NTT UD REIT Investment : Earnings Presentation for the Fiscal Period 39

Fiscal Period
39			(Ticker Symbol: 8956)
(6-monthPeriod Earnings Presentation
Ended April 2022)

Table of Contents

Fiscal Period 39 Earnings Presentation

 Financial Summary	P.02	 Status of Construction Works	P.18
 Status of External Growth (FP 39)	P.03	 Financial Information	P.19
 Overview of Urbannet Uchisaiwaicho Building	P.04	 Repayment Schedule	P.20
 Enhancing Quality of the Portfolio through Continuous Property	P.05	 Interest-Bearing Liabilities and Credit Ratings	P.21
Replacement
 Changes in Asset Size	P.06	 Changes in Unrealized Gains or Losses	P.22
 Status of the Portfolio	P.07	 Analysis of Period-end Appraisal Values	P.23
 Office: Tenant Turnover and Occupancy Rates	P.08	 Analysis of Changes in DPU: FP 39 (ended April 2022)	P.24
 Leasing Status of Urbannet Gotanda NN Building	P.09	 Analysis of Changes in DPU: FP 40 (ending October 2022)	P.25
		and FP 41 (ending April 2023)
 Office: Rent Revision Trends (at Tenant Turnover)	P.10	 Occupancy Rate Assumptions for FP 40 and FP 41	P.26
 Office: Rent Revision Trends (at Contract Renewal)	P.11	 Performance Trends	P.27
 Office: Rent Analysis (Greater Tokyo)	P.12	 Environmental Initiatives	P.28
 Office: Contract Renewal Schedule (Greater Tokyo)	P.13	 Initiatives for Society	P.29
 Office: Status of Tenants	P.14	 Initiatives on Governance	P.30
 Residential: Tenant Turnover and Occupancy Rates	P.15
 Residential: Rent Revision Trends (at Tenant Turnover)	P.16
 Residential: Rent Revision Trends (at Contract Renewal)	P.17

1

Financial Summary

• In addition to the property transactions announced upon conducting public offering, additionally acquired an office building by utilizing the acquisition capacity (for larger leverage) created through the public offering.
• With leasing of existing properties making more progress than assumed, actual distribution per unit (DPU) for FP 39 ended up at 4,054 yen, + 79 yen from initial forecast.

Public Offering External Growth

• Conducted the 7th public offering at the beginning of FP 39 to procure approx. 12.3 billion yen
• 1. Acquired Tokyo Opera City Building from NTT Urban Development (NTT UD) and transferred Sphere Tower Tennozu to a third party (Nov. - Dec. 2021)
  2. On top of the transactions in (1) conducted upon announcing the public offering, acquired Urbannet Uchisaiwaicho Building from NTT UD (Mar. 2022)

⇒ Asset size (comparison with the end of FP 38): 272.6 billion yen (+ 12.6 billion yen), with gain on sale of 2.2	P.3 - P.7
billion yen

	 Occupancy rate during FP 39 (comparison with FP 38):	 Period end occupancy rate (comparison with the end of FP 38):
	95.0% (+ 1.5%)		96.3% (+ 2.5%)
	 Office	94.5% (+ 1.5%)	 Office	96.2% (+ 2.8%)
Internal Growth	 Residential	95.9% (+ 1.5%)	 Residential 96.6% (+ 1.9%)
 Rate of increase or decrease in monthly rent
	 Office	- 3.5% at tenant turnover
		+ 0.1% at contract renewal
	 Residential + 5.1% at tenant turnover
			P.8 - P.18
		+ 0.1% at contract renewal
Financial Strategy	 LTV (total assets basis): 45.5% (- 1.9% from FP 38)
 Acquisition capacity (assuming LTV (total asset basis) of 50%): approx. 25.0 billion yen
	P.19 - P.23
Cash Distributions	 DPU (FP 39 actual): 4,054 yen (+ 924 yen period on period and + 79 yen from forecast*1)
 DPU (FP 40 forecast): 2,730 yen (- 1,324 yen period on period and - yen from forecast*1)
P.24 - P.27
	 DPU (FP 41 forecast): 2,680 yen (- 50 yen period on period)

*1 "Forecast" refers to the distribution forecast for FP 39 and FP 40 disclosed in "Financial Report for the Fiscal Period Ended October 31, 2021 (May 1, 2021 - October 31, 2021)" dated December 15, 2021.

2

Status of External Growth (FP 39)

• (Nov. - Dec. 2021) Acquired Tokyo Opera City Building from NTT UD by utilizing the proceeds from public offering and transfer of Sphere Tower Tennozu.
• (Mar. 2022) Acquired Urbannet Uchisaiwaicho Building from NTT UD by utilizing the acquisition capacity created by the capital increase through public offering.
  

Sphere Tower Tennozu

(Sold on December 10, 2021)

Transferred property

Tokyo Opera City Building		Urbannet Uchisaiwaicho Building
(Acquired on November 2, 2021)		(Acquired on March 28, 2022)

Acquired property

Location	Higashi-shinagawa, Shinagawa
Ward, Tokyo
Buyer	Domestic corporation
Use	Office, store
Transfer price	18,000 million yen
Appraisal value upon transfer	17,600 million yen
Gain on sale	2,231 million yen
NOI/year*1	672 million yen
NOI yield*1	4.3%
Building age*2	28.6 years
Occupancy rate*2	98.6%

Location	Nishi-shinjuku, Shinjuku Ward,
Tokyo
Seller	NTT Urban Development
Corporation
Use	Office, store, concert hall,
museum, exhibition hall
Acquisition price	22,000 million yen
Appraisal value upon acquisition	23,100 million yen
Appraisal NOI/year	1,186 million yen
Appraisal NOI yield	5.4%
Building age*2	25.3 years
Occupancy rate*2	95.2%

Forward Stroke

Shimbashi, Minato Ward,

Tokyo

NTT Urban Development

Corporation

Office

5,640 million yen

6,156 million yen

168 million yen

3.0%

2.7 years

98.9%

*1	The NOI and NOI yield of transferred properties are calculated on the basis of the annualized actual NOI and period-end book value of the fiscal period immediately preceding the fiscal period in which the transfer
	took place.
*2	The building age and the occupancy rate are calculated with the conclusion date of the respective transaction agreements set as the base date.
3

Overview of Urbannet Uchisaiwaicho Building

• Acquired a relatively new, complex building located in Central Tokyo and developed by NTT UD, as part of strengthening ties with the sponsor.
• Co-ownsthe interests in the property's office areas with NTT UD, with an aim to enhance NUD's presence in the Hibiya area where a redevelopment project*1 by the NTT Group is underway.

Ownership form of

"Urbannet Uchisaiwaicho Building"

18F - 27F:

Hotel

Compartmentalized

ownership (third party)

				2F - 17F:				Forward Stroke
				Offices
				Compartmentalized
				ownership
		Office portion	Hotel portion
		(Owned by a
		Ownership (right of site)
		third party)		Forward Stroke
*			sections are co-owned with NTT UD
			(NUD owning 12.0% interest)

Forward Stroke

Location Characteristics

• Multiple train lines including 4 JR lines, 3 subway lines and the New Transit Yurikamome line are available, providing the property with good access to major city centers, the Shinkansen, and airports.
• Located in close proximity to the Uchisaiwaicho 1-chome district, which is scheduled for redevelopment going forward, the property is in an area with potential for future growth.

Property Characteristics

• A large-scale office/hotel complex with a total floor space of 36,100 m2 and a standard floor area of 330 tsubos. A piloti full of greenery has been established on 1F to provide a relaxing space for people in the surrounding area.
• Achieving four-sided daylighting full of natural light and a high level of BCP considerations, including a seismic damping structure and a dual-circuit power receiving system using different power lines, the property provides comfortable office spaces good at intellectual productivity and business continuity.
• An eco-friendly building that adopts the latest environmental technologies, 100% utilizing renewable energy.

*1
"Announcement of TOKYO CROSS PARK Concept, Unparalleled Urban Solutions Combined with Hibiya Park and among the Largest in Tokyo with a Total Floor Space of Approx. 1.1 Million Square Meters" (dated
March 24, 2022) by NTT Urban Solutions
(https://www.ntt-us.com/news/2022/03/news-220324-01.html) (in Japanese)	4