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• External Growth Strategies
• Internal Growth Strategies
• Property Selection Policy

External Growth Strategies

Initially, we will establish a portfolio consisting primarily of logistics facilities, which are more familiar targets for investment. We will then actively pursue other industrial properties, such as manufacturing and research and development facilities, along with infrastructure properties held by the private sector. From there, we plan to expand into infrastructure properties held by the public sector with the aim of maintaining a balanced portfolio of industrial and infrastructure properties over the mid to long term.

Growth through Asset Manager's Network

Pipeline Establishment. Because we will be investing in properties in which other J-REITs have not invested previously, such as in manufacturing, research and development and infrastructure facilities, it is critical for us to establish both a new acquisition pipeline network that will give us access to information about such properties and the experience needed to assess such properties according to their particular characteristics.

Our asset manager has assembled a team with significant experience in fund and asset management in Japan to support our investment activities, including individuals with significant property acquisition experience from their work for Japan Retail Fund, and other real estate investment funds; individuals with experience at governmental financial institutions; alumni of MLIT; individuals with significant experience at major real estate appraisal firms and accounting firms; and individuals seconded from Mitsubishi Corporation and UBS Global Asset Management. We aim to steadily add properties to our portfolio by utilizing our asset manager's own network and the extensive experience of its employees to establish a new pipeline for the accumulation of property-related information.

Solution-oriented Acquisitions. Because we are the first J-REIT to focus on manufacturing, research and development, and infrastructure facilities, information from existing intermediary channels will be of limited use in sourcing new properties. Therefore, we will focus primarily on sourcing properties through active sale proposals by our asset manager.

Our initial property acquisition activities will include flexible proposals designed to match the needs of property owners to whom proposals are made, such as off-balance-sheet sale and leaseback transactions, proposals to inject external capital for early-stage development projects and proposals to improve various management indices of an owner by reviewing its asset management strategy. For example, for properties that are under development, we might propose a scheme that will allow us to acquire the property immediately after completion through a forward commitment with the cooperation of Mitsubishi Corporation or others we deem to be appropriate partners.

Cooperation with Mitsubishi Corporation and Others

We expect to make full use of Mitsubishi Corporation's vast network in connection with the acquisition of our properties, and we may acquire properties that it has developed or held first.

Warehousing

Occasionally, properties may become available at a time when we are unable to acquire them for one reason or another. In such situations, we may request a special purpose company, in which Mitsubishi Corporation or another appropriate partner has invested in the form of a silent partnership or other such arrangement to acquire and hold the property for later sale to us.

The following table details current ownership, both direct and indirect, of the various properties we intend to acquire in connection with the offerings:

Internal Growth Strategies

In order to maintain and increase portfolio revenues in the mid and long term, we will develop growth strategies based on the characteristics of each property and its asset category so that each of our properties can be managed in the most appropriate manner. We will ensure that our asset manager, either directly or indirectly through our property managers, works closely with our tenants to ensure that their needs are satisfied. We also aim to achieve portfolio growth by engaging in various activities tailored to the characteristics and surrounding environment of each property, including expanding and refurbishing the properties, so as to maintain and improve both the rental income and occupancy rate of our entire portfolio.

We will also engage in efforts to maximize the profitability of our properties by streamlining and improving their management as well as by reviewing and reducing expenses.

Property Selection Policy

To create and maintain a portfolio that will provide stable revenues and achieve ongoing growth in unitholder value, the primary focus of our property selection policy will be on long-term usability and versatility. The long-term usability of a property is of particular importance, because assets such as manufacturing and research and development facilities and infrastructure facilities are often designed and constructed based on the needs of a particular tenant and are not always adaptable to other tenants.

Long-term Usability

In analyzing the long-term usability of a property, we will consider tenant reliability, rent levels in the market, existing lease agreements and, in the case of manufacturing, research and development, and infrastructure facilities, the industry in which the tenant operates. In evaluating the tenant's industry, we will first evaluate the competitiveness and future viability of the industry, consumer trends in the industry and the regulatory environment surrounding the industry. Next, we will analyze the competitive position, business plan and financial condition of the tenant within that industry. Finally, we will evaluate whether the facility is likely to be used by the tenant on a long-term basis. To this end, we will evaluate the marketability and competitiveness of the business operated by the tenant at the facility and, if the facility is one of a number of facilities with which the tenant conducts its business, we will also evaluate the relative utility of that particular facility within the tenant's overall business. To conduct the above analysis, we may employ outside consultants to obtain industry reports and conduct interviews with tenants.

Versatility

In addition to considering the long-term usability of a property, we will also evaluate its versatility in order to assess the level of risk in the event that a tenant were to terminate or fail to renew its existing lease. First, we will evaluate the general suitability of the location for an industrial or infrastructure facility by examining whether other industries are located in the surrounding area as well as examining the suitability of the area for other tenants, including tenants in the same industry as the current tenant along with those in different industries. Next, we will analyze the general versatility of the location. For example, if the property is located within an urban or suburban area and adequately meets the transportation needs of commuters, we may analyze the possibility of converting the property from industrial to residential or retail use.

In some instances, we may invest in a property that does not completely satisfy the above requirements regarding versatility, but such an investment will only be undertaken after serious consideration of its long-term usability.

By focusing on the versatility of a property's location, we expect to invest largely in urban and suburban properties where versatility of the location is generally expected. We will also focus on properties that are located in industrial areas where suitability of the location for an industrial or infrastructure facility is expected. In certain instances, we may also invest in properties that are located in areas that do not fall into either of the above-mentioned categories, as described in the following table: