XYMAX REIT Investment : (REIT) Financial Report for the Fiscal Period Ended August 2021

REIT Securities Issuer:	(REIT) Financial Report for the Fiscal Period Ended August 2021	October 13, 2021
XYMAX REIT Investment Corporation	Listing:	Tokyo Stock Exchange
Securities Code:	3488	URL:	https://xymaxreit.co.jp/en/index.html
Representative:	Shotaro Kanemitsu, Executive Director
Asset Management Company: XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation
Representative:	Shotaro Kanemitsu, Representative Director and President
Contact:	Tatsuya Nakayama, Head of Business Planning Division
	TEL: [phone]

Scheduled date for submission of securities report:	Nov. 29, 2021
Scheduled date for commencement of distribution payment:	Nov. 19, 2021
Supplementary materials for financial results:	Yes
Financial results briefing session:	Yes (for institutional investors and analysts)
	(Amounts are rounded down to the nearest million yen)

1. Status of Management and Assets for the Fiscal Period Ended August 2021 (from March 1, 2021 to August 31, 2021)

	(1) Results of Operations							(% figures are the rate of period-on-period increase (decrease))
				Operating revenue		Operating income		Ordinary income	Net income
	Fiscal period		million yen		%		million yen		%				million yen				%	million yen	%
	ended Aug. 2021			1,305		0.9			701		(2.1)				648				(0.4)		647	(0.4)
	Fiscal period			1,293		(5.2)			716		(7.2)				651			(10.2)		650	(10.2)
	ended Feb. 2021																Ratio		of				Ratio
		Net income per unit		Return on equity							of
						ordinary income to	ordinary income to
	Fiscal period						yen					%				total assets	%	operating revenue %
	ended Aug. 2021					2,899					2.8								1.7			49.7
	Fiscal period					2,911					2.8								1.8			50.4
	ended Feb. 2021
	(2) Distribution		Distribution		Total		Distribution				Total
				per unit		distribution							Ratio of
			(excluding		(excluding		in excess of			distribution		Payout ratio
			distribution		distribution			earnings			in excess of		distribution to
			in excess of		in excess of			per unit			earnings				net assets
				earnings)		earnings)
	Fiscal period			yen		million yen				yen			million yen			%		%
	ended Aug. 2021			2,900			647			-			-			100.0		2.8
	Fiscal period			2,911			650			-			-			100.0		2.8
	ended Feb. 2021
	(3) Financial Position	Total assets			Net assets			Equity ratio		Net assets per unit
	Fiscal period				million yen						million yen							%			yen
	ended Aug. 2021					38,971					23,233								59.6			104,000
	Fiscal period					37,636					23,236								61.7			104,011
	ended Feb. 2021

	(4) Cash Flows		Net cash		Net cash		Net cash		Cash and
			provided by (used in)		provided by (used in)		provided by (used in)		cash equivalents
			operating activities		investing activities		financing activities		at end of period
	Fiscal period		million yen		million yen		million yen		million yen
	ended Aug. 2021		783		(1,393)		619		2,877
	Fiscal period		665		(1,170)		376		2,867
	ended Feb. 2021

2. Operating Forecasts for the Fiscal Period Ending February 2022 (from September 1, 2021 to February 28, 2022) and Fiscal Period Ending August 2022 (from March 1, 2022 to August 31, 2022)

(% figures are the rate of period-on-period increase (decrease))

									Distribution	Distribution
									per unit
	Operating revenue	Operating income	Ordinary income	Net income	(excluding	in excess of
	distribution	earnings
									in excess of	per unit
									earnings)
Fiscal period	mn yen	%	mn yen	%	mn yen	%	mn yen	%	yen	yen
ended Feb. 2022	1,383	6.0	740	5.5	665	2.7	664	2.6	2,977	-
Fiscal period	1,387	0.2	732	(1.0)	674	1.2	673	1.2	3,013	-
ended Aug. 2022

(Reference) Forecast net income per unit

(Forecast net income ÷ Forecast total number of investment units issued and outstanding at end of period)

Fiscal period ending February 2022: 2,976 yen

Fiscal period ending August 2022: 3,013 yen

• Other
• 1. Changes in Accounting Policies, Accounting Estimates, and Retrospective Restatements

i.	Changes in accounting policies accompanying amendments to accounting standards, etc.:	None
ii.	Changes in accounting policies other than i.:	None
iii.	Changes in accounting estimates:	None
iv.	Retrospective restatements:	None

1. Total number of investment units issued and outstanding
   i. Total number of investment units issued and outstanding (including treasury investment units) at end of period

Fiscal period ended Aug. 2021	223,400	units	Fiscal period ended Feb. 2021	223,400	units
ii. Number of treasury investment	units at end of period
Fiscal period ended Aug. 2021	0	units	Fiscal period ended Feb. 2021	0	units
(Note)	For the number of investment	units serving as the basis	for calculation of net income per unit, please see "Notes on Per Unit	Information"
	on page 23.

• Explanation of Appropriate Use of Operating Forecasts, and Other Matters of Special Note
  The operating forecasts and other forward-looking statements contained in this document are based on information currently available to and certain assumptions deemed reasonable by XYMAX REIT. Accordingly, the actual results of operations, etc. may differ materially due to various factors. Key factors that could affect the actual operational status include a decline in rent revenue, non-payment of rent and bankruptcy of tenants occupying owned properties, as a result of the further spread of the new coronavirus infectious diseases (COVID-19) and the prolongation of the period until the contagion converges. Factors affecting the investment status are not limited to these. In addition, the forecasts are not a guarantee of the amount of distribution. For the assumptions underlying the operating forecasts, matters of note in the use of the operating forecasts, etc., please see "Assumptions Underlying the Operating Forecasts for the Fiscal Period Ending February 2022 (from September 1, 2021 to February 28, 2022) and Fiscal Period August 2022 (from March 1, 2022 to August 31, 2022)" on page 5. Accordingly, the actual operating revenue, operating income, ordinary income, net income, distribution per unit and distribution in excess of earnings per unit may vary due to changes in the circumstances.

XYMAX REIT Investment Corporation (3488) Financial Report for the Fiscal Period Ended August 2021

Table of Contents .............................................................................................................................................................................	2
1. Management Status...............................................................................................................................	2
(1)	Overview of the Fiscal Period under Review
	................................................................................................................................................	3
(2) Outlook for the Next Fiscal Period
	...........................................................................................................................................................................	7
2. Financial Statements
	.................................................................................................................................................................................	7
(1)	Balance Sheet .....................................................................................................................................................................	9
(2)	Statement of Income...............................................................................................................................................	10
(3)	Statement of Unitholders' Equity
	..................................................................................................................................................	11
(4)	Statement of Cash Distribution
	.............................................................................................................................................................	12
(5)	Statement of Cash Flows..................................................................................................................................	13
(6)	Notes on the Going Concern Assumption.................................................................................................	13
(7)	Notes on Matters Concerning Significant Accounting Policies
	.............................................................................................................................................	15
(8)	Notes on the Financial Statements.................................................................................	24
(9)	Changes in Total Number of Investment Units Issued and Outstanding
	......................................................................................................................................................................	24
3. Reference Information
	........................................................................................................................................................................	24
(1)	Investment Status .......................................................................................................................................................................	26
(2)	Investment Assets

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XYMAX REIT Investment Corporation (3488) Financial Report for the Fiscal Period Ended August 2021

1. Management Status

1. Overview of the Fiscal Period under Review
   I. Brief History of the Investment Corporation

XYMAX REIT was incorporated under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended) (hereinafter, the "Investment Trusts Act") with XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation (hereinafter, the "Asset Management Company") as the organizer and investments in capital of 300 million yen (3,000 units) on September 14, 2017, and completed the registration with the Kanto Local Finance Bureau on October 31, 2017 (Registration No. 131 with the Director-General of the Kanto Local Finance Bureau). Later, XYMAX REIT implemented an issuance of new investment units through public offering (209,905 units) with February 14, 2018 as the payment due date, and listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, "Tokyo Stock Exchange") on February 15, 2018 (securities code: 3488). In addition, an issuance of new investment units through third-party allotment (10,495 units) was implemented on March 20, 2018.

These resulted in total number of investment units issued and outstanding of 223,400 units as of the last day of the fiscal period.

XYMAX REIT utilizes the real estate management (Note 1) strengths of the XYMAX Group (Note 2) to conduct appropriate portfolio management and thereby maximize the value of real estate with the aim of maximizing unitholder value.

(Note 1) "Real estate management" collectively refers to property management, comprehensive building maintenance services, and combined property management and comprehensive building maintenance services (including cases where contracted with such services in subleasing cases). The same shall apply hereinafter.

(Note 2) "XYMAX Group" refers to the corporate group comprising XYMAX Corporation and its consolidated subsidiaries and affiliates accounted for using the equity method. The same shall apply hereinafter.

1. Management Environments

With regard to the economic environment during the fiscal year under review, the real GDP growth rate for the April-June quarter of 2021 increased by 0.5% (an annual increase of 1.9%), partly due to an increase in investment in housing and the resumption of capital investment by companies that had been postponed.

As for the financial markets, according to "Loans and Discounts Outstanding by Sector" published by the Bank of Japan, total loans outstanding as of the end of June 2021 were JPY541 trillion and loans outstanding for real estate were JPY88.9 trillion, which remained at extremely high levels.

Although economic activities are expected to gradually resume due to an increase in the vaccination coverage rate, the outlook for epidemicity COVID-19 is uncertain worldwide, and therefore, XYMAX REIT believes that it is necessary to continue to closely monitor trends in the capital and financial markets in the future.

Under these circumstances, the following movements have been observed in the markets for office, retail and hotel and the real estate buy-sell market, in which XYMAX REIT is primarily invested.

As for offices, according to "Office Market Report Tokyo 2021Q2" (Note) published by XYMAX Real Estate Institute Corporation the vacancy rate in Tokyo's 23 wards in the second quarter of 2021 increased by 0.66 point from the previous quarter to 2.96%, however, the vacancy absorption rate in the 23 wards of Tokyo in the 2Q of 2021 is increased by 3.6 points from the previous quarter to 34.5%.

Based on the experience of teleworking activities as an infection control against the COVID-19, companies are seeking out an office strategy towards after-COVID-19.

For example, while some companies have reduced leased area of their head offices based on the company policy to use head offices together with other working places effectively ( such as satellite offices and home, etc.), there have also been moved to lease new office spaces for the purpose of opening satellite offices and consolidating dispersed offices.

Regarding retail facilities, according to the Ministry of Economy, Trade and Industry's Current Survey of Commerce, retail sales in the second quarter 2Q of 2021 increased by 6.5% from the same quarter of the previous year.

Sales at supermarkets and drugstores, which mainly sell daily necessities, remained firm even under the impact of - 2 -

XYMAX REIT Investment Corporation (3488) Financial Report for the Fiscal Period Ended August 2021

the spread of COVID-19.

In addition, according to a survey of trends in the service industry conducted by the Statistics Bureau of the Ministry of Internal Affairs and Communications, restaurant sales increased 11.9% year-on-year, but a full-fledged recovery is still likely to take time.

As for hotels, according to the Japan Tourism Agency's Accommodation Travel Statistical Survey, the total number of guests in the first half of 2021 (January-June) decreased by 16.4% year-on-year.

In addition, the number of guests of overseas visitors to Japan, as announced by the Japan National Tourism Organization, declined 97.6% in the first half of the year, and it is believed that it will take a considerable amount of time to recover to the number of overseas visitors before the spread of COVID-19.

The entire hotel industry continues to be significantly negatively affected by restrictions on the movement of people domestically and overseas due to COVID-19. However, some areas are showing signs of a gradual recovery, partly due to the impact of the gradual relaxation of restrictions on the holding of events and other events.

In the real estate buy-sell market, following the backdrop of a favorable financing environment and strong demand from overseas investors, investment activities continued, particularly in asset types such as residential and logistics facilities. There were also large-scale transactions, such as the sale of the head office building. As a result, the real estate market was active and real estate prices remained in a higher price range.

(NOTE) For more information on the survey, please refer to the website (https://soken.xymax.co.jp/) of Xymax Real Estate Institute Co., Ltd.

1. Management Status
   As of the last day of the fiscal period under review, XYMAX REIT had 15 properties in its portfolio. Its total acquisition price stood at 35,313 million yen, a total leasable area at 77,616.68 m2 and total leased area at 76,020.50 m2. The occupancy rate as of the last day of the fiscal period under review was 97.9%.

IV. Financing Status (Equity Financing)

In the fiscal period under review, XYMAX REIT did not procure funds through issuance of new investment units. As of the last day of the fiscal period under review, unitholders' capital was 22,585 million yen.

(Debt Financing)

In the period under review, XYMAX REIT borrowed a new loan of 1,270 million yen on July 1, 2021.

As a result, as of the last day of the fiscal period under review, the balance of loans outstanding was 14,050 million yen.

1. 1. Overview of Business Performance
      Business performance in the fiscal period under review resulted in operating revenue of 1,305 million yen, operating income of 701 million yen, ordinary income of 648 million yen and net income of 647 million yen.
      Concerning distribution for the fiscal period under review, pursuant to the distribution policy provided in XYMAX REIT's Articles of Incorporation, the decision was made to distribute unappropriated retained earnings in the amount of 647,860,000 yen, which is the largest integral multiple of the total number of investment units issued and outstanding (223,400 units) by application of special provisions for taxation on investment corporations (Article 67- 15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957, as amended)). This resulted in distribution per unit of 2,900 yen.
2. Outlook for the Next Fiscal Period
3. 1. General Management Outlook

1. External Growth Strategy
   Capture wide range of real estate disposition needs through real estate management customer base
   XYMAX REIT captures real estate disposition needs from the customer base of the XYMAX Group based on a sponsor support agreement with XYMAX Corporation with the aim to lead such needs to property acquisition opportunities for XYMAX REIT.
2. Internal Growth Strategy
   Utilization of the real estate management insight and know-how and network of the XYMAX Group
3. • 3 -