Industrial & Infrastructure Fund Investment : Notice Concerning Registration Change Application of Financial Instruments Business and Reorganization at Asset Manager to Start Private Fund Business

August 18, 2022

To all concerned parties:

Investment Corporation

Industrial & Infrastructure Fund Investment Corporation
(Tokyo Stock Exchange Company Code: 3249）
Representative:	Kumi Honda, Executive Director
	URL: https://www.iif-reit.com/english/
Asset Management Company
KJR Management
Representative:	Naoki Suzuki,
	President & Representative Director
Inquiries:	Hidehiko Ueda,
	Head of Industrial Division

TEL: [phone]

Notice Concerning Registration Change Application of Financial Instruments Business and Reorganization at Asset Manager to Start Private Fund Business

Industrial & Infrastructure Fund Investment Corporation ("IIF") announced that the Board of Directors of KJR Management, the Asset Management Company of IIF (hereafter the "Asset Manager") approved today at its meeting to file an application with the Financial Services Agency under the Financial Instruments and Exchange Act for registration of change related to investment advisory and agency services and type II financial instruments business for the purpose of establishing a private fund business, and to carry out an organizational change and similar events associated therewith.

1. Application for registration of change related to investment advisory and agency services and type II financial instruments business and related filings

1. Reason for and content of the application, etc. and related filings and the administrative agency to receive the filing

For the purpose of engaging in type II financial instruments business and investment advisory and agency services upon the establishment of a private fund business, the Asset Manager is to apply for registration of change under Article 31, paragraph 4 of the Financial Instruments and Exchange Act. In addition, also upon the establishment of a private fund business, the Asset Manager is to file a notification of changes in the statement of operating procedures in relation to the establishment of a discretionary investment business under the Financial Instruments and Exchange Act and a notification of concurrent business (services connected with money loans or intermediary for lending and borrowing money) under Article 35, paragraph 3 of the Financial Instruments and Exchange Act and application for approval regarding concurrent business (real estate development and management services) under Article 35, Paragraph 4 of the Financial Instruments and Exchange Act.

1. Date of the application August 18, 2022 (Planned)

2. Organizational change at the Asset Manager and changes in its rules regarding preferential consideration rights regarding investment information and its rules for transactions with related parties.

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Upon the establishment of a private fund business, the Asset Manager is to establish the Private Fund Business Department as of September 30, 2022 (planned). In addition, the rules regarding preferential consideration rights regarding investment information and the rules for transactions with related parties will be changed for the purpose of avoiding conflicts of interest between investment corporations and private funds to which the Asset Manager provides asset management, investment advisory and similar services. This change of the rules regarding preferential consideration rights pertaining to Real Estate Sale Information obtained by the Asset Manager will not impair the preferential consideration rights given to the Industrial Division, which oversees the asset management business for IIF or the Metropolitan Business Division, which oversees the asset management business for Japan Metropolitan Fund Investment Corporation, compared to the status before the change.

Please refer to the "Explanatory Materials" attached hereto for the organizational structure and both the rules regarding preferential consideration rights regarding investment information and the rules for transactions with related parties of the Asset Manager after its establishment of the Private Fund Business Department.

Regarding the above changes, the Asset Manager will follow procedures required under the Financial Instruments and Exchange Act, the Building Lots and Buildings Transaction Business Act and other applicable laws and regulations.

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Attachment: Explanatory Materials

On September 30, 2022, "Part 1, Fund Information, Item 1. Status of Fund, 1. Overview of the Investment Corporation, (4) Organization of the Investment Corporation, II Investment Corporation Management Structure" and "Part 2, Detailed Information on the Investment Corporation, Item 3. Management and Administration, II Restrictions on Transactions with Interested Parties, (2) Rules for Conflict-of-Interest Transaction Relating to the Investment Corporation" of the securities report filed on April 27, 2022 will be partly revised as below.

Part 1, Fund Information

Item 1. Status of Fund

1. Overview of the Investment Corporation

1. Organization of the Investment Corporation

II Investment Corporation Management Structure

As described above, the management of the Investment Corporation's assets is entrusted to the Asset Manager.

The Asset Manager has been entrusted with the asset management business by the Investment Corporation and Japan Metropolitan Fund Investment Corporation ("JMF") (hereinafter collectively referred to as the "Investment Corporations that have consigned services to the Asset Manager"). Since JMF is an investment corporation investing in retail facilities, office buildings, residences, hotels and mixed-used properties for these purposes, as of the date hereof, its investment target differs from the Investment Corporation which invests in industrial real estate described in "2. Investment Policy (1)Investment Policy ① Basic policy (A) Investment Target Assets" below).

In addition, the Asset Manager may be entrusted with the discretionary investment business, the investment advisory business, and other business (hereinafter, the "AM Business with Private Funds" and collectively referred to as the "AM Business" together with the business relating to the management of assets entrusted by the Investment Corporations that have consigned services to the Asset Manager) by real estate fund, etc. other than the Investment Corporation and JMF (including, but not limited to, a special purpose company which is an investment vehicle, other forms of a corporation or a partnership, or a trustee, etc. Hereinafter referred to as the "Private Funds" and collectively referred to as the "Funds" together with the Investment Corporations that have consigned services to the Asset Manager. Investment Corporations that have consigned services to the Asset Manager, or real estate fund, etc. may be referred to individually as the "Fund".).

The Asset Manager has placed the following management structure in order to prevent conflicts of interests among the Funds upon the asset management of the Investment Corporations that have consigned services to the Asset Manager and the entrustment of the AM Business with Private Funds by the Private Funds.

a．Separation of investment management divisions/department and support system

The Asset Manager has three Divisions/Department, namely, the Industrial Division which oversees the asset management business for the Investment Corporation, the Metropolitan Business Division which oversees the asset management business for JMF, and the Private Fund Business Department which oversees the discretionary investment business, the investment advisory business, and other business related to the Private Funds (hereinafter, solely or collectively referred to as the "Entrusted Fund Division/Department of Asset Manager"), by which the management responsibilities regarding management and advisory for the Funds ("Investment management, etc.") are clarified. Additionally, the Corporate Division supports the business of the Entrusted Fund Division/Department of Asset Manager through accounting, continuous disclosure, funding, and other businesses.

b．Securing Independence in Investment Decision-Making

In the internal structure, making decisions on Investment management, etc. for Fund requires confirmation from the Asset Manager's President and Representative Director and the Investment

Committee's approval as described in "ⅢDecision-Making Mechanism for Investment Management" and, in some cases, the approval of the Compliance Committee, the Senior Advisory Board and the Board of Directors. Any decision by the President and Representative Director on whether to give confirmation and any decision by the Investment Committee, the Compliance Committee, the Senior Advisory Board, and the Board of Directors on whether to give approval is examined solely from the perspective of whether or not the decision is appropriate as a decision made by a division/department of the Asset Manager to which a Fund consigns services, without taking into consideration the situation of other divisions/department of the Asset Manager to which the other Fund consigns services.

c．Rules regarding preferential consideration rights for investment information

The Asset Manager has been entrusted with the investment management business by the Investment Corporations that have consigned services to the Asset Manager, and it may also be entrusted with the discretionary investment business, the investment advisory business, and other business by Private Funds. As such, in light of the form of business of the Asset Manager, the Asset Manager has stipulated rules to decide which of its Entrusted Fund Division/Department of Asset Manager would have the right to preferentially consider Real Estate Sale Information obtained by the Asset Manager (i.e. information obtained by the Asset Manager regarding the search for potential purchasers of real estate or an asset backed by real estate that falls within investment target of the Funds and sufficient for the Funds to consider whether or not to invest; hereinafter the same). The Asset Manager operates under these rules (hereinafter, any right of the Entrusted Fund Division/Department of Asset Manager to consider Real Estate Sale Information obtained by the Asset Manager in preference to other Entrusted Fund Division/Department of Asset Manager in accordance with the Deal Review Meeting Rules shall be referred to as the "Preferential Consideration Right" for Real Estate Sale Information).

1. Preferential Consideration Right for a Commercial Facility (Note 1), Office Building (Note 2), Residential Facility (Note 3) or Hotel (Note 4)

1. For any Commercial Facility, Office Building, Residential Facility or Hotel (limited to Single Facilities (Note 5); hereinafter the same in this i.), the First Preferential Consideration Right (meaning the Preferential Consideration Right that ranks first; hereinafter the same in this c.) shall be given to the Metropolitan Business Division.
2. If the Metropolitan Business Division decides not to purchase the Commercial Facility, Office Building, Residential Facility or Hotel, or does not decide to purchase within the period of preferential consideration, the Second Preferential Consideration Right (meaning the Preferential Consideration Right that ranks second and is subordinated to the First Preferential Consideration Right; hereinafter the same in this c.) shall be given to the Private Fund Business Department.

(Omitted)

ii. Preferential Consideration Right for Industrial Real Estate

1. For any Logistic Facility (Note 1), Factory and Research and Development Facility (Note 2) or Infrastructure Facility (Note 3) (collectively, "Industrial Real Estate" in this c.) (limited to Single Facilities; hereinafter the same in this ii.), the First Preferential Consideration Right shall be given to the Industrial Division.
2. If the Industrial Division decides not to purchase the Industrial Real Estate or does not decide to purchase within the period of preferential consideration, the Second Preferential Consideration Right shall be given to the Private Fund Business Department.

(Omitted)

iii. Preferential Consideration Right for a Single Facility Used for Other Purposes

For any Single Facility that neither falls under i. nor ii. above, the head of Compliance Office shall

separately hold a meeting that is composed of the members of the Deal Review Meeting (please refer to "(E) Deal Review Meeting" below for details; hereinafter the same) plus the President and Representative Director and the full-time directors to determine through discussion which of the Industrial Division and the Metropolitan Business Division shall be given the First Preferential Consideration Right and which of them shall be given the Second Preferential Consideration Right (in such case, the Private Fund Business Department shall always be given the Third Preferential Consideration Right (meaning the Preferential Consideration Right that ranks third and is subordinated to the First Preferential Consideration Right and the Second Preferential Consideration Right)). In such case, the head of Compliance Office must invite a third party who is an expert and does not have any special interests in such determination to join the meeting as an observer and hear his/her opinion.

iv. Preferential Consideration Right for Real Estate Sale Information on a Complex Facility

1. (a) For any Commercial Facility, Office Building, Residential Facility or Hotel which is a Complex Facility, the First Preferential Consideration Right shall be given to the Metropolitan Business Division. If the Metropolitan Business Division decides not to purchase the Commercial Facility, Office Building, Residential Facility or Hotel which is a Complex Facility, or does not decide to purchase within the period of preferential consideration, the Second Preferential Consideration Right shall be given to the Private Fund Business Department.
2. 1. Notwithstanding the provision of (a) above, if any part of such Commercial Facility, Office Building, Residential Facility or Hotel which is a Complex Facility includes a portion used for Logistic Facility Use, Factory and Research and Development Facility Use or Infrastructure Facility Use ("Industrial Real Estate Use"), the Second Preferential Consideration Right shall be given to the Industrial Division, and the Third Preferential Consideration Right shall be given to the Private Fund Business Department. Provided, however, that in such case, if it is deemed that the Preferential Consideration Right may not be given appropriately when we judge such Complex Facility as a Commercial Facility, Office Building, Residential Facility or Hotel based solely on floor area, the head of Compliance Office shall separately hold a meeting that is composed of the members of the Deal Review Meeting plus the President and Representative Director and the full-time directors to determine through discussion which of the Industrial Division and the Metropolitan Business Division shall be given the First Preferential Consideration Right and which of them shall be given the Second Preferential Consideration Right (in such case, the Private Fund Business Department shall always be given the Third Preferential Consideration Right). In such case, the head of Compliance Office must invite a third party who is an expert and does not have any special interests in such determination to join the meeting as an observer and hear his/her opinion.

1. (a) For any Industrial Real Estate which is a Complex Facility, the First Preferential Consideration Right shall be given to the Industrial Division. If the Industrial Division decides not to purchase the Industrial Real Estate which is a Complex Facility, or does not decide to purchase within the period of preferential consideration, the Second Preferential Consideration Right shall be given to the Private Fund Business Department.
2. 1. Notwithstanding the provision of (a) above, if any part of such Industrial Real Estate which is a Complex Facility includes a portion used for Commercial Facility Use, office use, residential use or Hotel Use, the Second Preferential Consideration Right shall be given to the Metropolitan Business Division, and the Third Preferential Consideration Right shall be given to the Private Fund Business Department. Provided, however, that in such case, if it is deemed that the Preferential Consideration Right may not be given appropriately when we judge such Complex Facility as an Industrial Real Estate based solely on floor area, the head of Compliance Office shall separately hold a meeting that is composed of the members of the Deal Review Meeting plus the President and Representative Director and the full-time directors to determine through