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イオンスタイル検見川浜イオン喜連瓜破ショッピングセンター
Asset Manager:Securities Code: 3292http://www.aeon-jreit.co.jp/en/
Presentation Material for Investor MeetingFor the 10th Fiscal Period Ended Jan. 31, 2018
March 22, 2018
AEON REIT Investment Corporation
AEON STYLE Kemigawahama
Table of Contents
Ⅰ. Steady Performance of AEON REIT ----- P. 3
1. Distributions per Unit and NAV per Unit ----- P. 4
2. Asset Size ----- P. 5
3. Unrealized Gains ----- P. 6
4. Strong Cash Flows ~Depreciation~ ----- P. 7
5. Strategic Cash Management ----- P. 8
Ⅱ. Stability of AEON REIT ----- P. 9
1. Some of Questions Received by AEON REIT ----- P. 10
2. Large-scale Retail Properties “AEON MALLs” Maintain Competitiveness in line with the Environment
----- P. 11
3. Image of Large-scale Retail Properties “AEON MALLs” ----- P. 12
4. Specific Examples of “Value” Unable to be Provided by E-Commerce
----- P. 13
5. Characteristics of Successful Large-scale Retail Properties
----- P. 14
6. Comparison of Large-Scale Retail Properties in the United States and AEON MALLs
----- P. 15
7. Some of Questions Received by AEON REIT ----- P. 16
8. Lease Structure that Secures Stability of Cash Flows ----- P. 17
9. Performance Trends of Stores in Portfolio ----- P. 18-P.20
Ⅲ. Overview of Operation and Highlights in the 10th Fiscal Period Ended January 31, 2018
----- P. 21
1. Summary of Financial Results for the 10th Fiscal Period ----- P. 22
2. Summary of Efforts in the 10th Fiscal Period ----- P. 23
3. Portfolio Highlights ----- P. 24
4. [External Growth] Assets Acquired in the 10th Fiscal Period
----- P. 25
2
5. [External Growth] Acquisition of Logistics Facilities to Support Retail and Related Properties of AEON Group
----- P. 26
6. [Internal Growth] Achievement of Internal Growth by Investments in Revitalization
----- P. 27-P28
7. [Financial Strategy] Building of Firm Financial Base
----- P. 29
8. [Financial Strategy] Disperse Repayment Dates and Reduction of Borrowing Cost
----- P. 30
9. [Sustainability] Major Efforts ----- P. 31
10. [Appeal of the Investment Corporation] Efforts for IR Activities
----- P. 32
11. Forecasts of Performances for the 11th Fiscal Period Ending July 31, 2018
----- P. 33
12. Forecasts of Performances for the 12th Fiscal Period Ending January 31, 2019
----- P. 34
13. Capital Investment Plan ----- P. 35
14. Achievement of Internal Growth by Investments in Revitalization
----- P. 36
Ⅳ. Future of AEON REIT ----- P. 371. Practice of Strategies to Grow with Retail and Related Properties of AEON Group
----- P. 38
2. Roadmap for Growth ----- P. 39
Appendix
イオンモール直方(夜)
Ⅰ. Steady Performance of AEON REIT
イオンレイクタウン
AEON LakeTown kaze Daiei-Ibaraki Process Center
4
Steady Performance of AEON REIT ~ Distributions per Unit and NAV per Unit ~
686
2,461 2,4732,724 2,790
1,450
3,019 2,926 3,029
2ND FISCAL PERIOD
(JAN 2014)
3RD FISCAL PERIOD
(JULY 2014)
4TH FISCAL PERIOD
(JAN 2015)
5TH FISCAL PERIOD
(JULY 2015)
6TH FISCAL PERIOD
(JAN 2016)
7TH FISCAL PERIOD
(JULY 2016)
8TH FISCAL PERIOD
(JAN 2017)
9TH FISCAL PERIOD
(JULY 2017)
10TH FISCAL PERIOD
(JAN 2018)
(yen)( Distributions per Unit )
The 2016
Kumamoto Earthquake
110,456112,635
115,939
122,057
126,169
123,547
127,912 127,358 128,301
2ND FISCAL PERIOD
(JAN 2014)
3RD FISCAL PERIOD
(JULY 2014)
4TH FISCAL PERIOD
(JAN 2015)
5TH FISCAL PERIOD
(JULY 2015)
6TH FISCAL PERIOD
(JAN 2016)
7TH FISCAL PERIOD
(JULY 2016)
8TH FISCAL PERIOD
(JAN 2017)
9TH FISCAL PERIOD
(JULY 2017)
10TH FISCAL PERIOD
(JAN 2018)
( NAV per Unit )
Achieved an increase in unitholder value since the listing
(yen)The 2016
Kumamoto Earthquake
5
158.3 158.9 158.9
194.3 194.3
249.2268.5
330.6355.1
2ND FISCAL PERIOD
(JAN 2014)
3RD FISCAL PERIOD
(JULY 2014)
4TH FISCAL PERIOD
(JAN 2015)
5TH FISCAL PERIOD
(JULY 2015)
6TH FISCAL PERIOD
(JAN 2016)
7TH FISCAL PERIOD
(JULY 2016)
8TH FISCAL PERIOD
(JAN 2017)
9TH FISCAL PERIOD
(JULY 2017)
10TH FISCAL PERIOD
(JAN 2018)
Steady Performance of AEON REIT ~ Asset Size ~
( Asset Size )
2nd Follow-On Offering1st Follow-On Offering 4th Follow-On Offering3rd Follow-On Offering
AEON MALL KYOTO
Major property
AEON MALLYamatokoriyama
AEON MALLItamikoya
Daiei-IbarakiProcess Center
AEON STYLE Kemigawahama
AEON MALLKagoshima
Achieved steady growth in asset size since the listing
Daiei-kawasakiProcess Center
(billions of yen)
Acquisition of the first
logistics facility of
AEON REIT
One of the largest retail
properties in Kagoshima City
Third logistics facility
of AEON REIT
Retail property close
to a station
Retail property close
to a station
Medium-term target of
asset size
Achieved 300 billion yen
Major property Major property Major propertyPopulation in a
commercial area of 10km
500,000 people or more
Population in a
commercial area of 10km
500,000 people or more
6
Steady Performance of AEON REIT ~ Unrealized Gains ~
8.510.6
13.716.6
21.1 22.3
28.031.3
35.8
2ND FISCAL PERIOD
(JAN 2014)
3RD FISCAL PERIOD
(JULY 2014)
4TH FISCAL PERIOD
(JAN 2015)
5TH FISCAL PERIOD
(JULY 2015)
6TH FISCAL PERIOD
(JAN2016)
7TH FISCAL PERIOD
(JULY 2016)
8TH FISCAL PERIOD
(JAN 2017)
9TH FISCAL PERIOD
(JULY 2017)
10TH FISCAL PERIOD
(JAN 2018)
( Unrealized Gains )(billions of yen)
Increase in
unrealized gains
AEON MALL Mitouchihara
Unrealized gains have also been expanding steadily since the listing
AEON MALL NogataAEON LakeTown mori
7
イオンリートは
Strong Cash Flows ~Depreciation~
AEON REIT Investment Corporation is able to grow, using its strong cash flows.
1.1
2.2 2.2
2.6 2.6
3.13.3
4.14.3
2ND FISCAL PERIOD
(JAN 2014)
3RD FISCAL PERIOD
(JULY 2014)
4TH FISCAL PERIOD
(JAN 2015)
5TH FISCAL PERIOD
(JULY 2015)
6TH FISCAL PERIOD
(JAN2016)
7TH FISCAL PERIOD
(JULY 2016)
8TH FISCAL PERIOD
(JAN 2017)
9TH FISCAL PERIOD
(JULY 2017)
10TH FISCAL PERIOD
(JAN 2018)
External Growth
Investments in
Revitalization
Generation of
Cash Flow
Improvement
of Profitability
(billions of yen)
Strategic Cash Management
Track record of using cash created as an amount equivalent to depreciation.
Investing in revitalization of property to boost revenues and competitiveness
AEON MALL Yokkaichi-kita
AEON MaLL Nogata
Appropriation to the new properties (AEON MALL Seremban2) acquired funds
AEON MALL Hiezu
Appropriation to the new properties (AEON
MALL KYOTO, etc.) acquired funds
AEON MALL Morioka
3.3.3bn
AEON LakeTown kaze
Appropriation of funds to acquire new properties (Note)
10th Fiscal Period
5.67bn 8.63bn3.03bn6.0bn
AEON MALL Kurashiki
AEON MALL Suzuka
contin
uous v
alu
e c
reatio
n
contrib
utin
g to
both
investo
rs and o
pera
tors
incre
sein
in
vestm
ent e
fficie
ncy
AEON MALL Hiezu
0.05bn
AEON MALL Nogata
dealin
g w
ith
unpre
dic
table
facto
rs
Restoration of AEON MALL Kumamoto
Restoration of AEON MALL Kumamoto
(Note) The amount stated in “Appropriation to funds to acquire new properties” shows an amount appropriated to funds to acquire new properties from funds on hand, and it is calculated by subtracting the total amount of proceeds from public offering conducted during the fiscal period under review and borrowings with the acquisition of specified assets as the use from the acquisition price of properties acquired in each fiscal period (not including consumption taxes and expenses for acquisition).
8
9th Fiscal Period
8th Fiscal Period
7th Fiscal Period
6th Fiscal Period
5th Fiscal Period
Appropriation to the new properties (AEON MALL Yamatokoriyama, etc.)
acquired funds
Appropriation to the new properties (AEON MALL
Shimotsuma, etc.) acquired funds
Ⅱ. Stability of AEON REIT
イオンモール直方(夜)
AEON MALL KYOTO
Some of the Questions Received by AEON REIT
10
The number of dead malls are increasing in the
United States because of the impact of e-commerce.
I wonder if malls in Japan will be able to maintain
their business.
Isn’t it difficult for large-scale retail properties to
maintain competitiveness in the future?
Other retail groups announced that they would be
closing stores, and specific cases have emerged in other
companies. Will such an incident occur at properties held
by AEON REIT?
We expect that changes in the external
environment will continue to be severe given
factors such as population decline and the
expansion of e-commerce. However, retail
and related properties that will maintain
competitiveness in this environment will be
top-class regional retail and related
properties in a solid commercial area that
will capture the needs of the commercial
area, regardless of their category of urban
type or suburban type and malls or other.
▷See pages 11-15.
Given that properties held by AEON
REIT are stores supported by solid
commercial areas, we think that the
risk that the sponsor group will
depart is extremely low.
Both the operation status of end
tenants and the revenue situation
of the master lease company are
solid, and they will continue to
maintain competitiveness through
revitalization, etc.
▷See pages 17-20.
Future
business
conditions
of
investment
targets
Continuity
of rent in
the current
master
lease I wonder if rent will be reduced even in the long-term
fixed master lease if the business conditions of the AEON
Group becomes severe.
The Thinking of AEON REIT
Large-scale Retail Properties “AEON MALLs” Maintain Competitiveness in line with the Environment
11
Aeon Mall Specialty store sales as a whole maintains 100% compared to the previous terms
AEON MALL specialty store sales change
(source) Prepared by the Asset Manager based on result briefing materials of AEON MALL Co., Ltd. FY2010-2016.(note) With respect to sales of specialty store sales (after day adjustment) at AEON Mall Co., Ltd. and sales of large specialty stores and specialty stores by industry, we set the existing store sales in fiscal 2010 as 100, It is indicated by the index calculated by multiplying the index of the fiscal year
specialty store sales (after day
adjustment)
large specialty
store
service
clothing
accessories
amusement
sundries
food
80%
85%
90%
95%
100%
105%
110%
115%
120%
Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 Fiscal Year 2016
specialty store sales (after day adjustment) large specialty store
clothing accessories
sundries food
amusement service
Image of Large-Scale Retail Properties “AEON MALLs”
12
Mall zone for specialty stores
Securing solid customer demand in a local commercial area,
General merchandise store (GMS) centering on food,Delivery base of an online
supermarketCore tenants with an ability to
attract customers“Value-based consumption
tenants”“Large specialty stores”
More than 100 specialty stores which can be replaced in a flexible manner, making excellent use of the
leasing power of the AEON GroupOptimizing the ratio of product sales and services.
Parking lots
Huge parking lots with thousands of parking spaces
to draw in customers in a large commercial area
Core tenantsCore tenants
Food courtRestaurants, cafes
Holding of various events
Gathering space
Providing food in diverse forms. Prolongation of time that visitors stay at the mall
Able to change the composition of tenants in response to the consumption needs and preferences of customers
13
Specific Examples of “Value” Unable to be Provided by E-Commerce
MALL WALKING
Strengthening the deli
AEON STYLE Kemigawahama
radio gymnastic exercises
Space where customers can bring food
(1) Competitive core tenants and the diverse tenant mix
(2) Continuous floor expansion and revitalization
Characteristics of Successful Large-scale Retail Properties
✓ AEON STYLE,Maruetsu,
TOYOTA MALL,UNIQLO,ZARA
MUJI Stores ,Nojima,AEON CINEMA
【Core Tenants】
【floor expansion and revitalization】
2008 AEON LakeTown kaze and AEON LakeTown mori opend
2011 OUTLET expanded
2015 Large scale renewal
(New store:193stores、Transfer:70stores、
Renewal:89stores)(Note1)(Note2)
(Note1)Total of AEON LakeTown kaze,AEON LakeTown mori and
OUTLET(Note2)
Large-scale retail properties with competitiveness that have satisfied the conditions to succeed will survive both
in Japan and the United States.
(Note2)The Investment Corporation has not decided to acquire the outlet building and does not guarantee its acquisition in the future.
14
15
Large-scale retail properties in the United States and AEON MALLs have different characteristics.
AEON MALLs The United States
Core tenants
GMS (food items make up about 60%)*1
Delivery base of an onlinesupermarket
Large specialty storesMovie theater
Department stores
Large specialty stores
Movie theater
Tenants Product sales: Approx. 65%、
Drinking and eating establishments and services: Approx. 35%*2
Product sales: Approx. 80%
(Centered on apparel)*3
Developer
(SC development
entity) Developed from the retail industryDeveloper whose main business is
real estate
Comparison of Large-Scale Retail Properties in the United States and AEON MALLs
At AEON MALLs, the food zone is the key to attracting
customers.
At AEON MALLs, the percentage of drinking and
eating establishments and services is high.
AEON MALLs are operated with the collective strength
of the AEON Group, and risk of core tenants vacating
is low.
*1 Source: Presentation material of AEON MALL Co., Ltd. for the fiscal year ended February 28, 2017 (92nd term) *2 Calculated by the Asset Manager based on data of properties held by the Investment Corporation*3 Source: ICSC Research
Some of the Questions Received by AEON REIT
16
The number of dead malls are increasing in the
United States because of the impact of e-commerce.
I wonder if malls in Japan will be able to maintain
their business.
Isn’t it difficult for large-scale retail properties to
maintain competitiveness in the future?
Other retail groups announced that they would be
closing stores, and specific cases have emerged in other
companies. Will such an incident occur at properties held
by AEON REIT?
We expect that changes in the external
environment will continue to be severe given
factors such as population decline and the
expansion of e-commerce. However, retail
and related properties that will maintain
competitiveness in this environment will be
top-class regional retail and related
properties in a solid commercial area that
will capture the needs of the commercial
area, regardless of their category of urban
type or suburban type and malls or other.
▷See pages 11-15.
Given that properties held by AEON
REIT are stores supported by solid
commercial areas, we think that the
risk that the sponsor group will
depart is extremely low.
Both the operation status of end
tenants and the revenue situation
of the master lease company are
solid, and they will continue to
maintain competitiveness through
revitalization, etc.
▷See pages 17-20.
Future
business
conditions
of
investment
targets
Continuity
of rent in
the current
master
lease I wonder if rent will be reduced even in the long-term
fixed master lease if the business conditions of the AEON
Group becomes severe.
The Thinking of AEON REIT
Lease Structure for Stable Cash Flows
17
AEON REIT
Master lease agreements
AEON Group Companies
Lease term(Basically 20 years for domestic propertiesand 10 years for overseas properties)
Fixed rents
Sublease agreements Sublease agreements
Tenants Tenants
Lease structure diagram
AEON MallCo., Ltd.
AEON RetailCo., Ltd.
AEON HokkaidoCorporation
AEON KYUSHU CO., LTD.
The Daiei., Inc.AEON. CO.(M)
BHD.AEON GLOBAL SCM CO.,LTD.
General terms and conditions of Master Lease Agreement
Rents:
Basically fixed rents
The amount equivalent to the fixed asset tax and city planning tax will be reviewed as variable rent.
Conditions of cancellations:
Basically non-cancellable during the period of master lease agreement
Apart from lease period, non-cancellable period is set in each properties, and lessee can terminate the lease agreement by paying penalty equivalent to 6-month rents only on the day after the end of the day of non-cancellable period (Cancellation date).
Stable cash flows are continuously secured through long-term-fixed-rents master lease agreement.
18
Performance of Properties in Portfolio (1)
YoY Sales Comparison (Note 1) of End Tenants in 34 Retail Domestic Properties Portfolio
Actual End-Tenant Occupancy Rate (Note 2) in 34 Retail Domestic Properties Portfolio
Sales of end tenants almost on the same level but high occupancy rate in actual end tenants.
(Notes)1. The total amount of sales of end tenants of the 34 retail properties portfolio for the four periods of March–May, June–August, September–November and December–February each year as a percentage of sales for the same periods of the previous year.2. The percentage of total leased area in the 34 domestic retail properties that is actually occupied by end tenants (including area in which end tenants have committed to opening stores).
As for Aeon Kireuriwari shopping center, occupancy rates results reflect from May 2016.3. Year-on-year sales comparisons and the actual occupancy rates shown above are data based on interviews of master lease companies. The percentage of properties with master lease contracts is 100%.4. Year-on-year sales comparisons and the actual occupancy rates shown above have been rounded to the nearest hundredth of a percent.5. AEON STYLE Kemigawahama ,AEON REIT acquired on November 30, 2017 , does not include.
99.4% 99.5% 99.7%99.2%
99.4%99.0%
99.3% 99.3% 99.3%99.0% 99.2% 99.2% 99.2%
95%
96%
97%
98%
99%
100%
Nov 2014 Feb 2015 May 2015 Aug 2015 Nov 2015 Feb 2016 May 2016 Aug 2016 Nov 2016 Feb 2017 May 2017 Aug 2017 Nov 2017
103.6%
97.9% 99.1%96.8% 97.2%
100.1% 100.6% 101.3%
97.9% 96.8%99.5%
96.8%
100.4%101.6%
99.4%
80%
90%
100%
110%
Mar–May
2014
Jun–Aug
2014
Sep–Nov
2014
Dec 2014–
Feb 2015
Mar–May
2015
Jun–Aug
2015
Sep–Nov
2015
Dec 2015–
Feb 2016
Mar–May
2016
Jun–Aug
2016
Sep–Nov
2016
Dec 2016–
Feb 2017
Mar–May
2017
Jun–Aug
2017
Sep–Nov
2017
19
Rent Revenues at Master Lease Companies of 34 Retail Domestic Properties in Portfolio(Note1)
Performance of Properties in Portfolio (2)
20.4 19.9 19.5 21.0 20.3 20.0 19.721.4
20.019.3
19.621.0
20.3 20.0 19.7
103.8%100.7% 101.7% 99.3% 99.7%
100.6% 101.0%101.7%98.3% 96.8% 99.5% 98.2%
101.4% 103.2%100.3%
0%
20%
40%
60%
80%
100%
120%
0
5
10
15
20
25
Mar–May2014
Jun–Aug2014
Sep–Nov2014
Dec 2014–Feb 2015
Mar–May2015
Jun–Aug2015
Sep–Nov2015
Dec 2015–Feb 2016
Mar–May2016
Jun–Aug2016
Sep–Nov2016
Dec 2016–Feb 2017
Mar–May2017
Jun–Aug2017
Sep–Nov2017
(Billions of yen) Rent revenue (billions of yen) Indexed YoY comparison
Mar. 2016–Feb. 2017
(12-month period) ¥79.9billion
(YoY) 98.2%
Mar. 2015–Feb. 2016
(12-month period) ¥81.4billion
(YoY) 100.8%
Mar. 2014–Feb. 2015
(12-month period) ¥80.8billion
(YoY) 101.3%
Notes: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.2. The rent revenue figures above are data based on interviews of master lease companies. 3. The indexed YoY comparison figures above have been rounded to the nearest hundredth of a percent.
Increase in Y-O-Y rent revenues of master lease company demonstrating an adequate rent payment capacity
January , 201844.7
YoY sales index Less than 90%90%
~95%95%
~100%100%
~105%105%
~110%More than 110%
% of total 0% 8.8% 52.9% 32.4% 0% 5.9%
03
18
11
02
Percentage of properties with
sales index of 100% or higher :38.3%
The Percentage of properties with sales index of 100% or higher is increasing.
20
Performance of Properties in Portfolio (3)
(Reference) Consumer Confidence Index (Households of two or more persons, seasonally adjusted series)
(Source) “Consumer Confidence Survey” by Department of Business Statistics, Economic and Social Research Institute, Cabinet Office of Japan(Note) Changed to the postal survey method starting with the survey for April 2013. Until the survey for March 2013, surveys were carried out by the direct-visit and self-completion questionnaires method
(with telephone surveys at certain times).
25.0
30.0
35.0
40.0
45.0
50.0
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
Mar
May
Jul
Sep
No
v
Jan
CY 2007 CY 2008 CY 2009 CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018
(Notes)1. Sales of each property for June 2017 – November 2017 are expressed as a percentage of sales for the same period a year earlier (June 2016 – November 2016 ).2. The year-on-year sales index above presents data based on interviews of master lease companies.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%.4. AEON STYLE Kemigawahama ,AEON REIT acquired on November 30, 2017 , does not include.
Sales Trends of individual Domestic Retail Properties
Ⅲ. Overview of Operation and Highlights in the 10th Fiscal Period Ended January 31, 2018
イオンレイクタウン
AEON MALL Shimotsuma
22
Summary of Financial Results for 10th Fiscal Period Ended January 31, 2018
Major Factors of Changes from the Previous Period(Millions of yen)
Operating Revenues
Full-period contribution of properties acquired in 9th period + 400
Contribution of revenues from properties acquired in 10th period + 634
Increase in rents from AEON MALL Kumamoto + 45
Period-end dividends from SPC + 42
Operating Expenses
Land rent paid for the properties acquired in 9th period, etc. + 61
Land rent paid for the properties acquired in 10th period, etc. + 52
Depreciation for properties acquired in 10th period + 169
Depreciation for other properties + 29
Asset management fees + 108
Non-Operating Expenses
Increase in interest of borrowing and bond + 34
Borrowing related expenses + 5
Major Factors of Changes from the Forecast(Millions of yen)
Operating Revenues
Increase in water utility fee income + 3
Increase in insurance revenue + 3
Operating Expenses
Increase in repairs and maintenance expenses + 25
Decrease in depreciation ▲ 39
July January
2017 2018
9th Fiscal Period Result
10th Fiscal Period result
vs. Previous Period
10th Fiscal Period Forecast vs.
ForecastAnnounced on Sep. 12, 2017
(A) (B) (B-A) (C) (B-C)
Operating Revenues (Millions of yen) 14,642 15,780 + 1,137 15,769 + 10
Operating Expenses (Millions of yen) 9,017 9,503 + 485 9,530 ▲ 27
Expenses Related to Rent Business
(Millions of yen) 8,253 8,599 + 345 8,615 ▲ 15
(Of Which, Depreciation)
(Millions of yen) 4,176 4,380 + 204 4,420 ▲ 39
Operating Income (Millions of yen) 5,624 6,276 + 652 6,239 + 37
Ordinary Income (Millions of yen) 4,773 5,389 + 615 5,343 + 45
Unordinary Income (Millions of yen) 537 - ▲ 537 - -
Net Income (Millions of yen) 5,306 5,383 + 76 5,338 + 44
Distributions per Unit (yen) 2,926 3,029 + 103 3,000 + 29
Number of Investment Units Issued
(unit) 1,635,912 1,777,347 + 141,435 1,777,347 -
Summary of Efforts in the 10th Fiscal Period
ExternalGrowth
InternalGrowth
FinancialStrategy
summary of the major initiatives undertaken during the 10th fiscal period
SustainabilityFavorable Evaluation
on Environmental Considerations
Obtained from Sumitomo Mitsui
Banking Corporation
DBJ Green Building Certification
Assessment :
2017★★★★★(highest rank)
Acquired four properties.
total cost : 24.5 billion yen
Major cases of Investments in Revitalization
AEON MALL Morioka Installation of Wastewater Treatment Facility(Rent increase)
AEON MALL Kurashiki Large scale renewal(Rent increase)
AEON MALL Suzuka Large scale renewal(Rent increase)
LTV :44.9%(Previous Period:46.7%)
lender formation:21(Previous Period:19)
Issuance of New Investment Units Issue price: ¥110,662 per unit
The number of newly-issued investment units (including third-party allotment)
: 141,435 units
AEON REIT
designated as highest rank "Green Star“For the second Consecutive year.
AEON KireuriwariShopping Center AEON MALL Shimotsuma Daiei-Ibaraki Process Center AEON STYLE Kemigawahama
Maintain and increase
the value of properties
LTV fell to 44.9%
diversify financing methods
10th Fiscal Period result
→Acquired three certifications
23
Issuance of Investment Corporation Bonds
Total issue amount :¥2billionInterest rate :0.680% per annum
Rating :AA-(Japan Credit Rating Agency, Ltd.)
Assessment :A11th Fiscal Period
→Acquired one certification
Portfolio Highlights (as of January 31, 2018)
Number of properties 40
Total acquisition price 355.1bn
Portfolio appraisal NOI yield before depreciation 6.4%
Portfolio appraisal NOI yield after depreciation 3.9%
Average remaining lease term 17.0years
Average building age 14.0years
Total leasable area 3,410,000m²
Occupancy rate 100%
Summary of Portfolio
Expansion of Asset Size and Diversification of property type , location and investment
24
Hokkaido・Tohoku
Kanto
Tokai・Hokuriku・
Chubu
Kinki
Chugoku・Shikoku
Kyushu・Okinawa
Malaysia
SRSC: Super regional
shopping center
RSC: Regional shopping
center
CSC: Community shopping
center
Logistics facility
Portfolio DataBy investment(top 10 properties)By locationBy property type
6.0%
6.0%
5.0%
4.7%
4.7%
4.1%
4.0%
3.8%
3.7%
3.4%
54.5%
8.9%
35.5%
10.8%
22.8%
9.7%
10.6%
1.7%
KYOTO
mori
KURASHIKI
ITAMIKOYA
MITOUCHIHARA
YAMATOKORIYAMA
KAWASAKI PC
KAGOSHIMA
KUMAMOTO
CHIBA-NEWTOWN
Others
[External Growth] Assets Acquired in the 10th Fiscal Period
AEON Kireuriwari Shopping Center
CSC-3 Acquired on September 19, 2017
Seller
GodoGaisha
Double O2
5.7%
Appraisal NOI yield
Acquired community-based shopping centers close to a station, mall-type retail properties with a large commercial area and logistics facilities to support them. Built a solid portfolio by promoting diversity in investment targets.
AEON STYLE Kemigawahama
CSC-2 Acquired on November 30, 2017
7.2%
Appraisal NOI yield
Daiei-Ibaraki Process Center
L-3 Acquired on October 2, 2017
6.0%
Appraisal NOI yield
AEON MALL Shimotsuma
RSC-30 Acquired on September 19, 2017
6.6%
Appraisal NOI yield
25
Seller
Aeon RetailCo., Ltd.
Seller
GodoGaisha
Double O2
Seller
Tokyo Century
Corporation
[External Growth] Acquisition of Logistics Facilities to Support Retail and Related Properties of AEON Group
AEON REIT acquired the third logistics facilities.
7th fiscal period :5.7%
The ratio of logistics facilities to the portfolio (Acquisition price).
The ratio of logistics facilities to the portfolio as a whole has been increasing.
26
9th fiscal period :7.3% 10th fiscal period :8.7%
type merchandise function Kanto Region Kansai Region
Process Center(PC) 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(RDC)
High rotation products
Inventory storage baseMainly as a room temperature facility, responsible for temporary storage and supply of goods frequently replenished at each store
Daiei-Kawasaki Process Center
AEON Minami-Osaka RDC
Daiei-IbarakiProcess Center
Logistic Properties Aeon Reit holdsAeon Reit holds
27
◇Project cost:132millions of yen◇Rent increase per annum:9.9millions of yen
◇Rent increase as a percentage of
project cost per annum :7.5%
Before
After
Refurbishment of Food court Refurbishment of children's space
Before
After
[Internal Growth] Achievement of Internal Growth by Investments in Revitalization
Achievement of Rent increase by Investments in Revitalization(AEON MALL Kurashiki Large-scale renovation )
28
Major cases of Investments in Revitalization with increase in rent after Apr. 2016
[Internal Growth] Achievement of Internal Growth by Investments in Revitalization
Effect of revitalization
propertyConstruction
completion monthRevitalization project
Project cost(millions of yen)
(Note 1)
Rent increase per annum
(millions of yen)
Rent increase asa percentage of project cost per
annum (%)
AEON MALL Morioka April 2016 Revitalization 790 57 7.3
AEON MALL Ota July 2017 Construction of new Escalator 199 14 7.3
AEON MALL Yokkaichi-kita July 2017 Food court refurbishment 113 9 8.5
AEON MALL Kurashiki August 2017 Large scale renewal 132 9.9 7.5
AEON MALL Morioka September 2017Installation of
Wastewater Treatment Facility99 7.5 7.6
AEON MALL Suzuka November 2017 Large scale renewal 297 22 7.7
(Millions of yen)
0.013.9 18.8
50.6 54.7
115.1 118.0
154.2
200.6
0.0
50.0
100.0
150.0
200.0
250.0
2nd Fiscal Period(Jan
2014)
3rd Fiscal Period
(July 2014)4th Fiscal Period(Jan
2015)
5th Fiscal Period
(July 2015)6th Fiscal Period
(Jan2016)7th Fiscal Period
(July 2016)8th Fiscal Period
(Jan 2017)9th Fiscal Period
(July 2017)10th Fiscal Period
(Jan 2018)
Cumulative amount of annualized rent increase as a result of investments in revitalization projects
10th
(Note1) “Projected cost of investments in revitalization” indicates construction cost in order to improve the value of the properties operated.
[Financial Strategy] Building of Firm Financial Base
29
Borrowing Amount
termFloating rate/
Fixed rate Spread
Borrowings ¥1.5bn 0.3yr Floating rate 0.22%
Borrowings ¥4.2bn 0.2yr Floating rate 0.22%
Borrowing Amount
termFloating rate/
Fixed rate Spread
Borrowings ¥3.4bn 5.8yr Effective fixed rate (Note3)
0.37%
Borrowings ¥0.3bn 5.8yr Fixed rate 0.30%
+serial
numberTotal issue
amountterm Interest rate
Investment Corporation Bonds
Fourth ¥2.0bn 10.0yr 0.68%
Before
After
Diversification of Lenders Achieved
Rating
Credit Rating Agency Rating target Rating Outlook
Japan Credit Rating Agency
Long-term issuer rating
AA- Stable
Numbers of Lenders 21 (+2 compared to previous period)
Mizuho Bank 26,700 mil yen 18.5%
Sumitomo Mitsui Banking 22,800 mil yen 15.8%
SUmitomo Mitsui Trust Bank
20,800 mil yen 14.4%
Bank of Tokyo-Mitsubishi UFJ
16,600 mil yen 11.5%
Norinchukin Bank 9,600 mil yen 6.7%
Mizuho Trust & Banking 8,700 mil yen 6.0%
Mitsubishi UFJ Trust and Banking
9,500 mil yen 6.6%
Resona Bank 4,100 mil yen 2.8%
AEON BANK 4,700 mil yen 3.3%
Development Bank of Japan 4,600 mil yen 3.2%
Hyakugo Bank 3,500 mil yen 2.4%
Hiroshima Bank 2,000 mil yen 1.4%
Mie Bank 3,800 mil yen 2.6%
77 Bank 1,600 mil yen 1.1%
Chiba Bank 300 mil yen 0.2%
Nippon Life Insurance 1,000 mil yen 0.7%
Meiji Yasuda Life Insurance 1,300 mil yen 0.9%
The Daisan Bank 500 mil yen 0.3%
Shinsei Bank 1,300 mil yen 0.9%
newThe Juroku Bank 300 mil yen 0.2%
Momiji Bank 300 mil yen 0.2%
Solid Financial Base
(Note1) LTV=(Total interest-bearing debt after new debt financing + Tenant leasehold and security deposits) ÷ Total assets at end of 10th period
(Note2) LTV is estimated at the end of 10th period.
Refinance in Dec. 2017
8th Fiscal Period
(January 2017)
9th Fiscal Period
(July 2017)
10th Fiscal Period
(January 2018)
LTV (Note1)(Note2)
(including tenants’ deposits)46.4% 46.7% 44.9%
Long-term debt ratio
98.7% 99.0% 100.0%
Fixed interest rate ratio
96.5% 92.9% 95.7%
Average remaining borrowed period
4.7 yr 4.4 yr 4.2 yr
Average interest rate on borrowings
0.84% 0.79% 0.80%
➢ Considering increase in interest rate, realized to shift to long-term loans and fix interest rate.
➢ Promoting diversification of financing sources with new two lenders invited.
(note3)Although it is borrowing by floating interest rate, in this context it is considered as substantially fixed interest rate, as we conduct interest rate swap transactions to avoid interest rate fluctuation risk.
[Financial Strategy] Disperse Repayment Dates and Reduction of Borrowing Cost
Period remaining to maturity and our borrowing cost
Diversification of maturity dates *at the end of Jan. 2018(10th fiscal period)
LTV Trend
Available capacity to LTV (including deposit) 50% approx. ¥36.0 bn.
(Note)This indicates financeable debt amount up to LTV 50%.
30
(hundred of millions of yen )
41.0% 40.8%
42.8%
46.4% 46.7%
44.9%
30.0%
34.0%
38.0%
42.0%
46.0%
50.0%
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)
4.3 year4.0 year 4.1 year
4.7 year4.4 year 4.2 year
0.94% 0.95%
0.85% 0.84%
0.79% 0.80%
2.0 year
3.0 year
4.0 year
5.0 year
6.0 year
7.0 year
0.60%
0.70%
0.80%
0.90%
1.00%
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)
Average period remaining to maturity (year)
Average of procurement interest rate (%)
20 10 20 10
270
156
220
161 172
117 113 9391
10
37
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2036
New debt financing Existing Borrowings investment corporation bonds
[Sustainability] Major Efforts
AEON REIT cares and considers over Environmental, Social and Governance - related issues (ESG) in all aspects of work jointly with AEON Group and cooperate with stakeholders to facilitate it.
Environmental Certification and Evaluation(10th Fiscal Period result)
Case examples(Environmenal)
Favorable Evaluation on Environmental ConsiderationsObtained from Sumitomo Mitsui Banking Corporation
Conversion of lighting to LEDs
(AEON MALL Nogata)
Property:AEONMALL KYOTO, AEON MALL Mitouchihara
Assessment :2017★★★★★(highest rank)
DBJ Green Building Certification
Assessment :A
Environmental Certification and Evaluation(11th Fiscal Period)
Property :AEON MALL Kagishima
Assessment :S (highest rank)
Assessment Certification in CASBEE
31
GRESB in 2017
AEON REIT designated as Highest Rank
"Green Star" for the second consecutive year.
32
[Appeal of the Investment Corporation] Efforts for IR Activities
Meetings for individual investors For institutional investors
Active in IR for investors
Holding of a property tour(AEON LakeTown)
Number of meetings held: SevenTotal number of participants: Approx. 650(August 2017 – January 2018)
33
Forecasts of Performances for the 11th Fiscal Period Ending July 31, 2018*Based on the Assumptions for Forecasts of Performance of Financial Report for the Fiscal Period Ended January 31, 2018(page 5 to 6)
January July
2018 2018
10th Fiscal Period Result
11th Fiscal Period
Forecast
vs. Previous Period
11th Fiscal Period Forecast vs.
ForecastAnnounced on Sep. 12, 2017
(A) (B) (B-A) (C) (B-C)
Operating Revenues(Millions of
yen)15,780 16,143 + 363 16,132 + 11
Operating Expenses(Millions of
yen)9,503 10,148 + 645 10,151 ▲ 3
Expenses Related to Rent Business
(Millions of yen)
8,599 9,207 + 608 9,212 ▲ 4
(Of Which, Depreciation)
(Millions of yen)
4,380 4,416 + 35 4,470 ▲ 53
Operating Income(Millions of
yen)6,276 5,995 ▲ 281 5,980 + 15
Ordinary Income(Millions of
yen)5,389 5,111 ▲ 277 5,083 + 28
Net Income(Millions of
yen)5,383 5,106 ▲ 276 5,078 + 28
Distributions per Unit (yen) 3,029 2,870 ▲ 159 2,855 + 15
Number of Investment Units Issued
(unit) 1,777,347 1,777,347 - 1,777,347 -
Major Factors of Changes from the Previous Period(Millions of yen)
Operating Revenues
Full-period contribution of properties acquired in 10th period
+ 353
Increase in rent of other properties
+ 16
Operating Expenses
Taxes and dues for properties acquired in 9th period
+ 320
Taxes and dues for properties acquired in 10th period
+ 111
Repairs and maintenance expenses of properties acquired in 10th period
+ 31
Repairs and maintenance expenses of other properties
+ 82
Land rent paid for the properties acquired in 10th period
+ 27
Depreciation for properties acquired in 10th period
+ 60
Depreciation for other properties ▲ 24
Non-OperatingExpenses
Decrease in interest of borrowing
▲ 7
Increase in interest of bond + 4
Decrease in amortization of investment unit issuance expenses
▲ 8
Major Factors of Changes from the Forecast(Millions of yen)
Operating Revenues
Increase in rent of revitalized properties
+ 5
Increase in dividends from Overseas SPC
+ 4
Operating Expenses
Increase of repairs and maintenance expenses
+ 54
Decrease in depreciation ▲ 53
Non-OperatingExpenses
Decrease in interest of borrowing
▲ 18
34
Forecasts of Performances for the 12th Fiscal Period Ending January 31, 2019*Based on the Assumptions for Forecasts of Performance of Financial Report for the Fiscal Period Ended January 31, 2018(page 5 to 6)
July January
2018 2019
11th Fiscal Period Forecast
12th Fiscal Period Forecast
vs. Forecast
(A) (B) (B-A)
Operating Revenues (Millions of yen) 16,143 16,147 + 3
Operating Expenses (Millions of yen) 10,148 10,128 ▲ 19
Expenses Related to Rent Business
(Millions of yen) 9,207 9,189 ▲ 18
(Of Which, Depreciation)
(Millions of yen) 4,416 4,436 + 20
Operating Income (Millions of yen) 5,995 6,019 + 23
Ordinary Income (Millions of yen) 5,111 5,130 + 18
Net Income (Millions of yen) 5,106 5,125 + 18
Distributions per Unit (yen) 2,870 2,880 + 10
Number of Investment Units Issued
(unit) 1,777,347 1,777,347 -
Major Factors of Changes from the Previous Period(Millions of yen)
Operating RevenuesIncrease in rent of revitalized properties + 4
Operating Expenses
Decrees in repairs and maintenance expenses ▲ 40
Increase in depreciation + 20
Increase in asset management fees + 10
Non-Operating ExpensesIncrease in interest of borrowing + 10
Decrease in borrowing related expenses ▲ 8
Conduct capital investment to maintain and enhance the value of the portfolio, while taking cost-effectiveness into consideration.
Capital Investment Plan
35
182 346 371
218 314 445 452
429
798
238
2,833
389
2,777
1,063 1,922
2,458
2,245
2,659 2,677
3,169
3,386
4,178 4,380 4,416 4,436
Jan 2015 Period
(4th Period)
Actual
July 2015 Period
(5th Period)
Actual
Jan 2016 Period
(6th Period)
Actual
July 2016 Period
(7th Period)
Actual
Jan 2017 Period
(8th Period)
Actual
Jan 2017 Period
(9th Period)
Actual
Jan 2018 Period
(10th Period)
Actual
July 2018 Period
(11th Period)
Scheduled
Jan 2019 Period
(12th Period)
Scheduled
1,426
1,222
(millions of yen)
Restoration WorkOf Aeon Mall Kumamoto(Capex)
Achievement of Internal Growth by Investments in Revitalization
Concluded a Development Agreement in October 2017 based on the discussion with AEON Mall Co., Ltd.
Major cases of floor-space expansion and investments for revitalization under way
36
(Note1) “Projected cost of investments in revitalization” indicates construction cost in order to improve the value of the properties operated.
Effect of revitalization(forecast)
Property Revitalization projectProject cost(millions of yen)(Note 1)
Rent revision date(forecast)
Rent increase perannum(millions of yen)
Rent increase as apercentage of projectcost per annum (%)
AEON MALL NogataConversion of lighting to
LEDs69 Feb.2018 6.9 10.0
AEON MAKK Hiezu Large scale renewal 64 May.2018 5.0 7.8
AEON MALL kurashiki Revitalization 82 Aug.2018 6.1 7.5
Major revitalization cases with increase in rent to be scheduled
AEON MALL Kumamoto
(Note)
Sub-Anchor Zone is framed in red line. The above image is an architectural
rendering and will not necessarily be identical with the building after it is
completed. For the building, AEON REIT has simply obtained preferential
negotiation rights and has not decided on its acquisition. AEON REIT does not
guarantee its acquisition in the future, either.
■Architectural rendering of Sub-Anchor Zone
Renovation with floor-space expansion of Sub Anchor Zone(Completion of the Building (scheduled):Summer 2018)
Anchor(AEON Kumamoto) East Mall West Mall Sub-
AnchorZone
■Floor plan of AEON MALL Kumamoto
Ⅳ. Future of AEON REIT
イオンレイクタウン鹿児島
ARON MALL Kofu Showa
expanded floor space
(Note)For the building with expanded floor space, AEON REIT has not decided on its acquisition. AEON REIT does not guarantee its acquisition in the future, either.
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
AEON MALL Kofu Showa
Development
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.
Diversification of property
acquisition methods
Realizing mobile property acquisition by
obtainment of preferential negotiation rights.
Able to acquire property utilizing mobility
and available capacity by utilizing various
acquisition methods.
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.Acquisition of completed building
+ Internal growth
AEON STYLE Kemigawahama
Implementation of Growth Strategies Through Collaboration with 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.
Expanding the portfolio to include logistics facilities supporting AEON Group
Establishing an efficient group supply chain intensification by
strategically locating and operating group logistics facilities.
Acquisition of full-scale overseas properties as J-
REIT’s first practice
Enhancing relations with Sponsor Group
Capitalizing on AEON Group’s overseas strategy
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).
AEON MALL Seremban2
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.
38
Practice of Strategies to Grow with Retail and Related Properties of AEON Group
AEON MALL Kurashiki AEON MALL Suzuka
(Note)For the building with expanded floor space, AEON REIT has not decided on its acquisition. AEON REIT does not guarantee its acquisition in the future, either.
Enrolment in earthquake insurance
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)
By realizing a mutually beneficial relationship with our sponsor, we have achieved assets of ¥300 billion in approx. 3 years and continuously aim for ¥500 billion in medium term (Note).
Key Measures
● External growth using the AEON Group’s pipeline
● Strategic cash management using internal reserves
● Expansion of overseas investment and diversification of types and regions of properties
● Management of leverage with LTV in the 40–50% range
At time of listing
(Note) The figures above are targets made as of the date of these materials and there is a possibility that they may not be achieved due to future events or the market environment.
39
Aim for continued growth
Roadmap for Growth
Medium TermJan. 2018
At time of listing
158.3 billions of yen
355.1 billions of yen
500.0 billions of yen
Targets of asset size in the medium to long term
Appendix
AEON REIT invests primarily in retail and related properties(Note) that are an integral part of the communities in
which they are located. We believe that these properties and facilities form the backbone of the local
communities and their retail business infrastructure.
Our mission is to contribute to the betterment of individual lives and local communities through investment in
retail and related properties. In doing so, we seek to generate stable revenues and achieve the steady growth
of our asset portfolio over the medium to long term.
(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 distribution and transport of merchandise and other goods.
Basic Philosophy and Basic Policy
Basic Philosophy
Basic Policy
We will aim to maximize value for unitholders by building a mutually beneficial relationship between AEON REIT and the AEON Group.
A growth strategy based on a mutually beneficial relationship between AEON REIT and AEON Group(Note)
(Note) Refers to the group comprising the holding company AEON CO., LTD. and its 296 consolidated subsidiaries and 32 equity-method associates (as of February 28, 2017).
41
Portfolio Policy
42
Type
Investment ratio (Note1)
Domestic Overseas
85% or more No more than 15%
Reta
il pro
pert
ies,
etc
.
Large-scale
retail
property
SRSC (Super regional shopping center) (Note2)
80% or moreRSC (Regional shopping center) (Note3)
CSC (Community shopping center) (Note4)
Other retail
property
NSC (Neighborhood shopping center) (Note5)
No more than 20%SM (Supermarket) (Note6)
Logistics facility No more than 10%
Investment areas Investment targets
Countries and regions with good economic growth prospects in the
medium to long term, like Malaysia of ASEAN region(Note7) and
China
In principle, retail properties that are leased in their entirety under
master lease contracts to the AEON Group, which manages and
operates the properties
Investment Properties Centered on Large-Scale Retail Properties and Investment Ratios
(Notes)
1. Calculated based on acquisition price.
2. Larger commercial area than regional shopping centers. A super regional-type shopping center having a number of anchor tenants and a shopping mall forming a complex of over 200 specialty stores.
3. A regional-type shopping center having a general merchandise or other similar store as the anchor tenant and a complex of over 50 specialty stores.
4. A retail property having a general merchandise store, a discount store, a large grocery supermarket or another similar store as the anchor tenant, and a complex of approximately 20–50 specialty stores.
5. A small-scale retail property serving a small commercial area, having a grocery supermarket or another similar store as the anchor tenant and a complex of approximately 10–30 specialty stores generally selling household goods.
6. A grocery supermarket mainly selling high purchase frequency commodities such as food and household goods.
7. Indicates Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia.
43
Propertynumber
Property name Appraisal agencyAcquisition price(Millions of yen)
Appraisal value (Millions of yen)Capitalization Rate based on
direct capitalization method (%)
9th Period(July 31, 2017)
10th Period(January 31, 2018)
Difference9th Period
(July 31, 2017)10th Period
(January 31, 2018)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-3 AEON MALL Mitouchihara Japan Real Estate Institute 16,460 18,000 18,000 0 6.0 6.0 0.0
AEON MALL Mitouchihara (Land) Japan Real Estate Institute 105 112 113 1 5.2 5.2 0.0
RSC-4 AEON MALL Ota Japan Real Estate Institute 6,860 8,190 8,190 0 6.4 6.4 0.0
RSC-5 AEON Sagamihara Shopping Center Japan Real Estate Institute 10,220 10,900 10,900 0 5.2 5.2 0.0
RSC-6 AEON MALL Ogaki Japan Real Estate Institute 4,950 5,110 5,110 0 6.9 6.9 0.0
RSC-7 AEON MALL Suzuka Japan Real Estate Institute 9,660 10,200 10,600 400 6.4 6.2 ▲ 0.2
RSC-8 AEON MALL Meiwa The Tanizawa Sōgō Appraisal Co., Ltd. 3,290 3,700 3,700 0 6.5 6.5 0.0
RSC-9 AEON MALL Kasai-Hojo Japan Real Estate Institute 7,230 7,690 7,690 0 6.8 6.8 0.0
RSC-10 AEON MALL Hiezu Japan Real Estate Institute 7,780 8,440 8,440 0 6.8 6.8 0.0
RSC-11 AEON MALL Kurashiki Japan Real Estate Institute 17,890 19,300 19,400 100 6.0 6.0 0.0
RSC-12 AEON MALL Ayagawa Japan Real Estate Institute 8,740 9,260 9,270 10 6.4 6.4 0.0
RSC-13 AEON MALL Nogata Japan Real Estate Institute 11,246 13,000 13,000 0 6.4 6.4 0.0
RSC-14 AEON MALL Kumamoto Japan Real Estate Institute 13,148 12,500 12,500 0 6.0 6.0 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 2,610 2,610 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 Japan Real Estate Institute 8,389 8,600 8,610 10 5.8 5.8 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 6,430 0 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 - 9,810 - - 6.4 -
CSC-1 AEON Chigasaki-Chuo Shopping Center Japan Real Estate Institute 6,410 6,560 6,550 ▲ 10 5.0 5.0 0.0
CSC-2 AEON STYLE Kemigawahama Japan Real Estate Institute 3,748 - 3,850 - - 6.2 -
CSC-3 AEON KireuriwariShopping Center The Tanizawa Sōgō Appraisal Co., Ltd. 4,394 - 4,620 - - 5.2 -
L-1 Daiei-Kawasaki Process Center Japan Real Estate Institute 14,280 15,000 15,000 0 4.9 4.9 0.0
L-2 AEON Minami-Osaka RDC Japan Real Estate Institute 9,870 10,300 10,300 0 4.9 4.9 0.0
L-3 Daiei-Ibaraki Process Center Japan Real Estate Institute 6,810 - 7,100 - - 5.1 -
M-1 AEON Taman Universiti Shopping Centre(Note2)(Note3)
Japan Real Estate Institute658
(20milRM)554
(21.5milRM)600
(21.5milRM)- - - -
M-2 AEON MALL Seremban2(Note3) Japan Real Estate Institute5,252
(215milRM)6,011
(233milRM)6,505
(233milRM)- - - -
Total 355,192 352,878 379,307 - - - -
(Note1)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).
(Note2)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.
(Note3)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, 2017; 1RM = ¥25.80, January 31, 2018; 1 RM = ¥27.92; rounded down to the nearest 100th).
Appraisal Value for the 40 Properties held in 10th fiscal period
Asset Size 355.1bn yen
40properties(domestic38, overseas2)
44
Malaysia
● M-1
Hokkaido and Tohoku
Kanto
Kyushu and Okinawa
16 17 16
1 2
1 2 17
2418 19
24
1
2
18193 4
5 22 1 1
25
21
4 3
5
22
11
25
14
13
13
14
Kinki, Chugoku and Shikoku
20
23
6 7
8
9 10 11
211512
10
11
12
915
21
27
27
28
28
29
2
2
26
7
29
8
6 23
20
● M-2
Tokai, Hokuriku and Chubu
26
30
30 AEON MALL Shimotsuma AEON STYLE Kemigawahama2
2
3
3
3
3
AEON Kireuriwari
Shopping Center
Daiei-Ibaraki
Process Center
Portfolio Map (as of January 31, 2018)
SRSC: Super regional shopping center
RSC: Regional shopping center
CSC: Community shopping center
Logistics facility
Existing properties acquiredby 9th period
Acquired since 10th period
ASEAN region
AEON MALL
Nogata
AEON MALL
Kagoshima
AEON MALL
Kumamoto
M - 1AEON Taman
UniversitiShopping Centre
M - 2AEON MALL
SEREMBAN 2
AEON MALL
Ogaki
AEON MALL
Suzuka
AEON MALL
MeiwaAEON MALL Yokkaichi
AEON MALL
Kofu Showa
AEON MALL
Kahoku
AEON MALL
Morioka
AEON MALL
IshinomakiAEON MALL
Sapporo-Hiraoka
AEON MALL
Kushiro-Showa
AEON MALL
Rifu
AEON MALL
Yamagata-Minami
AEON MALL
Tomakomai
AEON MALL Hiezu AEON MALL
Kurashiki
AEON MALL
Kasai-Hojo
AEON MALL
Itamikoya
AEON MALL
Ayagawa
AEON MALL
KYOTO
AEON MALL
Yamatokoriyama
AEON
MINAMI-OSAKA RDC
AEON Lake Town
mori
AEON MALL
Mitouchihara
AEON Lake Town
k a z e
AEON MALL
Ota
AEON Chigasaki-Chuo
Shopping Center
Daiei-Kawasaki
Process Center
AEON Sagamihara Shopping Center
AEON MALLChiba-New Town
(Mall, Cinema andSports building)
AEON MALL Oyama AEON MALL Tsuchiura
45
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
Percentage
(%)
21,798,587 6.3% 18,237,512 5.0% 5,908,878 1.7% 28,705,412 7.9%
Cash and deposits 12,002,593 3.5% 9,538,680 2.6% Operating accounts payable 1,177,198 0.3% 851,409 0.2%
Cash and deposits in trust 6,850,168 2.0% 8,041,075 2.2% Current portion of long-term loans payable 4,200,000 1.2% 27,000,000 7.4%
Prepaid expenses 512,960 0.1% 647,245 0.2% Accounts payable - other 334,632 0.1% 350,377 0.1%
Income taxes receivable 9 0.0% 14 0.0% Accrued expenses 48,121 0.0% 44,192 0.0%
Consumption taxes receivable 2,421,369 0.7% - - Income taxes payable 605 0.0% 605 0.0%
Other 11,486 0.0% 10,497 0.0% Accrued consumption taxes - - 268,141 0.1%
322,915,145 93.6% 344,166,940 94.9% Other 148,320 0.0% 190,685 0.1%
Property, plant and equipment 268,759,693 77.9% 286,760,656 79.1% 156,774,477 45.4% 135,915,844 37.5%
Land 108,463 0.0% 108,463 0.0% Investment corporation bond 4,000,000 1.2% 6,000,000 1.7%
Buildings in trust 163,353,883 47.3% 169,553,403 46.7% Long-term loans payable 140,300,000 40.7% 117,000,000 32.3%
Structures in trust 577,328 0.2% 579,303 0.2% Tenant leasehold and security deposits 2,628 0.0% 2,628 0.0%
Furniture and fixtures in trust 2,636 0.0% 7,917 0.0% Tenant leasehold and security deposits in trust 12,471,849 3.6% 12,913,216 3.6%
Land in trust 104,717,380 30.4% 116,511,568 32.1% 162,683,355 47.2% 164,621,256 45.4%
Intangible assets 46,785,787 13.6% 50,178,762 13.8%
Leasehold rights in trust 46,785,787 13.6% 50,178,762 13.8% 182,334,301 52.8% 198,077,143 54.6%
Investments and other assets 7,369,664 2.1% 7,227,521 2.0% Unitholders' capital(net) 177,026,618 51.3% 192,172,327 53.0%
Shares of subsidiaries and associates 6,078,453 1.8% 6,078,453 1.7% Unitholders' capital 180,552,316 52.3% 195,698,024 54.0%
Long-term prepaid expenses 1,280,749 0.4% 1,138,607 0.3% Deduction from unitholders' capital △ 3,525,697 △1.0% △ 3,525,697 △ 0.0%
Lease and guarantee deposits 10,460 0.0% 10,460 0.0% Surplus 5,307,682 1.5% 5,904,815 1.6%
303,924 0.1% 293,946 0.1% General reserve - - 520,000 0.1%
Investment unit issuance expenses 251,602 0.1% 220,787 0.1%Unappropriated retained earnings
(undisposed loss)5,307,682 1.5% 5,384,815 1.5%
52,322 0.0% 73,159 0.0% 182,334,301 52.8% 198,077,143 54.6%
345,017,657 100.0% 362,698,399 100.0% 345,017,657 100.0% 362,698,399 100.0%
Ⅲ Deferred assets
Investment corporation bonds issuance
costs
Total assets
Assets Liabilities
Ⅰ Current assets Ⅰ Current liabilities
Ⅱ Non-current assets
Ⅱ Non-current liabilities
Total net assets
Total liabilities and net assets
Total liabilities
Net Assets
Ⅰ Unitholders’ equity
10th Period
As of January 31, 2018
9th Period
As of July 31, 2017
10th PeriodAs of January 31, 2018
9th Period
As of July 31, 2017
Balance Sheet for the 10th Fiscal Period (as of January 31, 2018)
46
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
Percentage
(%)
14,642,554 100.0% 15,780,299 100.0%
Rent revenue - real estate 14,561,163 99.4% 15,656,508 99.2%
Dividend income 81,390 0.6% 123,790 0.8%
9,017,702 61.6% 9,503,310 60.2%
Expenses related to rent business 8,253,947 56.4% 8,599,621 54.5%
Asset management fee 613,960 4.2% 722,381 4.6%
Asset custody fee 17,380 0.1% 18,478 0.1%
Administrative service fees 50,702 0.3% 58,076 0.4%
Directors’ compensations 3,600 0.0% 3,600 0.0%
Taxes and dues 2,814 0.0% 1,684 0.0%
Other operating expenses 75,297 0.5% 99,467 0.6%
5,624,851 38.4% 6,276,989 39.8%
2,724 0.0% 7,433 0.0%
Interest income 62 0.0% 91 0.0%
Refund of unpaid distributions 2,662 0.0% 3,382 0.0%
Interest on refund - - 3,249 0.0%
Other - - 709 0.0%
853,875 5.8% 895,417 5.7%
Interest expenses 546,237 3.7% 578,222 3.7%
Interest expenses on investment corporation bonds 17,907 0.1% 20,061 0.1%
Amortization of investment unit issuance expenses 70,587 0.5% 77,002 0.5%
Investment unit issuance expenses 4,413 0.0% 30 0.0%
Amortization of investment corporation bonds issuance costs 2,438 0.0% 2,832 0.0%
Other offering costs associated with issuance of investment units 334 0.0% 4 0.0%
Borrowing related expenses 211,943 1.4% 217,262 1.4%
Other 13 0.0% - -
4,773,701 32.6% 5,389,004 34.2%
537,819 3.7% - -
Gain on reversal of provision for loss on disaster 500,263 3.4% - -
Refund of fixed asset tax 37,555 0.3% - -
5,311,520 36.3% 5,389,004 34.2%
Income taxes - current 4,621 0.0% 5,193 0.0%
Income taxes - deferred - - - -
Total Income taxes 4,621 0.0% 5,193 0.0%
5,306,899 36.2% 5,383,811 34.1%
Retained earnings (deficit) brought forward 783 0.0% 1,004 0.0%
5,307,682 36.2% 5,384,815 34.1% Ⅵ Unappropriated retained earnings
Non-operating income
Non-operating expenses
Ⅱ Ordinary income
Ⅲ Extraordinary income
Ⅳ Profit before income taxes
Ⅴ Profit
Ⅰ Operating income
9th Period
From February 28, 2017 to
July 31, 2017
10th Period
From August 1, 2017 to
January 31, 2018
Operating revenue
Operating expenses
Statement of Income for the 10th Fiscal Period (as of January 31, 2018)
(%)
(%)
47
(%)
Average cap rate of Portfolio
(Note) ・Average cap rate is calculated excluding Malaysian properties whose return yield by
direct capitalization method is not calculated.・7th and 8th fiscal period is calculated excluding AEON MALL Kumamoto.・“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.
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)
5.5
5.6
5.7
5.8
5.9
6.0
6.1
6.2
6.3
2nd Fiscal Period
(January 2014)
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)
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
(July 2018)
three largest cities others
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)
500 thousand or more less than 500 thousand
48
5th period 6th period 7th period 8th period 9th period 10th period
(July 31, 2015) (January 31, 2016) (July 31, 2016) (January 31, 2017) (July 31, 2017) (January 31, 2018)
Short-term loans payable
¥2,000million - ¥-million ¥1,500million ¥1,500million -
Long-termloans payable
¥73,400million ¥73,400million ¥98,900million ¥113,300million ¥143,000million ¥144,000million
Investment Corporation bonds
- ¥2,000million ¥2,000million ¥4,000million ¥4,000million ¥6,000million
Tenant leasehold and security deposits
¥8,111million ¥8,111million ¥10,169million ¥10,449million ¥12,474million ¥12,916million
Total debt ¥83,512million ¥83,512million ¥111,069million ¥134,904million ¥162,683million ¥164,621million
LTV (including leasehold deposits)
41.0% 40.8% 42.8% 46.4% 46.7% 44.9%
LTV (excluding leasehold deposits)
37.0% 36.9% 38.9% 42.7% 43.0% 41.4%
Long-term debt ratio 97.3% 100.0% 100.0% 98.7% 99.0% 100.0%
Fixed interest rate ratio
84.5% 87.1% 88.4% 96.5% 92.9% 95.7%
Average remaining borrowed period
4.3 year 4.0 year 4.1 year 4.7 year 4.4 year 4.2year
Average interest rate on borrowings
0.94% 0.95% 0.85% 0.84% 0.79% 0.80%
Financial Management
49
Borrowing Date TermBorrowing Amount
MaturityFloating rate/
Fixed rate Interest rate
Breakup
Existing Borrowings
November 25, 2013 Long-term ¥54.0bn
¥27.0bn October 22, 2018 Effective fixed rate (Note 2) 0.78125%
¥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 21, 2027 Effective fixed rate (Note 2) 1.40730%
October 20, 2016Long-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, 2017Long-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 Effective fixed rate (Note 2) 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%
New debt financing 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%
Debt Snapshot (after new debt financing)
Syndicate of lenders arranged by Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank, Limited
(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.
50
Sponsor
Pipeline support companies
AEON Co., LTD.
Shopping center management providers
AEON Mall Co., Ltd.
AEON Retail 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
Expansion of Network of Support-Agreement Companies
AEON GLOBAL SCM CO.,LTD.
Expanding sponsor support companies to fully utilize sponsors’ comprehensive strength for achieving asset size of ¥500 billion in the long term and maintaining and improving the value of our portfolio
The Daiei, Inc.
Realization of Growth Strategies through Collaboration with AEON Group
51
●Major Shopping Centers currently under development by AEON Group
●Major Shopping Centers developed by AEON Group
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●(tentative name) 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
●AEON MALL Osaka Dome City Osaka-shi, Osaka●AEON MALL Shijonawate Shijonawate-shi/Neyagawa-shi, Osaka●AEON MALL Sakaiteppoucho Sakai-shi, Osaka●(tentative name) AEON MALL Kobeminami Kobe-shi, Hyogo●AEON MALL Kashihara Kashihara-shi, Nara●AEON MALL Wakayama Wakayama-shi, Wakayama
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●(Tentative) 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 and Okinawa●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
(Source) Prepared by the Asset Manager based on the information provided by AEON CO., LTD. and AEON Mall Co., Ltd. (as of Jan. 2018).Note: AEON REIT neither owns nor plans to acquire any of these properties as of now.
AEON MALL Tokushima
AEON MALL Kobe Minami
●●
●
●●
●
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 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 ●(tentative name) AEON MALL Tsu minami Tsu-shi, Mie
AEON MALL ShinKomatsu
AEON MALL Matsumoto
Scheme for acquisition of overseas property
52
Overseas SPC Scheme (acquired in September 2016)
Malaysia
JapanHolding a 100% stake
JAMBATAN MANSEIBASHI (M)
Sdn Bhd
Capital stock, etc.
approx.239million RM*
(¥ 5,838million)Other assetsapprox.24
millionRM*
(¥ 586 million)
Real estate (exclusive of
taxes)215 million
RM*(¥5,252million)
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
Declaration-of-trust scheme was utilized to acquire overseas real estate as J-REIT’s first practice in June 2013.
Overseas SPC scheme is utilized to acquire the second overseas real estate as J-REIT’s first practice.
Master Lease
Agreement
*1RM=24.43JPY (as of September 2016)
Holding a
property
Store operationStore operation
Holding a
property
53
Outline of Master Lease Agreement with AEON Co. (M) BHD.
Property name AEON Taman Universiti AEON MALL Seremban 2
Acquisition price 20 million RM 215 million RM
Appraisal value 21.5 million RM 230 million RM
Date of
completion2002 2005
In Malaysia, which is expected to experience economic growth, the sponsor
group aims to achieve internal growth in the future through CPI-linked
rent adjustment.
It will reduce risk through net lease which requires the tenant to pay
expenses related to rent business.
(Source) IMF World Economic Outlook Database, October 2017
Changes in CPI in Malaysia and Japan
Properties held by AEON REIT in Malaysia
The sponsor group will invest in Malaysia, where it has a track record of over 30 years.It aims to achieve internal growth in the future through CPI-linked rent agreements.
Outline of Master Lease AgreementOutline of AEON Co. (M) BHD
Mall-type SCs operated in Malaysia
The sponsor group has a track record of over 30
years in Malaysia, and possesses know-how about
laws, taxation and accounting, etc. on real estate.
Like in Japan, the AEON Group has established a solid
position as a retailer in Malaysia.
It can acquire properties based on confirmation of its
adequate track record.
Total net sales of AEON Co. (M) BHD
Company name
AEON Co. (M) BHD.
Major shareholder and shareholding ratio
AEON CO., LTD 51.0%
No. of employees
8,642(as of December 31,
2016/Consolidated basis)
JAYA JUSCO Dayabumi
AEON MALL Kota Bharu
2,500
3,000
3,500
4,000
4,500
2012/12期 2013/12期 2014/12期 2015/12期 2016/12期
(Million RM)
Forecast
Fixed rent agreement
(10-year lease period)
CPI-linked rent revision(every
3 years)
Net lease(Tenant bears expenses
related to lease business)
*Only AOEN MALL Seremban 2
Sep. 1984 JAYA JUSCO STORES BHD established.
Jun. 1985 First store JAYA JUSCO Dayabumi opened.
Dec. 1996JAYA JUSCO STORES BHD listed on the Malaysia Exchange
Mar. 2005Corporate name changed from JAYA JUSCO STORES BHD to AEON CO. (M) BHD.
Apr. 2016 36th SC, AEON Kota Bharu, opened.
History of AEON Co. (M) BHD Achieved an increase in rent by 7.35% over current rent linked to CPI(AEON Taman Universiti)
(Source):SPEEEDA
Acquisition of full-scale overseas properties as J-
REIT’s first practice
AEON MALL Seremban2
FY2013 FY2014 FY2015 FY2016
75
85
95
105
115
125
135
145
CPI(マレーシア) CPI(日本)CPI(Japan)CPI(Malaysia)
FY2012
54
Overview of Malaysia
Outline of Malaysia
Capital Kuala Lumpur
Population31.19 million
(2015)
AreaApprox. 330,000㎢
(Around 0.9 times
the size of Japan)
Official language Malay
Form of government/Head of state
Constitutional monarchy(Parliamentary
democracy)Per capital GDP(nominal)
$9,360
(2016)
Date History
Early 15th century Kingdom of Malacca was founded.
16th to 17th century Malacca was controlled by the Portuguese and the Dutch East India Company.
1824The Malay Peninsular and Northern Borneo were placed under British influence through the Anglo-Dutch Treaty. Malacca became a British Colony.
1942 to 1945 Malaya was occupied by the Japanese Army.
1948 Federation of Malaya was established under British protection.
1957 Federation of Malaya gained independence.
1963 Malaysia was established(merger with Singapore, Sabah and Sarawak)
1965 Singapore separated from Malaysia and became independent.
(Source)Embassy of Japan in Malaysia
Appointed in April 2009, Prime Minister Najib Razak is steadily implementing the New Economic
Model, Government Transformation Programme and Economic Transformation Programme under the
slogan “1 (One) Malaysia (People First, Performance Now), and is working to achieve harmony
among Malaysians, government transformation and improvement of people’s welfare.
In 2015, the Government announced the Eleventh Malaysia Plan (Five-year plan from 2016 to 2020).
Malaysia aims to become a developed country by 2020. It is promoting deregulation and liberalization
to strengthen international competitiveness and maintaining stable growth supported by domestic
investment and domestic consumption.
Overview of the Malaysian Economy
History of Malaysia
0-14
24%
15-64
70%
65+
6%
94% of Malaysia’s population is aged less than 65 years.
In particular, the working-age population aged 15 to 64 accounts for 70% of the total population and exceeds 22 million.
Breakdown of population of Malaysia by age
Age group
Population(in
thousands)
Aged 0-14 7,733
Aged 15-64 22,314
Aged 65 and over 2,002
Changes in Malaysia’s real GDP per capita
(Source)Department of statistics Malaysia
(Source)International Monetary Fund, World Economic Outlook Database (October 2017)*Index of GDP per capita (1995 = 100). USD terms
Penang
Cambodia
Vietnam
Kuala Lumpur
Kota Kinabalu
Johor Bahru
Indonesia
Thailand
90
110
130
150
170
190
210
230
19
95
19
96
19
97
19
98
19
99
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
20
19
20
20
20
21
20
22
Malaysia U.S. Japan Germany
(Millions of people)
(Source) International Monetary Fund, World Economic Outlook Database (October 2017)
(Source) THE WORLD BANK DataBank, August 2017
(Source)Bloomberg
(Yen)
Trading volume(RM)
Closing price
(Source) Bloomberg
0
10
20
30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017E
2018E
2019E
2020E
2021E
2022E
20
25
30
35
40
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
55
Monthly trends of RM / Yen
Summary of Malaysian Economy
FTSE Bursa Malaysia KLCI Index trends
Population growth in Malaysia (estimated figures for FY2017 onwards)
Changes in GDP growth rate in Japan & Malaysia
6.8% 5.3%
5.6%
9.4%
3.3%-2.5%
7.0%
5.3%5.5%
4.7%6.0%
5.0%4.2%
2.2%
1.7%
1.4%
1.7%
-1.1%
-5.4%
4.2%
-0.1%1.5% 2.0% 0.3%
1.2%1.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
real GDP growth rate
(Malaysia)
real GDP growth rate
(Japan)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
900,000,000
trading
volume
closing price
Management Fee
StructureCalculation Method
Manage-
ment fee
Manage-
ment fee I
Total assets × 0.3% (maximum rate)× {No. of operating days
/ 365}
Manage-
ment fee II
DPU before deducting Management fee II × NOI1× 0.001%
(maximum rate)
Acquisition fee
Acquisition price × 0.5% (maximum rate)
[Related party transactions: Acquisition price ×0.25%(maximum rate) ]
Disposition feeDisposition 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, 2018)
Co-owned properties 3 (as of January 31, 2018)
Drafting of
proposal by the
responsible
department
Approval by the
Compliance Officer
Deliberation and
resolution by the
Compliance
Committee*
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.
Returned
Dropped or instructions
given to modify content
Dropped or instructions
given to modify content
Transparent Decision-Making Process
Further Aligning the Interests of Unitholders
and the AEON Group
Introduction of an Asset Management Fee Structure
Linked to Distributions per Unit
Introduction of Cumulative Investment Unit Purchase Program
• 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.
Framework for Maximizing Unitholder Value
Disapproved
Deliberation and
resolution by the
Investment
Committee*
Approval by
Investment
Corporation
56
(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)
(Note 3) The table shows the management fee structure in accordance with the Articles of Incorporation
after amendment by the General Meeting of Unitholders held on October 2017. The amendment took
effect on February 1, 2018.
57
2nd Fiscal Period
(January 2014)
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)
Net assetsper unit(Yen)
102,108 103,883 103,896 109,536 109,603 107,959 109,528 111,457 111,445
Trend of Investment Unit Price
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
(Units)(Yen) Trading Volume (Right axis) AEON REIT Investment Unit Price (Left axis)
58
Unitholder NameNumber
of Units
% of
Total
1 AEON Co., Ltd. 352,351 19.8%
2 Japan Trustee Services Bank, Ltd. (trust account) 261,997 14.7%
3 The Master Trust Bank of Japan, Ltd. (trust account) 214,722 12.1%
4Trust & Custody Services Bank, Ltd. (securities investment trust account))
77,241 4.3%
5The Nomura Trust & Banking Co., Ltd. (trust account)
62,496 3.5%
6 NORTHERN TRUST CO. (AVFC) RE HSD00 28,202 1.6%
7 Sumitomo Mitsui Trust Bank, Limited 27,150 1.5%
8 STATE STREET BANK AND TRUST COMPANY 505012 26,210 1.5%
9 STATE STREET BANK AND TRUST COMPANY 505223 23,786 1.3%
10 NORTHERN TRUST CO. (AVFC) RE HCR00 23,307 1.3%
Total 1,097,462 61.7%
10.2%
9.5%
9.9%
9.3%
9.9%
48.6%
51.3%
56.3%
51.1%
56.3%
23.6%
23.3%
23.9%
24.0%
24.8%
17.6%
15.9%
9.9%
15.6%
9.0%
Jan. 2018 Period(10th Period)
July 2017 Period(9th Period)
Jan. 2017 Period(8th Period)
July 2016 Period(7th Period)
Jan. 2016 Period(6th Period)
Individualsand others
Financial institutions(including financial instruments firms)
Other domestic corporations Foreigncorporations
Investment Unit Ownership Ratio by Unitholder Type Major Unitholders (As of January 31, 2018)
Unitholder Information
Number of Units Number of Units
9th Period
(July 31, 2017)
10th Period
(January 31, 2018)
9th Period
(July 31, 2017)
10th Period
(January 31, 2018)
Number of
Investment Units% of total
Number of
Investment Units% of total
Number of
Unitholders% of total
Number of
Unitholders% of total
Individuals and others 155,477 9.5% 181,080 10.2% 21,159 96.7% 24,053 96.9%
Financial institutions (including financial
instruments firms)839,345 51.3% 864,549 48.6% 159 0.7% 161 0.6%
Other domestic corporations 380,900 23.3% 419,236 23.6% 351 1.6% 381 1.5%
Foreign corporations 260,190 15.9% 312,482 17.6% 203 0.9% 220 0.9%
Total 1,635,912 100.0% 1,777,347 100.0% 21,872 100.0% 24,815 100.0%
Number of Unitholders and Number of Investment Units by Unitholder Type
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
Disclaimer
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