interest, these deposits provide a source of low-cost funding.
Utilizing depreciation
Utilizing capital equivalent to each period’s depreciation enables aggressive strategic investment in addition to the repayment of security deposits.
AEON MALL Ibaraki 2015
AEON Shinagawa Seaside Shopping Center
2014
Large-scale renovations
*The disposition of AEON Hadano Shopping Center was completed on November 28, 2014.
AEON Hadano Shopping Center*
2011
17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th
(forecast)
(million yen)
Over 10 years: Approx. 40%
Over 5 years: Approx. 70%
■ Property acquisition, etc. ■ Large-scale
renovations ■ Ordinary capital expenditure ■ Return of security
deposits
47
9,231
8,539 8,499 8,909
9,695
8,896 9,468
10,022 216
451 112
435
1742 1,456
1,208 686
9,405
10,211
9,707
9,360
9,695 9,694 9,903
10,022
7,000
8,000
9,000
10,000
11,000
Stable distribution management
*1
-947
0
Property acquisition (24th) ・KOJIMA x BIC CAMERA
Naha Store Acquisition price: ¥1,850 million
Property sale (24th) ・Joyfultown Okayama Sale price: ¥8,685 million Loss on sale: ¥469 million
Property acquisition (25th) ・LaLaport SHIN-MISATO
(50% co-ownership) Acquisition price:
¥15,100 million
Property acquisitions (22nd) ・Shinsaibashi Square
Acquisition price: ¥8,620 million
・LaLaport SHIN-MISATO
(16% co-ownership) Acquisition price: ¥4,740 million
・Costco Wholesale Warehouse Shin-Misato
(land interest) Acquisition price: ¥3,810 million
Property sale ・AEON Hadano Shopping Center Sold 55% Sold 25% Sold 20% (19th) (20th) (21st)
Sale price: ¥11,800 million Gain on sale: ¥3,800 million
Property sale (19th) ・WV Sakae Sale price: ¥5,200 million Loss on sale: ¥1,957 million
Property acquisitions (20th) ・Kohnan Kawasaki (land interest)
Acquisition price: ¥7,000 million
・LaLaport SHIN-MISATO
Annex Acquisition price: ¥3,930 million
At end of 18th fiscal period
¥271.6 bn At end of 26th fiscal period
¥289.0 bn
Asset size Total sales3 ¥25.6 bn
Total acquisitions3 ¥45.0 bn
1.Distribution of gain on property sales = (gain on property sales – portion put toward internal reserves) / number of units issued and outstanding 2.The gain on property sales presented for the 19th fiscal period is the net total of the gain on sale of AEON Hadano Shopping Center and loss on sale of WV Sakae. 3.Total sales and total acquisitions are the totals of the prices paid and received for properties acquired and sold, respectively. These figures do not account for the full difference in
asset size.
19th 20th 21st 22nd 23rd 24th 25th 26th
■ Distribution of rent business revenue
■ Distribution through new
property acquisitions ■ Distribution of gain on
property sales1 ■ Distribution of reversal of
reserve for reduction entry ■ Impact on distributions of
loss on property sales
Breakdown of distribution per unit
(yen)
48
Growth cycle and property acquisitions
公募増資
一口当たり
分配金(
円)
資産規模(
取得価格ベース)
LTV
スポンサー からの取得
スポンサー外 からの取得
50.0%
40.0%
¥9,000
資産規模(億円)
第1期
(04/12期)
第2期
(05/6期)
第3期
(05/12期)
第4期
(06/6期)
第5期
(06/12期)
第6期
(07/6期)
第7期
(07/12期)
第8期
(08/6期)
第9期
(08/12期)
第10期
(09/6期)
第11期
(09/12期)
第12期
(10/6期)
第13期
(10/12期)
第14期
(11/6期)
第15期
(11/12期)
第16期
(12/6期)
第17期
(12/12期)
第18期
(13/6期)
第19期
(13/12期)
第20期
(14/6期)
第21期
(14/12期)
第22期
(15/6期)
第23期
(15/12期)
第24期
(16/6期)
第25期
(16/12期)
第26期
(17/6期)
第27期(予想)
(17/12期)
2,739 1,231 1,596 1,743 1,780 2,068 2,212 2,458 2,716 2,370 1,780 2,212 2,592 2,678
Property sales
2,659 2,831 648 648 669 917 967 999 948 2,831
Property sale
2,934 2,890
Approx. 42%
2,890
Public
offe
rings
Distrib
utio
n
per u
nit (y
en)
Ass
et siz
e
(acquisitio
n p
rice b
asis)
LTV
Sponsor
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th Forecast**
Dec.‘04 Jun.’05 Dec.‘05 Jun.’06 Dec.’06 Jun.’07 Dec.’07 Jun.’08 Dec.‘08 Jun.’09 Dec.’09 Jun.’10 Dec.’10 Jun.’11 Dec.’11 Jun.’12 Dec.’12 Jun.‘13 Dec.’13 Jun. ’14 Dec.‘14 Jun.‘15 Dec.’15 Jun.’16 Dec. ‘16 Jun.‘17 Dec.’17
Japan Tobacco March 2008 onward: Mitsui Fudosan
July 2010 July 2012 July 2008
March 2008 Third-party allotment
March 2013
Sound, careful control of LTV
Track record of stable distributions
Seeking to grow FRI’s asset size to maintain and improve the stability of the earnings base
Asset size (billion yen)
Acquisitions from the sponsor
Acquisitions not from the sponsor
9.3% 8.3%
14.3%
34.0% 35.2% 35.9% 37.5%
41.0% 41.0% 45.5% 46.2% 45.7%
43.6% 46.8% 46.3%
49.6%
42.5% 41.0%
37.6% 39.2% 38.0%
41.7% 41.2% 39.1% 42.3% 41.6%
*FRI implemented a two-for-one split of its investment units effective January 1, 2014. Distributions before the split have been divided by two and truncated to the nearest yen.
** Distribution per unit (DPU), LTV and asset size forecasts for the 27th period are given as the figures announced in “Summary of Financial Results for the 26th Fiscal Period,” published August 15, 2017.
4,771 5,622
6,045
7,218
8,648 8,846 8,922 8,980 9,205 9,274 9,368 9,294 9,097 9,239 9,299
9,991 9,191 9,173 9,405
10,211 9,707 9,360 9,695 9,694 9,903 10,022 10,080
49
26,060 26,060 29,160
57,960 67,960
76,760
102,560 106,490 123,660
138,760
3,100
28,800
10,000
8,800
25,800
3,930
17,170
15,100
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2008年6/12期 2009年6/12期 2010年6/12期 2011年6/12期 2012年6/12期 2013年6/12期 2014年6/12期 2015年6/12期 2016年6/12期 2017年6/12期
Assets acquired from the sponsor (Mitsui Fudosan)
Properties acquired from Mitsui Fudosan
Average annual acquisition price: ¥15,418 million
Non-sponsor 17.7%
Japan Tobacco 35.1%
Mitsui Fudosan, etc. 47.3%
Acquisition resources
Cumulative assets acquired from Mitsui Fudosan, etc.
Steady track record of property acquisitions via the sponsorʼs robust pipeline
Mitsui Shopping Park LaLaport SHIN-MISATO
Annex ¥3.9 billion
Queen’s Isetan Suginami-Momoi
¥3.5 billion
AEON TOWN Tanashi-Shibakubo
¥3.1 billion
GINZA GLASSE ¥13.6 billion
Mitsui Shopping Park LaLagarden
KASUKABE ¥10.0 billion
QANAT Rakuhoku ¥8.8 billion
Ikebukuro Square ¥20.4 billion
Shinsaibashi Square ¥8.6 billion
Mitsui Shopping Park LaLaport
SHIN-MISATO (50%) ¥15.1 billion
Mitsui Outlet Park IRUMA
¥19.9 billion
Mitsui Shopping Park LaLaport IWATA
¥15.2 billion
Mitsui Shopping Park ALPARK (East Building)
¥5.4 billion
Mitsui Shopping Park LaLaport SHIN-MISATO (16%)
¥4.7 billion
Costco Wholesale Warehouse
Iruma (land interest) ¥2.6 billion
Costco Wholesale Warehouse Shinmisato (land interest)
¥3.8 billion
(million yen)
8th/9th 10th/11th 12th/13th 14th/15th 16th/17th 18th/19th 20th/21st 22nd/23rd 24th/25th 26th
Total acquisition
price: ¥293.4 billion
10 properties
¥102.8 bn
9 properties
¥51.8 bn
14 proper-
ties
¥138.7 bn
(As of Aug. 15, 2017)
50
Mitsui Fudosanʼs retail facility development
Total: Approx.
¥873.5 billion
Retail facilities in operation 14%
Planned & under development 45%
Office buildings in operation 20%
Rental housing in operation 6%
Logistics facilities in operation 8%
As of March 31, 2016
Opening year Project name Location
2014
LaLaterrace Musashikosugi Kawasaki City, Kanagawa
Mitsui Outlet Park Sapporo Kita Hiroshima (Phase 2) Kitahiroshima City, Hokkaido
Mitsui Outlet Park Kisarazu (Phase 2) Kisarazu City, Chiba
LaLaport Kashiwanoha (north building) Kashiwa City, Chiba
Akarenga TERRACE Sapporo City, Hokkaido
Iidabashi Sakura Terrace Chiyoda City, Tokyo
LaLaport Izumi Izumi City, Osaka
Shin Kawasaki Square Kawasaki City Kanagawa
2015
LaLaport Fujimi Fujimi City, Saitama
Mitsui Outlet Park Kuala Lumpur International Airport Sepang (Phase 1)
Selangor, Malaysia
Mitsui Outlet Park Hokuriku Oyabe Oyabe City, Toyama
Mitsui Outlet Park Makuhari (Phase 3) Chiba City, Chiba
LaLaport Ebina Ebina City, Kanagawa
LaLaport EXPOCITY Suita City, Osaka
Mitsui Outlet Park LINKOU New Taipei, Taiwan
2016 LaLaport SHONAN HIRATSUKA Hiratsuka City, Kanagawa
2017
MITSUI OUTLET PARK JAZZ DREAM NAGASHIMA (Phase 5)
Kuwana City, Mie
Mitsui Outlet Park Kuala Lumpur International Airport Sepang (Phase 2)
Selangor, Malaysia
2018 Nagoya City Komei Project Nagoya City, Aichi
Mitsui Outlet Park Taichung Port Taichung, Taiwan
2021
Mitsui Outlet Park Kuala Lumpur International Airport Sepang (Phase 3)
Selangor, Malaysia
LaLaport Kuala Lumpur Kuala Lumpur, Malaysia
TBD Retail Facility Development Project in Togocho, Aichi Aichi-gun, Aichi
Miyashita Park Project Shibuya City, Tokyo
Overseas rental assets in operation 8%
Main retail facility projects under development Breakdown of Mitsui Fudosanʼs inventory of property for
sale to investors
REIT sponsored by the Mitsui Fudosan Group, etc.
Property sales to various investors
Institutional investors, corporations, etc.
Buyers commission property management
Mitsui Fudosan’s model for joint value creation with investors
Prepared from data in Mitsui Fudosan’s “Investor Presentation March 2017”
Prepared from data in Mitsui Fudosan’s “Investor Presentation March 2017”
51
Mitsui Fudosanʼs retail facility operation
Mitsui Fudosanʼs retail facility operation
Takeshita-dori Square LaLaport SHONAN HIRATSUKA LaLaport FUJIMI
COREDO Muromachi Tokyo Midtown
Source: Mitsui Fudosan. As of April 1, 2017. Includes properties operated and managed on a consignment basis.
Number of facilities 109
Total floor space Approx. 5,200,000 m2
Leased floor space Approx. 2,900,000 m2
Tenant stores Approx. 7,600
Tenant companies Approx. 2,300
Mitsui Fudosan owns and operates retail facilities across Japan, mainly in the Tokyo metropolitan and Kansai areas
(million yen)
Rental revenue of Mitsui Fudosan’s retail facilities (non-consolidated)
Source: Fact books for the years ended March 31, 2002-2017, Mitsui Fudosan
34,657 36,935 37,601 45,947 51,716
62,091
87,393 103,191
118,823 123,114
129,235 148,025
157,716 169,894
201,371 215,221
0
50,000
100,000
150,000
200,000
250,000
2002年
3月期
2003年
3月期
2004年
3月期
2005年
3月期
2006年
3月期
2007年
3月期
2008年
3月期
2009年
3月期
2010年
3月期
2011年
3月期
2012年
3月期
2013年
3月期
2014年
3月期
2015年
3月期
2016年
3月期
2017年
3月期 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
● Regional SC ● Mitsui Outlet Park ● Urban retail facilities ● Other
Hokkaido
Tohoku
Tokyo metropolitan area Chubu
Kansai
Chugoku
Kyushu
52
Utilizing the support of the sponsor
Frontier REIT SC Management Co., Ltd.
Asset custodianship Preventive maintenance of buildings/facilities, approval of construction by tenants, emergency response, etc.
Operation and management Management company supervision, reporting on operations/management
Accounting support
Retail facility operation/management
Specialized in the operation and management of properties owned by FRI
Support for external growth
• Rich property pipeline
• Provides brokerage and information regarding properties from third parties
Support for internal growth
• Operation/management using the Mitsui Fudosan Group’s expertise
• Provides information on the retail market and tenant leasing
Asset Management Company
Comprehensive developer
53
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2004/08 2005/08 2006/08 2007/08 2008/08 2009/08 2010/08 2011/08 2012/08 2013/08 2014/08 2015/08 2016/08
出来高(右軸)
FRI投資口価格(左軸)
Investment unit price
Average trading volume Price at end of 26th period
918 463,500
(26th period) (June 30, 2017)
*FRI投資口価格はIPO価格を100%とする。 *東証REIT指数は2004年8月9日の終値を100%とする。
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
220%
240%
2004/08 2005/08 2006/08 2007/08 2008/08 2009/08 2010/08 2011/08 2012/08 2013/08 2014/08 2015/08 2016/08
FRI投資口価格(左軸) 東証REIT指数(左軸) 配当利回り(右軸、次期予想ベース)
Price comparison (Aug. 9, 2004 – Jun. 30, 2017)
Investment unit price (Aug. 9, 2004 – Jun. 30, 2017)
FRI unit price (left axis)
Volume (right axis)
(yen)
Source: QUICK
(units)
Source: QUICK
* FRI implemented a two-for-one split of its investment units effective January 1, 2014. Accordingly, unit prices before December 25, 2013, have been divided by two.
FRI unit price (left axis) Distribution yield (right axis) TSE REIT Index (left axis)
*For FRI unit price, the price upon IPO has been set at 100% *For TSE REIT Index, the closing value of August 9, 2004 has been set at 100%
54
28.7%
25.7%
25.5%
25.5%
26.5%
26.8%
25.5%
28.1%
26.4%
28.1%
37.8%
40.8%
45.8%
46.8%
44.3%
47.2%
46.0%
43.2%
45.0%
44.1%
9.4%
8.4%
7.3%
6.7%
7.0%
6.5%
6.9%
6.6%
6.5%
6.7%
9.2%
9.4%
8.6%
8.8%
8.8%
8.6%
8.7%
8.6%
8.5%
8.2%
14.9%
15.8%
12.7%
12.2%
13.5%
10.8%
12.9%
13.5%
13.5%
12.9%
0% 20% 40% 60% 80% 100%
第17期
(12/12月)
第18期
(13/6月)
第19期
(13/12月)
第20期
(14/6月)
第21期
(14/12月)
第22期
(15/6月)
第23期
(15/12期)
第24期
(16/6期)
第25期
(16/12期)
第26期
(17/6期)
金融機関 投信等 個人・その他 その他の国内法人 外国法人等
Unitholders
Name Units held
Proportion
Japan Trustee Services Bank, Ltd. (Trust Account) 114,258 23.0 %
The Master Trust Bank of Japan, Ltd. (Trust Account) 48,152 9.7 %
Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)
31,951 6.4 %
Mitsui Fudosan Co., Ltd. 29,200 5.9 %
The Nomura Trust and Banking Co., Ltd. (Investment Trust Account) 20,188 4.1 %
The Yamanashi Chuo Bank, Ltd. 9,543 1.9 %
State Street Bank-West Pension Fund Clients-Exempt 505233
7,044 1.4 %
The Chugoku Bank, Limited 6,275 1.3 %
State Street Bank and Trust Company 505223 6,141 1.2 %
Trust & Custody Services Bank, Ltd. (Money Trust Tax Account) 6,138 1.2 %
Total 278,890 56.2%
* All as of June 30, 2017
Financial
institutions* Individuals,
other
Other domestic
corporations
Overseas corporations and others
Total
26th period (June 2017)
183 7,713 190 206 8,292
25th period (Dec. 2016)
178 7,623 192 213 8,206
Change +5 +90 -2 -7 +86
Units held by unitholder type Unitholders by type
Principal unitholders* (top 10)
26th 6/17
25th 12/16
24th 6/16
23rd 12/15
22nd 6/15
21st 12/14
20th 6/14
19th 12/13
18th 6/13
17th 12/12
*Includes mutual funds, etc.
■Financial institutions ■Mutual funds, etc. ■Individuals, other
■Other domestic corporations ■Overseas corporations and others
Asset Management Company