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AEON REIT Investment Corporation
Asset Manager:
AEON Reit Management Co., Ltd.
Securities Code: 3292
https://www.aeon-jreit.co.jp/en/index.html
Presentation Material for Investor Meeting For the 12th Fiscal Period Ended January 31, 2019
March 19, 2019
AEON MALL Kofu Showa
Table of Contents
2
I. Overview of Financial Results for the 12th Fiscal Period
Ended January 31, 2019
1.Financial Highlights of the 12th Fiscal Period Ended January 31,
2019--- P. 4
2. Topics for 12th Fiscal Period—External Growth/Internal Growth— --- P. 53. Topics for 12th Fiscal Period—Financing Matters— --- P. 6
4.Overview of Financial Results for the 12th Fiscal Period Ended
January 31, 2019--- P. 7
5. Portfolio Indicators at the End of 12th Fiscal Period --- P. 8
II. AEON REIT’s Strengths and Growth Strategy
1. Trends in Results for Five-Year Period After Listing --- P. 102. AEON REIT’s Advantages --- P. 113. External Growth—Pipeline Support— --- P. 12
4.External Growth—AEON Group’s business domains and
pipelines—--- P. 13
5. External Growth—Advantages of investment targets— --- P. 14
6.External Growth—Stance on property acquisitions and future
initiatives—--- P. 15
7. Internal Growth—Investment for Expansion and Renewal— --- P. 16
8.Internal Growth—Robust Matter Lease Agreement with the AEON
Group—--- P. 17
9. Internal Growth—Lease Structure— --- P. 18
10. Introduction of Individual Property (AEON Mall Kurashiki) --- P. 19
11.Financing policy—Diversification of Lenders and Financing
Methods (1)—--- P. 20
12.Financing policy—Diversification of Lenders and Financing
Methods (2)—--- P. 21
13. Risk Management --- P. 22
14. Strategic cash management—Cash Generation Skills— --- P. 23
15.Strategic cash management Utilization for the growth of
distribution--- P. 24
III. Forecasts of Performances and Future Objectives
1. Financial Forecasts(13th&14th) --- P. 26
2. Activities to Achieve Sustainability—AEON Group and AEON
REIT—--- P. 27
3. Future Growth Objectives --- P. 28
4. Messages from the Management Team --- P. 29
Appendix 1 Characteristics of AEON REIT --- P. 31-48
Appendix 2 Supplement --- P. 50-69
I. Overview of Financial Results for the 12th Fiscal Period Ended January 31, 2019
Financial Highlights of the 12th Fiscal Period Ended January 31, 2019
Improved quality of the portfolio through sustained and stable growth.
4
Distributions
External Growth
FinancialStrategy
InternalGrowth
12th Fiscal Period Ended January 31, 2019
Distributions per unit 3,066 yen
Up 56 yen (+1.9%) from 3,010 yen, the initial forecast
Investing in revitalization of property to boost revenue and competitiveness
Kurashiki (accessibility improvement work)
Increase in rent: up 3.10 million yen/year
Kagoshima and Yamagata Minami (disaster prevention work)Increase in rent: up 3.32 million yen/year
Acquired the extended building at Kofu Showa
Unrealized gain up 0.8 billion yen
Increase in rent (annualized) up 0.53 billion yen
Refinancing 27.0 billion yen (including 15.0 billion yen through issuance of retail bonds)
Average residual period 3.7 years → 4.6 years
Average financing cost 0.80% → 0.78%Overall situation of
interest-bearing debt
Topics for 12th Fiscal Period - External Growth/Internal Growth -
5
(Note) Unrealized gain: (Appraisal value at the end of the 11th fiscal period – Book value at the end of the 11th fiscal period) + Appraisal value at the time of acquisition of the extended building at Kofu Showa (existing and
extended buildings) – (Book value of the existing building + Acquisition value of the extended building + Expenses for investment in the revitalization of the existing building)
Strengthened profitability by utilizing sufficient cash on hand without depending on borrowings.
External
Growth
Improved accessibility by installing a new exit and entrance and implemented disaster prevention measures, preferentially.
Internal
Growth
増築棟取得前 増築棟取得後
1 2 Increase in annual rentIncrease of 0.8 billion yen in
unrealized gain (note)3 Evolution to an overwhelmingly top-
rated local community mall
806
million yen
0.5
billion
yen
010,00020,00030,00040,00050,00060,00070,00080,000
(㎡)Store areas in the 10 km trading area
Rent of the
existing building
(before renewal)
Rent of the extended building
+ Rent after renewal of the
existing building
Existing building
(Acquired)
After acquisition of
extended building
(Existing and
extended buildings)
Location Nakakoma-gun, Yamanashi Pref.
Acquisition
price8.3 bilion yen 15.4 billion yen
Appraisal
price8.6 billion yen 17.3 billion yen
Site area 119,064.22㎡
Total floor
area66,417.84 ㎡ 99,680.71㎡
Overview of AEON MALL Kofu Showa
Effects of the acquisition of the extended building at Kofu Showa and renewal of the existing building
Rent
of the
existing building
Increased
of rent
Acquisition of an extended building of the existing AEON MALL building at Kofu Showa.
1.3
billion
yen
+0.8
billion
yen
AEON Group’s strength
in development capability
1,346
million yen
Property Detail Effect InvestmentIncrease in rent
(annualized)
AEON MALL KurashikiInstallation of a new exit and entrance on
the north side of the mall
Improvement in
accessibility44 million yen +3.1 million yen
AEON MALL KagoshimaAnti-smoke hanging walls made of
inflammable films
Disaster prevention
measures
72 million yen +2.1 million yen
AEON MALL Yamagata Minami 38 million yen +1.1 million yen
Before acquisition
of the extended
building
After acquisition
of the extended
building
Rent
of the
existing building
Before refinancing After refinancing
Total amount of refinancing 27 billion yen 27 billion yen
Initial procurement period 4.9 years 7.8 years
Average financing cost 0.78% 0.71%
Topics for 12th Fiscal Period -Financing Matters-
6
Implemented the refinancing of 27 billion yen, funds borrowed when an IPO
was made.
Retail bonds with
JREIT’s largest
issuance amount
and longest term
Issuance AEON REIT’s first retail bonds
Refinancing
Poster
announcing the
issuanceConditions of investment
corporation bonds
Effects of investment
corporation bonds
Overview of
refinancing
1
Allotted funds procured through the issuance of retail bonds to funds for the
refinancing.2
Raised new loans from The Yamaguchi Bank and The Gunma Bank, Ltd. in
efforts to diversify procurement sources.3
Results of refinancing
1
2
Extended the term and reduced procurement cost.
Increased the number of financial institutions
that provide loans to 23 (21 at the end of the
11th fiscal period).
Issuance amount
15 billion yen
Term 10 years
Interest rate 0.783%
Gift for purchasers
AEON gift certificate
Before refinancing After refinancing
Interest-bearing debts 150 billion yen 150 billion yen
Average residual period 3.7 years 4.6 years
Average financing cost 0.80% 0.78%
Comparison of procuring conditions (27 billion yen) Comparison of interest-bearing debts (150billion yen)
Successfully diversified our means of financing, extending our procurement period and reducing our
procurement cost.
Diversification of financing means
Enhancement of the investment
corporation’s popularity
(Acquisition of potential investors)
Overview of Financial Results for the 12th Fiscal Period Ended January 31, 2019Removed the impact of disasters and achieved distribution of 3,066 yen, a significantly larger amount than the initial announcement.
7
11th Fiscal Period Ended July 2018
12th Fiscal Period Ended January 2019
Result Result vs. Previous Period Initial Forecast vs. Forecast(A) (B) (B-A) (C) (B-C)
Operating Revenues (Millions of yen) 16,201 16,329 ① +127 16,283 ⑦ +45
Operating Expenses (Millions of yen) 10,019 9,993 ② ▲25 10,014 ⑧ ▲20
Operating Income (Millions of yen) 6,182 6,335 +153 6,269 +66
Ordinary Income (Millions of yen) 5,297 5,448 ③ +151 5,362 ⑨ +86
Extraordinary income (Millions of yen) - 152 ④ +152 - ⑩ +152
Extraordinary Loss (Millions of yen) 37 274 ⑤ +237 - ⑪ +274
Net Income (Millions of yen) 5,254 5,325 +71 5,357 ▲31 Reversal of dividend reserves
(Millions of yen) - 122 ⑥ +122 - ⑫ +122
Distributions per Unit (yen) 2,956 3,066 +110 3,010 +56
NOI (Millions of yen) 11,299 11,553 +254 11,529 +23 (Note) The number of investment units issued for each period is 1,777,347.
【Major factors of changes from the previous period】 【Major factors of changes from the forecast】
No. Main items Amount (million yen) No. Main items Amount (million yen)
Newly acquired properties/
rent income from extended properties+586 Income from dividends paid by overseas SPCs +9
Rent income from properties sold
in the previous period▲407 Insurance income +27
Absence of gains from sale of properties
as posted in the previous fiscal period▲35 Expenses for the leasing business +5
Rent expenses for properties sold
in the previous fiscal period▲224 Fund costs ▲25
Depreciation for newly-acquired properties
and extended properties+211 Loan related costs ▲58
Loan related costs ▲37 Investment corporation bond related costs +39
Investment corporation bond related costs +39 ⑩ Insurance income +152
④ Insurance income +152 ⑪ Disaster related losses +274
⑤ Disaster related losses +237 ⑫ Reversal of dividend reserves(⑪-⑩) +122
⑥ Reversal of dividend reserves +122
①
⑦
⑧
②
⑨
③
Portfolio Indicators at the End of 12th Fiscal Period
Portfolio that features stable revenues, and sufficient borrowing capacities and unrealized gains.
8
Distributions per unit
362.4 billion yen(up 7.1 billion yen from
the end of the 11th period)
Asset size(Note 1)40 properties Unrealized gains(Note 2)
Up 45.0billion yen
(up 4.4 billion yen from
the end of the 11th period)
41.4%Loan to Value (LTV)
(excl. leasehold deposits)
Available capacity(Note 4)
Approx. 37.0 billion yen
Net asset value (NAV)per unit
Portfolio NOI yield
6.4%NOI yield after portfolio depreciation
3.9%
44.9%
Note 1: The total purchase price not including expenses (brokerage fees, taxes and dues, etc.) incurred for the purchase of the real estate, etc.
Note 2: The unrealized gain and loss as of the end of the 12th fiscal period (difference between appraisal value and book value at the end of each fiscal period)
Note 3: The difference from the distribution forecast of 3,010 yen for the 12th fiscal period announced on September 12, 2018
Note 4: The amount of interest-bearing debts that can be acquired until LTV (including leasehold deposits) reaches 50%
3,066 yen(up 1.9% from initial forecast)
(Note 3)
133,464 yen(up 2,507 yen from
the end of the 11th period)
(incl. leasehold deposits)
II. AEON REIT’s Strengths and Growth Strategy
第3期 第12期
資産規模の推移とアセットクラスの多様化
RSC 82.0%
SRSC 17.6%
SRSC 7.7%
RSC 78.1%
CSC 4.0%
Logistics 8.5%
Overseas 0.4% Overseas 1.6%
第3期 第12期
Net asset value (NAV) per unit
10
Trends in Results for Five-Year Period After Listing
Achieved expansion of asset size, diversification of investment targets, distribution growth and an increase in NAV
158.9 billion yen
362.4 billion yen
第3期 第12期
Distributions per unit
Increase of 124.6%
2,461 yen3,066yen
112,635 yen
133,464 yen
Increase of 118.5%
3rd Fiscal Period Ended July 2014
7th Fiscal Period Ended July 2016
8th Fiscal Period Ended January 2017
10th Fiscal Period Ended January 2018
11th Fiscal Period Ended July 2018
12th Fiscal Period Ended January 2019
Asset size by 2.2 times
AEON Taman Universiti SC Daiei Kawasaki Process CenterAEON MALL Seremban 2
AEON Style Kemigawahama
AEON MALL Kyoto Gojo AEON MALL Kofu Showa
J-REIT’s first acquisition
of overseas properties
Scheme for the
acquisition of extended
buildings
Strategic property
replacement
Kumamoto⇔Kyoto Gojo
Acquisition of new
properties through the
Group’s collaborative
initiatives
Acquisition of properties
by utilizing the overseas
SPC scheme
Acquisition of logistics
properties to support
commercial distribution
systems
Initiatives leveraging AEON REIT’s strengths
12th Fiscal Period
12th Fiscal Period
12th Fiscal Period
3rd Fiscal Period
3rd Fiscal Period
3rd Fiscal Period
Change in the asset size and diversification of the asset class
AEON REIT’s Advantages
AEON REIT’s unique growth strategy built on AEON Group’s strengths.
11
External Growth
Promote the diversification of asset types including urban-based properties.
Investment in community
infrastructure2
(→ pages 14 & 15)
Take advantage of many pipelines in
acquiring properties through
negotiated transactions.
Strength due to many pipelines1
(→ pages 12 & 13)
Internal Growth
Achieve stable rent income through the conclusion of long-term and fixed master leasing agreements.
Robust master leasing scheme4
( → pages 17 & 18)
Increase property value by taking measures in line with changes in the business environment and local characteristics.
Effective building extensions and revitalization3
(→ page 16)
Strategic Cash Management
Generate free cash flow of approximately 7.0 billion yen per year.
Generation of free cash flow7
(→ page 23)
Create diverse and flexible choices in response
to a variety of settings.
Flexible utilization of cash on hand8
(→ page 24)
Financing Policy
Implement stable financing operations such as the issuance of retail bonds and increase in the number of loan providers.
Implementation of stable fund-raising5
(→ pages 20 & 21)
Enhance consistency through the coverage of earthquake insurance and effective utilization of reserves.
Consistent payment of
distributions6
(→ page 22)
Risk Management
External Growth Strategy -Pipeline Support-
Aim to increase the asset size by utilizing AEON Group’s many pipelines.
12
(Note 1) Some of these stores are operating as tenants at SCs managed by AEON Mall or AEON TOWN.
(Note 2) Excerpts from the supplements to the financial results of AEON CO., LTD for the fiscal period ended February 28, 2018 (excluding AEON Mall Co., Ltd. and AEON TOWN Co., Ltd.) and websites of respective companies.
(Note 3) Excerpts from the data (for the fiscal period ended February 28, 2018) provided by AEON GLOBAL SCM CO. LTD.
(Note 4) GMS, SM, DS, HC and SuC stand for General Merchandise Store, Supermarket, Discount Store, Home Center and Supercenter, respectively.
Properties managed by pipeline support companies
Japan
Overseas
AEON Mall Co., Ltd.
AEON TOWN Co., Ltd.
AEON Retail Co., Ltd.
AEON Hokkaido Co., Ltd.
AEON KYUSHU CO., LTD.
AEON RYUKYU CO., LTD.
The Daiei, Inc.
AEON Mall Co., Ltd. AEON Co. (M)BHD.AEON BIG Co. (M)SDN. BHD.
175 SC
140 SC
27 SC 56 stores
( GMS/SM/DS only )
913 stores
(GMS・SM・DS・HC・SuC)
Properties owned by
AEON REIT Investment Corporation
Japan
AEON GLOBAL SCM CO., LTD.
56 facilities
38
2
AEON Retail Co., Ltd.
21properties
AEON Mall Co., Ltd.
11properties
AEON Hokkaido Co., Ltd.
2properties
AEON KYUSHU CO., LTD.
1property
The Daiei, Inc.
2properties
AEON GLOBAL SCM CO., LTD.
1property
AEON Co.(M)BHD.
2properties
Acquisition
of properties
through
negotiated
transactions
Advantages of pipeline support
Offering of information from
within the AEON Group
Acquisition of preferential
negotiation rights Utilization of warehousing
functionality
(Note 1)
(Note2)(Note3)(Note 4)
properties
properties
Overseas
Top sales in Japan Top sales in Japan
Developer Business Supermarket BusinessHealth & Wellness
BusinessInternational Business
Net sales Approx. 335.0 billion yen Approx. 3.2 trillion yen Approx. 696.0 billion yen Approx. 418.0 billion yen
No. of stores Approx. 310 stores Approx. 2,180 stores Approx. 4,370 stores -
その他の主要企業
Pipeline
support
partners
13
External Growth Strategy -AEON Group’s Diverse Retail Businesses-
AEON Mall Co., Ltd.
AEON TOWN Co., LtdThe Daiei, Inc.
Many potential pipelines held by the AEON Group.
AEON Co. (M)BHD.AEON BIG Co. (M)SDN. BHD.
ChinaAEON(CHINA)CO., LTD.AEON Stores (Hong Kong) Co., Limited
ASEANAEON ASIA SDN.BHD.AEON(CAMBODIA)Co.,Ltd.AEON(Thailand)CO., LTD.AEON VIETNAM Co., LTDPT.AEON INDONESIA
(Note 1)Source:AEON REPORT 2018
(Note 1)
(Note 1)
External Growth Strategy -Investment Targets-
Investment targets
Investment in very stable community infrastructure assets based on past track records.
14
Percentage of commercial facilities owned by the REIT in which tenants of the
following respective categories operate
自治体との包括連携協定(防災・福祉・環境保全推進、商業・観光の振興)
• A community platform that covers all daily needs by offering varieties of tenants
that people visit repeatedly, with a grocery supermarket positioned as a core facility.1
• A facility that flexibly responds to changes in the needs for daily life and the
business environment by flexibly changing the composition of tenants, thereby
enabling continuous operation for a long period time down the road.
• A facility essential to communities that offers a place for community-based activities
in respective areas, secures lifelines when emergencies including natural disasters
occur, and functions as a disaster prevention center.
Community infrastructure assets defined by AEON REIT
2
3
These commercial facilities feature
many tenants that make people want tovisit compared to other facilities
(Frequency
of visits)Low High
Grocery
supermarket
Restaurants ClinicsAmusement
facilities
Gyms Hobby schools
100%
100% 97.1% 97.1%
48.6%94.3%
Comprehensive alliance agreements with local governments
Number of visitors to the commercial facilities (Note 1) owned
by the REIT (2017)
Cinemas51.4%
(Note 1) Based on calculations for 28 large commercial facilities of 35 commercial facilities owned by the
REIT, in which the number of visitors can be counted based on the same concept.
25%
68%
7%1,000万人以上
500万人以上1,000万人未満
300万人以上500万人未満
Outside the
community
Within the
community
Average number of
visitors per facility
Approx. 9 million
10 million or more
3 million or more and less than 5 million
5million or more and less than 10 million
Conclusion of
agreements 100%
(38 properties in Japan)
External Growth Strategy –Our Stance on the Acquisition of Properties-
AEON REIT’s stance on acquisitions Advantages through negotiated transactions with the AEON Group
Top-class stores can be acquired through negotiated transactions in the respective communities.
15
Acquire the most competitive stores
in the respective communities
Acquire top-class stores that best respond to changes in the business environment.
Properties can be acquired in better condition through negotiated transactions with pipeline support companies
Future
initiatives
Acquisition of respective
communities’ top-class, large-
scale commercial facilitiesReplacement of properties
Acquisition of different types
of urban commercial facilities
Ratio of negotiated transactions
Third
parties
41%
Sponsors
59%
negotiated transactions
100%
Only negotiated transactions
Prime location
in city centersCities (Note 1) Regional areas
Investment
targets
50%(18 properties )
50%(17 properties )
Properties owned by
AEON REIT Investment Corporation (Note 2)
(Note 3)based on number of Properties Held
(Operating
results)
(Note 1) Cities refer to the three major metropolitan areas and ordinance-designated cities.
(Note 2) Calculated on an acquisition price basis for 38 domestic properties owned by AEON REIT
Good
Poor
Internal Growth- Investment for Expansion and Renewal -
Implementation of effective investments to enhance the value of properties in collaboration with the AEON Group.
16
Initiatives taken so far
Investment for expansion and renewalsMaintenance and
enhancement of the
competitiveness of
facilities
Measures to prevent the loss of interest
in facilities operating for many years.
Measures to stay prepared for entry of
new competitors
Policy for future expansion and renewals
Examples of major initiativesRent increases due to expansion and renewal
(annual amount)
Expected investment cycles
Efforts to
increase rents
Efforts to achieve an increase in
master lease-based rents
Will continue to make effective investments that
reflect the characteristics of targeted properties
in collaboration with the AEON Group.
2019 2020 2021 and beyond
Two properties are
expected to be included.
Properties included in the current plan (Note)
(Note) The expected numbers are subject to change in the future.
Large-scale renewals: Roughly every six years
Expansion: Roughly every 10 years
(Millions of yen)
(Note)As of January 2019
7th Fiscal PeriodExamples of major
initiatives in Morioka
Investment amount 790 million yen
Annual rent Up 57 million yen
12th Fiscal PeriodRenewal at Kofu
Showa
Investment amount 781 million yen
Annual rent Up 50 million yen
Two properties are
expected to be included.
12th Fiscal Period
ended January 2019
13th Fiscal Period
ended July 2019
10th Fiscal Period
ended January 2018
11th Fiscal Period
ended July 2018
8th Fiscal Period
ended January 2017
9th Fiscal Period
ended July 2017
Internal Growth- Robust Matter Lease Agreement with the AEON Group -
Efforts to secure stable rent income on a medium- to long-term basis by making the most
of AEON’s facility operation skills and master lease agreements.
17
Commercial facilities in the portfolio have been operating stably.
AEON Group’s facility operation skills
Lease structure
Occupancy rate of mater lease companies
100%
Efforts to generate stable cash flow from rent on a
medium- to long-term basis
Concluded long-term/fixed master lease agreements with Group companies.
(For details, refer to the next slide.)
Approx. 100% stable Approx. 100% stable Approx. 100% stable
Occupancy Rate of End TenantsOperating Revenue at Master Lease
CompaniesNet Sales of End Tenants
Sep-Nov 2017
Dec 2017-Feb 2018
Mar-May 2018
Jun-Aug 2018
Sep-Nov 2018 Nov 2017 Feb 2018 May 2018 Aug 2018 Nov 2018 Sep-Nov 2017
Dec 2017-Feb 2018
Mar-May 2018
Jun-Aug 2018
Sep-Nov 2018
Internal Growth—Lease Structure—
Concluded long-term/fixed master lease agreements with Group companies.
18
Sublease Agreement (each tenant)
AEON Group
・AEON MALL Co., Ltd.
・AEON RETAIL Co., Ltd.
・AEON Hokkaido Co., Ltd.
・AEON KYUSHU Co., Ltd.
・AEON CO. (M) BHD.Specialty store area in the mall
Major specialty store categories
・Apparel
Core tenant
General merchandise
store
Core tenant
Amusement facilities / large specialty stores
・Services
・Goods
・Gourmet eats/foods
Master Lease Agreement
Sublease rents Master lease rents
Master lease
companiesEnd tenant
Investment
corporation
Conceptual image of the lease structure.
Outline of the Master Agreement
Japan Overseas (Malaysia)
Rent Cancellation conditions Rent
Fixed rent, Lease term: 20 yearsIn principle, the contract is not cancellable
during the lease period.Fixed rent, Lease term: 10 years
The amount equivalent to the fixed asset tax
and city planning tax will be paid as additional
variable rent. (To be revised every year
according to changes in the taxed amount.)
However, the contract may be terminated
subject to payment of a penalty fee
equivalent to six months’ rent on the day
following the final day of the non-cancellable
term defined with respect to each property,
aside from the rent term.
The rent changes every three years
according to the consumer price index.
Introduction of Individual Property (AEON Mall Kurashiki)
1919
Maintenance of appeal through expansion and
revitalization
Cooperation with administrationConcluded a disaster prevention agreement with the Kurashiki City government
Community contribution/community development Holding of many events to draw local
Strong trading area that creates an overwhelming large number of visitors
Diverse functions offered in the form of community infrastructure assets
Environmental friendliness Received DBJ’s Green Building Certification 2018 ★★★★★
Accepted evacuees when the
Western Japan torrential rainfall
occurred in 2018
80
90
100
110
120
開業1999年 増床2011年 2018年
Okayama Pref.
Kurashiki City
(Note 1) Number of visitors for March 2018 – February 2019
(Note 2) Indicated as indexes with population in 1999 treated as 100
150
200
250
70,000
80,000
90,000
開業1999年 増床2011年 2018年
Number tenants increased by 1.26 times
(㎡)
Motivate people to visit the facility and contribute to the local community while continuing to change.
1999(OPEN)
2011(Expansion)
2018(Present)
(number of tenants)
Store area increased by 1.17 times.
1999(OPEN)
2011(Expansion)
2018(Present)
Number of visitors in 2018: 12 million
Population of Kurashiki City: 480 thousand (increasing from the year when the facility
commenced operation)
The Ogyatto, a fun childcare event for
parents and children
Established a permanent
administration service corner
Solar panels Planted 70,000 trees
Diversification of Lenders and Financing Methods (1)
20
Diversification of Maturity Dates (as of January 2019)
Key Financial Indicators (as of January 2019)
Note: Refinancing except bridge loans and debt financing for the purchase of new properties are included.
Rating
Breakdown of interest-bearing debts
Credit rating agency Rating target Rating Outlook
Japan Credit Rating
Agency
Long-term issuer
ratingAA- Stable
Ratio of long-term and
short-term DebtsFixed interest rate ratio
4.3%
95.7%
変動 固定
0%
100%
短期 長期
10th Period
ended January
2018
11th Period
ended July
2018
12th Period
ended January
2019New borrowing
amount (Note 1)¥5.7 billion ― ¥27.0 billion
Interest-bearing debt
balance ¥150.0 billion ¥150.0 billion ¥150.0 billion
Portion accounted for by
the balance of
investment corporation
bonds
¥6.0 billion ¥6.0 billion ¥21.0 billion
Avg. number of years
remaining4.2 years 3.7 years 4.6 years
Avg. cost of interest-
bearing debts0.80% 0.80% 0.78%
LTV (incl. leasehold
deposits)44.9% 44.7% 44.9%
Available capacity
(up to 50%)
Approx.
¥36.0 billion
Approx.
¥37.0 billion
Approx.
¥37.0 billion
Number of partners in the financial organization: 23 (Two banks, namely, The
Yamaguchi Bank and The Gunma Bank, Ltd., were included in the previous fiscal period.)
Financial Management
Establishment of a strong bank and diversification of financing to respond to future business changes
2.0 1.0 2.0
15.0
1.0
15.6
22.0
16.1 17.2 15.411.3 9.3
9.1
1.0
3.0 5.0
4.0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2036
New debt financing Existing borrowings
(billions of yen)
Long termShort term Floating rates Fixed rates
Megabanks,
41%
Loan and trust
company, 22%
a government-controlled
bank, 8%
leading bank, 6%
assurance
company, 2%
local bank, 7%
investment
corporation
bond
14%
Diversification of Lenders and Financing Methods (2)
21
Note : As of April 16, 2018, Mitsubishi UFJ Trust and Banking Corporation’s corporate lending
operations were transferred to The Bank of Tokyo-Mitsubishi UFJ, Ltd. through a company split. In
accordance with this, the loan claims held by Mitsubishi UFJ Trust and Banking Corporation were
succeeded to The Bank of Tokyo-Mitsubishi UFJ, Ltd. as of the same date.
LTV Trend List of Lenders(as of January 2019)
Interest-Bearing Debt Period remaining to maturity and our borrowing cost
Syndicate of lenders arranged by Mizuho Bank, Ltd., Sumitomo Mitsui
Banking Corporation and Sumitomo Mitsui Trust Bank, Limited
Further extension of an average period remaining to maturity and reduction in costs
42.8%
46.4% 46.7%
44.9% 44.7% 44.9%
38.9%42.7%
43.0%
41.4% 41.4% 41.4%
38.0%
42.0%
46.0%
50.0%
7th FiscalPeriod
(July 2016)
8th FiscalPeriod
(January 2017)
9th FiscalPeriod
(July 2017)
10th FiscalPeriod
(January 2018)
11th FiscalPeriod
(July 2018)
12th FiscalPeriod
(January 2019)
LTV (incl. leasehold deposits) LTV (excl. leasehold deposits)
6.1 years
6.6 years 6.4 years 6.6 years 6.6 years7.1 years
4.1 years 4.7 years 4.4 years 4.2 years3.7 years 4.6 years
0.85% 0.84%
0.79%0.80%
0.80% 0.78%
1.0 years
3.0 years
5.0 years
7.0 years
9.0 years
0.70%
0.75%
0.80%
0.85%
0.90%
7th FiscalPeriod
(July 2016)
8th FiscalPeriod
(January 2017)
9th FiscalPeriod
(July 2017)
10th FiscalPeriod
(January 2018)
11th FiscalPeriod
(July 2018)
12th FiscalPeriod
(January 2019)
Initial period remaining to maturity (on the right axis)Average period remaining to maturity (year)Average of procurement interest rate (%)
Numbers of Lenders 23 (+2 compared to previous period
Mizuho Bank 24,600 mil yen 19.1%
Sumitomo Mitsui Banking 20,900 mil yen 16.2%
Sumitomo Mitsui Trust Bank 19,300 mil yen 15.0%
Bank of Tokyo-Mitsubishi UFJ 16,600 mil yen 12.9%
Norinchukin Bank 8,100 mil yen 6.3%
Mizuho Trust & Banking 6,700 mil yen 5.2%
Mitsubishi UFJ Trust and Banking (note
2)6,500 mil yen 5.0%
Resona Bank 3,500 mil yen 2.7%
AEON BANK 3,600 mil yen 2.8%
Development Bank of Japan 4,600 mil yen 3.6%
Hyakugo Bank 2,400 mil yen 1.9%
Hiroshima Bank 1,400 mil yen 1.1%
Mie Bank 3,800 mil yen 2.9%
77 Bank 1,000 mil yen 0.8%
Chiba Bank 300 mil yen 0.2%
Nippon Life Insurance 1,000 mil yen 0.8%
Meiji Yasuda Life Insurance 1,300 mil yen 1.0%
The Daisan Bank 500 mil yen 0.4%
Shinsei Bank 1,300 mil yen 1.0%
The Juroku Bank 300 mil yen 0.2%
Momiji Bank 300 mil yen 0.2%
The Gunma Bank, Ltd. New! 500 mil yen 0.4%
The Yamaguchi Bank, Ltd. New! 500 mil yen 0.4%
Total 129,000 mil yen 100.0%
Risk Management
Grew into a REIT resistant to unexpected disasters
22
3,010 yen
3,066 yen
当初予想 実績
Extraordinary losses related to disasters:
275 million yen
Insurance money received (extraordinary profit):
153 million yen
Reversal of distribution reserves:122 million yen
Diversified investments to avoid concentration on particular
areas and properties
1 Diversified investments
Coverage by earthquake insurance for domestic properties
Insurance amount for earthquake insurance: 3.0 billion yen
(deductibles: 100 million yen)
Fire insurance covers storm and flood damages
2 Coverage by fire insurance and earthquake insurance
Reserved 520 million yen in the 9th fiscal period.
Measures can be taken if unpredictable events occur.
3 Accumulation of distribution reserves
Free cash flow of approximately 7.0 billion yen per year.
Measures can be taken if unpredictable events take
place.
4 Strong cash flow
Measures
Extraordinary
losses related to
disasters ▲155 yen
Insurance
money received
(extraordinary profit)
+86 yen
eversal of
distribution
reserves
+69 yen
Increase due
to improved
performance +56 yen
Removed the impact of distributions through a range of measures
Effects of distributions
in the 12th period
Investment area
(as of the end of the 12th fiscal period)
23 prefectures and Malaysia
(14 prefectures when listed)
ResultInitial forecast
Strategic cash management -Cash Generation Skills-
A free cash flow of approximately 7.0 billion yen per year to be used as funds for the implementation of a range of strategies.
23
Free cash flow for the respective fiscal periods (Note)
Main track records on the utilization of cashExternal
Growth
写真
Allocated partially to the acquisition of overseas properties
3,052 million yen
(Note) Free cash flow = Depreciation - Capital Expenditures
Jan 2019 Period
Measures taken in
relation to disasters
Acquisition of the extended building at Kofu Showa
7,155 million yen
Internal
Growth
Renewal in Ota
199 million yen
(Millions of yen)
Renewal in Suzuka
296 million yen
Distributions in excess of earnings for the fiscal period ended July 31, 2016
1,898 million yen
Jul 2018 PeriodJan 2018 Period Jul 2019 Period Jan 2020 Period
DepreciationCapital
ExpendituresFree cash flow
Financial Strategy- Implementation of Measures That Contribute to Growth in Distributions -
Seek to maximize unit-holder value by considering the efficient utilization of funds.
24
Acquisition of
properties
Investment for
revitalization
LTV control
Investment in newly acquired
properties
Boosting of revenues and
competitiveness of existing properties
owned
Contribution to the enhancement of
unit-holder value through continuous
value increasing efforts
Improvement
of
profitability
Stabilization
of financial
position
Capital
policy
Response to
unpredictable
events
Unit buy-backs
Distributions in
excess of
earnings
Reduction in the cost of debt
Enhancement in available capacity
Response to natural disasters and
unexpected events caused by
natural disasters and payment of
temporary expenses
Increased capital efficiency
Will consider implementation if
the P/NAV continues to be at a
level significantly below one and
sufficient excess funds are
available
Management of distributions
(i) If utilized for acquiring properties,(assuming the acquisition of a property whose NOI yield is 3.9%
after depreciation)
(ii) If interest-bearing debt is utilized for repayment,
(assuming the repayment of borrowings whose average interest
is 0.8% per year.)
(iii) If utilized for unit buy-backs and depreciation(assuming the implementation of unit buy-backs for the
investment unit price of 106,771 yen (Note) and cancellation)
(Note) An investment unit level that stands at 0.8 times per
133,464 yen, or NAV per unit at the end of the 12th fiscal period.
Increase of approx. 54 yen
per unit LTV remains
unchanged.
Increase of approx. 11 yen
per unit LTV decreases 0.77%
Increase of approx. 82 yen
per unit LTV increases 0.63%.
A simulation on the result of fund utilization based on
the assumption of using free cash of 5.0 billion yen
III. Forecasts of Performances and Future Objectives
【13th term: Major factors of changes from the previous period】 【13th term: Major factors of changes from the forecast】 【14th term: Major factors of changes from the previous period】
No. Main items Amount (million yen) No. Main items Amount (million yen) No. Main items Amount (million yen)
Rent income from extended properties
(Full-period contribution)+47
Rent increase due to investment
for revitalization+5 Repairs and maintenance expenses ▲14
Income from dividends of overseas SPC
(Exchange rate factors)▲12
Income from dividends of overseas SPC
(Exchange rate factors)▲2 Depreciation ▲23
Insurance revenue ▲27 Repairs and maintenance expenses +28 Fund costs +3
Taxes and dues for properties acquired +89 Depreciation ▲12
Repairs and maintenance expenses +59 Fund costs +15
Depreciation +17 Loan related costs ▲106
Fund costs +27 Investment corporation bond related costs +63
Loan related costs ▲65
Investment corporation bond related costs +23
Depreciation of investment unit issuance expenses ▲31
④ Difference from income revenue posted in the pervious period ▲152
⑤ Difference from disaster factors reflected in the previous period +274
⑥ Reversal of reserves posted in the previous period ▲122
⑤⑧
⑥
②
⑦
③
①
Financial Forecasts
Achieved the medium-term objective of distributing an ordinary dividend of approximately 3,000 yen.
26
12th Fiscal Period Ended July 2019
13th Fiscal Period Ended January 2019 14th Fiscal Period Ended July 2020
ResultForecast
Announced on Jan. 14, 2019vs. Previous Period
ForecastAnnounced on Sep. 12, 2018 vs. Forecast
ForecastAnnounced on Jan. 14, 2019
vs. Previous Period
(A) (B) (B-A) (C) (B-C) (D) (D-B)
Operating Revenues (Millions of yen) 16,329 16,334 ① +5 16,331 ⑤ +3 16,335 -
Operating Expenses (Millions of yen) 9,993 10,186 ② +192 10,149 ⑥ +36 10,154 ⑧ ▲31
Operating Income (Millions of yen) 6,335 6,148 ▲187 6,181 ▲33 6,180 +32
Ordinary Income (Millions of yen) 5,448 5,333 ③ ▲115 5,318 ⑦ +14 5,333 -
Extraordinary income (Millions of yen) 152 - ④ ▲152 - - - -
Extraordinary Loss (Millions of yen) 274 - ⑤ ▲274 - - - -
Net Income (Millions of yen) 5,325 5,332 +6 5,313 +19 5,332 -Reversal of dividend reserves
(Millions of yen) 122 - ⑥ ▲122 - - - -
Distributions per Unit (yen) 3,066 3,000 ▲66 2,985 +15 3,000 -
NOI (Millions of yen) 11,553 11,423 ▲130 11,451 ▲28 11,435 +12
(Note) The number of investment units issued for each period is 1,777,347.
Activities to Achieve Sustainability - AEON Group and AEON REIT -
Will seek to take proactive actions in collaboration with the AEON Group
27
AEON GROUP
Environment
Planted 11.66 million tress(Cumulative number of trees planted at the end of February 2018)
AEON Carbon-free Vision 2050Will reduce CO2 emissions 35% by 2030 from the level in 2010
and achieve zero emissions by 2050.
Reduction in food disposalsWill collaborate with stakeholders including customers and
create a resource-recycling society.
Society
AEON 1% Club FoundationPromote initiatives aimed to develop the next generation, promote friendships with foreign countries and sustain the development of local communities (succession of cultural heritage)
AEON Environmental Foundation Promote efforts to plant trees, preserve biodiversity and develop human resourcesin the environmental field.
Disaster prevention
Agreements on disaster preventionConcluded agreements with more than 850 localgovernments and private companies nationwide.
Collaboration with external partiesCollaboration with the Self Defense Force and Japan Airlines in case of an emergency.
AEON REIT
GRESB in 2018
Obtained the Green Star for the third straight year
Received DBJ’s certification for six properties
AEON Mall Itami Koya
AEON Mall Mito Uchihara
AEON Mall KYOTO
AEON Mall Kurashiki
AEON Mall Nogata
AEON Mall Morioka
Received CASBEE certification for two properties
AEON Mall Yamatokoriyama
AEON Mall Kagoshima
MSCI Japan ESG Select Leaders IndexIncluded from 2017
Indicator selected as an ESG indicator index for
GPIF’s passive investments
Corporate Governance CodeEstablished the code of an asset management company ahead of other companies in March 2016
As of the end of
the12th fiscal period 3,300 yen
3,000 yen
Future Growth Objectives
Will steadily implement growth strategies by leveraging strong,
free cash flows and aiming to achieve an ordinary dividend of 3,300 yen.
28
Summary of growth strategies
External Growth
Implement selected investments from many pipelines in the AEON Group via negotiated transactions
Acquire top-class stores in each area that are resistant to changes in the business environment
Internal Growth
Maintain and enhance the competitiveness of facilities through the Group’s collaborative implementation of effective investments
Achieve not only stable rents through matter lease agreements but rent increases through revitalization
Financing policy
Facilitate the diversification of financing methods to respond to changes in the business environment in the future
Further stabilize financial management through efforts to extend and fix the term of interest-bearing debt
Growth objectives
As of the end of
the12th fiscalperiod 500.0billion yen362.4 billion yen
(Note) The Asset Management Company does not guarantee the amounts presented as ordinary distributions and asset size, which are management targets set by the Company.
Asset sizeOrdinary distributions
Seek to expand the asset size steadily by making
selected investments in response to market
conditions.
Aim to meet the medium-term objective through a
range of measures by leveraging strong cash flows.
Messages from the Management Team
29
In charge of Investment
Management Department.
and Asset Management
Department.
In charge of Business
Administration Department.,
Accounting Department.
and Financial and Planning
Department.
Career in brief
Mr. Shiozaki joined Jusco Co., Ltd. (currently, AEON
Co., Ltd.) in 1977. He engaged in real estate-related
operations for approximately 25 years while
developing his career at AEON Kosan Co., Ltd.
(currently, AEON Mall Co., Ltd.) and Rock
Development Co., Ltd. (currently, AEON TOWN Co.,
Ltd.). He has extensive experience in sales and
brokerage services, in addition to his current
assignment that he has been engaged in since the
dawn of the securitization of domestic real estate at
the beginning of 2000. Mr. Shiozaki was appointed
President and Representative Director of the
Company in May 2016, after engaging in asset
management-related assignments as Director of the
Company, a position that he took on August in 2012.
Career in briefMr. Seki joined Juso Co., Ltd. (currently, AEON Co. Ltd.) in
1988. He was seconded to JAYA JUSCO STORES (currently,
AEON Malaysia) in 1995. Since 2000, Mr. Seki engaged in the
management of the Group’s overseas companies and
assignments related to Asian businesses and developer
business strategies. He became deeply involved in the
establishment of AEON Reit as an Auditor and a Director of the
Company in 2012 and 2013, respectively. After gaining his
career as an Executive Officer of AEON Retail Co., Ltd. while
concurrently serving as the General Manager of Developer
Department and General Manager of President’s Office, he was
appointed Director of the Company in 2018.
Career in briefMr. Arisaka joined The Dai-Ichi Kangyo Bank, Ltd. (currently,
Mizuho Bank, Ltd.) in 1983. He engaged in a range of
assignments including corporate financing, fund and exchange
transactions, foreign bond transactions, market planning and
asset management. After developing his career through services
at the bank’s Hong Kong and New York branches and as the
assistant general manager of the International currency
exchange division, general manager of the North America office
of Global Alternative Investment Management division, and
general manager of the risk control operation division, Mr.
Arisaka took on the position of Compliance Officer and the
general manager of Compliance Department at the Company in
2012. He was appointed Director of the Company in 2015.
Compliance Officer
General Manager of
Compliance Department.
Career in briefMr. Ogusu joined The Fuji Bank Limited (currently, Mizuho Bank,
Ltd.) in 1984. He engaged in a variety of assignments such as
financing for U.S. and domestic real estate properties, corporate
sales for large real estate companies and auditing of operations.
He took on the position of the manager of IR and planning
group of Finance and Planning Department at the Company in
2012. He played a leading role in the establishment of IR
operations even before the Company was listed. He assumed
the position of Compliance Officer and general manager of
Compliance Department, and became Director of the Company
in 2016.
Yasuo Shiozaki
President and Representative DirectorMessage from Representative Director.
Director
Nobuaki Seki
Director
Tetsuya Arisaka
Director
Yasushi Ogusu
Five years have passed since AEON REIT was listed in November 2013.
Thanks to your support, we recorded successful results for the 12th fiscal
period.
Despite many natural disasters such as earthquakes and typhoons during the
period, we achieved distribution of 3,066 yen per unit, which was 56 yen
higher than the 3,010 yen expected at the end of the previous period.
AEON REIT has been implementing various measures including earthquake
insurance to prepare for the risk of natural disasters. In addition, it succeeded
in enhancing revenues through the acquisition of the extended building at
Kofu Showa and reducing financing costs through the refinancing and
issuance of retail bonds. Going forward, the Company will continue to
manage its assets to achieve stable distributions on a medium- to long-term
basis.
Your continued support is greatly appreciated.
Appendix 1 Characteristics of AEON REIT
AEON Group Profile
31
●General Financing
Business 4.5%
Operating Revenue
8.39 trillion yen
●GMS Business 34.4%
●SM Business 36.1%
●Drugstore/Pharmacy
Business7.8%
●Shopping Center
Development Business 3.7%
●Service/Specialty Store Business
8.6%
●International Business 4.7%
AEON’s Top salesbusiness
domains
● Sales from general merchandising stores: 3.1 trillion yen
● Sales from grocery supermarkets: 3.2 trillion yen
● Operating revenue from domestic shopping centers: 288.0 billion yen
Seven businesses promoted by the AEON Group to
support people’s daily lives (Note 1)
Continuous growth of the AEON
Group
AEON expanding into 14 countries globally (Note 2)
Aim to achieve 10 trillion yen and 340 billion yen in operating revenue and
operating income, respectively, by 2020.
10兆円
●GMS 584 stores ●SM 2,185 stores
●DS 568 stores ●HC 122 stores
●CVS 5,436 stores ●Specialty stores 4,324 stores
●Others 938 stores ●Mall-style SC 311 facilities
●NSC 162 facilities ●Financing 690 facilities
●Service 2,045 facilities ●Drugstores 4,376 stores
●Tasmania Ranch operated directly by AEON 1 facility
Total 21,742 stores/facilities
●GMS Business
●Shopping Center
Development Business
● General Financing Business
●Health & Wellness
Business
●SM Business
●Service/Specialty Store
Business● International
Business
(Note 1) Business compositions, sales and operating revenues are quoted from the AEON Report 2018.
(Note 2) The number of stores, operating revenues in the medium-term management plan and operating income targets are
quoted from the AEON Report 2018.
(Note 1)
Myanmar
Laos
Indonesia
Philippines
Korea
JapanAEON Group across
Asia and the world
Record high revenue for
8 consecutive fiscal periods8.39 trillion yen
8.70 trillion yen
10 trillion yen
Fiscal period
Medium-term management plan
(Note 2)
Australia
Singapore
India
Malaysia
Thailand
Vietnam
China
Cambodia
Company name Headquarters Sales
1 Walmart Stores USA 495,761
2 CVS Health USA 184,765
3 Amazon.com USA 177,866
4 Costco USA 126,171
5 Kroger USA 122,662
6 Walgreens Boots Alliance USA 118,214
7 Schwarz Gruppe Germany 116,312
8 The Home Depot USA 100,904
9 ALDI Germany 99,870
10 Carrefour France 94,714
11 Tesco UK 77,690
12 AEON Japan 77,458
13 Ahold Delaize The Netherlands 75,478
14 Target USA 71,879
15 Lowe’s USA 68,619
Company name Total operating earnings
1 AEON 8,390,012
2 Seven & i Holdings 6,037,815
3 Fast Retailing 1,861,917
4 Yamada Denki 1,573,873
5 Family Mart UNY Holdings 1,275,300
6 Isetan Mitsukoshi Holdings 1,268,865
7 Takashimaya 949,572
8 H20 Retailing 921,871
9 Don Quijote Holdings 828,798
10 Bic Camera 790,639
AEON Group’s Rankings
32
Retailer rankings by total domestic operating revenue in 2017 Top 15 retailers by global sales in 2017
(Note) Prepared by the Asset Management Company based on an article in the January
2019 issue of the Hanbai Kakushin, an industry magazine. Earnings are indicated
in millions of yen. Figures for Fast Retailing and Don Quijote Holdings show
earnings in FY2017/8 and FY2017/6, respectively. Figures for the other companies
show earnings in either FY2018/12 or FY2018/3.
(Note) Prepared by the Asset Management Company based on an article in the January 2019
issue of the Hanbai Kakushin, an industry magazine. Sales are indicated in millions of
dollars.
Realization of Growth Strategies through Collaboration with AEON Group
33
(Source) Prepared by the Asset Manager based on the information provided by AEON CO., LTD. and AEON Mall Co., Ltd. (as of Jan. 2019).Note: AEON REIT neither owns nor plans to acquire any of these properties as of now.
● Major Shopping Centers currently under development by AEON Group
● Major Shopping Centers developed by AEON Group
Tokai and Hokuriku● AEON MALL Takaoka Takaoka-shi, Toyama ● AEON MALL Tonami Tonami-shi, Toyama ● AEON MALL Shin-Komatsu Komatsu-shi, Ishikawa● AEON MALL Kakamigahara Kakamigahara-shi, Gifu
●(tentative name) AEON MALL Toki Toki-shi, Gifu● AEON MALL Hamamatsuichino Hamamatsu-shi, Shizuoka ● AEON MALL Odaka Nagoya-shi, Aichi ● AEON MALL Nagoya Chaya Nagoya-shi, Aichi ● AEON MALL Fuso Niwa-gun, Aichi ● AEON MALL Tokoname Tokoname-shi, Aichi● AEON MALL Nagakute Nagakute-shi, Aichi● AEON MALL Toin Inabe-gun, Mie ● AEON MALL Tsu minami Tsu-shi, Mie
Hokkaido and Tohoku● AEON MALL Around Asahikawa Station Asahikawa-shi, Hokkaido ● AEON MALL Shimoda Kamikita-gun, Aomori ● AEON MALL Moriokaminami Morioka-shi, Iwate ● AEON MALL Natori Natori-shi, Miyagi ●(tentative name) AEON MALL Rifu
(New Building) Rifu-cho,Miyagi● AEON MALL Akita Akita-shi, Akita ● AEON MALL Tendo Tendo-shi, Yamagata ● Shopping Mall Festa Koriyama-shi, Fukushima● AEON MALL Iwakionahama Iwaki-shi, Fukushima
Kanto and Koushinetsu● AEON MALL Tsukuba Tsukuba-shi, Ibaraki● AEON MALL Sanoshintoshi Sano-shi, Tochigi● AEON MALL Takasaki Takasaki-shi, Gunma● AEON MALL Urawamisono Saitama-shi, Saitama● AEON MALL Hanyu Hanyu-shi, Saitama● AEON MALL Kasukabe Kasukabe-shi, Saitama● AEON MALL Yono Saitama-shi, Saitama●(tentative name) AEON MALL Ageo Ageo-shi, Saitama● AEON MALL Makuhari New City Chiba-shi, Chiba● AEON MALL Kisarazu Kisarazu-shi, Chiba● AEON MALL Tamadairanomori Hino City-shi, Tokyo● AEON MALL Hinode Nishitama-gun, Tokyo● AEON Hadano Shopping Center Hadano-shi, Kanagawa●(tentative name) AEON MALL Hiratsuka Hiratsuka-shi, Kanagawa● AEON MALL Zama Zama-shi, Kanagawa● AEON MALL Nigataminami Nigata-shi, Nigata● AEON MALL Sakudaira Saku-shi, Nagano● AEON MALL Matsumoto Matsumoto-shi, Nagano
Chugoku and Shikoku●AEON MALL Tottorikita Tottori-shi, Tottori● AEON Matsue Shopping Center Matsue-shi, Shimane● AEON MALL Izumo Izumo-shi, Shimane● AEON MALL Okayama Okayama-shi, Okayama ● AEON MALL Hiroshima Fuchu Aki-gun, Hiroshima ● AEON MALL Hiroshima Gion Hiroshima-shi, Hiroshima● THE OUTLETS HIROSHIMA Hiroshima-shi, Hiroshima● AEON Town Houfu Hofu-shi, Yamaguchi ● AEON MALLTokushima Tokushima-shi, Tokushima● AEON MALL Takamatsu Takamatsu-shi, Kagawa● AEON MALL Niihama Niihama-shi, Ehime ● AEON MALL Imabarishintoshi Imabari-shi, Ehime● AEON MALL Kochi Kochi-shi, Kochi
Kyushu・Okinawa●(tentative name) The project Kitakyushu-shi, Fukuokaof Yahatahigashida
●AEON MALL Fukuokaito Fukuoka-shi, Fukuoka● AEON MALL Fukutsu Fukutsu-shi, Fukuoka● AEON MALL Yahatahigashi Kitakyushu-shi, Fukuoka● AEON MALL Sagayamato Saga-shi, Saga● AEON Daito Shopping Center Sasebo-shi, Nagasaki● AEON Yatsushiro Shopping Center Yatsushiro-shi, Kumamoto● AEON MALL Sankoh Nakatsu-shi, Oita● AEON MALL Miyazaki Miyazaki-shi, Miyazaki● AEON MALL Okinawa Rycom Nakagami-gun, Okinawa
AEON MALL Iwakionahama
THE OUTLETS HIROSHIMA
AEON MALL Tsu minami
● AEON MALL Osaka Dome City Osaka-shi, Osaka● AEON MALL Shijonawate Shijonawate-shi/Neyagawa-shi, Osaka● AEON MALL Sakaiteppoucho Sakai-shi, Osaka● AEON MALL Kobeminami Kobe-shi, Hyogo● AEON MALL Kashihara Kashihara-shi, Nara● AEON MALL Wakayama Wakayama-shi, Wakayama
Kinki● AEON MALL Kusatsu Kusatsu-shi, Shiga ● AEON MALL Kyotogojo Kyoto-shi,Kyoto● AEON MALL Kyoto Katsuragawa Kyoto-shi/Mukou-shi, Kyoto ● AEON MALL Rinkusennan Sennan-shi, Osaka● AEON MALL Dainichi Moriguchi
Investment Shift Program
Reforms Undertaken by the AEON Group
34
Asia Shift Program
Digital Shift ProgramRegional Shift Program
Spin off the food business to regional
companies.
Promote small and urban-style stores.
Facilitate manufacturing and retailing of food products and respond to needs for ready-to-eat or semi-
cooked foods against the backdrop of an increase in the number of the elderly and working women.
GMS reform – Make operation more professional and locally-oriented through the
establishment of specialized companies
SM reform — Top-selling companies by area after the integration of the
AEON SM business
Build a Process Center and open stores mainly in that vicinity.
Establish specialized companies for clothing,
housing/leisure and HBC, respectively.
Process Center
Increase the percentage of online sales by 17 times (0.7%
in FY2016 to 12% in FY2020).
Receiving items purchased online
at brick and mortar stores.
Investment in BOXED
Provision of
information
ShoppingFinancing/Payment
Local parties who open
shops and sell products
in the marketplace
Marketplace
Utilize automated
distribution systems and
data management as well
as AI technologies for
online shopping.
Increase the percentage of operating income by 3.8 times
in Asia (6% in FY2016 → 23% in FY2020).
(i) Raise net sales through online supermarkets.
(ii) Increase the total monetary amount of items sold in the marketplace
business.
(iii) Facilitate sales through the transfer of customers from online stores
to brick and mortar stores or vice versa. (Increase sales at brick and mortar stores by making online promotional efforts and
featuring smartphone coupons)
Offer multiple options to target
customers by strengthening product and
service lineups.
Acquisition of customers in different
income groups.
Accelerate a local-oriented management style to better
address needs in respective countries.
Investments totaling 500 billion yen will be made in IT, digitalization and
logistics (200 billion yen have been invested over the past three years).
AEON Financial Service
AEON DELIGHT
Customize Japanese-style services to
suit local needs.
(Note) Prepared based on websites and explanatory materials of AEON Group companies.
Group company name Sales Area (after integration)
AEON Hokkaido 1,860Hokkaido area
MaxValu Hokkaido 1,240
MaxValu Tohoku 1,030Tohoku area
AEON Retail Tohoku 980
MaxValu Tokai 2,170Tokai & Chubu area
MaxValu Chubu 1,720
Daiei 2,800Kinki area
Kohyo 1,120
MaxValu Nishinihon 2,690Chugoku & Shikoku
areaMarunaka 1,780
Sanyo Marunaka 1,220
AEON Kyushu 2,140
Kyushu areaMaxValu Kyushu 1,750
AEON Store Kyushu 540
Area Priority measures
Vietnam
Concluded a memorandum with the Hanoi
municipal government.
Development of large-scale shopping
centers.
IndonesiaEfforts to further promote Halal-certified
products, among other products.
ChinaEfforts to increase the number of stores in
Guangzhou.
Expansion of Network of Support -Agreement Companies
Support agreement signed with 11 companies in the AEON Group in order to utilize the collective strengths of the Group
35
Sponsor
Pipeline support companies
AEON Co., LTD.
Shopping center management providers
AEON Retail Co., Ltd.
AEON Mall Co., Ltd.
AEON Hokkaido Corporation
AEON KYUSHU CO., LTD.
AEON RYUKYU CO., LTD.
AEON TOWN Co., Ltd.
Pipeline support company
Logistics facilities management support
company
Overseas support companies
AEON BIG (M) SDN.BHD.
AEON CO.(M) BHD.
Trademark license agreement
Sponsor support agreement
Shopping center management agreements
Logistics facilities management agreement
Pipeline support agreements Memorandum of understanding on
investments in properties in Malaysia
Major terms of such agreements
Stable portfolio growth over the medium-to-long term
AEON REIT Investment CorporationAEON Reit Management Co., Ltd.
Integrated AEON Group’s capabilities
⚫ Provision of information on properties owned
⚫ Grant of preferential negotiation rights on the retail properties operated by AEON Group
⚫ Provision of information on potential sales of properties owned by third parties
AEON GLOBAL SCM CO.,LTD.
The Daiei, Inc.
AEON REIT positions retail properties as the infrastructure assets of local communities and invests in those properties to support
the rich life of people living there.
AEON REIT aims to create a rich life for people and contribute to local communities through investment activities and implements
stable asset management on a medium- to long-term basis.
Basic Philosophy and Basic Policy
36
(Note) Refers to retail properties, logistics facilities and related facilities. Retail properties refer to facilities containing retail businesses and other merchandising businesses, entertainment and amusement
facilities and other facilities that attract customers (including parking lots and equipment and systems for logistics). Logistics facilities refer to warehouses and other storage facilities for the distribution and
transport of merchandise and other goods.
AEON REIT carries out a growth strategy based on the policy of maintaining a mutually beneficial relationship with the AEON
Group (Note), thereby aiming to maximize value for unitholders.
Basic Philosophy
Basic Policy
(Note) Refers to the group comprised of the holding company AEON CO., LTD. and its 291 consolidated subsidiaries and 31 equity-method associates (as of February 28, 2018).
(i) Acquire retail properties
from the AEON Group
(ii) Expand the asset size, make asset management
more stable and improve financing capabilities
(iii) Increase distribution and improve
unitholder value
(ii) Make growth investments by
leveraging funds obtained from
property sales
(iii) Increase revenues and
enhance corporate value
(i) Sell retail
properties to the REIT
Portfolio Policy
37
TypeInvestment ratio (Note 1)
Domestic85% or more
OverseasNo more than 15%
Large-scale retail
property
(i) Super regional shopping center (SRSC): More than one anchor tenant with over 200 specialty stores
80% or more(ii) Regional shopping center (RSC)
: A large GMS with over 50 specialty stores
(iii) Community shopping center (CSC): A GMS, discount store and large grocery store with 20 to 50 specialty stores
Other retail property(Small- and medium-scale)
Neighborhood shopping center (NSC): A grocery store with 10 – 30 specialty stores
No more than 20%Supermarket (SM): A grocery supermarket with a focus on the selling of high purchase frequency
commodities, such as food and household good
Logistics facility No more than 10%
(Note 1) Calculated based on acquisition prices.
(Note 2) Indicates Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia.
Anchor tenant
Anchor tenant
Mall area
(Specialty store area)
Overseas investment areas Overseas investment targets
Countries and regions with strong economic growth
prospects in the medium to long term, such as Malaysia in
the ASEAN region(Note 2)
and China
Retail properties leased to and managed and operated by
the AEON Group comprehensively, in principle, under
master lease contracts
AEON MALL Mitouchihara
(Super regional shopping center)
: Logistics facilities that support a supply chain, an integral part of the retail business
The AEON Group’s stable management of properties supports the stable payment of distributions.
38
Fixed and variable rents
Anchor tenants Other specialty stores
Fixed rent (Note)
Rental and operational expenses, etc.
End tenants: Sales
Master lessee: Rent income
AEON REIT: Operating revenue
Distributions
Lease Structure (Conceptual Image of Capital Flows)
(Note) The amount equivalent to the fixed asset tax
and city planning tax will be paid as additional
variable rent.
Strategic Cash Management and a Stable Financial Position
39
In the large-scale retail properties that we target for investment, the depreciation expense accounts for a large percentage of the property value.
The percentage of depreciation expenses in a real estate price tends to be higher than office buildings and distribution facilities due to a shorter period of depreciation in accounting.
By deploying internal reserves in an amount equal to the depreciation expense, we plan to increase capital efficiency and stabilize cash flow.
Measures aimed at stabilizing financial position
Investment contributing to an increase in income
Appropriation of funds to acquire new properties
Response to natural disasters and unexpected events caused by natural disasters, payment of temporary expenses, etc.
Capital strategies that protect unitholder interests
Investing in revitalization of property to boost revenues
and competitiveness
Reduction in the cost of our debt by repayment of
interest-bearing debt
Distributions in excess of earnings
Increased capital efficiency through unit buy-backs
Response to other unpredictable events
Growth
driven by
efficient
use of
capital
Trends in Results for Five-Year Period After Listing
Asset size has been growing steadily and distributions have been paid stably since the REIT was listed.
40
2nd Fiscal Period
3rd Fiscal Period
4th Fiscal Period
5th Fiscal Period
6th Fiscal Period
7th Fiscal Period
8th Fiscal Period
9th Fiscal Period
10th Fiscal Period
11th Fiscal Period
12th Fiscal Period
Distributions per unit
(yen)686 2,461 2,473 2,724 2,790 1,450 3,019 2,926 3,029 2,956 3,066
NAV per Unit(yen)
110,456 112,635 115,939 122,057 126,169 123,547 127,912 127,358 128,301 130,957 133,464
Net assetsper unit(yen)
102,108 103,883 103,896 109,536 109,603 107,959 109,528 111,457 111,445 111,372 111,413
Depreciation(billions of yen)
1.1 2.2 2.2 2.6 2.6 3.1 3.3 4.1 4.3 4.3 4.4
158.3 158.9 158.9
194.3 194.3
249.2268.5
330.6
355.1 355.3 362.4
0.0
100.0
200.0
300.0
400.0
2nd Fiscal
Period
3rd Fiscal
Period
4th Fiscal
Period
5th Fiscal
Period
6th Fiscal
Period
7th Fiscal
Period
8th Fiscal
Period
9th Fiscal
Period
10th Fiscal
Period
11th Fiscal
Period
12th Fiscal
Period
Asset sizeBillions of yen
Property name
AEON Taman Universiti Shopping Centre
AEON MALL Seremban 2
Acquisition price
20 million RM 215 million RM
Appraisal value
21.3 million RM 233 million RM
Date of completion
2002年 2005年
Appraised NOI yield
7.2% 6.8%
TopicsAchieved an increase in monthly rent
of 7.35% over current rent linked to
CPI
23.8%
69.7%
6.5%
0-14歳 15-64歳 65歳以上
Initiatives leveraging AEON REIT’s strengths①
Acquired properties from AEON Malaysia, which has been operating locally for more than 30 years.Rents are CPI-linked, reflecting Malaysia’s growth potential.
41
Fixed rent agreement
(10-year lease term)
CPI-linked rent revision
(every 3 years)
Net lease
* Only AOEN MALL Seremban 2
Changes in CPI in Malaysia and Japan
Total net sales of AEON Co. (M) BHD
Population 32,020,000
Area
Approx. 330,000 km2 (approx. 90% of the area of
Japan)
GDP per capita (nominal) $9,755
The GDP per capita increased approximately 2.3 times compared to the level in 2000 and is expected to continue growing sharply going forward.
The median age is 28.6 years. The young generation and working-age people account for more than 90% of the population.
Overview of Malaysia✓ Has been operating business in
Malaysia for more than 30 years,
has established a solid position as a
retailer, and has knowledge of laws,
taxation, accounting, etc. related to
real estate.
✓ Is therefore able to purchase
properties after verifying adequate
track records.
(Millions of RM)
Properties held by AEON REIT in Malaysia
Outline of Master Lease Agreement
Age composition
Source:SPEEDA
Source:Department of Statistics MalaysiaSource:IMF - World Economic Outlook Databases
0-14years old
15-64years old
65years old and over
75
85
95
105
115
125
135
145
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018E
2019E
2020E
2021E
2022E
2023E
CPI(Malaysia)
CPI(Japan)
2,500
3,000
3,500
4,000
4,500
FY2013 FY2014 FY2015 FY2016 FY2017
Overview of AEON Malaysia (AEON Co. (M) BHD)
Initiatives leveraging AEON REIT’s strengths② - Logistics facility -
Invested in logistics facilities, an integral part of commercial distribution. Currently owns three properties.Seeks to incorporate growth potential and profitability in the Group’s overall supply chain.
42
type merchandise function Kanto Region Kansai Region
Process Center Fresh food
Fresh food processing centerProduction and processing of fresh food that can not be processed in each store and supply raw materials for cooking at each store
Regional Distribution Center
High rotation products
Inventory storage baseMainly as a room temperature facility, responsible for temporary storage and supply of goods frequently replenished at each store
Customers
community
infrastructure assets
Stores Logistics facility
Daiei-Kawasaki Process Center
Daiei-IbarakiProcess Center
AEON Minami-Osaka RDC
Initiatives leveraging AEON REIT’s strengths③- property replacement and acquisition of the extended building -
Acquired the extended building at Kofu Showa Acquisition of AEON MALL Kyoto Gojo
Improved portfolio quality with the replacement of properties and acquisition of the extended building of a property owned by the REIT.
⚫ Acquisition of complete ownership of land in Kyoto,
where land is scarce
⚫ Located in a populated housing area in Kyoto City whose population of trading area is approx. 340,000 in the 3-kilometer area with a high market density
AEON MALL Kumamoto AEON MALL Kyoto Gojo
⚫ Converted the property into the area’s overwhelmingly Number One mall in terms of both floor area and the number of tenants.
⚫ Sales rose 1.6 times at specialty stores after the acquisition of the extended building.
22,582
32,044
46,222
0 25,000 50,000 75,000
商業施設B
商業施設A
甲府昭和
Before expansion
22,582
32,044
69,583
0 25,000 50,000 75,000
商業施設B
商業施設A
甲府昭和
After expansion
Extended building
43
Store areas in the 10 km trading areaNeighborhood-based Commercial Facilities
Parking lots for approx.2,000 bicyclesFor the large local population
Food sales area, Kyo-Deli, selling fresh foodProvided by local companies
Asset
replacement
Kofu showa
Commercialfacility A
Commercialfacility B
Kofu showa
Commercialfacility A
Commercialfacility B
(Source) Prepared by the Asset Manager based on the market report prepared by
BAC Urban Projects Co.,Ltd..
北海道・東北
関東
東海・北陸・中部
近畿
中国・四国
九州・沖縄
マレーシア
Portfolio Highlights (as of January 31, 2019)
44
Number of properties 40
Total acquisition price ¥362.4bn
Portfolio appraisal NOI yield before depreciation 6.4%
Portfolio appraisal NOI yield after depreciation 3.9%
Average remaining lease term 16.2 years
Average building age 14.7 years
Total leasable area 3,430,000m²
Occupancy rate 100%
By property type
Portfolio Data
By location
Summary of Portfolio
8.7%
34.8%
12.6%
26.1%
9.5%
6.8%
1.6%
■SRSC 7.7%(Super regional shopping cente)r
■RSC 79.7%(Regional shopping center)
■CSC 4.0%(Community shopping center)
■L 8.5%(Logistics facility)
Kanto
Hokkaido・Tohoku
Tokai・Hokuriku・Chubu
Kinki
Chugoku・Shikoku
Kyushu・Okinawa
Malaysia
Portfolio Map (as of January 31, 2019)
45
Malaysia
● M - 1
Hokkaido and Tohoku
Kanto
Kyushu and Okinawa
40properties(domestic38, overseas2)
Asset Size ¥362.4bn
SRSC: Super regional shopping center
RSC: Regional shopping center
CSC: Community shopping center
Logistics facility
16 17 16
1 2
1 2 17
2418 19
24
1
2
1819
3 4
5 22 1 1
25
21
4
3
5
22
11
25
13
13
Kinki, Chugoku and Shikoku
20
23
6 7
8
9 10 11
211512
10
1112
9 15
21
27
27
28
28
29
2
2
26
7
29
8
623
20
● M - 2
Tokai, Hokuriku and Chubu
26
30
30 2
23
3
3
331
31
M - 1 AEON Taman
Universiti Shopping Centre
M - 2 AEON MALL SEREMBAN 2
ASEAN region
AEON MALL Nogata
AEON MALL Kagoshima
AEON MALLKyoto Gojo
AEON MALL Ayagawa
AEON MALL Kasai-Hojo
AEON MALL Hiezu
AEON MALL KYOTO
AEON MALL Kurashiki
AEON MALL Yamatokoriyama
AEON MINAMI-OSAKA RDC
Daiei-Ibaraki Process Center
AEON MALL Ogaki
AEON MALL Suzuka
AEON MALL Meiwa
AEON MALL Kofu Showa
AEON MALL Itamikoya
AEON KireuriwariShopping Center
AEON MALL Yokkaichi-Kita
AEON MALL Kahoku
AEON MALL Morioka
AEON MALL Ishinomaki
AEON MALL Sapporo-Hiraoka
AEON MALL Kushiro-Showa
AEON MALL Rifu
AEON MALL Yamagata-Minami
AEON MALL Tomakomai
AEON Lake Town mori
AEON Lake Town kaze
AEON MALL Mitouchihara
AEON MALL Ota
AEON Sagamihara Shopping Center
AEON MALLChiba-New Town
(Mall, Cinema and Sports building)
AEON Chigasaki-Chuo
Shopping Center
Daiei-Kawasaki Process Center
AEON MALL Oyama AEON MALL Tsuchiura AEON MALL Shimotsuma AEON STYLE
Kemigawahama
Trend of Investment Unit Price
46
AEON REIT Investment Unit Price and Trading Volume
0
10,000
20,000
30,000
40,000
50,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
190,000
Nov 2
013
Feb 2
014
May 2
014
Aug 2
014
Nov 2
014
Feb 2
015
May 2
015
Aug 2
015
Nov 2
015
Feb 2
016
May 2
016
Aug 2
016
Nov 2
016
Feb 2
017
May 2
017
Aug 2
017
Nov 2
017
Feb 2
018
May 2
018
Aug 2
018
Nov 2
018
(Units)(Yen)Trading Volume (Right axis) AEON REIT Investment Unit Price (Left axis)
Framework for Maximizing Unitholder Value
47
Management Fee Structure Calculation Method
Management
fee
Manage-
ment fee I Total assets × 0.3% (maximum rate)× {No. of operating days / 365}
Manage-
ment fee IIDPU(Note1) before deducting Management fee II × NOI(Note2) × 0.001%
(maximum rate)
Acquisition fee Acquisition price × 0.5% (maximum rate)
[Related party transactions: Acquisition price × 0.25%(maximum rate) ]
Disposition fee Disposition price × 0.5% (maximum rate)
[Related party transactions: no disposition fee paid]
• Ownership of investment units by AEON Group
• Co-ownership of properties with AEON Group
Ownership interest 19.8% (as of January 31, 2019)
Co-owned properties 3 (as of January 31, 2019)
Drafting of proposal
by the responsible
department
Approval by the
Compliance Officer
Report to the Asset
Manager’s board of
directors
* An outside expert must attend the meeting and agree in
order for the resolution to pass.
Transparent Decision-Making Process
Further Aligning the Interests of Unitholders and the AEON GroupIntroduction of an Asset Management Fee Structure Linked to
Distributions per Unit
Introduction of Cumulative Investment Unit Purchase Program
Deliberation and
resolution by the
Compliance
Committee*
Deliberation and
resolution by the
Investment
Committee*
Approval by
Investment
Corporation
(Note 1) Total assets are calculated by subtracting the amount of capital contributions, etc. related to the overseas real estate
holding corporation from net assets recorded on the balance sheet for the fiscal period directly preceding the relevant
operating period and then adding the total assets of the overseas real estate corporation to the balance.
(Note 2) NOI refers to total real estate leasing revenues for the relevant fiscal period less real estate leasing expenses (excluding
depreciation and loss on retirement of non-current assets)
Disapproved
ReturnedDropped or instructions
given to modify content
Dropped or instructions
given to modify content
• We introduced a program on May 1, 2014, that enables the acquisition of AEON
REIT’s investment units, using the cumulative investment unit purchase program
through securities firms, for directors and employees of AEON REIT and the Asset
Manager.
• The program will help to further raise awareness towards enhancing the value of
AEON REIT’s investment unit price and improving business performance, and
provide greater financial motivation in line with the interests of the unitholders.
48
Portfolio formation mainly led by large-scale retail properties Implementation of new redevelopment strategy cooperating with Sponsor Group
Expecting to realize internal growth by establishing WIN-WIN relations
Development
Approach to disaster
◼ Following the Kumamoto Earthquake, AEON REIT obtained
earthquake insurance for its portfolio to ensure stable management
and distribution in the future. The insurance covers the 38
properties in Japan (it does not cover the 2 properties overseas).
◼ Insurance amount:¥3.0 billion(exemption from responsibility:
¥100 million)
◼ Removed impact on distribution through coverage by earthquake
insurance and the reversal of distribution reserves to deal with
unexpected disasters, such as typhoon and earthquake, that
occurred during the respective fiscal periods.
Diversification of property
acquisition methods
Acquisition of completed building+ Internal growth
Expanding the portfolio to include logistics facilities supporting AEON Group
Enhancing relations with Sponsor Group
Capitalizing on AEON Group’s overseas strategy
Major stores of AEON Group in Malaysia
Store renovation by investment revitalization and Enhancement of internal growth
◼ Enhancing internal growth by rent increase, continuing
investment in revitalization contributing to improve values
of retail properties and making efforts to maintain and
improve competitiveness.
AEON MALL Kumamoto
Practice of Strategies to Grow with Retail and Related Properties of AEON Group
AEON REIT will aim to achieve steady portfolio growth over the medium-to-long term by fully utilizing AEON
group’s comprehensive strengths - Developing, leasing, operating and managing AEON group’s various types of
retail properties etc.
Large-scale
retail properties
Entertainment
facilities
Community
facilities
Numerous
specialty stores
GMS, Dept. stores
(Core tenants)
◼ AEON Group’s large-scale retail properties
– top-class regional retail properties with
competitive advantage.
◼ Large-scale retail properties can deal with
changes by lifestyle and needs of
customers and secure position as top-class
regional retail related properties with
competitive advantage.
◼ Internal growth utilizing Sponsor’s know-how (abilities of retail properties development
& operation).
◼ Contributing to NOI increase without taking risk to attract tenants in re-development.
◼ Implementing drastic renovation for existing building as well, with development for
expanded building by AEON Mall Co., Ltd.
◼ AEON Mall Co., Ltd. can also enhance expansion strategy for excellent stores without
considering land acquisition cost.
AEON MALL Kofu Showa
Implementation of Growth Strategies Through Collaboration with AEON Group
◼ Establishing an efficient group supply chain intensification by
strategically locating and operating group logistics facilities.
Daiei-Ibaraki Process Center
Daiei-Kawasaki Process Center
AEON MINAMI-OSAKA RDC
◼ Realizing mobile property acquisition by
obtainment of preferential negotiation rights.
◼ Able to acquire property utilizing mobility
and available capacity by utilizing various
acquisition methods.
AEON MALL Kyoto Gojo
Increase in “Portfolio Quality”
◼ Acquisition of full-scale overseas properties as J-REIT’s first
practice
◼ In Malaysia where AEON Group has more than thirty-year track
records, planning to acquire AEON MALL Seremban2, full-scale-
mall-type RSC (approx. ¥5.2 billion).
Acquisition of full-scale overseas properties as J-
REIT’s first practiceAEON MALL Seremban2
Appendix2Supplement
Balance Sheet for the 12th Fiscal Period (as of January 31, 2019)
50
11th PeriodAs of July 31, 2018
12th PeriodAs of January 31, 2019
11th PeriodAs of July 31, 2018
12th PeriodAs of January 31, 2019
Amount(thousands of
yen)
Percentage(%)
Amount(thousands of
yen)
Percentage(%)
Amount(thousands of
yen)
Percentage(%)
Amount(thousands of
yen)
Percentage(%)
Assets Liabilities
Current assets 22,947,646 6.3% 18,386,990 5.1% Current liabilities 29,474,267 8.1% 17,294,840 4.8%
Cash and deposits 15,392,040 4.2% 9,504,798 2.6% Operating accounts payable 665,785 0.2% 950,743 0.3%
Cash and deposits in trust 7,093,497 2.0% 7,821,463 2.2% Current portion of long-term loans payable 27,000,000 7.4% 15,600,000 4.3%
Prepaid expenses 444,990 0.1% 592,920 0.2% Accounts payable - other 348,633 0.1% 365,061 0.1%
Income taxes receivable 12 0.0% 15 0.0% Accrued expenses 52,192 0.0% 63,109 0.0%
Consumption taxes receivable - 0.0% 459,376 0.1% Income taxes payable 605 0.0% 605 0.0%
Other 17,105 0.0% 8,417 0.0% Accrued consumption taxes 1,184,456 0.3%-
0.0%
Non-current assets 339,583,837 93.6% 343,656,762 94.9% Provision for loss on disaster 32,558 0.0% 126,859 0.0%
Property and equipment 283,281,269 78.1% 287,395,064 79.3% Other 190,036 0.1% 188,462 0.1%
Land 108,463 0.0% 108,463 0.0% Non-current liabilities 135,330,949 37.3% 146,981,777 40.6%
Buildings in trust, net 161,832,860 44.6% 165,989,732 45.8% Investment corporation bond 6,000,000 1.7% 21,000,000 5.8%
Structures in trust, net 446,948 0.1% 403,486 0.1% Long-term loans payable 117,000,000 32.3% 113,400,000 31.3%
Tools, furniture and fixtures in trust, net
7,571 0.0% 6,766 0.0% Tenant leasehold and security deposits 2,628 0.0% 2,628 0.0%
Land in trust 120,885,426 33.3% 120,885,426 33.4%Tenant leasehold and security deposits in trust
12,328,321 3.4% 12,579,149 3.5%
Construction in progress in trust - -1,188
0.0% Total liabilities 164,805,216 45.4% 164,276,617 45.3%
Intangible assets 49,235,482 13.6% 49,235,482 13.6% Net assets
Leasehold rights in trust 49,235,482 13.6% 49,235,482 13.6% Unitholders’ equity 197,947,907 54.6% 198,019,906 54.7%
Investments and other assets 7,067,085 1.9% 7,026,215 1.9% Unitholders’ capital, net 192,172,327 53.0% 192,172,327 53.0%
Shares of subsidiaries and associates 6,078,453 1.7% 6,078,453 1.7% Unitholders’ capital 195,698,024 53.9% 195,698,024 54.0%
Long-term prepaid expenses 978,170 0.3% 937,301 0.3%Other deduction from unitholders’ capital
△ 3,525,697 △1.0% △ 3,525,697 △1.0%
Lease and guarantee deposits 10,460 0.0% 10,460 0.0% Surplus 5,775,580 1.6% 5,847,579 1.6%
Deferred assets 221,639 0.1% 252,771 0.1% Distribution reserve 520,000 0.1% 520,000 0.1%
Investment unit issuance expenses 152,102 0.0% 83,417 0.0%Unappropriated retained earnings(undisposed loss)
5,255,580 1.4% 5,327,579 1.5%
Investment corporation bond issuance costs
69,537 0.0% 169,353 0.0% Total net assets 197,947,907 54.6% 198,019,906 54.7%
Total assets 362,753,124 100.0% 362,296,524 100.0% Total liabilities and net assets 362,753,124 100.0% 362,296,524 100.0%
Statement of Income for the 12th Fiscal Period (as of January 31, 2019)
51
(Breakdown of revenues and expenses related to real estate leasing business)
(Statements of Income)
11th PeriodAs of July 31, 2018
12th PeriodAs of January 31, 2019
Amount(thousands of yen)
Percentage(%)
Amount(thousands of yen)
Percentage(%)
Operating revenue 16,201,842 100.0% 16,329,586 100.0%
Rent revenue - real estate 16,025,515 98.9% 16,197,957 99.2%
Gain on sale of real estate 35,691 0.2% - -
Dividends received 140,636 0.9% 131,628 0.8%
Operating expenses 10,019,439 61.8% 9,993,899 61.2%
Expenses related to rent business 9,081,776 56.1% 9,068,931 55.5%
(Depreciation) (4,355,394) (26.9%) (4,424,597) (27.1%)
Asset management fee 734,982 4.5% 752,486 4.6%
Asset custody fee 18,728 0.1% 18,915 0.1%
Administrative service fees 56,438 0.3% 56,176 0.3%
Directors’ compensation 3,600 0.0% 3,600 0.0%
Taxes and dues 19,003 0.1% 6,617 0.0%
Other operating expenses 104,909 0.6% 87,172 0.5%
Operating income 6,182,403 38.2% 6,335,687 38.8%
Non-operating income 1,315 0.0% 1,478 0.0%
Interest income 84 0.0% 100 0.0%
Refund of unpaid distributions 1,134 0.0% 1,377 0.0%
Other 96 0.0% - -
Non-operating expenses 886,561 5.5% 888,637 5.4%
Interest expenses 570,881 3.5% 549,357 3.4%
Interest expenses on investment corporation bonds 24,619 0.2% 42,915 0.3%
Amortization of investment unit issuance expenses 68,684 0.4% 68,684 0.4%
Amortization of investment corporation bond issuance costs
3,621 0.0% 5,375 0.0%
Investment corporation bond issuance costs - - 19,714 0.1%
Borrowing related expenses 218,626 1.3% 202,275 1.2%
Other 127 0.0% 315 0.0%
Ordinary income 5,297,156 32.7% 5,448,528 33.4%
Extraordinary income - - 152,758 0.9%
Insurance income - - 152,758 0.0%
Extraordinary losses 37,459 0.2% 274,845 1.7%
Loss on disaster 4,900 0.0% 147,986 0.9%
Provision for loss on disaster 32,558 0.2% 126,859 0.8%
Income (loss) before income taxes 5,259,697 32.5% 5,326,441 32.6%
Income taxes - current 5,349 0.0% 605 0.0%
Total income taxes 5,349 0.0% 605 0.0%
Net income (loss) 5,254,348 32.4% 5,325,836 32.6%
Retained earnings brought forward 1,231 0.0% 1,742 0.0%
Unappropriated retained earnings (undisposed loss) 5,255,580 32.4% 5,327,579 32.6%
11th PeriodAs of July 31, 2018
12th PeriodAs of January 31, 2019
Amount(thousands of
yen)
Percentage(%)
Amount(thousands of
yen)
Percentage
(%)
Rent revenue–real estate16,025,515
100.0%16,197,957
100.0%
Rent15,951,087
99.5%16,117,260
99.5%
Other rent revenue–real estate74,427
0.5%80,697
0.5%
Expenses related to real estate leasing business9,081,776
56.7%9,068,931
56.0%
Property and facility management fees 43,192
0.3%42,846
0.3%
Repairs and maintenance expenses550,088
3.4%532,102
3.3%
Insurance expenses149,235
0.9%155,278
1.0%
Trust fees20,702
0.1%20,708
0.1%
Land rent paid2,048,376
12.8%2,020,929
12.5%
Taxes and dues1,862,128
11.6%1,818,691
11.2%
Depreciation4,355,394
27.2%4,424,597
27.3%
Water charges49,238
0.3%51,835
0.3%
Other expenses related to rent business 3,419
0.0%1,941
0.0%
NOI11,299,133
-11,553,623
-
Rent revenue–real estate(+)16,025,515
-16,197,957
-
Expenses related to real estate leasing business(▲)
▲ 9,081,776 - ▲ 9,068,931 -
Depreciation (+)4,355,394
-4,424,597
-
Portfolio①
52
No. Region Property Name Location Acquisition DateTotal Leasable
Area(㎡)
Acquisition Price(millions of yen)
Book Value at the end of period(millions of yen)
Appraisal value(Note1)
(millions of yen)
Unrealized Profit&Loss(Note2)
(millions of yen)
PML value(Note3)
(%)
1Hokkaido/
TohokuAEON MALL Sapporo-Hiraoka Sapporo City, Hokkaido February, 2015 78,360.81 5,900 5,397 6,340 942 3.5%
2Hokkaido/
TohokuAEON MALL Kushiro-Showa Kushiro City, Hokkaido February, 2015 51,763.05 1,780 1,751 1,930 178 7.0%
3Hokkaido/
TohokuAEON MALL Tomakomai Tomakomai City, Hokkaido September, 2016 71,308.33 7,840 7,598 8,220 621 2.9%
4Hokkaido/
TohokuAEON MALL Morioka Morioka City, Iwate Pref. November, 2013 98,968.59 5,340 5,456 6,720 1,263 11.1%
5Hokkaido/
TohokuAEON MALL Ishinomaki Ishinomaki City,Miyagi Pref. November, 2013 60,682.20 6,680 6,085 7,080 994 3.9%
6Hokkaido/
TohokuAEON MALL Rifu Miyagi County, Miyagi Pref. February, 2015 66,478.91 2,560 2,326 2,770 443 6.9%
7Hokkaido/
TohokuAEON MALL Yamagata-Minami Yamagata City, Yamagata Pref. February, 2015 53,502.94 1,350 1,324 1,470 145 6.2%
8 Kanto AEON MALL Mitouchihara(Note 4) Mito City, Ibaraki Pref. November, 2013 159,997.49 16,565 14,527 17,413 2,885 0.7%
9 Kanto AEON MALL Tsuchiura Tsuchiura City, Ibaraki Pref. February, 2016 86,848.51 12,030 11,541 12,400 858 1.0%
10 Kanto AEON MALL Shimotsuma Shimotsuma City, Ibaraki Pref. September, 2017 58,402.66 9,552 9,300 9,820 519 2.7%
11 Kanto AEON MALL Oyama Oyama City, Tochigi Pref. August, 2016 47,872.33 6,280 5,936 6,450 513 4.5%
12 Kanto AEON MALL Ota Ota City, Gunma Pref. November, 2013 93,165.27 6,860 5,991 8,060 2,068 4.8%
13 Kanto AEON LakeTown mori(Note 5) Koshigaya City, Saitama Pref. November, 2013 205,711.70 21,190 19,185 23,800 4,614 2.0%
14 Kanto AEON LakeTown kaze(Note 5) Koshigaya City, Saitama Pref. November, 2013 127,183.81 6,730 6,055 7,880 1,824 1.7%
15 Kanto AEON MALL Chiba-Newtown Inzai City, Chiba Pref. March, 2016 107,425.97 12,190 11,794 12,400 605 2.7%
16 Kanto AEON STYLE Kemigawahama Chiba City, Chiba Pref November, 2017 29,947.62 3,748 3,636 3,860 223 2.6%
17 Kanto AEON Sagamihara Shopping Center Sagamihara City, Kanagawa Pref. November, 2013 75,056.62 10,220 9,804 11,000 1,195 13.4%
18 Kanto AEON Chigasaki-Chuo Shopping CenterChigasaki City, Kanagawa Pref. May, 2016 63,158.24 6,410 6,381 6,590 208 14.8%
19 Kanto Daiei-Kawasaki Process Center Kawasaki City, Kanagawa Pref. February, 2016 59,265.77 14,280 13,932 15,100 1,167 3.7%
20Tokai/Hokuri
ku/Chubu
AEON MALL Kahoku Kahoku City, Ishikawa Pref. February, 2016 70,948.14 9,940 9,314 10,600 1,285 11.4%
21Tokai/Hokuri
ku/Chubu
AEON MALL Kofu Showa(Note 6) Nakakoma County, Yamanashi Pref. February, 2016 99,772.38 15,489 15,743 17,300 1,556 2.5%、3.1%
22Tokai/Hokuri
ku/Chubu
AEON MALL Ogaki Ogaki City, Gifu Pref. November, 2013 64,246.26 4,950 3,845 4,960 1,114 9.2%
23Tokai/Hokuri
ku/Chubu
AEON MALL Suzuka Suzuka City, Mie Pref. November, 2013 125,253.74 9,660 9,321 10,100 778 7.5%
24Tokai/Hokuri
ku/Chubu
AEON MALL Meiwa Taki County, Mie Pref. November, 2013 44,193.80 3,290 3,181 3,650 468 4.6%
25Tokai/Hokuri
ku/Chubu
AEON MALL Yokkaichi-Kita Yokkaichi City, Mie Pref. February, 2015 41,447.33 2,210 2,209 2,630 420 6.0%
26Tokai/Hokuri
ku/Chubu
AEON MALL KYOTO Kyoto City, Kyoto Pref. February, 2015 136,468.45 21,470 20,276 22,500 2,223 13.5%
27Tokai/Hokuri
ku/Chubu
AEON Mall Kyoto Gojo Kyoto City, Kyoto Pref. July, 2018 86,984.79 13,333 13,369 13,600 230 11.6%
Portfolio②
53
No. Region Property Name Location Acquisition DateTotal Leasable
Area(㎡)
Acquisition Price(millions of yen)
Book Value at the end of period(millions of yen)
Appraisal value(Note1)
(millions of yen)
Unrealized Profit&Loss(Note2)
(millions of yen)
PML value(Note3)
(%)
28Tokai/Hokuriku/
ChubuAEON Minami-Osaka RDC Sakai City, Osaka Pref. February, 2017 50,197.06 9,870 9,716 10,600 883 12.5%
29Tokai/Hokuriku/
ChubuAEON Kireuriwari Shopping Center
Osaka City, Osaka Pref. September, 2017 27,603.46 4,394 4,434 4,640 205 9.3%
30Tokai/Hokuriku/
ChubuDaiei-Ibaraki Process Center Ibaraki City, Osaka Pref. October, 2017 50,783.58 6,810 6,854 7,290 435 12.6%
31Tokai/Hokuriku/
ChubuAEON MALL Kasai-Hojo Kasai City, Hyogo Pref. November, 2013 48,229.25 7,230 6,235 7,610 1,374 10.7%
32Tokai/Hokuriku/
ChubuAEON MALL Itamikoya Itami City, Hyogo Pref. February, 2016 122,944.71 16,860 16,364 17,600 1,235 1.8%
33Tokai/Hokuriku/
ChubuAEON MALL Yamatokoriyama Yamatokoriyama City, Nara Pref. February, 2016 105,230.88 14,500 13,631 14,800 1,168 12.0%
34Tokai/Hokuriku/
ChubuAEON MALL Hiezu Saihaku County, Tottori Pref. November, 2013 102,045.24 7,780 7,024 8,310 1,285 8.0%
35Tokai/Hokuriku/
ChubuAEON MALL Kurashiki Kurashiki City, Okayama Pref. November, 2013 157,274.78 17,890 16,553 19,700 3,146 0.5%
36Tokai/Hokuriku/
ChubuAEON MALL Ayagawa Ayauta County, Kagawa Pref. November, 2013 113,149.07 8,740 7,016 8,710 1,693 0.6%
37 Kyushu/Okinawa AEON MALL Nogata(Note7) Nogata City, Fukuoka Pref. November, 2013 151,969.51 11,246 9,888 13,300 3,411 0.1%
38 Kyushu/Okinawa AEON MALL Kagoshima Kagoshima City, Kagoshima Pref. February, 2016 132,341.35 13,400 12,975 13,900 924 6.1%
39 Overseas AEON Taman Universiti(Note8) Johor, Malaysia June, 2014 22,870.00658
(20millions of RM)645
(19millions of RM)567
(21mililions of RM)△77
(1miliions of RM)0.8%
40 Overseas AEON MALL SEREMBAN 2 Negeri Sembilan, Malaysia September, 2016 81,135.005,252
(215millions of RM)-
6,211(233millions of RM)
- 4.0%
Grand total (as of January 31, 2019 with 40 properties)
3,430,189.60 362,478 - 387,882 45,039 1.5%
(Note 1) The valuation date of the Appraisal value is January 31, 2019. (Note 2) Unrealized profit (loss) = Appraisal value − Book value at end of period(Note 3) Each property undergoes a seismic risk analysis to forecast the loss rate related to damage from the recurrence of an earthquake during a 475 year period. The number for Domestic Subtotal is not an average, but rather the PML value for the whole
domestic portfolio. (Note 4) Acquisition price, Book value at end of period, Appraisal value and Unrealized profit (loss) include a real estate portion (adjacent land portion that was additionally acquired on April 28, 2015).(Note 5) Acquisition price, Book value at end of period, Appraisal value and Unrealized profit (loss) describe AEON REIT’s pro-rata portion of the quasi-co-ownership interest (jun kyōyū-mochibun) in the trust beneficiary rights (40% for each property).(Note 6) Acquisition price, Book value at end of period, Appraisal value and Unrealized profit (loss) include a real estate portion (The Extended Building that was additionally acquired on September 3, 2018).
PML of the existing building and the extended building of AEON MALL Kofu Showa is 2.5%, 3.1%, respectively.(Note 7) Acquisition price of AEON MALL Nogata has decreased because of transfer of land.(Note 8) Acquisition price, Book value at end of period, Appraisal value and Unrealized profit (loss) describe AEON REIT’s portion of the amount equivalent to the rights (18.18%) similar to the co-ownership interest (kyōyū-mochibun) of the trust property for
which the rights were transferred from AEON CO. (M) BHD., which holds the whole property.
Appraisal Value for the 40 Properties held in 12th fiscal period
54
Propertynumber
Property name Appraisal agencyAcquisition price(Millions of yen)
Appraisal value (Millions of yen)Capitalization Rate based on direct capitalization
method (%)11th Period
(July 31, 2018)12th Period
(Jun 31, 2019)Difference
11th Period(July 31, 2018)
12th Period(Jun 31, 2019)
Difference
SRSC-1 AEON LakeTown mori (Note1) The Tanizawa Sōgō Appraisal Co., Ltd. 21,190 23,800 23,800 0 4.8 4.8 0.0
SRSC-2 AEON LakeTown kaze (Note1) The Tanizawa Sōgō Appraisal Co., Ltd. 6,730 7,880 7,880 0 5.2 5.2 0.0
RSC-1 AEON MALL Morioka Japan Real Estate Institute 5,340 6,720 6,720 0 6.6 6.6 0.0
RSC-2 AEON MALL Ishinomaki Japan Real Estate Institute 6,680 7,080 7,080 0 6.2 6.2 0.0
RSC-3AEON MALL Mitouchihara Japan Real Estate Institute 16,460 17,300 17,300 0 6.0 6.0 0.0
AEON MALL Mitouchihara (Land) Japan Real Estate Institute 105 113 113 0 - - -
RSC-4 AEON MALL Ota Japan Real Estate Institute 6,860 8,060 8,060 0 6.4 6.4 0.0
RSC-5 AEON Sagamihara Shopping Center Japan Real Estate Institute 10,220 11,000 11,000 0 5.2 5.2 0.0
RSC-6 AEON MALL Ogaki Japan Real Estate Institute 4,950 4,960 4,960 0 7.0 7.0 0.0
RSC-7 AEON MALL Suzuka Japan Real Estate Institute 9,660 10,600 10,100 ▲ 500 6.2 6.2 0.0
RSC-8 AEON MALL Meiwa The Tanizawa Sōgō Appraisal Co., Ltd. 3,290 3,660 3,650 ▲ 10 6.5 6.5 0.0
RSC-9 AEON MALL Kasai-Hojo Japan Real Estate Institute 7,230 7,690 7,610 ▲ 80 6.8 6.8 0.0
RSC-10 AEON MALL Hiezu Japan Real Estate Institute 7,780 8,500 8,310 ▲ 190 6.8 6.8 0.0
RSC-11 AEON MALL Kurashiki Japan Real Estate Institute 17,890 19,700 19,700 0 6.0 6.0 0.0
RSC-12 AEON MALL Ayagawa Japan Real Estate Institute 8,740 8,720 8,710 ▲ 10 6.5 6.5 0.0
RSC-13 AEON MALL Nogata Japan Real Estate Institute 11,246 13,200 13,300 100 6.4 6.4 0.0
RSC-15 AEON MALL KYOTO Japan Real Estate Institute 21,470 22,500 22,500 0 4.8 4.8 0.0
RSC-16 AEON MALL Sapporo-Hiraoka The Tanizawa Sōgō Appraisal Co., Ltd. 5,900 6,340 6,340 0 6.2 6.2 0.0
RSC-17 AEON MALL Kushiro-Showa The Tanizawa Sōgō Appraisal Co., Ltd. 1,780 1,930 1,930 0 6.8 6.8 0.0
RSC-18 AEON MALL Rifu The Tanizawa Sōgō Appraisal Co., Ltd. 2,560 2,770 2,770 0 6.4 6.4 0.0
RSC-19 AEON MALL Yamagata-Minami The Tanizawa Sōgō Appraisal Co., Ltd. 1,350 1,470 1,470 0 6.6 6.6 0.0
RSC-20 AEON MALL Yokkaichi-Kita The Tanizawa Sōgō Appraisal Co., Ltd. 2,210 2,630 2,630 0 6.2 6.2 0.0
RSC-21 AEON MALL Yamatokoriyama Japan Real Estate Institute 14,500 14,800 14,800 0 5.6 5.6 0.0
RSC-22 AEON MALL Chiba-Newtown Japan Real Estate Institute 12,190 12,400 12,400 0 4.9 4.9 0.0
RSC-23 AEON MALL Kofu Showa(note2) Japan Real Estate Institute 15,489 17,300 17,300 0 5.7 5.7 0.0
RSC-24 AEON MALL Tomakomai The Tanizawa Sōgō Appraisal Co., Ltd. 7,840 8,220 8,220 0 5.9 5.9 0.0
RSC-25 AEON MALL Oyama Japan Real Estate Institute 6,280 6,430 6,450 20 6.7 6.7 0.0
RSC-26 AEON MALL Itamikoya Japan Real Estate Institute 16,860 17,600 17,600 0 5.6 5.6 0.0
RSC-27 AEON MALL Kagoshima The Tanizawa Sōgō Appraisal Co., Ltd. 13,400 13,900 13,900 0 6.0 6.0 0.0
RSC-28 AEON MALL Tsuchiura Japan Real Estate Institute 12,030 12,400 12,400 0 6.3 6.3 0.0
RSC-29 AEON MALL Kahoku Japan Real Estate Institute 9,940 10,600 10,600 0 6.9 6.9 0.0
RSC-30 AEON MALL Shimotsuma Japan Real Estate Institute 9,552 9,820 9,820 0 6.4 6.4 0.0
RSC-31 AEON MALL Kyoto Gojo The Tanizawa Sōgō Appraisal Co., Ltd. 13,333 13,600 13,600 0 4.9 4.9 -
CSC-1 AEON Chigasaki-Chuo Shopping Center Japan Real Estate Institute 6,410 6,570 6,590 20 5.0 5.0 0.0
CSC-2 AEON STYLE Kemigawahama Japan Real Estate Institute 3,748 3,860 3,860 0 6.2 6.2 0.0
CSC-3 AEON KireuriwariShopping Center The Tanizawa Sōgō Appraisal Co., Ltd. 4,394 4,640 4,640 0 5.2 5.2 0.0
L-1 Daiei-Kawasaki Process Center Japan Real Estate Institute 14,280 15,000 15,100 100 4.9 4.9 0.0
L-2 AEON Minami-Osaka RDC Japan Real Estate Institute 9,870 10,300 10,600 300 4.9 4.8 ▲ 0.1
L-3 Daiei-Ibaraki Process Center Japan Real Estate Institute 6,810 7,140 7,290 150 5.1 5.0 ▲ 0.1
M-1 AEON Taman Universiti Shopping Centre (Note2) Japan Real Estate Institute658
(20百万RM)588
(21.5百万RM)567
(21.3百万RM)- - - -
M-2 AEON MALL Seremban2 (Note3) Japan Real Estate Institute5,252
(215百万RM)6,374
(233百万RM)6,211
(233百万RM)- - - -
TOTAL 362,478 388,166 387,882 - - - -
(Note 1) For AEON LakeTown mori and AEON LakeTown kaze, their appraisal values, price based on direct capitalization method, price based on DCF method, and NOI describe the Investment Corporation’s pro-rata portion of the quasi-co-ownership interest (jun kyōyū-mochibun) in the beneficiary rights of real estate in trust (40% for each property).
(Note 2) The appraisal value of AEON MALL Kofu Showa at the end of 11th period is based on the total appraisal value of the existing building and the extended building of AEON MALL Kofu as of August 1, 2018.(Note 3) Pursuant to the local appraisal methodology, we entrusted the evaluation of the appraisal value of the property to Japan Real Estate Institute. Appraisal value represents the amount equivalent to the Investment Corporation’s pro-rata portion of the
rights (18.18%) similar to the co-ownership right (kyōyū-mochibun) of the trust property pertaining to the trust of the beneficiary rights of real estate in trust. In addition, the amount in Malaysian Ringgit was converted to Japanese yen based on the exchange rate as of the end of the fiscal period (July 31, 2018; 1 RM = ¥27.36, January 31, 2019; 1RM = ¥26.66; rounded down to the nearest 100th).
(Note 4) The amount in Malaysian Ringgit was converted to Japanese yen based on the exchange rate as of the end of the fiscal period (July 31, 2018; 1 RM = ¥27.36,January 31, 2019; 1RM = ¥26.66 ; rounded down to the nearest 100th).
4.00
4.50
5.00
5.50
6.00
6.50
7.00
3rd Fiscal Period
(July 2014)
4th Fiscal Period
(January 2015)
5th Fiscal Period
(July 2015)
6th Fiscal Period
(January 2016)
7th Fiscal Period
(July 2016)
8th Fiscal Period
(January 2017)
9th Fiscal Period
(July 2017)
10th Fiscal Period
(January 2018)
11th Fiscal Period
(July 2018)
12th Fiscal Period
(Junuary 2019)
500 thousand or more less than 500 thousand
55
Average cap rate of portfolio(Note)
(%)
(%)
Average cap rate of portfolio of in area-wise(Note)
(%)
Average cap rate of portfolio for Trade-Area Population within 10km(Note)
Average cap rate of Portfolio
(Note) ・Average cap rate is calculated excluding Malaysian properties whose return yield by direct capitalization method is not calculated.・“The three largest cities” indicates the Metropolitan, Chubu and Kinki areas, i.e. Metropolitan area covers Tokyo, Kanagawa, Saitama and Chiba pref., Chubu area covers Aichi, Gifu and Mie pref. and Kinki covers Osaka, Kyoto, Hyogo, Nara and Shiga pref. in each.・“Trade-Area Population within 10km” is calculated excluding Daiei-Kawasaki PC , AEON Minami-Osaka RDC and Daiei-Ibaraki PC.
4.00
4.50
5.00
5.50
6.00
6.50
7.00
3rd Fiscal Period
(July 2014)
4th Fiscal
Period(January
2015)
5th Fiscal Period
(July 2015)
6th Fiscal
Period(January
2016)
7th Fiscal Period
(July 2016)
8th Fiscal Period
(January 2017)
9th Fiscal Period
(July 2017)
10th Fiscal Period
(January 2018)
11th Fiscal Period
(July 2018)
12th Fiscal Period
(January 2019)
three largest cities others
5.5
5.6
5.7
5.8
5.9
6.0
6.1
6.2
6.3
3rd Fiscal Period
(July 2014)
4th Fiscal Period
(January 2015)
5th Fiscal Period
(July 2015)
6th Fiscal Period
(January 2016)
7th Fiscal Period
(July 2016)
8th Fiscal Period
(January 2017)
9th Fiscal Period
(July 2017)
10th Fiscal Period
(January 2018)
11th Fiscal Period
(July 2018)
12th Fiscal Period
(January 2019)
KYOTO
レイクタウンmori
倉敷
伊丹昆陽
水戸内原
甲府昭和
大和郡山
川崎PC
鹿児島
京都五条
その他
Portfolio PML and Earthquake Insurance
56
⚫ Promote portfolio diversification (size per property and property locations)
⚫ Consider purchasing earthquake insurance for individual properties whose PML(Note) exceeds 15%. Manage the portfolio to prevent its PML from exceeding 10%.
⚫ Ensure available financing capacity and funds in hand for contingencies through conservative LTV management and cash flow generated by depreciation expenses.
PML(%)
Probable Maximum Loss
Domestic portfolio PML 38 properties 1.5 % Approx. ¥5.0 billion
*1. Earthquake risk assessment report (Tokio Marine & Nichido Risk Consulting Co., Ltd.)*2. The expected maximum amount of loss calculated by multiplying the sum total of replacement costs of the properties (the amount required for constructing new equivalent buildings) by the portfolio PML
(Note)The probable maximum loss (PML) indicates a loss from a very rare, massive earthquake that strikes once in 475 years as a percentage of a building’s price.
⚫ AEON examines the effect on distributions and cost effectiveness of the insurance premiums based on the maximum loss estimated from the domestic portfolio PML and acquires earthquake insurance coverage.
Diversification of property locations (23 prefectures in Japan)
Investment ratio (top 10 properties) 5.9%
5.8%
4.9%
4.7%
4.6%
4.3%
4.0%
3.9%
3.7%
3.7%
54.5%
10.5%
9.6%
8.5%
7.7%
6.6%
5.8%
4.9%
4.4%
4.3%
4.2%
33.3%
Conventional policy against earthquake risk
Status of earthquake risk in the current portfolio
Use of earthquake insurance茨城県
京都府
神奈川県
埼玉県
兵庫県
大阪府
岡山県
千葉県
北海道
山梨県
その他
Properties insured Properties held in Japan
38 properties
Maximum payment (deductible: ¥100 million)
¥3.0 billion
Premiums (annual) ¥150 million
KYOTO
Lake Town mori
Kurashiki
Itamikoya
Mitouchihara
Kofu Showa
Yamatokoriyama
Kawasaki PC
Kagoshima
Kyoto Gojo
Other
Ibaraki
Kyoto
Kanagawa
Saitama
Hyogo
Osaka
Okayama
Chiba
Hokkaido
Yamanashi
Other
13 15 47 50
110 113 149
196 217
291 298
3rd Period 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period 13th Period
(Forecast)
Result of Internal Growth
Achieved increases in medium- and long-term rents by making investments for revitalization.
57
(Millions of yen)
(Note 3)The scope is limited to the properties which Aeon Reit owned at the end of July 2018.
Major cases of Investments in Revitalization with increase in rent after Feb. 2018
Cumulative amount of annualized rent increase as a result of investments in revitalization projects (note3)
PropertyRent increase (scheduled)
monthRevitalization project
Project cost (millions of yen)
(Note 1)
Effect of revitalization(per annum)
Rent increase(millions of yen)
Rent increase as a percentage of project cost (%)
AEON MALL Nogata(Note2) February 2018 Conversion of lighting to LEDs 69 6.9 10.0
AEON MALL Hiezu July 2018 Large scale renewal 73 6.1 8.4
AEON MALL Nogata(Note2) August 2018 Conversion of lighting to LEDs 71 7.1 10.0
AEON MALL Kurashiki August 2018 Renewal of food sales area 82 6.1 7.5
AEON MALL Kofu showa September 2018 the revitalization of the existing building 781 50.7 6.5
AEON MALL Kurashiki December 2018Installation of a new exit and entrance
on the north side of the mall44 3.1 7.0
AEON MALL Suzuka March 2019 Connection to public sewerage 88 6.4 7.3
(Note1) “Projected cost of investments in revitalization” indicates construction cost in order to improve the value of the properties operated.
(Note2) Rent has been increased for 10 years.
20.1 19.6 19.621.0 20.1 19.8 19.5
21.320.3 20.1 19.7
0.0
5.0
10.0
15.0
20.0
25.0
Mar–May
2016
Jun–Aug
2016
Sep–Nov
2016
Dec 2016–
Feb 2017
Mar–May
2017
Jun–Aug
2017
Sep–Nov
2017
Dec 2017–
Feb 2018
Mar–May
2018
Jun–Aug
2018
Sep–Nov
2018
Performance of Properties in Portfolio
58
Sales Trends of individual Properties for June 2018 - November 2018
Rent Revenues at Master Lease Companies of 34 Retail Domestic Properties in Portfolio
Mar. 2016–Feb. 2017
(12-month period) ¥80.4billion
Mar. 2017–Feb. 2018
(12-month period) ¥80.7billion
0 0
22
92 1
YoY sales index Less than 90%90%
~95%95%
~100%100%
~105%105%
~110%More than 110%
% of total 0% 0% 64.7% 26.5% 5.9% 2.9%
Notes)1. Sales of each property for June 2018 – November 2018 are expressed as a percentage of sales for the same period a year earlier (June 2017 – November 2017 ).2. The year-on-year sales index above presents data based on interviews of master lease companies. AEON STYLE Kemigawahama ,AEON REIT acquired on November 30, 2017 , does not include.3. The figures in the year-on-year sales index above have been rounded to the nearest hundredh of a percent. As a result, the total amount may not always total 100.0%.
(Note 1)Revenue such as rent income and income incidental thereto received by the master lease company from end tenant. And, AEON STYLE Kemigawahama ,AEON REIT acquired on November 30, 2017 , does not include.(Note 2)The rent revenue figures above are data based on interviews of master lease companies.
(Billions of yen)
7th period 8th period 9th period 10th period 11th period 12th period
(July 31, 2017) (January 31, 2017) (July 31, 2017) (January 31, 2018) (July 31, 2018) (January 31, 2019)
Short-term loans payable ¥0million ¥1,500million ¥1,500million ¥0million ¥0million ¥0million
Long-term loans payable ¥98,900million ¥113,300million ¥143,000million ¥144,000million ¥144,000million ¥129,000million
Investment Corporation bonds ¥2,000million ¥4,000million ¥4,000million ¥6,000million ¥6,000million ¥21,000million
Tenant leasehold and security deposits
¥10,169million ¥10,449million ¥12,474million ¥12,916million ¥12,330million ¥12,581million
Total debt ¥111,069million ¥134,904million ¥162,683million ¥164,621million ¥164,805million ¥164,276million
LTV (including leasehold deposits)
42.8% 46.4% 46.7% 44.9% 44.7% 44.9%
LTV (excluding leasehold deposits)
38.9% 42.7% 43.0% 41.4% 41.4% 41.4%
Long-term debt ratio 100.0% 98.7% 99.0% 100.0% 100.0% 100.0%
Fixed interest rate ratio 88.4% 96.5% 92.9% 95.7% 95.7% 95.7%
Average remaining borrowed period
4.1 year 4.7 year 4.4 year 4.2 year 3.7 year 4.6 year
Average interest rate on borrowings
0.85% 0.84% 0.79% 0.80% 0.80% 0.78%
Financial Management
59
Debt Snapshot
60
(Note 1) Refers to the Japanese yen TIBOR released by the Japanese Bankers Association; provided, however, that if there is no corresponding time period, it refers to the interest rate reasonably set by the agent by the straight-line method.(Note 2) While funds are borrowed at floating rates, the interest rates are fixed in effect by entering into interest rate swap agreements to hedge interest rate fluctuation risk. The figures are the interest rates calculated after taking into consideration the effect of interest rate swaps.
2. Investment Corporation BondsDate of
Determining Conditions
Serial Number
Interest Rate Amount Issued Maturity Date Term DescriptionRating
Pricing Standard Lead ManagerJCR
October 6, 2015 1 0.961 % ¥2.0 billion October 10, 2025 10 years Without collateral or guarantee AA- Spread from JGBDaiwa Securities Co., Ltd.SMBC Nikko Securities Inc.
October 13, 2016 2 0.470 % ¥1.0 billion October 20, 2026 10 years Without collateral or guarantee AA- Interest rate
SMBC Nikko Securities Inc.Mizuho Securities Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
October 13, 2016 3 1.200 % ¥1.0 billion October 20, 2036 10 years Without collateral or guarantee AA- Interest rate
SMBC Nikko Securities Inc.Mizuho Securities Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
November 28, 2017 4 0.680 % ¥2.0 billion December 8, 2027 10 years Without collateral or guarantee AA- Interest rateSMBC Nikko Securities Inc.Mizuho Securities Co., Ltd.Daiwa Securities Co., Ltd.
November 16, 2018 5 0.783% ¥15.0 billion December 7, 2028 10 years Without collateral or guarantee AA- Spread from JGBSMBC Nikko Securities Inc.Mizuho Securities Co., Ltd.Daiwa Securities Co., Ltd.
1. Borrowings
Borrowing Date TermBorrowing Amount
MaturityFloating rate/
Fixed rate Interest rate
Breakup
Existing Borrowings
November 25, 2013 Long-term ¥27.0bn¥22.0bn October 20, 2020 Effective fixed rate (Note 2) 1.17250%
¥5.0bn October 20, 2023 Effective fixed rate (Note 2) 1.76375%
February 27, 2015 Long-term ¥9.7bn
¥1.2bn October 21, 2019 Effective fixed rate (Note 2) 0.61910%
¥4.0bn October 20, 2021 Effective fixed rate (Note 2) 0.88915%
¥4.5bn October 21, 2024 Effective fixed rate (Note 2) 1.40390%
February 29, 2016
Long-term ¥23.5bn
¥4.1bn October 21, 2019 Effective fixed rate (Note 2) 0.14750%
March 29, 2016¥6.0bn October 20, 2021 Effective fixed rate (Note 2) 0.35125%
¥5.8bn October 20, 2022 Effective fixed rate (Note 2) 0.54100%
May 31, 2016 ¥6.6bn October 20, 2025 Effective fixed rate (Note 2) 0.99100%
February 29, 2016 ¥1.0bn October 20, 2027 Effective fixed rate (Note 2) 1.40730%
October 20, 2016 Long-term ¥23.4bn
¥3.9bn October 21, 2019 Effective fixed rate (Note 2) 0.23700%
¥4.8bn October 20, 2022 Effective fixed rate (Note 2) 0.48750%
¥1.2bn October 20, 2022 Fixed rate 0.55000%
¥6.7bn October 20, 2023 Effective fixed rate (Note 2) 0.61375%
¥2.7bn October 20, 2025 Effective fixed rate (Note 2) 0.87250%
¥4.1bn October 20, 2026 Effective fixed rate (Note 2) 1.00300%
March 28, 2017 Long-term ¥29.7bn
¥6.4bn October 21, 2019 Floating base rate(Note 1) +0.22%
¥6.1bn October 20, 2021 Effective fixed rate (Note 2) 0.43200%
¥5.2bn October 20, 2022 Effective fixed rate (Note 2) 0.52800%
¥0.2bn October 20, 2022 Fixed rate 0.63000%
¥6.8bn October 21, 2024 Effective fixed rate (Note 2) 0.83800%
¥5.0bn October 20, 2026 Effective fixed rate (Note 2) 1.09710%
December 27, 2017 Long-term ¥3.7bn¥3.4bn October 20, 2023 Effective fixed rate (Note 2) 0.52270%
¥0.3bn October 20, 2023 Fixed rate 0.60000%
NewBorrowings
November 22, 2018 Long-term ¥12.0bn
¥3.0bn October 20, 2021 Effective fixed rate (Note 2) 0.37850%
¥4.6bn October 20, 2023 Effective fixed rate (Note 2) 0.59700%
¥0.4bn October 20, 2023 Fixed rate 0.64000%
¥4.0bn October 20, 2025 Effective fixed rate (Note 2) 0.85100%
Many Choices of Financing Methods According to Investment Unit Prices
Financing efforts in a way that contributes to an increase in distribution per unit and total market value.
Follow-on
offerings
Policy for financing means
With the goal of achieving continuous growth in distributions and market value, AEON REIT will adopt optimal financing means at each point in time, factoring in assets to be acquired and market conditions.
Hybrid financing
Loan-based
financing
Investment
corporation bonds
Investment unit price levels
Profitability of properties to be acquired in future
DPU growth
Consider implementation as a new financing method
Utilize cash generating skills
Balance between LTV and DPU
Points to be factored inMethod
Interest conditions
LTV levels
Balance between long-term fixed loans and financing cost
Utilize derivatives (interest swaps)
Investment corporation bonds for the wholesale market
Investment corporation bonds for individual investors
Follow-on
offerings
Hybrid(Subordinated
bonds/loans)
Debt
financing
Consider implementation by leveraging borrowings and funds on hand with priority given to the improvement of profitability through property acquisition.
Consider implementing unit buy-backs if sufficient capital surpluses are available and the measure is considered very effective.
Consider financing by combining follow-on offerings and borrowings while at the same time taking the dilution of distributions per unit into consideration, from the perspective of the profitability of properties to be acquired.
Consider financing mainly through public offerings whose possibility of a successful premium capital increase is strong.
A level at which urban-type and recently built properties, among other properties, whose cap rates are relatively low, can be considered as acquisition targets.
61
0
5
10
15
20
25
30
35
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
E
20
19
E
20
20
E
20
21
E
20
22
E
20
23
E
Summary of Malaysian Economy
62
(Millions of people)
Changes in GDP growth rate in Japan & Malaysia
Population growth in Malaysia (estimated figures for FY2018 onwards) Monthly trends of RM / Yen
(yen)
FTSE Bursa Malaysia KLCI Index trends
20
25
30
35
40
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
6.8% 5.3%
5.6%
6.3%4.8%
-1.5%
7.4%
5.3%5.5%
4.7%6.0%
5.0%
4.2%
5.9%
2.8%0.4%
0.1%
1.5%
2.2%
1.7%
1.4%
1.7%
-1.1%
-5.4%
4.2%-0.1% 1.5%
1.7%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
real GDP growth rate
(Malaysia)
real GDP growth rate
(Japan)
(Source) THE WORLD BANK DataBank
(Source) International Monetary Fund, World Economic Outlook Database (Source) Bloomberg
(Source) Bloomberg
0
500
1,000
1,500
2,000
0
100
200
300
400
500
600
700
800
900
trading volume closing priceTrading volume(mil RM)
Closing price
Scheme for acquisition of overseas property
63
Overseas SPC Scheme (acquired in September 2016)
Holding a 100% stake
JAMBATAN MANSEIBASHI (M) Sdn Bhd
Capital stock, etc.
approx.239million RM*
(¥ 5,838 billion)Other assetsapprox.24
millionRM*
(¥ 586 million)
Real estate (exclusive of
taxes)215 million
RM*(¥5,252 billion)
AEON REIT Investment Corporation
M-2 AEON MALL SEREMBAN 2
AEON CO. (M) BHD.(master lessee)
Master Lease
Agreement
Declaration-of-Trust Scheme (acquired in June 2014)
全体の18.18%
(6.58億円)
M-1 AEON Taman Universiti
Shopping Centre
Malaysia
Japan
AEON CO. (M) BHD.(beneficiary and master lessee))
AEON REIT Investment Corporation(beneficiary)
Trust beneficiary interests of trust formed by declaration of trust
18.18% of total(¥658 million)Rights to hold in common
Master Lease
Agreement
Declaration-of-trust scheme was utilized to acquire overseas real estate as J-REIT’s first practice in June 2014.
Overseas SPC scheme is utilized to acquire the second overseas real estate as J-REIT’s first practice.
Holding a property
Store operation
Malaysia
Japan
Holding a
property
Store operation
*1RM=24.43JPY (as of September 2016)
Relationship between the Fiscal Year of the Overseas SPC and the Settlement of Accounts of the Investment Corporation (Conceptual Diagram)
64
Overseas real estate acquired by an overseas SPC starts contributing to the full-year revenues of AEON REIT in the settlement for the following fiscal period (X+ 1 period). Although the overseas SPC has full-year accounting terms under the local laws, it is expected to pay interim dividends.
X-1 Period X Period X + 1 Period
Income from beginning of
X+1th
Period to end of X+1th period.
X + 2 Period
AEON REIT Investment Corporation
Overseas SPC
Income from the
acquisition of
property to end of
Xth period
Acquisition of shares in the overseas SPC
Conclusion of the sales
agreement
Establishment of the overseas
SPC
Acquisition of property
Fiscal year-end (SPC)
Announcement of results for
the X-1th fiscal period
Completedacquisition of shares in the overseas SPC
Announcement of results for the Xth fiscal
period
Receipt of interim dividends of the overseas SPC
Marking-to-market of properties
owned by the overseas SPC on
end of Xthperiod
Implementation of interim audit on
SPC
Payment of interim
dividends after the numbers
are fixed by audit
Announcement of results for
the X+1th fiscal period
Receipt of dividends of the overseas
SPC
Marking-to-market of properties owned
by the overseas SPC on
end of X+1th period
Implementation of audit on SPC
Payment of dividends after the numbers
are fixed by audit
Fiscal year-end (SPC)
Currency Hedging Policy for Investment Capital(Overseas SPC Shares) and Dividends
65
Overseas SPC
Overseas SPC
Day A Day B
Currency hedging period
Currency hedging policy for investment capital(when acquiring the Overseas SPC shares)
⚫ Plan to hedge the investment capital (the Overseas SPC shares) by concluding an exchange contract upon acquiring the shares.✓ Conduct currency hedging for acquiring the shares at the exchange rate of
the date when the acquisition is announced, so that there will be no difference between the yen-denominated acquisition price announced upon acquisition and the actual yen-denominated acquisition price
✓ When the acquisition is conducted in the fiscal period following the fiscal period in which the announcement is made, currency hedging shall be arranged by the end of the fiscal period in which the announcement is made, not extended into the following fiscal period, as a rule.
⚫ For the investment capital (the Overseas SPC shares), fix the acquisition price at the exchange rate of the day when the agreement is concluded
End of Xth fiscal period
Acquisition of shares issued by overseas real
estate holding corporation
Receipt of rental income for the Xth fiscal period as
dividends denominated in yen
Conduct audits of the Overseas SPC
for the Xthfiscal period
Currency hedging policy for dividends received from the Overseas SPC
⚫ For dividends received from the Overseas SPC, plan to conduct hedging by concluding an exchange contract as of the end of the fiscal period in order to fix the dividend amount denominated in yen
✓ For share dividends paid by the Overseas SPC, conduct hedging by concluding an exchange contract for the period from the finalization of the dividend amount denominated in ringgit by the Overseas SPC to the receipt of the dividends by AEON REIT
Fixing of dividends for the Xth fiscal
period
Payment of dividends for
the Xthfiscal period
Currency hedging period
Assume conservative exchange rates at the time of drawing up budgets in consideration of exchange rate trends. The exchange rate assumed for forecasts for the 13th period (ending July 31, 2019) and the 14th period (ending January 31, 2020) is ¥24.0(on January 31,
2019: ¥26.66).
Exchange rate assumed for budgeting
Conclusion of purchase agreement on shares
issued by overseas real estate holding corporation
Property acquisition
Payment based on capital increase underwriting
agreement
Receipt of dividends from the Overseas
SPC for the Xth fiscal period
Comparisons between Retail Environments in Japan and the US
66
Japan US
Population(Note 1)
Approx.120 million
Approx.320 million
2.5 times (compared
to Japan)
Number ofLarge Malls
(Note 2)
Approx.3,000
Approx.46,000
2.5 times (compared
to Japan)
Population per one Large Mall
Approx.39,000
Approx.6,000
5.6 times (compared
to US)
Oversupply of retail facilities in the United States compared with the level in Japan The ratio of online stores in Japan is lower than in the United States,
hovering at a 5% level in recent years.
Comparison of the number of retail facilities Comparison of the EC ratio
(Note) Japan’s EC ratio: Graph prepared by the Asset Management Company based on the FY2017 Survey of Infrastructure
Development Status for Data-driven Society in Japan (E-Commerce Market Survey) by the Ministry of Economy, Trade and Industry.
The United States’ EC ratio: Graph prepared by the Asset Management Company based on data issued by the United States Census Bureau.
commercial facilities owned by AEON REIT
US
Core TenantsGMS(food items sales 60%)Large specialty stores / Movie
theater
Department stores/Large specialty stores / Movie
theater
TenantsComposition
Product sales: Approx. 65%、Drinking and eating & services: Approx. 35%
Product sales: Approx. 80%
Location and
means for store
visits
A range of means for store visits
due to shopping areas located
nearby
Store visits mainly by car due to
facilities located in the suburbs
Comparison of retail facility characteristics
(Note)Prepared by the Asset Manager based on Supplementary of 92th Financial Results for FY2017 of AEON Co., Ltd..(Note)Prepared by the Asset Manager based on data of the properties owned by AEON REIT.(Note)Source: ICSC、Office J.K
Image figure
(i) Food product area used by
visitors repeatedly.
(ii) Tenant composition including
time-consuming type facilities such
as a cinema and large food court.
Retail facilities whose frequency of use by local people is high because all of the retail facilities owned sell food products
(iii) Store visits by a range of means such as by public
transportation, car, bicycle or on foot.
(Note1)Population in Japan is as of Septenber 1, 2018(Homepage of Ministry of Internal Affairs and Communications). Population in the US is as of May 2018.(Homepage of US Federal Bureau)
(Note2)Number of Large Malls in Japanis based on Japan Shopping Center Association SC White Paper 2017.Number of Large Malls in the US is based on CoStar, ICSC, Office J.K.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2010 2011 2012 2013 2014 2015 2016 2017
Comparison of the EC ratio between Japan and the United States
US Japan
8.9%
5.8%
AEON REIT received GRESB Real Estate Assessment
• AEON REIT achieved the “Green Star” in three consecutive years AEON MALL ItamikoyaAEONMALL KYOTO AEON MALL Mitouchihara
AEON MALL Kurashiki AEON MALL Morioka AEON MALL Nogata
Activities to Achieve Sustainability ~ Initiatives by AEON REIT~
67
DBJ Green Building Certification
AEON MALL
Yamatokoriyama
Inclusion in the MSCI Japan ESG Select Leaders Index
• Inclusion in the MSCI Japan ESG Select Leaders Index on July 3, 2017
• There are currently six J-REITs included in this index as of Dec.2018.
• In July 2017, the Government Pension Investment Fund (GPIF) selected this index as one of the ESG indices used for passive investment.
Actively implementing construction for environmental protection such as the replacement of air-conditioners and lighting with LED
AEON MALL Nogata
Expects to obtain more than 10 environmental certifications, going forward, and continue to make environmental and social contributions.
Activities to Safety
Investment in the installation of anti-smoke hanging
walls made of inflammable film and construction work
that contributes to reducing damages from
earthquakes
AEON MALL Kagoshima
• Transparent Decision-Making Process • The Corporate Governance Code was established by
the Asset Management Company in March 2016 ahead
of other companies.
• The Sustainability Policy was established in January
2016.
• Companywide initiatives are promoted under the
leadership of the Sustainability Promotion
Subcommittee (Chairman: President & Representative Director).
Certification for CASBEE for Real Estate
PropertyInvestment amount
(millions of yen)
AEON MALL Yamagata-Minami 30
AEON MALL Kagoshima 58
AEON MALL Yokkaichi-Kita 34
PropertyInvestment amount
(millions of yen)
AEON MALL Nogata 220(LED)
AEON MALL Hiezu 37(air-conditioners)
AEON MALL Morioka 30(air-conditioners)
AEON MALLKagoshima
Activities to Environment
✓ A scheme is established to reflect the opinions of
third parties that have no interest in the Group
with respect to stakeholder transactions.
✓ Decisions to be made at meetings of the
Investment Committee and Compliance
Committee require attendance and agreement by
outside experts who shall be third parties.
Asset Manager’s activities
Activities to Achieve Sustainability (AEON Group)
68
Governance
Social
Environment
Establishment of Aeon Sustainability Principles
Inclusion in a range of trackers
AEON’s tree-planting projects
• In FY1991, AEON started tree-planting with
customers in numerous locations around the
world.
• The total number of trees planted so far
reached 11,66mil (as of February 28, 2018).
AEON Carbon-free Vision 2050 Reduction of food waste
Reduce CO2 emissions by 35%
from the level in 2010 by 2030
and achieve zero emissions by
2050 at each store.
AEON's "zero waste” concept
• Dispose of and combust waste through the 3R
approach of “reduce,” “reuse” and “recycle” to
eliminate reclamation.
• Contribute to building a resource-recycling
system in cooperation with AEON’s customers
and other stakeholders.
Activities led by public interest
incorporated foundations
AEON as a regional disaster
control base
Collaboration with local communities
Wellness & Diversity Management
AEON 1% Club Foundation
Established in 1989. Activities that have been conducted for
approximately 30 years.
✓ Its main objectives are the development of the next generation,
the promotion of friendships with foreign countries and the
sustained development of local communities.
✓Major AEON Group companies donate 1% of their pre-tax
profits.
AEON Environmental Foundation
Established in 1990. Activities that have been conducted
for approximately 30 years.
• Exclusive local WAON
cards
• Aeon Happy Yellow Receipt Campaign」
Aiming to raise the AEON Group’s female
manager ratio to 50% by FY2020
AEON CO., LTD.
■ MSCI Japan ESG Select Leaders Index
■ MSCI Japan Empowering Women Index (Select)
■ The Nadeshiko Brand 2018 stocks
AEON Mall Co., Ltd.
■MSCI Japan ESG Select Leaders Index
■MSCI Japan Empowering Women Index (WIN)
■Nadeshiko Brand 2018 stocks
(Only company selected in the real estate industry for the
second consecutive year.)
Unitholder Information
69
Number of Unitholders and Number of Investment Units by Unitholder Type
9.9%
9.5%
10.2%
9.9%
8.8%
56.3%
51.3%
48.6%
47.8%
51.2%
23.9%
23.3%
23.6%
23.7%
23.4%
9.9%
15.9%
17.6%
18.5%
16.6%
2017/1期
(第8期)
2017/7期
(第9期)
2018/1期
(第10期)
2018/7期
(第11期)
2019/1期
(第12期)
個人・その他 金融機関(金融商品取引業者含む)
その他国内法人 外国法人等
Investment Unit Ownership Ratio by Unitholder Type Major Unitholders (As of January 31, 2019)
Unitholder NameNumber of
Units% of Total
1 AEON Co., Ltd. 352,351 19.8%
2 The Master Trust Bank of Japan, Ltd. (trust account) 261,872 14.7%
3 Japan Trustee Services Bank, Ltd. (trust account) 237,125 13.3%
4 The Nomura Trust & Banking Co., Ltd. (trust account) 68,171 3.8%
5Trust & Custody Services Bank, Ltd. (securities investment trust
account)54,687 3.1%
6 Sumitomo Mitsui Trust Bank, Limited 27,150 1.5%
7 Mizuho Bank, Ltd. 20,000 1.1%
7 Tokyo Century Corporation 20,000 1.1%
9 STATE STREET BANK WEST CLIENT - TREATY 505234 19,774 1.1%
10 STATE STREET BANK AND TRUST COMPANY 505001 18,802 1.1%
Total 1,079,932 60.8%
Number of Units Number of Unitholders
11th Period(July 31, 2018)
12th Period(January 31, 2019)
11th Period(July 31, 2018)
12th Period(January 31, 2019)
Number of Investment Units
% of totalNumber of
Investment Units% of total
Number of Unitholders
% of totalNumber of
Investment Units% of total
Individuals and others 176,343 9.9% 155,952 8.8% 23,612 96.8% 22,058 96.7%
Financial institutions (including financial
instruments firms)849,993 47.8% 910,435 51.2% 167 0.7% 151 0.7%
Other domestic corporations 421,726 23.7% 415,151 23.4% 374 1.5% 362 1.6%
Foreign corporations 329,285 18.5% 295,809 16.6% 237 1.0% 248 1.1%
Total 1,777,347 100.0% 1,777,347 100.0% 24,390 100.0% 22,819 100.0%
8th Prriod(Jan.2017)
9th Prriod(Jul.2017)
10th Prriod(Jan.2018)
11th Prriod(Jul.2018)
12th Prriod(Jan.2019)
Individuals and Others
Financial institutions
Other domestics Corporations
Foreign Corporations
Disclaimer
Disclaimer
― These materials contain forward-looking statements with respect to the future business results, plans, and management targets and strategies of AEON REIT
Investment Corporation (AEON REIT). These forward-looking statements are based on assumptions made at the present time about future events and the operating
environment. There is no guarantee that these assumptions are correct. Various factors could cause actual future results to differ materially from those expressed or
implied by the forward-looking statements contained herein.
― While all reasonable measures have been taken to ensure that the information presented herein is correct, AEON REIT makes no assurance or guarantee as to the
accuracy or completeness of that information. The contents of the information may be changed or eliminated without notice.
― These materials include analyses, judgments and other views based on information currently available to AEON REIT and AEON Reit Management Co., Ltd. As such,
actual operating results may differ from these views. Furthermore, there are other views that differ from these, and AEON REIT and AEON Reit Management Co., Ltd.
may change these views in the future.
― These materials are provided for the sole purpose of presenting general information and explaining the management strategies of AEON REIT, and are not intended
as a solicitation to purchase AEON REIT’s investment units, nor to enter into any other financial instruments transaction agreement. When making investments,
investors are advised to use their own judgment and discretion.
Disclaimer for Dutch Investors
― The units of AEON REIT Investment Corporation (“AEON REIT”) are being marketed in the Netherlands under Section 1:13b of the Dutch Financial Supervision Act
(Wet op het financieel toezicht, or the “Wft”). In accordance with this provision, AEON Reit Management Co., Ltd. (the “AIFM”) has notified the Dutch Authority for the
Financial Markets of its intention to offer these units in the Netherlands. The units of AEON REIT will not, directly or indirectly, be offered, sold, transferred or delivered
in the Netherlands, except to or by individuals or entities that are qualified investors (gekwalificeerde beleggers) within the meaning of Article 1:1 of the Wft, and as a
consequence neither the AIFM nor AEON REIT is subject to the license requirement pursuant to the Wft. Consequently, neither the AIFM nor AEON REIT is subject
to supervision of the Dutch Central Bank (De Nederlandsche Bank) or the Netherlands Authority for Financial Markets (Autoriteit Financiële Markten). The AIFM is
therefore solely subject to limited ongoing regulatory requirements as referred to in Article 42 of the European Alternative Investment Fund Managers Directive
(European Directive 2011/61/EU) (the “AIFMD”).
Please visit AEON REIT’s home page (www.aeon-jreit.co.jp/en) to access its latest annual report referred to in Article 22(1) of the AIFMD or information provided
under Article 23 of the AIFMD.
Asset Manager: AEON Reit Management Co., Ltd.
(Registration of financial instruments business: Kanto Local Finance Bureau, Director-General (Financial Instruments), No. 2668)
Contact Information
Please contact us if any questions:
AEON Reit Management Co., Ltd.
Finance and Planning Department
TEL: 03-5283-6361
70