CRE Logistics REIT : Financial Results Briefing for the 9th Fiscal Period Ended December 31, 2020 (2024)

Securities Code 3487

LogiSquare Sayama Hidaka

The property is located approximately 0.7 km from the Sayama Hidaka Interchange on the Ken-O Expressway, and access to

National Route 407 is also easy. Surrounded by numerous warehouses, factories and other facilities, the property can be operated

24 hours a day.

February 17, 2021 CRE REIT Advisers, Inc.

Contents

Contents

Glossary

• 1. Fourth Capital Increase by Public Offering and Asset Acquisitions

  2

• 2. Financial Results and Forecasts

• 3. Growth Strategies

• 4. Characteristics of CRE Logistics REIT, Inc.

• 5. Market Environment

• 6. Appendix

12 17 29 40 48

• • This material is not a disclosure material under the Financial Instruments and Exchange Act, the Act on Investment Trusts and Investment Corporations or the

  Securities Listing Regulations of the Tokyo Stock Exchange.

• • The purpose of this material is to provide information and not to offer, solicit the purchase of or sell certain products. When you make an investment, please do so at your own discretion and risk.

• • The market price of investment securities of the Investment Corporation will be affected by the demand and supply of investors at an exchange and will fluctuate under the influence of the interest rate environment, economic conditions, the real estate market conditions and other factors surrounding the market. Accordingly, the investment securities may possibly not be sold at a higher price than the acquisition price, and investors could suffer a loss as a result.

• • The investment securities of the Investment Corporation need to be purchased and sold through a securities company with which you undertake business. At that time, please read the contents of the document provided before concluding the contract (or a prospectus) carefully.

• • While this material contains forward-looking statements and results forecasts, these statements do not guarantee the future results and financial conditions of the

  Investment Corporation.

• • In this material, amounts are rounded off to the unit and areas, years and ratios are rounded to the nearest one decimal place, unless otherwise noted. Any average or ratio pertaining to assets is the weighted average based on the acquisition price, unless otherwise noted.

  Copyright (C) 2021 CRE Logistics REIT, Inc. All Rights Reserved.

1. Fourth Capital Increase by Public Offering and Asset Acquisitions

LogiSquare Sayama Hidaka

By making the rampway exclusive to incoming vehicles and the slope exclusive to outgoing vehicles, this property is considered to prevent vehicle congestion and accidental contacts in the facility caused by alternating traffic and make full use of the site.

Summary of Fourth Capital Increase by Public Offering

Acquisition at appropriate price above implied cap rate

9,900 million yen (including consumption tax loan of 900 million yen)

Promote reduction of LTV, borrowing from new lenders and long-term debt

45.0 %

3.5 years

10

Increase in borrowing

Assets

Improve quality of portfolio through investment in LogiSquare

16 properties

91,527 million yen

4.8 %

20

4.5 years

100.0 %

100.0 %

Realize external growth that contributes to improvement in distributions per unit and NAV per unit

Net assets

137,499 yen

Forecast on normalised level after third PO 3,258 yen

Number of new investment units issued

76,650 units

(18.1% of total issued and outstanding investment units)

Total issue value

10,862 million yen

Form of offering

Domestic offering

Note1:Implied cap rate = Appraisal NOI stated in real estate appraisal reports of assets held at the end of the 9th fiscal period with December 31, 2020 as the date of the value opinion ÷[Market capitalization of the Investment Corporation as of January 13, 2021 +

Amount of interest-bearing debt at the end of the 9th fiscal period (December 31, 2020) + Leasehold deposits received at the end of the 9th fiscal period (December 31, 2020) - Cash and deposits at the end of the 9th fiscal period (December 31, 2020) -

Restricted deposits at the end of the 9th fiscal period (December 31, 2020)]

Note2: Please refer to the notes on page 1 or on each page from page 4 for the definition of each term and the calculation method of each figure on this page.

Since Listing in February 2018, Steadily Growing through Four Public Offerings

Distributions per unit （DPU）

4,000

Annual rate ＋7.1%

NAV per unit（Note）

年率 ＋6.8%

3,000

2,000

1,000

150,000

130,000

110,000

90,000

4th FP

(Yen)

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP Forecast

11th FP Forecast

The Investment Corporation will continue to increase DPU and NAV per unit steadily together with the enhancement of unitholder value.

ＬＴＶ

Asset size

140,186

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

(Yen)

After fourth PO

X 2.4

50%

48%

46%

44%

44.7%

Estimate dated February 16, 2021Estimate dated January 4, 2021

42%

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP Forecast

11th FP Forecast

Set the LTV level of the Investment Corporation at around 45% and work to reduce it according to the market environment.

Annual rate ＋33.0%

0 (Billion yen)

150

100

50

4th FP

112

5th FP

6th FP

7th FP

8th FP

9th FPAfter fourth

PO

The Investment Corporation will continue to expand the portfolio size steadily by using the pipeline in cooperation with the CRE

Group together with then enhancement of unitholder value.

Note:NAV per unit after the fourth PO = (NAV at the end of the 9th fiscal period (ended December 31, 2020) + Total issue price by the fourth capital increase by public offering (including private placement) + Sum total of appraisal values of newly acquired assets - Sum total of acquisition prices of newly acquired assets)÷Total number of investment units outstanding of the Investment Corporation after the fourth capital increase by public offering

* Appraisal values of newly acquired assets are figures with November 30, 2020 as the date of the value opinion.

Flexible Acquisition of Properties in Consideration of the Capital Market for the Four Consecutive Periods

Trends in investment unit price (closing price) since listing (as of February 12, 2021)

170,000

July 16, 2019

First capital increase by public offeringIssue price

July 13, 2020

Third capital increase by public offering

Issue price 147,828 yen Total issue value 11.2 billion yen Acquired property 3 properties 17.9 billion yen

January 19, 2021

Fourth capital increase by public offering

Issue price 146,835 yen Total issue value 11.2 billion yen Acquired property 3 properties 20.7 billion yen

8.0%

150,000

February 7, 2018 Listing

Issue price 110,000 yen Total issue value 17.7 billion yen

Total issue value Acquired property

117,975 yen 3.3 billion yen 2 properties 6.3 billion yen

7.0%

130,000

6.0%

110,000

5.0%

90,000

4.0%July 17, 2019

August 2018

Introduced a cumulative investment unit investment system.

The presidents of the Sponsor and the Asset Management Company acquired investment units.

70,000

50,000

(Yen) 2018 2/7

5/9

NAV per unit

8/2

10/30

2019 1/31

Tokyo Stock Exchange REIT Index (Note2)

Note 1: Total issue prices of the third PO and the fourth PO include private placement.

September 27, 2019

The revision of asset management fees was resolved at the General Meeting of Unitholders.

May 29, 2020 Incorporated into the MSCI Global Small Cap Index.

March 31, 2020 Newly acquired A-rating from R&I.

5/7

September 8, 2020 Issued a green bondSeptember 18, 2020 Incorporated into the FTSE Global Equity Index Series

7/31

10/30

2020 1/30

4/28

Investment unit price of the Investment Corporation

7/29

10/27

Distribution yield (right axis)

2021

1/26

Note2: Trends in the closing price of the Tokyo Stock Exchange REIT Index at Tokyo Stock Exchange, Inc. (hereinafter "TSE") show trends in relativized figures on the assumption that the closing price (1,664.83pt) of the TSE REIT Index on the date of the listing of the Investment Corporation (February 7, 2018) is the same as the issue price (110,000 yen per unit) of the Investment Corporation at the time of listing.

3.0%

2.0%

2019 1/9

0 2018 2/7

5/2

7/25

10/17

4/3

(Million yen)

Market capitalization

6/26

9/18

Trading turnover (right axis)

12/11

2020 3/4

5/27

8/19

11/13

20210 2/12

(Million yen)

60-day moving average of trading turnover (right axis)時価総額

Realize External Growth that Contributes to Increase in Distributions per Unit and NAV per Unit

Raise normalised DPU by annual rate 7.1% within two years by increasing capital for four consecutive periods.

Normalised DPU

+14.8％ Annual rate +7.1％

3,500

3,000

2,500

2,000

1,500

(Yen)

At第in７i期tial normalised （2019年12月期）

level

7th FP

(ended December 2019)

Initial Forecast dated February 18, 2019

At no第rm８期alised

level after （2020年6月期）

first PO

8th FP (ended June 2020)

Forecast at first PO dated June 27, 2019

Forecast at second PO based on the 9th FP (ended December 2020) forecast dated January 7, 2020

Earnings per unit (EPU)

OPD per unitAt normalised level after second POAt normalised level after third PO

Forecast at third PO based on the 10th FP (ending June 2021) forecast dated June 29, 2020

At normalised level after fourth PO

Forecast at fourth PO based on the 11th FP (ending December 2021) forecast dated January 4, 2021

Achieve Further Portfolio Diversification

Diversification of tenants

Tenant industries (Note 2)

Cargo handled by tenants (Note 3)

Note 1: Based on leased area.

Note 2：Outer circle shows the industries of end users.

Note 3：Parcels handles are counted based on visual contact or hearing results, and only major items are stated.

Area Diversification Progressed by Acquiring 2 Properties in Tokyo Metropolitan Area and 1 Property in Other Area

Locations of Assets Held, Newly Acquired Assets and Pipeline

Portfolio

Newly acquired assets

Exclusive Negotiation Rights Granted

Under Development

Portfolio Comparison Before and After Acquisition of Newly Acquired Assets

+=

Note 1: "Average appraisal NOI yield after depreciation" is the ratio of the sum total of the appraisal NOI of each asset less forecast depreciation to the sum total of the acquisition price of each asset.

Note 2: "Average property age" indicates the weighted average (rounded to one decimal place) of the ages (refers to number of years f rom date of registration of new construction of each property in real property register to December 31, 2020) of each asset. Note 3: "Average remaining lease term" indicates the weighted average of the periods from December 31, 2020 to the expiration date of the lease agreement stipulated in the lease agreement of each asset.

Note 4: "Ratio of properties developed by CRE" is ratio of properties developed by CRE or Commercial RE Co., Ltd. before transfer to CRE.

Portfolio is Composed of Newly Built and Highly Occupying Properties Developed by CRE

Newly acquired assets

Note：LogiSquare Kawagoe II has two buildings, but the total floor area is stated the sum of total floor areas presented in the real estate registries of the two buildings. The age is stated based on the real estate registry of the building with the larger total floor area of the two buildings.

2. Financial Results and Forecasts

LogiSquare Sayama Hidaka

There is a raCmopwyraigyhetn(aCb)lin2g02h1eaCvyRtEruLcoksgitsotigcos dRirEeIcTtl,yIntoc.thAellsRecigohntdsaRndestehirrvdefdlo. ors, giving the property a total of 120 truck berths across the first, second and third floors.

Highlights on the 9th Fiscal Period

- Achieved Better than Expected Results and Increase Forecasts for 10th and 11th Fiscal Period

Distributions per unit

Asset

Forecast dated January 4, 2021

Forecast dated Februray 16, 2021

(Yen) 4th FP

5th FP

(Yen)

4th FP

Debt

Note2: Includes 12 million yen for construction work associated with the expropriation of LogiSquare Tosu.

3,351

Portfolio

5th FP

6th FP

7th FP

8th FP

9th FP

137,499

6th FP

7th FP

8th FP

9th FP

10th FP 11th FP Forecast Forecast

Results for the 9th Fiscal Period

Unit: million yen

Major factors for difference

• 1 Operating revenues +573

  • • Increase due to 3 properties acquired in the 9th fiscal

    period +467

  • • Full-period contribution of 4 properties acquired in the 8th

    fiscal period +94

  • • Expense compensation for partial expropriation of land in

    LogiSquare Tosu +14

  • • Non-occurrence of insurance claim income -3

• 2 Leasing expenses (excluding depreciation) +43

  • • Increase due to 3 properties acquired in the 9th fiscal

    period +25

  • • Full-period contribution of 4 properties acquired in the 8th

    fiscal period +6

  • • Construction work associated with the expropriation of

    LogiSquare Tosu +12

    3 General and administrative expenses, etc. +61

  • • Increase in asset management fees +53

  • • Increase in asset custody and administrative service fees +3

• 4 Non-operating expenses +42

  • • Increase in loan-related expenses and interest expenses +40

  • • Increase in amortization of expense related to issue of investment units +3

• 5 Operating revenues +14

  • • Expense compensation for partial expropriation of land in LogiSquare Tosu +14

• 6 Leasing expenses (excluding depreciation) +3

  • • Construction work associated with the expropriation of LogiSquare Tosu +12

  • • Decrease in repair expenses -8

• 7 OPD per unit +70

Although we planned to reduce it by 70 yen from an amount equivalent to 30% of depreciation to offset the fall in income due to re-tenanting assumed in the 10th fiscal period, we distributed an amount equivalent to 30% of depreciation without reducing it by 70 yen because we have agreed with the current tenants to re-sign the contract.

Forecasts for the 10th and 11th Fiscal Periods

Unit: million yen

Major factors for difference

<10th period>

• 1 Net leasing revenues +308

  • • Increase due to 3 newly acquired properties +377

  • • Full-period contribution of 3 properties acquired in the 9th period +32

  • • Expensing of property taxes, city planning taxes and other charges on 7 properties acquired in the 8th and the 9th period -102

• 2 General and administrative expenses, etc. +42

  • • Increase in asset management fees +34

  • • Increase in asset custody and administrative service fees +2

• 3 Non-operating expenses +54

  • • Increase in loan-related expenses and interest expenses +56

• 4 OPD per unit +31

  Add 19 yen, which was reduced in the 8th period, in

  addition to 337 yen, an amount equivalent to 30% of

  depreciation.

  <11th period>

• 5 Net leasing revenues +55

  • • Full-period contribution of 3 newly acquired properties +52

  • • Full-period contribution of upward revision of rents +3

• 6 General and administrative expenses, etc. +16

  • • Increase in asset management fees +14

  • • Increase in asset custody and administrative service fees +2

• 7 Non-operating expenses -34

  • • Decrease in loan-related expenses and interest expenses -16

  • • Non-occurrence of expenses related to issue of investment units for the fourth PO -10

  • • Decrease in amortization of organization expenses -5

Comparison of Distributions in the 9th FP with the Previous Period and the Forecast and Old and New Distribution Forecasts for the 10th and the 11th FP

9th FP results compared to 8th FP results and forecast

10th FP old and new forecast comparison

11th FP old and new forecast comparison

12月期

月期 実績

12月期

予想

Earnings per 実un績it (EPU)

Note : Calculated on the assumption that the total number of investment units issued at the end of the 8th FP is 347,250 units, at the end of the 9th FP is 423,500 and at the end of the 10th and 11th Periods is 500,150 units.

3. Growth Strategies

LogiSquare Kawagoe II

The property is located approximately 3.6 km from Sakado Interchange on the Ken-O Expressway, approximately 7.0 km from Kawagoe Interchange on the Kan-etsu Expressway, and approximately 7.0 km from the Tsurugashima Interchange on the Kanetsu Expressway and also has excellent access to the National Route 254, which is a main road within the Tokyo metropolitan area.

Rich Pipeline Enabling Future External Growth

Continue to promote property acquisitions at a reasonable price, aiming for continuous growth in distributions, based on cooperation with the CRE Group companies

Pipeline(Note 1)

Properties under development at CRE

（Note2）

9 properties / Total floor area 230,313 ㎡ +α (Property in Fujimino-shi, Saitama)

Name TBD

LogiSquare Sayama

Hidaka （20％）

• (1) May 2020

• (2) 73,728.44㎡

  （14,745.69㎡）

• (3) Hanno-shi, Saitama

1,200,000

LogiSquare Osaka Katano

• (1) January 2021

• (2) 80,534.54㎡

• (3) Katano-shi, Osaka

1,000,000

new!

LogiSquare Miyoshi II

Shiroi Naka PJ

• (1) March 2021

  • (1) Around autumn 2022

    800,000

• (2) 18,096 m2

  • (2) 20,000～33,000㎡

    Under planning

• (3) Miyoshi-machi, Saitama

• (3) Shiroi-shi, Chiba

600,000

LogiSquare Hirakata

• (1) From 2022

  • (1) January 2023

• (2) TBD (Site: 123,389 m2)

  • (2) 45,083㎡

    Under planning

• (3) Fujimino-shi, Saitama

• (3) Hirakata-shi, Osaka

400,000

new!

LogiSquare Atsugi I

• (1) March 2023

• (2) 18,200㎡

  Under planning

• (3) Aikawa-shi, Kanagawa

new!

LogiSquare Matsudo

200,000

• (1) Around spring 2023

• (2) 15,654㎡

• (3) Matsudo-shi, Chiba

In and after

Projects expected to be developedAlready announcedAlready worked on

new!

(m2)

LogiSquare Atsugi II

FY ending July 31, 2021

• (1) Around summer 2024

  Source:Prepared by the Asset Management Company based on

• (2) 18,000～20,000㎡

  Under planning

  • (1) Completion month and year (planned)

• (3) Atsugi-shi, Kanagawa

• (2) Total area (planned)

• (3) Location

Properties with first refusal right

"Summary of Financial Statements (Unaudited) for the First Quarter of the Fiscal Year ending July 31, 2021"(December 11, 2020), "Start Developing Logistics Facility LogiSquare Atsugi I" (December 17, 2020) and "Start Developing Logistics Facility LogiSquare Matsudo" (February 1, 2021) of CRE, Inc.

Note 1: As of February 17, 2021, CRE-REIT has not engaged in specific negotiations with the CRE Group companies on this pipeline, nor does it have any plan to acquire them at the present time or guarantee future acquisition. This slide shows the pipeline as of February 17, 2021 but first refusal rights will be granted at any time on other properties besides these properties and CRE Group companies will proceed at any time with the development of other properties besides these properties.

Note 2: The total (planned) total floor area of ​the pipeline is the lower limit for the planned total floor area for the Shiroi Naka PJ and LogiSquare Atsugi II, and the quasi-co-ownership ratio (20%) for LogiSquare Sayama Hidaka (20%). ) Is used for calculation.

The Investment Corporation's Approach to Property Acquisitions/ CRE's Approach to Property Sales and Development

The Investment Corporation's Approach to Property Acquisitions

• • Acquisition of property without dilution of distribution per unit/NAV per unit is a prerequisite for the improvement of unitholder value.

  All from the first to the fourth capital increases by public offering, CRE-REIT acquired properties at a NOI cap above the implied cap rate and upheld the above prerequisite. CRE-REIT plans to maintain this approach moving forward.

• • Achieve flexible external growth, taking investment unit price into consideration, including utilizing the bridge function.

  CRE-REIT acquired three properties from leasing company at IPO and one property from leasing company at first capital increase by public offering. The timing of the Sponsor's property sales and the REIT's acquisitions can be adjusted.

• • Acquisition of medium-sized properties and acquisition of quasi co-ownership interests using funds on hand is also possible.

  Available to invest to the properties with total floor area of 5,000m2 or larger and the acquisition of properties ranging from several hundred million yen to several billion yen is possible using retained funds on hand from accumulated depreciation.

CRE's Approach to Property Sales and Development

Stable operation of CRE-REIT over medium and long term is CRE's top priority

The Asset Management Company is involved from the time of site acquisition to implement development with discipline

CRE's Positioning of Asset Management Business

Rent assessment (scoring of location, road access, etc.)

Formulation of plan incorporating development risks

• • Grow asset management business into second pillar of stock business.

Sharing of level of cap rates on acquisitions in REIT market

• • Continuously earn asset management fees and property management fees by selling properties developed by CRE to CRE- REIT.

Appropriate cost control

Attraction of tenants

Source: Prepared by the Asset Management Company based on the Long-term Management Policy

(September 12, 2016) of CRE, Inc.

Generation of higher profits than planned

Realize Internal Growth when a Contract Expires for the First Time

Agreed on rent increase in two facilities.

Contracts expiring in the fiscal period ending June 30, 2021

+6.0%

+22 yen

Contracts expiring in the fiscal period ending December 31, 2024

+14.0%

+40 yen

20.0%

15.0%

10.0%

5.0%

0.0%

2020/12 2021/6 2021/12 2022/6 2022/12 2023/6 2023/12 2024/6 2024/12 2025/6 2025/12 2026/6 2026/12 2027/6 2027/12 2028/6 2028/12

2029/6

2029/12 2030/6 2030/12 2031/6 2031/12 2032/6

2032/12

2033/6 2033/12 2034/6 2034/12 2035/6 2035/12 2036/6 2036/12 2037/6 2037/12 2038/6 2038/12 2039/6 2039/12 2040/6 2040/12 2041/6 2041/12

Note：Calculated on the assumption that the total number of issued investment units is 500,150. It does not take into account the increase in costs associated with the increase in rental income.

Cash Management Aiming to Maximize and Level Distributions

Approach to the use of funds on hand

Consider the following choices, in addition to use for capital expenditure.

Effects by acquiring properties only with funds on hand

Estimate of an increase in distribution per unit (yen)

• 1. Appropriation of some funds to acquire properties at the time of capital increase

• 2. Acquisition of properties (quasi co-ownership interests, etc.) during the period, with funds on hand as source

3. Repayment of loans payable

Conduct ongoing surplus cash distributions equivalent to 30% of depreciation.

If the level of distribution per unit is expected to decrease temporarily, it will be operated flexibly within the range of 30% for distribution leveling.

Note: Calculated on the assumption that the total number of investment issued units is 500,150.

ＮＯＩ yield

Stable financial management (1) Diversification of Financing Methods

Diversify interest-bearing debt sources by issuing green bonds and inviting new lendersMore than 90% of the portfolio assets are green qualifying assets

Bank Formation after the Borrowing(Note)

Percentage of properties that have acquired an environmental certification.

Unit: million yen

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• Sumitomo Mitsui Banking Corporation 13,230 (24.7%)

• Mizuho Bank, Ltd. 10,592 (19.8%)

• Development Bank of Japan Inc. 7,102 (13.3%)

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• Resona Bank, Limited 4,934 (9.2%)

• The Nishi-Nippon City Bank, Ltd. 4,339 (8.1%)

• MUFG Bank, Ltd. 3,745 (7.0%)

• Sumitomo Mitsui Trust Bank, Limited 3,227 (6.0%)

• The Bank of f*ckuoka, Ltd. 1,300 (2.4%)

• Shinsei Bank, Limited 1,300 (2.4%)

• Aozora Bank, Ltd. 1,000 (1.9%)

• 株Th式e会Hy社ak百u十jus四hi銀B行ank, Ltd. 500 (0.9%)

• 株Th式e会Ba社n富ko山fT銀o行yama, Ltd.new! 300 (0.6%)

  投Bo資n法ds人債

  Note："the Borrowing" refers to borrowing executed on January 19, 2021.

• 2,000 (3.7%)

Acquired either or both BELS and CASBEE.

（11th FP Forecast）（Note）

94.3%

45 billion yen

Note："Room to increase green qualifying debt （11th FP Forecast）"=Acquisition price of properties that fall under the category of green qualifying assets x LTV（11th FP Forecast）-Green bond issued amount as of the end of December 2020

Rating status of the Investment Corporation

Rating and Investment Information, Inc. (R&I)

A- (Stable)

Stable financial management (2) Promote Diversification of Maturity

Promote diversification of Maturity

No maturity of interest-bearing debt until July 2021

Stable financial management (3) Promote Long-term Debt

Reduce LTV to 44.7%

Approach to interest-bearing debt

In the past

• • Set the LTV level of the Investment Corporation at around 45%, with 50% as the upper limit, in principle.

• • While the level above was slightly higher than those of other listed logistics REITs, we chose to use borrowings effectively because our cash flows were stable due to long-term contracts.

• • Conducted financial management with a focus on long-term stability by borrowing long-term loans at a fixed interest rate.

In the future

• • Set the LTV level of the Investment Corporation at around 45%, and work to reduce it according to the market environment.

• • (Deleted because LTV is expected to decline to a level similar to those of other listed logistics REITs)

• • Conduct financial management with focus on long-term stability by taking out long-term loans at a fixed interest rate.

Promoting ESG Efforts ― Environment (1)

80% of properties have acquired BELS and/or CASBEE certification (based on acquisition price).

Newly acquired assets

Promoting ESG Efforts ― Environment (2)

In-house consumption of solar power

Ensure a part of the electricity consumed in facilities from electricity generated by solar power.

Installation of human detecting sensors

Promote energy saving by installing human detecting sensors in facilities.

Installation of water-saving sanitation appliances

Promote the reduction of water usage by installing sanitation appliances with high performance in the reduction of water usage.

Installation of roof watering equipment

Contribute to the reduction of temperatures inside warehouses by installing roof watering equipment using well water.

Wall greening

Wall greening has the effect of lowering the surface temperature of buildings and contributes to the reduction of CO2 in the atmosphere.

Soil contamination countermeasures

Enbio Holdings, Inc., a CRE group company, revitalizes old factory sites, etc. as land for the development of logistics facilities by actively utilizing in-situ cleaning methods that decompose underground contaminants without excavating contaminated soil.

Promoting ESG Efforts ― Social

Improving amenities and the business continuity of tenants

• • Support for BCP measures

  • - Hold logistics facilities in inland areas with low risk of liquefaction.

  • - Install power receiving and transforming equipment at elevated locations as a flood control measure.

  • - Introduce earthquake early warning systems.

  • - Install AEDs.

  • - Install emergency power supply systems.

  • - Install disconnectors in automatic fire alarms to prevent the spread of fires.

• • Amenity Improvements

  • - Adopt warm-color lighting in entrances and truck berths, etc.

  • - Install restrooms for outside drivers.

  • - Renovate smoking rooms to respond to the April 2020 revised Health Promotion Act.

Active sharing of information with investors

• • Rationalize disclosures by correcting information gaps among investors.

  - Promote fair disclosure and the rationalization of disclosure by enhancing supplementary explanation materials.

• • IR activities in consideration of COVID-19

  - Since March 2020, we will hold conference calls and web conferences with institutional investors in Japan and overseas to have the same dialogue as usual.

Efforts for officers and employees

• • Support for skill development

  - Encourage them to acquire qualifications by paying for expenses and gift money for the acquisition of qualifications.

License holders (including those that have passed examinations)

• • Improvement of the work environment

  • - Refresh and expand the work space with the relocation of offices.

  • - Introduce staggered commuting and working from home as a measure to control COVID-19.

  • - The president has 1 on 1 meeting with all employees quarterly.

Contribution to regional and social development

• • CRE Activities

  • - The remains of 74 pit houses from the Middle Jomon Era (about 5,000 years ago) were excavated on the site in the wake of the development of LogiSquare Sayama Hidaka, and we are cooperating with the local government in their excavation work, record retention and observation-tours.

  • - Hold a CRE forum for the purpose of sharing logistics issues faced by companies.

• • Install fire cisterns able to provide tap water that can be used to fight fires.

• • Cooperate with traffic restrictions for the Saitama International Marathon.

Promoting ESG Efforts ― Governance

Holding of investment units by officers and employees of the Asset Management Company

• • President of sponsor hold units of CRE-REIT. Many officers and employees of the Asset Management Company hold investment units of CRE-REIT based on a cumulative investment system and internal regulations.

Independence of the Asset Management Company

• • Given that the Asset Management Company was established as an independent asset management company, all its members are proper employees and CRE is not involved in their recruitment or personnel evaluation.

Note: As of December 31, 2020. 12 employees of the Asset Management Company hold a total of 116 investment units, as of December 31, 2020. Also, the number of each holding unit is rounded down to the nearest unit.

Revision of asset management fee structure more aligned with unitholder interests

After Changes

Total assets  0.325% (Upper limit)

Income before income taxes  4.0% (Upper limit)

Earnings per unit  10,000

Acquisition cost  1.0% (Upper limit)

(0.5% (Upper limit) in case of transactions with interested party)

―

• • Amend Articles of Incorporation at the General

  Meeting of Unitholders held on September 27, 2019 and revise fee structure from the Period ending June 2020.

• • Introduce fee structure more aligned with unitholder interests by decreasing management fees based on total assets and income before income taxes and establishing a new management fee based on earnings per unit to increase linkage with earnings per unit.

• • Repeal fee on sale to prevent fee being charged even in the case of the sale of property that is detrimental to the interests of unitholders because a loss on sale is recognized.

4. Characteristics of CRE Logistics REIT, Inc.

LogiSquare Kobe Nishi

Many ingenuities have been applied with regard to signs on the property including the use of designs creating a sense of intimacy that visualizes warehouse features such as the effective ceiling height, floor weightCcoapaycritgyhatn(dCl)ig2h0ti2ng1 iCntRenEsiLtyo. gistics REIT, Inc. All Rights Reserved.

Characteristics/Advantages of CRE-REIT

Character -istics

1. Portfolio focused on LogiSquare

2. Long-term, stable asset management

3. Distinct external growth strategyHigh-quality portfolio

(1) Stable cash flow

Occupancy rate 100.0%Ratio of fixed-term leases 100.0%

Ratio of fixed-rate rents 100.0%

(2) Long-term contracts with diverse tenants

Average lease contract term 7.8 yearsAverage remaining lease term 5.3 years

Ratio of single-tenant facilities 78.5%

(3) Good location

Ratio of Tokyo Metropolitan Area 93.2%

Average mileage to interchange 2.9 km

Within 10 mins' walk of public transportation 84.5%

Sponsor is real estate company specializing in logistics properties(Note 1)

Advantages

Companies that have concluded lease contracts with CRE directly

1,075 companies

Master lease occupancy rate of logistics real estate 98.4%

Holding of private viewings, including for other listed REITs

Managed floor area 1,590 properties 5,340,000 m2

PM entrusted by other companies(Note 2)PM company management ranking centered on logistics facilities

Approx.60%

2nd place

• • Tenant requirements obtained through day-to-day management and leasing activities are fully reflected in facility development.

• • Has been developing suitable properties for REIT since 2006 when real estate securitization first appeared in Japan.

Capable of flexibly acquiring properties, taking consideration into investment unit price

• • Able to utilize bridge function. Already acquired three properties at IPO and one property at the first capital increase by public offering by utilizing the bridge function.

• • Also possible to acquire properties on the scale of hundreds of millions to billions of yen and quasi-co-ownership interests using cash on hand.

• • Already secured pipeline of 9properties with total floor area of 230,000 m2 +α.

Note 1: As of the end of July 2020. Produced by the Asset Management Company based on data provided by CRE. Figures include data relating to property management of other real estate besides logistics facilities and master leases.

Note 2: "PM entrusted by other companies" is area managed by CRE less area relating to PM contracts with the Investment Corporation and area relating to properties in which CRE is involved as master lessee (area managed under PM contracts with other listed logistics REITs and private funds, etc.) as a ratio of the total area managed by CRE.

High-quality Portfolio (1) Stable cash flow

Form of contract that enables stable operation

Inclusion of relatively new properties

Ratio of fixed-term lease contracts

Ratio of fixed-rate rents

Average age

Note：Depending on the amount of the penalty and other circ*mstances, the court may reduce the penalty in part or deny the effect of such provision.

High-quality Portfolio (2) Long-term lease contracts

Contribution to portfolio stability by concluding long-term contracts in consideration of tenant business plans.

Average lease contract term

Average remaining lease term

Tenant composition

High-quality Portfolio (3) Good location

Properties are mostly in locations suited to logistics facilities where strong demand is expected, with tenants' need to secure labor also taken into consideration.

Ratio in Tokyo Metropolitan Area

Mileage to an interchange

Walk within 10 mins 84.5%

Example: LogiSquare Urawa Misono

Time required from public transportation facilities

The property is located approximately 700 m from Urawa IC (Tohoku Expressway) and approximately 450 m and a six-minute walk from Urawa Misono Station on the Saitama Rapid Railway Line.

A large-scale community development project is underway in the surrounding area, which will allow a close proximity between work and the home and be a potential advantage in securing employee.

Features of LogiSquare

LogiSquare is the brand name of high-quality logistics facilities developed by CRE to meet tenant needs.

Sandwich panels are used on exterior walls to reduce heating and cooling loads and to give the exterior an attractive appearance.

Facility has roof spraying system that uses well water to reduce the internal temperature.

The facility has truck berths on the first and third floors.

To prevent congestion and accidents, the facility is designed to separate traffic flows and equipped with dedicated gates for the first/second floor tenants and the third/fourth floor tenants, respectively.

The facility has a total of 44 truck berths on the first and third floors to allow the docking of up to 44 large trucks simultaneously.

Truck berths are large enough to fit a whole 40ft container truck.

Rest area with wooden deck

Features of LogiSquare

LogiSquare not only improves the efficiency of warehouse operations, creates a pleasant working environment for tenants but helps reduce costs in the future for CRE-REIT.

Internal signage is designed to visually communicate warehouse functions.

Interior walls between offices and the warehouse space have windows in them to facilitate communication.

The women's restroom has lockers and designed to make female employees feel comfortable.

Fireproof partition walls are made of fire-resistant heat-insulating panels that have excellent insulation properties, seismic resistance and an aesthetically pleasing appearance.

To help reduce costs in the future, the facility already has windows and ventilation built in to ensure compliance with laws and regulations in case it is necessary to expand office areas in the future.

Sponsor is Real Estate Company Specializing in Logistics Properties

CRE, which sponsors CRE-REIT, has a track record of more than 50 years in the field of logistics real estate in Japan.

Launch of asset management business/Listing of CRE-REIT in February 2018

Participation in development business / Management of large-sized facilities

Small- and medium-sized warehouse asset utilization proposals / Building of relationships with tenants

1964

1980

2005

2014

Involvement of All Employees in Logistics Properties

Number of employees on a consolidated basis (as of July 31, 2020)

Proven Track Record in Providing Services to Other Companies(Note)

CRE-REIT can draw on knowhow gained through management of 5,340,000 m2

171

Property management

Logistics investment

9 21

Asset management

Administration

48

Total 249

Source: Prepared by the Asset Management Company based on Annual Report for Fiscal 2020 of CRE, Inc.

Master lease 29%

CRE-REIT 7%

Other listed REITs and Private fund, etc.

64%

Note : As of July 31, 2020. Includes results under property management and master lease agreements for properties other than logistics-related facilities.

CRE's Leasing / Property Management Capability ― Wide tenant network is a strength

Instantly understands rent trends, including actual rents paid and rent increases and decreases, through the conclusion of contracts directly with diverse tenants not just logistics service providers.

• • CRE can gain an understanding of rent levels by entering contracts with tenants directly as master tenant under a master lease arrangement

• • CRE builds relationships with tenants from a variety of industries not only logistics operators.

Other

Note: As of July 31, 2020. Includes tenants of properties other than logistics-related facilities.

Ranks Second Among Logistics Facilities-centered PM companies(Note 1)

(Million m2) 日本GLP

6

4

2

大和ハウス

GLP

Daiwa House プPロroロloジgスis プロパティ マネPrジopメeンrtyト

Major Customers (Note2)

SGリアルティ SG Realty

• • Mitsubishi Estate Logistics REIT Investment

  Corporation

• • Japan Logistics Fund, Inc.

• • Industrial & Infrastructure Fund Investment

  Corporation

• • LaSalle LOGIPORT REIT

• • Star Asia Investment Corporation

• • Kenedix Retail REIT Corporation

• • United Urban Investment Corporation

• • Sumisho Realty Management Co., Ltd.

• • Morgan Stanley Capital K.K.

• • Mitsui & Co., Realty Management Ltd.

• • Mitsubishi Jisho Investment Advisors, Inc

• • Yamato Home Convenience Co. Ltd.

• • Tokyu Land Capital Management Inc.

  (No particular order)

Note 1: Prepared by the Asset Management Company based on Monthly Property Management magazine (November 2020 edition)."Logistics facilities-centered PM companies" refer to property management companies with 70% or more of their entrusted areas those of logistics facilities. "Entrusted areas" include the management areas of real estate other than logistics facilities.In company names, Co., Ltd., Inc., etc. is omitted.

Note2: CRE Inc.'s Summary of Financial Statements for the the Fiscal Year Ended July 31, 2020.

Development Capability―Development Incorporating Tenant Requirements While Ensuring Versatility

Realization of Long-term Contracts and Mitigation of Tenant Risk by Incorporating Tenant Requirements

While Ensuring Versatility

= High-quality logistics facilities developed by CRE to meet tenant needs

Versatility

=

Location

+

Basic Specification

+

Expandability

+

Comfort

+

Improvement of Convenience Through Full Reflection of Requirements Learned Through Day-to-Day Management and Leasing Activities in Development Plans

Improvement of convenience/

Reduction of future costs

Development / CM team

Reflection of requirements and management status in development plans

Communication

CRE's Development Capability

―Development Since the Start of Real Estate Securitization in Japan

CRE has been developing logistics properties since real estate securitization started in Japan and has built up knowhow on the development of properties suitable for REITs.

Track record of development of 34 properties and around 780,000 m2

Toyama BTSLogiSquare Kobe Nishi

LogiSquare Chiba Kita II

LogiSquare Sayama HidakaLogiSquare Kuki II

LogiSquare Miyoshi IILogiSquare ChitoseLogiSquare Misato

LogiSquare Tosu

LogiSquare Ageo

LogiSquare Miyoshi

LogiSquare Osaka KatanoLogiSquare Urawa Misono

900 800 700 600 500 400 300 200 100

(Thousand m2)

(Plan)

Timing of listing of logistics

REITsMay 2005

Dec. 2012

Feb. 2013

Feb. 2016 Aug. 2016

Sep. 2017

Feb. 2018

Sep. 2018

Dec. 2019

Listing of first REIT specializing in logistics facilities

CRE-REIT listed

Note: While the above also includes other assets besides portfolio assets, CRE-REIT has not engaged in specific negotiations with the CRE Group companies on any of the above assets that are not portfolio assets, nor does it have any plan to acquire them at the present time or guarantee future acquisition. The above also includes properties that have already been sold to third parties. Furthermore, with respect to properties to be developed by CRE (planned), as of February 17, 2020, development is not complete and the conceptional drawing, total floor area and development completion timing are based on plans as of February 17, 2020 and may change in the future. The building completion dates of the above properties are stated as the development completion dates.

5. Market Environment

LogiSquare Kobe Nishi

The property is located in Kobe Compound Industrial Park (Kobe Techno Logistic Park), in Nishi-ku, Kobe-shi, Hyogo. It is located approximately 1.6 km from the Kobe Nishi Interchange on the Kobe-

Awaji-NarutCo oEpxpyreigshswt (aCy/)S2a0n2yo1 ECxRprEesLsowgaiys.tiTchseRpEroIpTe, rItnycis.Alolcl aRteigdhotns aRneisnedruvsetrdia.l park and is, therefore, surrounded by numerous warehouses and factories and can be operated 24 hours a day.

Summary of Market Trends

Recent Market Trends

Vacancy rate: 0.19% QoQ: Slightly Deteriorated (+ 0.04pt)

Robust new demand continued and vacant properties dried up.

Vacancy rate: 3.59% QoQ: Deteriorated (+ 1.45pt)

New demand is strong and the relocation from bay areas to inland areas continued.

Rising Demand for Rental Logistics Facilities

Around 30% of logistics facilities in the Tokyo Metropolitan Area are 40 to 50 years old.

3PL Market Size

2009

2019

1.2 trillion yen3.1 trillion yen

2.5-fold increase in 10 years

EC Market Size/EC Ratio

2010

2019

7.8 trillion yen19.4 trillion yen

2.8%

2.5-fold increase in 9 years

6.8%

64% of tenant companies that use logistics facilities have plans to relocate or expand logistics facilities.

Note: Please refer to the notes on each page from 42 to 47 page for the definition of each calculation method of each figure.

Vacancy rate: Less than 5%

Vacancy rate: 5% or more and less than 10%

(1) Tokyo Metropolitan Area and Osaka Area (from LogiSquare Market Report)Vacancy rate: 10% or more

Tokyo Metropolitan Area

Robust new demand continued and vacant properties dried up Vacancy rate: 0.19％ QoQ: Slightly Deteriorated

The vacancy rate was 0.19%, increasing 0.04 points from the previous Q, yet maintaining the lowest level following the previous Q since the survey started, along with vacant spaces of approx. 11,000 tsubo.

New supplies are the fifth largest in recent three years, but the rate of digestion is approx. 98%, the second largest following the 100% of the previous Q.

New supplies of approx. 880,000 tsubo, the largest since the survey started, are scheduled for 2021CY. Currently, the rate of reservations is reportedly approx. 65%, exceeding the rate as of the end of 2019CY, therefore the occupancy rate is likely to remain high for a while.The demand for new properties is strong and reservations for the properties for 2022CY and beyond are also in progress.

2,500

2,000

1,500 1,000

500

10%

8%

6% 4% 2% 0%

(Ten thousand m2)

Rented areaVacant area

Vacancy rate (right axis)

Osaka Area

New demand is strong and the relocation from bay areas to inland areas continued.

Vacancy rate: 3.59％ QoQ: Deteriorated

The vacancy rate was 3.59%, increasing 1.45 points from the previous Q. New supplies of approx. 29,000 tsubo were digested and existing properties of approx. 29,000 tsubo, a significant number, were supplied. The supply sources of the existing properties are the Hanshin Kobe Port area and Osaka Bay area. More than 20,000 tsubo were supplied from the Hanshin Kobe Port area. Digestion is expected due to the popularity of the area. Slightly more than 4,000 tsubo were supplied from the Osaka Bay area, as well. It was caused by the relocation to new supplies in inland areas. Moving out from the bay areas is likely to continue in future.

On the other hand, the demand for new supplies is strong. Of the new supplies with approx. 230,000 tsubo for 2021CY, approx. 70% have been reportedly reserved. New supplies with approx. 81,000 tsubo are scheduled for 2022CY.

1,000

500

20%

15%

10%

5%

0%

(Ten thousand m2)

Rented areaVacant areaVacancy rate (right axis)

Source: Prepared by the Asset Management Company based on data from "LogiSquare Market Report on Warehouses and Logistics Properties December 2020" of CRE, Inc.

(2) Saitama Prefecture each area (from LogiSquare Market Report)

Niiza

Urawa Misono

Southern Saitama area

Vacancy rate:0.02% QoQ: Stagnant

The vacancy rate was 0.02%, remaining flat from the previous Q. New supplies of approx. 25,000 tsubo were digested and there was no change in existing properties. New supplies of approx. 95,000 tsubo for 2020CY were digested and the low vacancy rate has remained. New supplies with approx. 83,000 tsubo are scheduled for 2021CY, of which slightly less than 60% have been reportedly reserved. The reservation rate for new supplies for 2021CY 1Q is reportedly less than 40% and the vacancy rate may temporarily increase.

4,000

Saitama Kan-Etsu/ Tohokudo area

Vacancy rate:0.60% QoQ: Slightly Deteriorated

The vacancy rate was 0.60%, increasing 0.27 points from the previous Q. Of new supplies with approx. 25,000 tsubo, slightly more than 10% have yet to be digested. There was no change in existing properties. New supplies of approx. 190,000 tsubo for 2020CY were almost digested and the low vacancy rate has remained. New supplies with approx. 150,000 tsubo are scheduled for 2021CY, the reservation rate of which is reportedly slightly more than 50%. The reservation rate of new supplies for 2021CY 1Q is slightly less than 90%, and leasing is reportedly in progress. No significant impact on the vacancy rate is expected.

千

3,000

2,000

1,000

(Thousand m2)

(Thousand m2)

15%

10%

5%

千

4,000 3,000 2,000 1,000

0%

Source: Prepared by the Asset Management Company based on data from "LogiSquare Market Report on Warehouses and Logistics Properties December 2020" of CRE, Inc.

千

(Thousand m2)

Breakdown: Saitama Kan-Etsu/ Tohokudo area

2,000

1,000

Saitama Kan-Etsudo area

201606 201606

201609 201609

Rented areaVacant areaVacancy rate (right axis)

201612 201612

201703 201703

201706 201706

201709 201709

Rented area

201712 201712

201803 201803

201806 201806

Mizuho B

201809 201809

201812 201812

Vacant area

201903 201903

201906 201906

Vacancy rate:1.16%

Kawagoe

Kawagoe II

201909 201909

Vacancy rate (right axis)

Source: Prepared by the Asset Management Company based on data from CRE, Inc.

201912 201912

202003 202003

202006 202006

Mizuho A

Sayama Hidaka

202009 202009

202012 202012

15%

10%

5%

0%

(Thousand m2)

千

2,000

1,000

Saitama Tohokudo area

201606 201606

201609 201609

201612 201612

Rented area

201703 201703

201706 201706

201709 201709

Rented area

201712 201712

Vacant areaVacancy rate (right axis)

201803 201803

201806 201806

Kuki II

201809 201809

Vacant area

201812 201812

201903 201903

Vacancy rate:0.05%

201906 201906

Kuki

Kasukabe

201909 201909

201912 201912

202003 202003

Hanyu

Ageo

202006 202006

Vacancy rate (right axis)

15%

10%

5%

0%

202009 202009

202012 202012

15%

10%

5%

0%

(3) Other each area (from LogiSquare Market Report)

Southwestern Ibaraki area

Moriya

Vacancy rate:0.00% QoQ: Stagnant

The vacancy rate was 0.00%, remaining at an extremely low level for five consecutive Qs. There were no changes in both new supplies and existing properties. New supplies of approx. 41,000 tsubo for 2020CY were digested. New supplies with approx. 45,000 tsubo are scheduled for 2021CY, the reservation rate of which is reportedly slightly more than 90%. The vacancy rate is likely to remain low for a while. Due to the low level of stock in the area, trends in new supplies will be monitored from an early stage.

Tosu area

Tosu

Vacancy rate:0.00%

QoQ: Stagnant

The vacancy rate was 0.00%, remaining at an extremely low level. New supplies of approx. 25,000 tsubo, the largest since the survey started, are scheduled for 2021CY, the reservation rate of which is reportedly less than 50%. New supplies for 2021CY 1Q have not yet been reserved, therefore the vacancy rate may increase. New supplies with approx. 70,000 tsubo, the largest since the survey started, are scheduled for 2023CY.

Reservation trends will be monitored from an early stage.

1,000

千

千

(Thousand m2)

(Thousand m2)

1,000

Inland Kobe areaVacancy rate:0.00%

The vacancy rate was 0.00%, remaining at an extremely low level for five consecutive Qs. New supplies of approx. 14,000 tsubo were digested and there was no change in existing properties. New supplies of approx. 19,000 tsubo for 2020CY were digested. New supplies with approx. 24,000 tsubo are scheduled for 2021CY, which reportedly have not yet been reserved. On the other hand, there will not be supplies until 3Q, therefore the vacancy rate is likely to remain low for a while. New supplies with approx. 22,000 tsubo are scheduled for 2022CY.

201606 201606

201609 201609

201612 201612

Rented area

201703 201703

201706 201706

201709 201709

Rented area

201712 201712

QoQ: Stagnant

Vacant areaVacancy rate (right axis)

201803 201803

201806 201806

201809 201809

201812 201812

201903 201903

201906 201906

201909 201909

201912 201912

202003 202003

202006 202006

Vacant areaVacancy rate (right axis)

40%

20%

0%

Kobe Nishi

1,000

202009 202009

202012 202012

30%

20%

10%

0%

(Thousand m2)

(Thousand m2)

千

千

4,000 3,000 2,000 1,000

Hokusetsu Higashi-Osaka area

Vacancy rate:0.01%

The vacancy rate was 0.01%, remaining flat from the previous Q. New supplies of approx. 15,000 tsubo were digested and there was no change in existing properties. New supplies of approx. 70,000 tsubo for 2020CY were digested and a low vacancy rate continued.

New supplies with approx. 162,000 tsubo are scheduled for 2021CY, of which approx. 70% have reportedly been reserved. On the other hand, there are properties that have not been reserved in 2021CY 1Q and the vacancy rate may increase.

201606 201606

201609 201609

201612 201612

Rented areaVacant areaVacancy rate (right axis)

201703 201703

201706 201706

201709 201709

Rented areaVacant areaVacancy rate (right axis)

Source: Prepared by the Asset Management Company based on data from "LogiSquare Market Report on Warehouses and Logistics Properties December 2020" of CRE, Inc.

201712 201712

QoQ: Stagnant

15%

10%

5%

0%

201803 201803

201806 201806

201809 201809

201812 201812

201903 201903

201906 201906

201909 201909

201912 201912

202003 202003

202006 202006

202009 202009

202012 202012

30%

20%

10%

0%

Rising Demand for Rental Logistics Facilities

(1) Reconstruction Demand for Logistics Facilities

• • About 30% of logistics facilities in the Tokyo Metropolitan Area(Note 1) were constructed during the period of high economic growth or the economic bubble, and they are 40 to 50 years old.

• • Given that the useful life of logistics facilities under the tax code is 38 years(Note 2), demand for reconstruction in pursuit of functionality appears to be increasing.

Percentage of logistics facilities in the Tokyo Metropolitan Area by year of construction

100%

80%

10%

To 1969

1970 - 1979

1980 - 1989

1990 - 1999

From 2000

60%

40%

23%

24%

20%

25%

0%

Construction from 2000, when foreign-affiliated developers began development in Japan and advanced logistics facilities began being

constructed.

Source: Prepared by the Asset Management Company based on data from Tokyo Metropolitan Transportation Planning Association

Distribution of locations by the number of facilities

Note 1: Tokyo Metropolitan Area includes Tokyo, Kanagawa, Saitama, Chiba, central and southern Ibaraki, southern Tochigi and southern Gunma Note 2: Steel-reinforced concrete or reinforced concrete structures

Rising Demand for Rental Logistics Facilities

(2) Expansion of 3PL Market and EC Market

• • The market for third-party logistics (3PL) is growing as increasingly companies are tending to comprehensively outsource their logistic operation.

3PL (Third-Party Logistics) Market Size

• • The EC market is expanding year by year. However, in Japan, the EC rate is low compared with the U.S. and there is still much room for expansion.

Growth in the BtoC e-commerce market size in Japan

(Trillion yen) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (year)

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

E-commerce market size in Japan (left axis)

2.59 2.85 3.03 3.16

Source: "The monthly Logistics Business" September 2020 issueE-commerce rate in Japan (right axis)

E-commerce rate in the U.S. (right axis)Source: Prepared by the Asset Management Company based on data of the Ministry of Economy, Trade and Industry for the

BtoC e-commerce market size and the e-commerce rate in Japan and data of the United States Census Bureau for the e-commerce rate in the U.S.

Note : The ratio of the e-commerce market size to the amount of all commercial transactions (the commercial transaction market size). The e-commerce rate in BtoC e-commerce refers to the value in the field of product sales.

• • In recent years, the floor space of new warehouse construction starts is around half the peak level and there is a shortage of logistics facilities to meet current logistics needs.

Trends in Floor Space of New Construction Starts

(Million m2)

20

15

10

5

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Source: Prepared by the Asset Management Company based on the Japan Construction Starts Report by the Ministry of Land, Infrastructure, Transport and Tourism and the Statistical Yearbook of Construction by the Ministry of Construction

(year)

Rising Demand for Rental Logistics Facilities

(3) Rising Importance of Logistics Network Strategy

• • 64% of tenant companies that use logistics facilities have plans to relocate or expand logistics facilities.

• • Possibility that rental demand for logistics facilities will increase due to COVID-19.

Plans for relocation / expansion of logistics facilities

Medium- to long-term changes and the impact of COVID-19 considered by tenants using logistics facilities

Building up of inventories to prepare for an emergency

Acceleration of the automation of warehouse operations (to reduce dependence on labor)Increase in demand for the last mileIncrease in demand for refrigerated warehouses for foods and fresh foods

Acceleration of the use of unmanned delivery robots (to avoid face-to-face delivery)

No particular changeOthers

0%

10%

20%

30%

40%

Number of responses: 336

Survey period: March 4, 2020 to March 19, 2020

Survey targets: Tenant companies using logistics facilities

Source: Prepared by the Asset Management Company based Tenant survey on the use of logistics facilities 2020 from CBRE K.K.

Number of responses: 361

Survey period: March 4, 2020 to March 19, 2020

Survey targets: Tenant companies using logistics facilities

Source: Prepared by the Asset Management Company based on the Impact of COVID-19 on Logistics from

CBRE K.K.

６． Appendix

LogiSquare Sayama Hidaka

The uppermost fifth floor of the facility features a cafeteria which can seat around 150 people and a retail space, a rooftop terrace with views of Mount Fuji and other shared amenities and there is also free Wi-Fi aCndopByGrMighbtro(aCd)c2a0st2in1gCeRquEipLmoegnitsttoichseRlpEimITp,roInvce.tAhell wRoigrkhintsg Renevsireornvmeden. t of workers.

Overview of Appraisal

Appraisal value / Unrealized gains rate

120,000

0 (million yen)

100,000

80,000

60,000

40,000

20,000

30.0% 150,000

By the acquisition of assets acquired in the 9th FP +19,080 million yen

By appraisal of existing assets +1,120 million yen

NAV per unit

25.0%

20.0% 100,000

15.0%

10.0% 50,000

5.0%

0.0%

0 (yen)Book valueAppraisal value

Unrealized gains rate

Net assets after distribution per unitUnrealized gains per unit

Overview of Appraisal

No.

Property name

Acquisition month and year

M-1

LogiSquare Kuki

M-2

LogiSquare Hanyu

M-3

LogiSquare Kuki II

M-4

LogiSquare Urawa Misono

M-5

LogiSquare Niiza

M-6

LogiSquare Moriya

M-7

LogiSquare Kawagoe

M-8

LogiSquare Kasukabe

M-9

LogiSquare Soka

M-10

LogiSquare Yashio

M-11

LogiSquare Mizuho A

M-12

LogiSquare Mizuho B

M-13

LogiSquare Ageo

M-14

LogiSquare Miyoshi

O-1

LogiSquare Tosu

O-2

LogiSquare ChitoseEnd of 9th FP Total / Average

For Reference: After Acquisition of Newly Acquired Assets (as of

M-15

LogiSquare Sayama Hidaka

M-16

LogiSquare Kawagoe II

O-3

LogiSquare Kobe Nishi

After acquisition of newly acquired assets Total / Average

Jul. 2016

Feb. 2018

Feb. 2018

Feb. 2018

Feb. 2018

Feb. 2020

Feb. 2020

Feb. 2020

Feb. 2020

Apr. 2018

Jul. 2016

Jul. 2019

Jul. 2019

Jul. 2020

Jul. 2020

Jul. 2020 ―

Acquisition price (million yen)

91,527

13,060

11,700

9,759

6,830

2,079

6,960

6,157

1,490

4,900

8,109

5,073

2,794

3,584

4,908

2,823

1,300

Book value at the end of the 9th FP (million yen)

90,253

Appraisal value (million yen)

98,780

Note: Based on the appraisal report with November 31, 2020 as the date of the value opinion in the case of newly acquired assets

Direct capitalization rate (%)

―

At the end of the

8th FPAppraisal value (million yen)

78,580

Direct capitalization rate (%)

―

ChangesAppraisal value (million yen)

+ 20,200

Direct capitalization (million yen)

rate (%)

―

Unrealized gains

8,526

9.4

M-15 LogiSquare Sayama Hidaka（Note）

Note: The Investment Corporation has acquired 80% of quasi co-ownership interests of trust beneficial interest in LogiSquare Sayama Hidaka.

Property Features

• • The property is located approximately 0.7 km from the

  Sayama Hidaka Interchange on the Ken-O Expressway, and access to National Route 407 is also easy. Surrounded by numerous warehouses, factories and other facilities, the property can be operated 24 hours a day.

• • The property has warehouse space on floors 1-4 and offices, a cafeteria and so forth on the fifth floor. Each floor has an area of approximately 18,000 m2 and there is a rampway enabling heavy trucks to go directly to the second and third floors, giving the property a total of 120 truck berths across the first, second and third floors. The facility has a slope exclusively for outgoing vehicles on the second and third floors, contribute to the prevention of congestion and accidents and making maximum use of the site.

• • The uppermost fifth floor of the facility features a cafeteria which can seat around 150 people and a retail space, a rooftop terrace with views of Mount Fuji and other shared amenities and there is also free Wi-Fi and BGM broadcasting equipment to help improve the working environment of workers.

M-15 LogiSquare Sayama Hidaka

By making the rampway exclusive to incoming vehicles and the slope exclusive to outgoing vehicles, this property is considered to prevent vehicle congestion and accidental contacts in the facility caused by alternating traffic and make full use of the site.

Incoming and outgoing guidelines are separated

Sandwich panels

Sandwich panels are used on exterior walls to reduce heating and cooling loads and to give the exterior an attractive appearance.

防災支援システム

The facility is also equipped with the TASKis system developed by NOHMI BOSAI LTD., a leading manufacturer of disaster prevention equipment, so that, in the event of a fire, information such as the location of a fire within the facility can be instantly sent to the smartphones of employees, the facility manager and other concerned parties, enabling the facility as a whole to efficiently support the in-house fire brigade in evacuating the facility and putting out the fire.

Self-consumption of solar power generation

The roof is leased to a solar power generation business operator and the lessee has installed solar panels with a power output of 751.10 KW. Some of the power used by the property is natural energy generated through these solar panels.

Powder corner

Small article container

AED

LED lighting in the whole building

Emergency generators

M-16 LogiSquare Kawagoe II

• • The property is located approximately 3.6 km fromProperty Features

  Sakado Interchange on the Ken-O Expressway, approximately 7.0 km from Kawagoe Interchange on the Kan-etsu Expressway, and approximately 7.0 km from the Tsurugashima Interchange on the Kanetsu Expressway and also has excellent access to the National Route 254, which is a main road within the Tokyo metropolitan area.

• • The property consists of two adjacent plots of land, with a logistics facility covering an area of approximately 14,000 m2 on the plot on the east side and primarily space for parking on the plot of the west side.

• • The property also gives consideration to tenant business continuity planning (BCP) through the use of an earthquake early warning system, the installation of AEDs, and the installation of circuit breakers to automatic fire alarm equipment as a measure to prevent fire spread in the event of a fire.

• • The roof is leased to a solar power generation business operator and the lessee has installed solar panels. Some of the power used by the property is natural energy generated through these solar panels.

LogiSquare Kawagoe II has two buildings, but the "building structure" is that of the building with the larger total floor area of the two buildings, which is listed in the real estate registry. For the total floor area, the sum of total floor areas presented in the real estate registries of the two buildings is stated. The completion date is stated based on the real estate registry of the building with the larger total floor area of the two buildings.

O-3 LogiSquare Kobe Nishi

Property Features

LogiSquare able to operate 24 hours a day as an interregional logistics base in the Kansai area

• • The property is located approximately 1.6 km from the

  Kobe Nishi Interchange on the Kobe-Awaji-Naruto Expressway/Sanyo Expressway. In addition, the property is located on Kobe Compound Industrial Park (Kobe Techno Logistic Park) and is, therefore, surrounded by numerous warehouses and factories and can be operated 24 hours a day.

• • With access to Sannomiya and Central Osaka via the

  Hanshin Expressway from the Kobe-Awaji-Naruto Expressway and now with two possible routes to Kyoto from the Sanyo Expressway, either the Shin-Meishin Expressway (between Kobe Junction and Takatsuki Junction) opened in 2018 or the Chugoku Expressway/Meishin Expressway, the location has become even more convenient and is an excellent location for wide-area logistics base covering not only the major cities of Kansai - Kobe, Osaka and Kyoto - but also Okayama and Tokushima Prefectures.

• • Situated in Nishi-ku, Kobe city with the largest population, the property is also well located for securing labor, with the nearest station Kizu Station on the Kobe Dentetsu Ao Line within walking distance, approximately 750m away.

Signs on the property including the use of designs creating a sense of intimacy that visualizes warehouse features such as the effective ceiling height, floor weight capacity and lighting intensity.

Cash Flow is Stable even after the Spread of COVID-19 Infection

Tenants have not requested the delay or reduction of rent payments.

• • As of February 17, 2021, there have been no requests from tenants to delay rent payments or reduce rent due to the deterioration of their operating status and earnings.

• • As of February 17, 2021, the Investment Corporation has confirmed that tenants have paid the entire amount of contracted rent by the payment dates.

100.0% occupancy rate has been maintained since the listing.

Trends in occupancy rate

Credit standing of tenants remains the same as before.

Bankruptcy prediction values of tenants (Note)

0.25

0.20

0.15

0.10

0.05

0.00 (%)

2018/02/10

2018/03/10

2018/04/14

2018/05/12

2018/06/09

2018/07/14

2018/08/11

2018/09/08

2018/10/13

2018/11/10

2018/12/08

2019/01/12

2019/02/09

2019/03/09

2019/04/13

2019/05/11

2019/06/08

2019/07/13

2019/08/10

2019/09/14

2019/10/12

2019/11/09

2019/12/14

2020/01/11

2020/02/08

2020/03/14

2020/04/11

2020/05/09

2020/06/13

2020/07/11

2020/08/08

2020/09/12

2020/10/10

Source: Prepared by the Asset Management Company based on the bankruptcy prediction values of Teikoku

Databank Ltd.

Note: For the credit standing of tenants of the Investment Corporation, the bankruptcy prediction values of Teikoku

Databank Ltd. about tenants of properties held are weight-averaged by their leased area and stated in percent figures by being rounded to the nearest two decimal places.

* The bankruptcy prediction values are the probability that a company will go bankrupt within a year. It is quantified by Teikoku Databank Ltd., using its own data analysis method based on data accumulated through its credit research and information gathering network. It is calculated for each company, using a value between 0% and 100%.

2018/2

2018/3 2018/4 2018/5 2018/6

2018/7

2018/8 2018/9 2018/10 2018/11

2018/12

2019/1 2019/2 2019/3 2019/4

2020/11/14

2019/5

2019/6 2019/7 2019/8 2019/9 2019/10 2019/11 2019/12 2020/1 2020/2 2020/3 2020/4 2020/5 2020/6 2020/7 2020/8 2020/9 2020/10 2020/11 2020/12 2021/1

2020/12/12

2021/01/09

Status of Investors

Major investors （as of December 31, 2020）

Number of investment units by type of owner

Individuals/othersForeigners

9th FP (2020/12)

Financial institutionsSecurities companiesOther domestic corporations

7th FP (2019/12)

5th FP (2018/12)

8th FP (2020/6)

6th FP (2019/6)

4th FP (2018/6)

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Disclaimer

CRE Logistics REIT Inc. published this content on 25 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 February 2021 06:03:11 UTC.