Real Estate Analysis Report

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1 1Q 2 1Q 21 1Q 22 1Q 23 1Q 24 1Q 25 1Q 26 1Q 27 1Q 28 1Q 29 1Q 21 1Q 211 1Q 212 1Q 213 1Q 214 1Q 215 1Q 216 1Q 217 NLI Research Institute May 22, 217 Real Estate Analysis Report Japanese Property Market Quarterly Review, First Quarter 217 ~Focus on Coming Large Supply of Offices, Hotels and Logistics Facilities~ Real Estate Investment Research Financial Research Department Eriko Kato ekato@nli-research.co.jp Summary Japan s real GDP grew for the fifth consecutive quarter and business conditions are expected to remain stable backed by the recovery of corporate earnings and capital expenditure. While housing starts have modestly grown y-o-y, concerns about loans for building apartments for lease and mounting inventories of new condominiums have also increased. While the average national land price appreciated y-o-y for the second consecutive year, the number of sites where land prices appreciated did not increase q-o-q in the first quarter. The rents of Tokyo Grade-A 1 offices declined 1.1% q-o-q in advance of large new supply starting from 218. While hotel demand has been strong due to increasing foreign visitors, coming large new supply worries investors about certain areas and categories. Large new supply of logistics facilities has been considerably absorbed so far by strong demand. The TSE REIT Index declined by 4.3% in the first quarter. Despite the interest rate hike in the U.S., 1-year JGB yields have remained around % and debt funding conditions have been favorable. (JPY/Month/Tsubo 3.3m2) 5, 45, Tokyo Grade-A, B and C Office Rent Index 4, 35, 33,398 3, 25, 2, 19,742 15, 1, 15,771 Tokyo Grade-A Tokyo Grade-B Tokyo Grade-C Source: Sanko Estate and NLI Research Institute 1 Sanko Estate Grade-A Office Guidelines: Located in urban area Tokyo five wards, main office areas or other specially integrated areas, with total floor area of more than 33, m 2, main floor size of more than 99 m 2, building age of 15 years or less 1 NLI Research Institute Real Estate Analysis Report May, 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

2 Economy and Housing Market Japan s real GDP growth rate was revised up by.1% to.3% q-o-q in the fourth quarter of 216, which also raised the NLI Research Institute GDP growth rate forecast for 216 by.1% to 1.3% y-o-y (Chart-1). The real GDP growth rate for the first quarter of 217 was.5% q-o-q for the fifth consecutive month of positive growth, as business conditions are expected to remain stable backed by the recovery of corporate earnings and capital expenditure. In the BOJ Tankan Survey, the current business confidence D.I. of both large manufactures and non-manufacturers improved (Chart-2). The D.I. of large companies in the property industry has remained above the 3-point level but the three-month forecast deteriorated to the 28-point level reflecting increasing uncertainty. (Y-o-y) 4.% Chart-1 Japan GDP Growth Rates Forecast 3.% 2.6% 2.% 1.%.9% 1.3% 1.3% 1.% 1.2%.% -1.% -.4% -2.% (Fiscal Year) Consumption Fixed Asset Investments Government Net Exports Others Real GDP Growth Source: Economic and Social Research Institute, Cabinet Office, Government of Japan "Quarterly Estimate of GDP", Taro Saito "Weekly Economist Letter" NLI Research Institute April 28, Chart-2 BOJ Tankan Survey Large Manufacturers Large Non-Manufacturers Large Companies in Property Industry Source: BOJ "Tankan Survey" Housing starts have modestly grown y-o-y led by apartments for lease (Chart-3). Regarding loans for building apartments for lease, the Financial Services Agency and the Bank of Japan intend to tighten controls over financial institutions. 2 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

3 29 Feb. 29 Aug. 21 Feb. 21 Aug. 211 Feb. 211 Aug. 212 Feb. 212 Aug. 213 Feb. 213 Aug. 214 Feb. 214 Aug. 215 Feb. 215 Aug. 216 Feb. 216 Aug. 217 Feb. Mar. 27 Jun. 27 Sep. 27 Dec. 27 Mar. 28 Jun. 28 Sep. 28 Dec. 28 Mar. 29 Jun. 29 Sep. 29 Dec. 29 Mar. 21 Jun. 21 Sep. 21 Dec. 21 Mar. 211 Jun. 211 Sep. 211 Dec. 211 Mar. 212 Jun. 212 Sep. 212 Dec. 212 Mar. 213 Jun. 213 Sep. 213 Dec. 213 Mar. 214 Jun. 214 Sep. 214 Dec. 214 Mar. 215 Jun. 215 Sep. 215 Dec. 215 Mar. 216 Jun. 216 Sep. 216 Dec. 216 Mar. 217 The number of new condominium units sold in the Tokyo metropolitan area increased by 1% y-o-y to 7,12 in the first quarter, however, the contracted rate dropped below 7% and inventories have accumulated (Chart-4). New condominium prices have stopped rising and leveled off. Some developers have furnished their units for free to clear their inventories, which suggest that new condominium prices are about to decline. The transaction volume in the secondary condominium market in the Tokyo metropolitan area remained the same as last year. After rising for years, condominium prices have become too expensive for ordinary people looking for their own home (Chart-5), urging potential buyers to move to the residential leasing market. (K Units) Chart-3 Housing Starts (%) Source: MLIT Housing Starts Y-o-y (RHS) Apartments for Lease y-o-y (RHS) (Units) 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Chart-4 New Condominium Inventory and Sales Y-o-y (Y-o-y) 8% 6% 4% 2% % -2% -4% -6% Source: Real Estate Economic Institute Inventory New Condominium Sales y-o-y (RHS) 3 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

4 Sep. 27 Mar. 28 Sep. 28 Mar. 29 Sep. 29 Mar. 21 Sep. 21 Mar. 211 Sep. 211 Mar. 212 Sep. 212 Mar. 213 Sep. 213 Mar. 214 Sep. 214 Mar. 215 Sep. 215 Mar. 216 (Jan. 2=1) 1 Chart-5 Secondary Condominium Transacted Prices Tokyo Metropolitan Area Tokyo Source: Japan Real Estate Institute "Home Price Indices" 2. Land Prices Regarding Kouji Chika, national land prices, as of January 1, 217, the average national land price appreciated by.4% y-o-y for the second consecutive year of positive growth following seven years of depreciation. The ratio of appreciating monitoring sites increased for both commercial and residential lands while that of depreciating monitoring sites decreased (Chart-6, 7). While the average land price in the major three metropolitan areas and four other large cities, Sapporo, Sendai, Hiroshima and Fukuoka, posted positive growth, the average land price of other local areas continued to moderately depreciate. The six commercial sites that performed the best nationally all turned out to be in the Kansai area, with the top five sites located in Osaka and the sixth site in Kyoto. Strong demand for hotels and retail stores has lifted commercial land prices backed by the increase in foreign visitors, despite the noticeable shrink in spending volume per visitor. On the other hand, seven of ten residential sites that performed the best nationally turned out to be in Miyagi prefecture, suggesting a steady home demand in recovering areas affected by the Great East Japan Earthquake. Regarding Land Value Look Report published quarterly by MILT, the number of sites with no land price change has increased since the third quarter of 216 (Chart-8). It appears land price appreciation has lost steam as the land price of only one site with land price appreciation increased while sites with land price appreciation of more than 6% q-o-q disappeared in the fourth quarter. Chart-6 Ratio of Price Change of Commercial Land Nationwide % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% Source: MLIT Appreciated Unchanged Declined 4 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

5 4Q7 1Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3Q9 4Q9 1Q1 2Q1 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Chart-7 Ratio of Price Change of Residential Land Nationwide % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% Source: MLIT Appreciated Unchanged Declined Chart-8 Ratio of Price Change of Intensively Used Land Nationwide 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % <-12% -12%~-9% -9%~-6% -6%~-3% -3%~% % %~+3% +3%~+6% +6%< Source: MLIT "Land Value Look Report" 3. Sub-sectors 1) Office The rent index of Tokyo Grade-A offices declined by 1.1% q-o-q and 1.8% y-o-y to 33,398 JPY per month per tsubo in the first quarter (Chart-9). Grade-A office rents have been on a declining trend since peaking in the third quarter of 215. Tenants have taken the initiative in leasing negotiations on the back of the 1.4 million square meters of new supply scheduled in 218, even with current favorable business conditions and corporate earnings. On the other hand, the rent index of Tokyo Grade-B 2 offices rose by 1.1% q-o-q and declined by 1.8% y-o-y while that of Tokyo Grade-C 3 offices rose by 1.1% q-o-q and 1.8% y-o-y. Grade-C office rents have been strong without direct influence by the glut of coming Grade-A supply. However, office rents of all grades have been much lower than those at the peak in 28. Vacancy rates of Grade-A offices deteriorated to 3.9% for the third consecutive quarter (Chart-1). On the contrary, vacancy rates of Grade-B and C have improved and have driven the rent increase. 2 Offices with main floor size of more than 66 m 2 excluding Grade-A offices 3 Offices with main floor size of more than 33 m 2 excluding Grade-A or B offices 5 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

6 Dec. 26 Jun. 27 Dec. 27 Jun. 28 Dec. 28 Jun. 29 Dec. 29 Jun. 21 Dec. 21 Jun. 211 Dec. 211 Jun. 212 Dec. 212 Jun. 213 Dec. 213 Jun. 214 Dec. 214 Jun. 215 Dec. 215 Jun. 216 Dec Q 2 1Q 21 1Q 22 1Q 23 1Q 24 1Q 25 1Q 26 1Q 27 1Q 28 1Q 29 1Q 21 1Q 211 1Q 212 1Q 213 1Q 214 1Q 215 1Q 216 1Q 217 1Q 2 1Q 21 1Q 22 1Q 23 1Q 24 1Q 25 1Q 26 1Q 27 1Q 28 1Q 29 1Q 21 1Q 211 1Q 212 1Q 213 1Q 214 1Q 215 1Q 216 1Q 217 Office vacancy rates in major cities other than Tokyo have been improving supported by limited new supply excluding Yokohama, where some tenants moved to their own buildings, and Nagoya, where a landmark building was completed next to a JR station (Chart-11). (JPY/Month/Tsubo 3.3m2) 5, 45, Chart-9 Tokyo Grade-A, B and C Office Rent Index 4, 35, 33,398 3, 25, 2, 19,742 15, 1, 15,771 Tokyo Grade-A Tokyo Grade-B Tokyo Grade-C Source: Sanko Estate and NLI Research Institute 12% Chart-1 Tokyo Grade-A, B and C Office Vacancy Rates 1% 8% 6% 4% 2% % 3.9% 2.% 2.7% Source: Sanko Estate Tokyo Grade-A Tokyo Grade-B Tokyo Grade-C (%) Chart-11 Office Vacancy Rates in Major Cities Source: Miki Shoji Sapporo Sendai Tokyo Yokohama Nagoya Osaka Fukuoka 6 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

7 2Q Q Q 2 4Q 2 2Q 21 4Q 21 2Q 22 4Q 22 2Q 23 4Q 23 2Q 24 4Q 24 2Q 25 4Q 25 2Q 26 4Q 26 2Q 27 4Q 27 2Q 28 4Q 28 2Q 29 4Q 29 2Q 21 4Q 21 2Q 211 4Q 211 2Q 212 4Q 212 2Q 213 4Q 213 2Q 214 4Q 214 2Q 215 4Q 215 2Q 216 4Q 216 4Q 21 2Q 22 4Q 22 2Q 23 4Q 23 2Q 24 4Q 24 2Q 25 4Q 25 2Q 26 4Q 26 2Q 27 4Q 27 2Q 28 4Q 28 2Q 29 4Q 29 2Q 21 4Q 21 2Q 211 4Q 211 2Q 212 4Q 212 2Q 213 4Q 213 2Q 214 4Q 214 2Q 215 4Q 215 2Q 216 4Q 216 2) Residential Rental Residential rents in major cities have been on the rise (Chart-12). The residential rents in Tokyo rose again in the fourth quarter after declining once in the third quarter of 216. The vacancy rates of Tokyo luxury apartments have leveled off since the beginning of 216 following several years of improvement (Chart-13). The luxury residential rents which still appear on the ascending trend also declined by 3.% q-o-q to 15,853 JPY per tsubo per month in the first quarter of 217. The rents have been much lower than those at the peak above 17, JPY per tsubo per month in 28, suggesting the spending ability of potential tenants has drastically deteriorated. Q1 29=1 125 Chart-12 Residential Rent Index in Major Cities Sapporo Sendai Tokyo 23 Wards Yokohama Kawasaki Nagoya Osaka Fukuoka Source: Sumitomo Mitsui Trust Research Institute, At Home (JPY/Month,Tsubo=3.3m2) 19, Chart-13 Tokyo Luxury Residential Market 14% 18, 12% 17, 1% 16, 8% 15, 6% 14, 4% 13, 2% Vacancy Rate, RHS Rental Value, LHS *Sample consists of contracts with more than 3K JPY/Month, tsubo rental value or 3 tsubo space. Source: Ken Real Estate Advisors Ltd. 7 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

8 1H 28 2H 28 1H 29 2H 29 1H 21 2H 21 1H 211 2H 211 1H 212 2H 212 1H 213 2H 213 1H 214 2H 214 1H 215 2H 215 1H 216 2H 216 Dec. 27 Apr. 28 Aug. 28 Dec. 28 Apr. 29 Aug. 29 Dec. 29 Apr. 21 Aug. 21 Dec. 21 Apr. 211 Aug. 211 Dec. 211 Apr. 212 Aug. 212 Dec. 212 Apr. 213 Aug. 213 Dec. 213 Apr. 214 Aug. 214 Dec. 214 Apr. 215 Aug. 215 Dec. 215 Apr. 216 Aug. 216 Dec ) Retail Same-store sales of department stores declined y-o-y for the thirteenth consecutive month, however, the pace of decline moderated in the first quarter (Chart-14). Those of supermarkets and convenience stores remained stable though shrinking somewhat y-o-y. Prime retail rents in Tokyo Ginza remained mostly unchanged after declining from the peak in 215 which was lower than that in 28 (Chart-15). Prime retail rents in other major cities have been stable. Y-o-y(%) 3 (Same-store Sales) 25 Chart-14 Retail Same-store Sales Source: Ministry of Economy, Trade and Industry Department Stores Supermarkets Convenience Stores (JPY/M/Tsubo) 8, Chart-15 Prime Retail Rents (Ground Floor) 7, 6, 5, 4, 3, 2, 1, Tokyo Ginza Sapporo Odori Osaka Shinsaibashi Fukuoka Tenjin Nagoya Sakae Source: Attractors Lab Co. and BAC Urban Project, Japan Real Estate Institute 4) Hotel Foreign visitor arrivals which have recently stimulated hotel demand still increased moderately (Chart-16). However, the total number of stays in accommodation facilities by foreign visitors has often posted negative y-o-y growth since October 216 (Chart-17). One of 8 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

9 214/12 215/1 215/2 215/3 215/4 215/5 215/6 215/7 215/8 215/9 215/1 215/11 215/12 216/1 216/2 216/3 216/4 216/5 216/6 216/7 216/8 216/9 216/1 216/11 216/12 217/1 217/2 217/3 Jan.28 Apr.28 Jul.28 Oct.28 Jan.29 Apr.29 Jul.29 Oct.29 Jan.21 Apr.21 Jul.21 Oct.21 Jan.211 Apr.211 Jul.211 Oct.211 Jan.212 Apr.212 Jul.212 Oct.212 Jan.213 Apr.213 Jul.213 Oct.213 Jan.214 Apr.214 Jul.214 Oct.214 Jan.215 Apr.215 Jul.215 Oct.215 Jan.216 Apr.216 Jul.216 Oct.216 Jan.217 the reasons may be Minpaku, private residential units leased for short stays operated through Airbnb and others. Hotel occupancy rates declined y-o-y in many cities, Yokohama and Nagoya in particular, in March (Chart-18). On the contrary, hotel occupancy rates in Fukuoka, Kyoto and Hiroshima increased y-o-y in March. Fukuoka often faces hotel shortages when live concerts are held, while Kyoto and Hiroshima have high reputations as global, sightseeing cities. In Tokyo and Osaka, it appears expensive room rates in the city center have pushed tourists to choose to stay in the suburbs. However, hotel occupancy rates have been above the long-term average while hotel investment and development are also active. The number and space for construction starts of accommodation facilities increased by 4% and 86% y-o-y respectively in 216 (Chart-19). Considering hotel demand has been diverted to Minpaku and the suburbs, increasing hotel developments can bring low occupancy rates in certain areas and categories. In hotel development and operation, targeting customers in appropriate categories is becoming increasingly important in order to secure demand. (K People) 2,4 Chart-16 Foreign Visitor Arrivals 2% 2, 15% 1,6 1% 1,2 5% 8 % 4-5% -1% Foreign Visitor Arrivals Source: Japan National Tourism Oganization (JNTO) % Change from the Previous Year (Mil. Stays) 6 Chart-17 Total Stays in Accommodation Facilities 6% 5 4% 4 2% 3 % 2-2% 1-4% -6% Stays by Foreign Guests (LHS) Stays by Japanese Guests (LHS) Foreign Guests Y-o-y (%) Japanese Guests Y-o-y (%) Source: Japan Tourism Agency 9 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

10 Sapporo Sendai Tokyo Yoko Yokohama Kanazawa Nagoya Kyoto Osaka Kobe Hiroshima Fukuoka Okinawa Chart-18 Hotel Occupancy Rates 1% 95% 9% 85% 8% 75% 7% Source: Ohta Publications Weekly HOTERES 216 Mar. 217 Mar. Chart-19 Number and Space of Construction Starts of Hotels and Ryokans (No.) 4,5 (Mil. m2 ) 4. 4, 3.5 3,5 3. 3, 2.5 2,5 2. 2, 1, , No. of Buildings (LHS) Spaces (RHS) Source: MLIT 5) Logistics Facility According to CBRE, large, multi-tenant logistics facilities in the Tokyo and Osaka metropolitan areas posted respective vacancy rates of 6.5% and 17.4% in the first quarter (Chart-2). Several large logistics facilities have been supplied in both Tokyo s and Osaka s metropolitan areas on the back of high expectations for e-commerce growth. While a largest-ever 1.9 million square meters of space was newly supplied in the Tokyo metropolitan area, strong demand absorbed 1.76 million square meters and vacancy rates did not deteriorate much in 216. While new supply volume will shrink somewhat in 217, there is concern that more than 2.5 million square meters, a glut of new space, will be supplied in 218. On the other hand, in the Osaka metropolitan area.71 million square meters of space, which is too much for the area, was supplied and vacancy rates surged in 216. Even worse, another 1.3 and.94 million square meters of space will be supplied in 217 and 218, respectively. Though high vacancy rates should be inevitable for years, inland areas close to consumers can expect relatively strong demand and high rents. 1 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

11 Jun. 25 Dec. 25 Jun. 26 Dec. 26 Jun. 27 Dec. 27 Jun. 28 Dec. 28 Jun. 29 Dec. 29 Jun. 21 Dec. 21 Jun. 211 Dec. 211 Jun. 212 Dec. 212 Jun. 213 Dec. 213 Jun. 214 Dec. 214 Jun. 215 Dec. 215 Jun. 216 Dec. 216 In addition, the recent fire accident at a large logistics facility will lead to additional costs charged to investors in preparation for fire prevention and recovery processes. Chart-2 Logistics Facility Rents and Vacancy Rates (Large-Sized, Multi-Tenant-Use) 3% 25% 2% 15% 1% 5% % Tokyo Metropolitan Area *Large sized multi-tenant use(gfa 33,m2 or more) Source: CBRE Osaka Metropolitan Area 4. J-REIT and Property Investment Markets The TSE REIT Index declined by 4.3% in the first quarter (Chart-21) as foreign investors sold aggressively with 28.5 billion JPY of net selling volume. The office sector declined by 5.1%, the residential sector by 2.1% and other sectors including retail and logistics by 4.1%. At the end of March, the value of the J-REIT market was 11.9 trillion JPY, while the price-to-nav ratio was 1.2 times and the dividend yield was 3.7%, with a 3.7% yield spread on % of 1-year JGBs. J-REITs acquired properties amounting to 561 billion JPY in the first quarter, increasing by 2% y-o-y (Chart-22). Mori Trust Hotel REIT was listed with 4 assets valued at 12 billion JPY, and the number of J-REITs increased to 58. Though the recent interest rate hike in the U.S. has worried investors, 1-year JGB yields have remained around % due to the yield curb control by Bank of Japan while debt funding conditions have been extremely favorable. J-REITs issued 32 billion JPY of bonds at an average yield of.32% in the first quarter,.51% lower than in the fourth quarter of 216 (Chart-23). The current bond issuance conditions for J-REITs are % for 3-year,.2% for 5-year and.5% for 1-year bonds. The average bond duration held by J-REITs was greater than 1 years under the negative interest rate environment last year. However, J-REITs have flexibly managed bond issuance conditions and the average duration has shortened to 7-8 years following introduction of yield curb control by Bank of Japan. The current average debt costs of J-REITs are.8%. In the case that debt costs are brought to.5%, earnings of J-REITs will increase by 5%. 11 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

12 21.1H 21.2H 211.1H 211.2H 212.1H 212.2H 213.1H 213.2H 214.1H 214.2H 215.1H 215.2H 216.1H 216.2H 217.1H Dec. 214 Jan. 215 Feb. 215 Mar. 215 Apr. 215 May 215 Jun. 215 Jul. 215 Aug. 215 Sep. 215 Oct. 215 Nov. 215 Dec. 215 Jan. 216 Feb. 216 Mar. 216 Apr. 216 May 216 Jun. 216 Jul. 216 Aug. 216 Sep. 216 Oct. 216 Nov. 216 Dec. 216 Jan. 217 Feb. 217 Mar. 217 Apr. 217 Chart-21 TSE REIT Index (Dec. 215=1) Source: Tokyo Stock Exchange TSE REIT INDEX Office Residential Retail and Logistics (JPY Bn.) 2,4 Chart-22 J-REIT Property Acquisition 2, 1,6 1,2 8 4Q 3Q 2Q 1Q *Assets of new J-REITs are included at IPO Source: NLI Research Institute (Year) Chart-23 J-REIT Bond Issuance Conditions 1.6% 1.4% 1.2% 1.%.8%.6%.4%.2%.% % Average J-REIT Bond Duration Average J-REIT Bond Yiled 1 Year JGB Yield Source: Tokyo Stock Exchange Expected yields have been lowered in the Japanese property investment market since the negative interest rate policy was introduced by the Bank of Japan in February 216. According to CBRE, the average expected NOI yield of Tokyo CBD offices in Otemachi was 3.6% in January 217, shrinking by.5% q-o-q and.3% lower than its peak of 3.9% in 28. Both general corporations and J-REITs disposed their assets at the current high prices with 12 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.

13 NOI yields of less than 4% of the Tokyo CBD. Even logistics facilities were disposed by not only developers but also a J-REIT. Investors have looked for relatively high yields and have acquired large and relatively new office buildings located in fringe areas such as Tennozu Isle, Shinagawa Seaside and Yokohama Minato Mirai 21. * This report includes data from various sources and NLI Research Institute does not guarantee the accuracy and reliability. In addition, this report is intended only for providing information, and the opinions and forecasts are not intended to make or break any contracts. 13 NLI Research Institute Real Estate Analysis Report May 22, 217 Copyright 217 NLI Research Institute. All rights reserved.