AEON REIT Investment Corporation...AEON REIT Investment Corporation 5th Fiscal Period Ended July...
Transcript of AEON REIT Investment Corporation...AEON REIT Investment Corporation 5th Fiscal Period Ended July...
AEON REIT Investment Corporation
5th Fiscal Period Ended July 2015
Materials for Investor Meeting
September 15, 2015
Asset Manager:
AEON Reit Management Co., Ltd.
Securities Code: 3292
http://www.aeon-jreit.co.jp/en/
Table of Contents
I. Overview of Operations in 5th Fiscal Period Ended July 31, 2015
1. Summary of Financial Results for 5th Fiscal
Period Ended July 31, 2015----- P. 4
2. Trends of Major Indicators ----- P. 5
3. Portfolio Data (5th Fiscal Period) ----- P. 6
4. Appraisal Value (based on 23 properties as of
the end of 5th Fiscal Period)----- P. 7
II. Operation Highlights of 5th Fiscal Period
1. Operation Highlights (1) ----- P. 9
2. Operation Highlights (2) ----- P. 10
3. Acquisition of Third Party-Owned Properties
(Sponsor-Operated)----- P. 11
4. Performance of 23 Properties in Portfolio (1) ----- P. 12
5. Performance of 23 Properties in Portfolio (2) ----- P. 13
6. Performance of 23 Properties in Portfolio (3) ----- P. 14
7. Summary of Malaysian Economy ----- P. 15
8. Maintaining of Stable Financial Base (1) ----- P. 16
9. Maintaining of Stable Financial Base (2) ----- P. 17
10. Portfolio Map (based on 23 properties as of July
31, 2015)----- P. 18
11. Portfolio List (based on 23 properties as of July
31, 2015)----- P. 19
12. Trend of Investment Unit Price ----- P. 20
III. Forecasts
1. Forecasts for 6th Fiscal Period Ending January
31, 2016 and 7th Fiscal Period Ending July 31,
2016
----- P. 22
2. Expansion of Asset Size and Capital Investment
Plan----- P. 23
3. Large-scale Renewal of AEON MALL Morioka ----- P. 24
2
IV. AEON REIT’s Investment Strategy
1. Roadmap for Growth ----- P. 26
2. Basic Philosophy and Basic Policy ----- P. 27
3. A Highly Stable Portfolio Centered on the Aeon
Group’s Large-Scale Retail Properties----- P. 28
4. Sponsor Supports from the AEON Group to
utilize its collective strength ----- P. 29
5. Major Large-Scale Shopping Centers Developed
by the AEON Group(Including Properties It
Plans to Develop)----- P. 30
6. Strategic Cash Management and a Stable
Financial Position----- P. 31
7. Framework for Maximizing Unitholder Value ----- P. 32
Appendix.
I. Overview of Operations in 5th Fiscal Period Ended July 31, 2015
Summary of Financial Results for 5th Fiscal Period Ended July 31, 2015
4
January 2015
PeriodJuly 2015 Period July 2015 Period
4th Period
Results
5th Period
Results
vs.
Previous Period
5th Period
Forecast
vs.
Forecast
(A) (B) (B-A) (C) (B-C)
Operating Revenue(millions
of yen)7,422 9,164 1,741 9,165 △ 1
Operating Expenses(millions
of yen)4,612 5,658 1,046 5,719 △ 60
Expenses Related
to Rent Business
(millions
of yen)4,165 5,168 1,002 5,212 △ 43
(Of Which,
Depreciation)
(millions
of yen)2,245 2,659 414 2,687 △ 27
Operating Income(millions
of yen)2,810 3,505 695 3,445 59
Ordinary Income(millions
of yen)2,353 2,978 625 2,918 60
Net Income(millions
of yen)2,349 2,969 619 2,907 61
Distributions per Unit (yen) 2,473 2,724 251 2,665 59
Number of Investment
Units Issued(units) 950,000 1,090,200 140,200 1,090,200 -
Difference in operating revenue
Decrease in real estate rent revenue[-3]
Increase in other real estate rent revenue
[+1]
Difference in operating expenses
Decrease in expenses related to rent
business[-43]
• Increase in repairs and maintenance
expenses[+11]
• Taxes and dues[-26]
• Decrease in depreciation[-27]
• Decrease in commission paid [-6]
• Decrease in investor relations expenses[-
13]
Mainly due to revenues from property
acquisition in 5th period
Difference in operating revenue
Increase in real estate rent revenue[+1,741]
Difference in operating expenses
Increase in expenses related to rent
business[+1,002]
• Increase in repairs and maintenance
expenses[+163]
• Taxes and dues[-25]
• Increase in land rent paid[+432]
• Increase in depreciation from capital
expenditures[+414]
Major Reasons for Difference During 5th Period
(vs. Previous Period)
Major Reasons for Difference During 5th Period
(vs. Forecast)
Trends of Major Indicators
5
NOI from leasing activities (millions of yen)Aggregate market value at end of period
(billions of yen)資産規模 (取得価額ベース) (億円)
1口当たりNAV (円) (注)
Note: NAV (Net asset value) per unit = (Total unitholders’ capital at end of period + Unrealized profit or loss of the whole portfolio at end of period) / Number of total investment units issued at end of period
Asset size (based on acquisition price)
(billions of yen)
NAV per unit (Note) (yen)Distributions per unit (yen)
686
2,461 2,473 2,724 2,710
2,530
Jan 2014 Period(2nd Period)
July 2014 Period(3rd Period)
Jan 2015 Period(4th Period)
July 2015 Period(5th Period)
Jan 2016 Period(6th PeriodForecast)
July 2016 Period(7th PeriodForecast)
110,457 112,635 115,940 122,059
Jan 2014 Period(2nd Period)
July 2014 Period(3rd Period)
Jan 2015 Period(4th Period)
July 2015 Period(5th Period)
158.3 158.9 158.9
194.3
Jan 2014Period
(2nd Period)
July 2014Period
(3rd Period)
Jan 2015Period
(4th Period)
July 2015Period
(5th Period)
125.6 128.4
153.1162.4
Jan 2014Period
(2nd Period)
July 2014Period
(3rd Period)
Jan 2015Period
(4th Period)
July 2015Period
(5th Period)
2,445
5,488 5,502
6,655
Jan 2014Period
(2nd Period)
July 2014Period
(3rd Period)
Jan 2015Period
(4th Period)
July 2015Period
(5th Period)
Portfolio Data (5th Fiscal Period)
Notes:
1. Calculated as the weighted average age of the building based on the acquisition price as of Juy 31, 2015
2. The acquisition price is the amount (the sale and purchase price, etc., shown on the sale and purchase agreement, etc.) excluding expenses incurred on the acquisition of each property (commission, taxes and dues, etc.).
3. Remaining lease term as of July 31, 2015
4. Appraisal value as of July 31, 2015
Property
typeRegion Investment
6
23
Portfolio Highlights
Distribution of Portfolio
Portfolio properties
¥194.3bn
Total acquisition price 2 Book value at end of period Appraisal value 4
¥189.6bn ¥206.3bn(+¥0.7bn vs. previous period)
11.1 years
Average building age 1
18.5 years
Average remaining lease term 3Properties with master lease
contracts
Unrealized profit(Appraisal value – book value at end of period)
100% +¥16.6bn(+¥2.8bn vs. previous period)
14.4%
85.6%
11.0%
10.9%
9.2%
8.5%
7.2%
5.8%
5.3%
5.0%
4.5%
4.0%
28.6%
SRSC
RSC
AEON MALL KYOTO
AEON Lake Town mori
AEON MALL Kurashiki
AEON MALL Mitouchihara
AEON MALL Kumamoto
AEON MALL Nogata
AEON Sagamihara SC
AEON MALL Suzuka
AEON MALL Ayagawa
AEON MALL Hiezu
Others
Hokkaido and Tohoku
Kanto
Tokai, Hokuriku and Chubu
Kinki
Chugoku and Shikoku
Kyushu
Malaysia
12.1%
31.7%
10.3%
14.8%
17.7%
13.0%
0.3%
Appraisal Value (based on 23 properties as of the end of 5th Fiscal Period)
7
(Note1) Appraisal value represents the appraisal value as of the valuation date of January 31, 2015 for 4th period and July 31, 2015 for 5th period.
The appraisal values and capitalization rate based on direct capitalization method for AEON MALL Mitouchihara(Land) and properties whose property numbers are RSC-15 to RSC-20 are as of the acquisition date.
(Note2) 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).
(Note3) Pursuant to the local appraisal methodology, we entrusted the evaluation of the appraisal value of the property to Japan Real Estate Institute. 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, and is based on the appraisal value as indicated on the appraisal report as of the valuation date of January 31, 2015 for 4th
period and July 31, 2015 for 5th period. In addition, the amount in Malaysian Ringgit was converted to Japanese yen based on the exchange rate as of the end of the fiscal period (January 30, 2015; 1 RM = ¥32.57 and July 31, 2015: 1RM=¥32.49; rounded down to the
nearest 100th).
4th Period (note1) 5th Period Difference 4th Period (note1) 5th Period Difference
SRSC-1 AEON LakeTown mori (Note2) The Tanizawa Sōgō Appraisal Co., Ltd. 21,190 23,000 23,000 0 5.0 5.0 0.0
SRSC-2 AEON LakeTown kaze (Note2) The Tanizawa Sōgō Appraisal Co., Ltd. 6,730 7,290 7,660 370 5.4 5.4 0.0
RSC-1 AEON MALL Morioka Japan Real Estate Institute 5,340 5,590 5,590 0 6.9 6.9 0.0
RSC-2 AEON MALL Ishinomaki Japan Real Estate Institute 6,680 7,020 7,020 0 6.3 6.3 0.0
RSC-3 AEON MALL Mitouchihara Japan Real Estate Institute 16,460 17,300 17,300 0 6.3 6.3 0.0
AEON MALL Mitouchihara (Land) Japan Real Estate Institute 105 112 112 0 - - -
RSC-4 AEON MALL Ota Japan Real Estate Institute 6,860 7,820 7,820 0 6.6 6.6 0.0
RSC-5 AEON Sagamihara Shopping Center Japan Real Estate Institute 10,220 10,300 10,500 200 5.5 5.4 ▲ 0.1
RSC-6 AEON MALL Ogaki Japan Real Estate Institute 4,950 5,210 5,160 ▲ 50 6.8 6.9 0.1
RSC-7 AEON MALL Suzuka Japan Real Estate Institute 9,660 10,100 10,100 0 6.3 6.3 0.0
RSC-8 AEON MALL Meiwa The Tanizawa Sōgō Appraisal Co., Ltd. 3,290 3,610 3,620 10 6.7 6.7 0.0
RSC-9 AEON MALL Kasai-Hojo Japan Real Estate Institute 7,230 7,610 7,610 0 6.9 6.9 0.0
RSC-10 AEON MALL Hiezu Japan Real Estate Institute 7,780 8,180 8,320 140 6.9 6.9 0.0
RSC-11 AEON MALL Kurashiki Japan Real Estate Institute 17,890 18,700 18,700 0 6.2 6.2 0.0
RSC-12 AEON MALL Ayagawa Japan Real Estate Institute 8,740 9,190 9,190 0 6.5 6.5 0.0
RSC-13 AEON MALL Nogata Japan Real Estate Institute 11,250 12,800 12,700 ▲ 100 6.4 6.5 0.1
RSC-14 AEON MALL Kumamoto Japan Real Estate Institute 14,060 14,800 14,800 0 6.2 6.2 0.0
RSC-15 AEON MALL KYOTO Japan Real Estate Institute 21,470 21,700 21,800 100 5.0 5.0 0.0
RSC-16 AEON MALL Sapporo-Hiraoka The Tanizawa Sōgō Appraisal Co., Ltd. 5,900 6,210 6,230 20 6.3 6.3 0.0
RSC-17 AEON MALL Kushiro-Showa The Tanizawa Sōgō Appraisal Co., Ltd. 1,780 1,880 1,900 20 6.9 6.9 0.0
RSC-18 AEON MALL Rifu The Tanizawa Sōgō Appraisal Co., Ltd. 2,560 2,710 2,720 10 6.5 6.5 0.0
RSC-19 AEON MALL Yamagata-Minami The Tanizawa Sōgō Appraisal Co., Ltd. 1,350 1,430 1,440 10 6.7 6.7 0.0
RSC-20 AEON MALL Yokkaichi-Kita The Tanizawa Sōgō Appraisal Co., Ltd. 2,210 2,340 2,370 30 6.4 6.4 0.0
M-1 AEON Taman Universiti Shopping Centre (Note3) Japan Real Estate Institute658
(20mil RM)
651
(20mil RM)
649
(20mil RM)▲ 1 - - -
194,363 205,553 206,311 759 - - - Total
Property
numberProperty name Appraisal agency
Acquisition price
(Millions of yen)
Appraisal value (Millions of yen) (Note1)Capitalization Rate based on direct capitalization
method (%)
II. Operation Highlights of 5th Fiscal Period
Time of
implementation of
revitalization
Description of revitalization work
Amount of
Revitalization
(millions of yen)
Increase in rent
(annualized)(thousands of yen)
Effect of
revitalization (note)
AEON MALL Nogata January 2014・Rainwater/wastewater counter
measures in underground parking garage109 8,120 7.4%
AEON Sagamihara Shopping
CenterOctober 2014
・Re-covering floor and renovation of rest
rooms20 1,310 6.3%
AEON MALL Kumamoto November 2014 ・Installation of LED lights 53 3,570 6.7%
AEON Lake Town kaze April 2015 ・Large-scale renewal 312 21,260 6.8%
AEON MALL Hiezu March 2015 ・Large-scale renewal 105 8,040 7.7%
Operation Highlights (1)
9
Shopping Center Renewal
Implementing large-scale renewal in Phase1 (autumn in 2014 to April 24, 2015) and
in Phase 2 (autumn in 2015)
A total of 155 stores including 96 newly opened stores, 26 relocated stores, and 33
renovated stores were renewed in Lake Town kaze in Phase1. 183 stores including
85 newly opened stores, 42 relocated stores, and 56 renovated stores were renewed
in Lake Town mori.
Implementing large-scale renewal with rezoning of the mall
Effect of Revitalization
Note: Effect of revitalization = Increase in rent(annualized)/ Amount of revitalization
AEON Lake Town kaze AEON MALL Hiezu
Operation Highlights (2)
10
Taking Inbound Tourism Consumption
AEON MALL KYOTO
“Quantum of the Seas”, one of the world
largest cruise passenger boat with 4,700
Chinese tourists stopped at Sakai-minato
on July 2.
Approximately 100 buses stopped at
AEON MALL Hiezu.
Tourists bought tons of cosmetics and
groceries in AEON MALL Hiezu.
AEON MALL Hiezu
Acquisition price
(millions of yen)105
Appraisal value
(millions of yen )112
(March 1, 2015)
Acquisition date April 28, 2015
Location 1-198, Uchihara, Mito-shi, Ibaraki
Site area 1,999.83㎡
Seller Mito city, Ibaraki Pref.
External Growth
Acquiring land adjacent to AEON MALL Mitouchihara , which is an asset already held by AEON REIT from Mito City, Ibaraki Prefecture by general competitive bidding
Effort for IR Activities for Individual Investors
Number of tourists in Kyoto city and tourist consumption per
person
Property name LocationAcquisition price
(billions of yen) Appraisal value
AEON MALL KYOTOKyoto City,
Kyoto Pref.21.4 21.7
AEON MALL
Sapporo-Hiraoka
Sapporo City,
Hokkaido5.9 6.2
AEON MALL
Kushiro-Showa
Kushiro City,
Hokkaido1.7 1.8
AEON MALL RifuMiyagi County,
Miyagi Pref.2.5 2.7
AEON MALL
Yamagata-Minami
Yamagata City,
Yamagata Pref.1.3 1.4
AEON MALL
Yokkaichiita
Yokkaichi City,
Mie Pref.2.2 2.3
Total 35.2 36.2
AEON MALL Mitouchihara (additional acquisition of land)
Acquiring properties through follow-on offering in February 2015
Holding AEON group IR seminar in AEON Lake Town kaze
・Holding AEON group IR
seminar at AEON Hall in
AEON Lake Town kaze,
which is an asset already
held by AEON REIT, on
July 20.
・Approximately 130
people participated in the
seminar.
Overview of IR activities for individual investors
5th period(February 2015 to July 2015)
A total of 780 people participated in our IR seminars.
AEON REIT IR seminars arranged by
securities companies (Tokyo, Saitama,
Aichi, Kyoto, Kumamoto, Gifu )
11 seminars were held.
11
AEON MALL
KYOTO
AEON Lake Town kazeAEON Lake Town mori
AEON Taman UniversitiShopping Centre
AEON MALL
Ishinomaki
AEON MALL
Morioka
AEON MALL
Mitouchihara
AEON MALL
Ogaki
AEONSagamihara SC
AEON MALL
Suzuka
AEON MALL
Kasai-Hojo
AEON MALL
Meiwa
AEON MALL
Hiezu
AEON MALL
Ayagawa
AEON MALL
Kurashiki
AEON MALL
Kumamoto
AEON MALLSapporo-Hiraoka
AEON MALLKushiro-Showa
AEON MALL
Rifu
AEON MALLYamagata-Minami
AEON MALLYokkaichi-Kita
RSC
SRSC
RSC
RSC
RSC
RSC
RSC
RSC
RSC
RSC
RSC
RSC
RSC
RSC
SRSC
AEON MALL
Nogata
AEON MALL
OtaRSC RSC
RSC
RSC
RSC RSC RSC
RSC
4th fiscal period(End of January
2015)
5th fiscal period(End of July
2015)
Number of
properties17
properties
23
properties
Total acquisition
price158.9
billion yen
194.3
billion yen
Average NOI yield 7.0% 6.9%
Average NOI yield
after depreciation4.1% 4.1%
Average remaining
lease term18.8
years
18.5
years
Average building
age11.0
years
11.1
years
Total leasable area1.70
million ㎡2.13
million ㎡
Properties with
master lease
contracts100% 100%
Changes in Portfolio
Acquisition of Third Party-Owned Properties (Sponsor-Operated)
Aggressively acquire third-party-owned properties, in addition to the sponsor-owned properties.
Consider acquisition of external properties which are not operated by our Sponsor, by utilizing the Sponsor and the Asset Manager’s
own channel.
Ope-
rationSeller
Sp
on
sor-O
pera
ted P
rope
rties
Sp
on
sor-O
wn
ed
Pro
pe
rties
Th
ird-P
arty
-Ow
ned
Pro
pe
rties
Our Portfolio as of July 2015
Performance of 23 Properties in Portfolio (1)
Slight increase in sales of end tenants and High occupancy rate in actual end-tenant since fiscal year of 2011
12
YoY Sales Comparison 1 of End Tenants in 23-property Portfolio
Actual End-Tenant Occupancy Rate 2 in 23-property Portfolio
Notes:
1. The total amount of sales of end tenants of the 23 portfolio properties 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 23 portfolio properties that is actually occupied by end tenants (including area in which end tenants have committed to opening stores)
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 tenth of a percent.
99.6% 99.7% 99.7% 99.8% 99.8%99.5%
99.7% 99.7% 99.7% 99.8% 99.6% 99.5%99.7%
95%
96%
97%
98%
99%
100%
May 2012 Aug 2012 Nov 2012 Feb 2013 May 2013 Aug 2013 Nov 2013 Feb 2014 May 2014 Aug 2014 Nov 2014 Feb 2015 May 2015
114.0%
98.2% 98.9% 98.0%100.8%
102.9% 102.0%99.4%
103.1%
97.6% 97.9% 97.2%97.2%
80%
90%
100%
110%
120%
Mar–May2012
Jun–Aug2012
Sep–Nov2012
Dec 2012–Feb 2013
Mar–May2013
Jun–Aug2013
Sep–Nov2013
Dec 2013–Feb 2014
Mar–May2014
Jun–Aug2014
Sep–Nov2014
Dec 2014–Feb 2015
Mar–May2015
Performance of 23 Properties in Portfolio (2)
13
Rent Revenue at Master Lease Companies1 of 23 Properties in Portfolio
Notes:
1.Revenue such as rent income and income incidental thereto received by the master lease company from end tenants
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 tenth of a percent.
4.Rent revenue from AEON Taman Universiti Shopping Centre is converted to Japanese yen based on the exchange rate as of the end of January 2015 (1 RM = ¥32.57; rounded down
to the nearest hundredth).
Mar. 2012–Feb. 2013
(12-month period) ¥51.7 billion
(YoY) 104.4%
Mar. 2013–Feb. 2014
(12-month period) ¥55.5 billion
(YoY) 107.3%
Mar. 2014–Feb. 2015
(12-month period) ¥56.2 billion
(YoY) 101.3%
12.7 12.7 12.4
13.9 13.6 13.7 13.4
14.714.1 13.8 13.5
14.714.2
113.6%
103.0%99.4%
102.7%107.4% 108.0%108.4%105.6%
103.8% 100.5%100.6% 100.2% 100.2%
0%
20%
40%
60%
80%
100%
120%
0
2
4
6
8
10
12
14
16
18
20
Mar–May2012
Jun–Aug2012
Sep–Nov2012
Dec 2012–Feb 2013
Mar–May2013
Jun–Aug2013
Sep–Nov2013
Dec 2013–Feb 2014
Mar–May2014
Jun–Aug2014
Sep–Nov2014
Dec 2014–Feb 2015
Mar–May2015
(Billions of yen)Rent revenue (billions of yen) Indexed YoY comparison
1
4
12
5
1 0
Sales Trends of Individual Properties for December 2014 – May 2015
Percentage of properties with
sales index of 100% or higher: 26.1%
Average of 23Properties in ARI
portfolio
97.2%
Year-on-year
sales index <90% 90%–95% 95%–100% 100%–105% 105%–110% ≥110%
% of total 4.3% 17.4% 52.2% 21.7% 4.3% 0.0%
14
Performance of 23 Properties in Portfolio (3)
Distribution of YoY Indexed Sales Growth for six months of End Tenants by Property 1
(Reference) Consumer Confidence Index (Households of two or more persons, seasonally adjusted series)
July 201540.3
Notes:
1. Sales of each property for June 2014–Nov. 2014 are expressed as a percentage of sales for the same period a year earlier (June 2013–Nov. 2013).
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 tenth of a percent. As a result, the total amount may not always total 100.0%.
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).
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
Oct
Dec
Fe
b
Apr
Jun
Aug
CY 2004 CY 2005 CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015
Summary of Malaysian Economy
15
Changes in Malaysian population(Unit:million people) Changes in GDP growth rate in Malaysia
Changes in Malaysian Ringgit/Yen(Monthly)(Note) Changes in rate of increase in CPI
GDP growth rate remain at a high level and CPI remains stable.
Introduction of GST in April 2015 affects retail market in Malaysia.
The decline in crude oil prices lead to weak Malaysian Ringgit.
(Source) IMF World Economic Outlook Database, April 2015 (Source) IMF World Economic Outlook Database, April 2015
(Source) Reuter
(Note) Number of year 2015 is data uo to August.
(Source) IMF World Economic Outlook Database, April 2015
Ministry of Internal Affairs and Communications :Consumer Price Index
26.526.8 27.1
27.628.1
28.629.1
29.529.9
30.3
2006 2007 2008 2009 2010 2010 2011 2012 2013 2014
5.0%5.6%
6.3%
4.8%
-1.5%
7.4%
5.2%
5.6%
4.7%
6.0%
2006 2007 2008 2009 2010 2010 2011 2012 2013 2014
3.0% 3.6%
2.0%
5.4%
0.6%1.7%
3.2%1.7%
2.1%3.1%
-0.3%
0.3%
0.0%
1.4%
-1.4% -0.7% -0.3% 0.0% 0.3%
2.8%
2006 2007 2008 2009 2010 2010 2011 2012 2013 2014
rate of increase in CPI【Malaysia】
rate of increase in CPI【Japan】
20
25
30
35
40
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Maintaining of Stable Financial Base(1)
16
2nd Period(January 31, 2014)
3rd Period(July 31, 2014)
4th Period(January 31, 2015)
5th Period(July 31, 2015)
Short-term loans
payable¥4,000 million ¥- million ¥- million ¥2,000 million
Long-term loans payable ¥63,000 million ¥63,000 million ¥63,000 million ¥73,400 million
Tenant leasehold and
security deposits¥7,411 million ¥7,411 million ¥7,411 million ¥8,111 million
Total debt ¥74,411 million ¥70,411 million ¥70,411 million ¥83,512 million
LTV (including leasehold
deposits)43.4% 41.4% 41.5% 41.0%
LTV (excluding leasehold
deposits)39.0% 37.1% 37.1% 37.0%
Long-term debt ratio 94.0% 100.0% 100.0% 97.3%
Fixed interest rate ratio 80.6% 85.7% 85.7% 84.5%
Average remaining
borrowed period5.2 years 5.0 years 4.5 years 4.3 years
Average interest rate on
borrowings0.92% 0.95% 0.95% 0.94%
Trend in Major Financial Indicators
Maintaining of Stable Financial Base (2)
17
Borrowing amount Borrowing
DateMaturity Interest rate
Breakdown
Short-
term¥2.0bn ¥2.0bn
Feb. 27,
2015Oct 20, 2015
Floating
(base rate 1 +0.25%)
Long-
term
¥73.4
bn
¥9.0bn
Nov. 25,
2013
Oct. 20, 2016Floating
(base rate 1 +0.25%)
¥27.0bn Oct. 22, 2018Effective fixed rate 2
0.78125%
¥22.0bn Oct. 20, 2020Effective fixed rate 2
1.17250%
¥5.0bn Oct. 20, 2023Effective fixed rate 2
1.76375%
¥0.7bn
Feb. 27,
2015
Oct 20, 2017Floating
(base rate 1 +0.25%)
¥1.2bn Oct 21, 2019Effective fixed rate 2
0.61910%
¥4.0bn Oct. 20, 2021Effective fixed rate 2
0.88915%
¥4.5bn Oct 21, 2024Effective fixed rate 2
1.40390%
Notes:
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.
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.
AA-(Stable)
Mix of Lenders (as of July 31, 2015)
Distribution of Maturities after the new
debt financing
(billions of yen)
17.0%
15.1%
12.5%
10.7%
7.8%
7.7%
7.3%
4.6%
3.3%
3.1%
3.1%
3.1%
1.7%
1.7%
1.3%
Debt Snapshot
Syndicate of lenders arranged by Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation
and Sumitomo Mitsui Trust Bank, Limited
Credit Rating
Japan Credit Rating Agency, Ltd. (JCR)
Mizuho Bank
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank
Bank of Tokyo-Mitsubishi UFJ
The Norinchukin Bank
Mitsubishi UFJ Trust & Banking Corporation
Mizuho Trust & Banking Co.
Resona Bank
Development Bank of Japan
AEON BANK
The Hyakugo Bank
The Mie Bank
The 77 Bank
Hiroshima Bank
The Chiba Bank
9.0
27.0
22.0
5.02.0 0.7 1.2
4.0 4.5
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Portfolio Map (based on 23 properties as of July 31, 2015)
18
Malaysia
Hokkaido and Tohoku
Tokai, Hokuriku and Chubu
Kinki, Chugoku and Shikoku
Kyushu
AEON MALL Morioka
AEON Lake Town mori AEON Lake Town kaze
AEON MALL Ishinomaki
AEON MALL Mitouchihara AEON MALL Ota
AEON Sagamihara Shopping Center
AEON MALL OgakiAEON MALL Suzuka
AEON MALL Meiwa
AEON MALL Kasai-Hojo AEON MALL Hiezu
AEON MALL KurashikiAEON MALL Ayagawa
AEON MALL Nogata AEON MALL Kumamoto
AEON Taman UniversitiShopping Centre
Prefectures Located on
Domestic Properties
AEON MALL
Sapporo-Hiraoka
AEON MALL
Kushiro-Showa
AEON MALL
Yamagata-Minami
AEON MALL
Yokkaichi-Kita
AEON MALL KYOTO
Currently Held Properties
Kanto
AEON MALL Rifu
Portfolio List (based on 23 properties as of July 31, 2015)
19
Notes: 1. The valuation date of the Appraisal value is July 31, 2015.2. Unrealized profit (loss) = Appraisal value − Book value at end of period3. Capitalization rate using the direct capitalization method.4. NOI = Real estate leasing business revenue − Real estate leasing business expenses + Depreciation5. Each property undergoes a seismic risk analysis to forecast the loss rate related to damage from the recurrence of an earthquake during a 475 year period. The number for Domestic Subtotal is not an average, but rather the PML value for the whole
domestic portfolio.6. Acquisition price, Book value at end of period, Appraisal value, Unrealized profit (loss), and NOI describe AEON REIT’s pro-rata portion of the quasi-co-ownership interest (jun kyōyū-mochibun) in the trust beneficiary rights (40% for each property).7. Acquisition price, Book value at end of period, Appraisal value, Unrealized profit (loss), and NOI describe AEON REIT’s portion of the amount equivalent to the rights (18.18%) similar to the co-ownership interest
(kyōyū-mochibun) of the trust property for which the rights were transferred from AEON CO. (M) BHD., which holds the whole property.
Leasable
area
Acquisition
price
Portfolio
composition
Book value
at end of period
Appraisal
value 1
Unrealized profit
(loss) 2
Capitalization
rate 3 NOI
4PML
5
(m2) (Millions of yen) (%) (Millions of yen) (Millions of yen) (Millions of yen) (%) (Millions of yen) (%)
SRSC-1 AEON LakeTown mori 6 Koshigaya City, Saitama November 2013 160,387.00 21,190 10.9 % 20,628 23,000 2,371 5.0 % 589 2.0 %
SRSC-2 AEON LakeTown kaze 6 Koshigaya City, Saitama November 2013 127,183.81 6,730 3.5 % 6,754 7,660 905 5.4 % 217 1.7 %
RSC-1 AEON MALL Morioka Morioka City, Iwate November 2013 98,968.59 5,340 2.7 % 5,121 5,590 468 6.9 % 222 11.1 %
RSC-2 AEON MALL Ishinomaki Ishinomaki City, Miyagi November 2013 60,682.20 6,680 3.4 % 6,459 7,020 560 6.3 % 231 3.9 %
AEON MALL Mitouchihara November 2013 159,997.49 16,460 8.5 % 15,828 17,300 1,471 6.3 % 549 0.7 %
AEON MALL Mitouchihara (Land) April 2015 - 105 0.1 % 107 112 4 - 1 -
RSC-4 AEON MALL Ota Ota City, Gunma November 2013 93,165.27 6,860 3.5 % 6,610 7,820 1,209 6.6 % 285 4.8 %
RSC-5 AEON Sagamihara Shopping Center Sagamihara City, Kanagawa November 2013 75,056.62 10,220 5.3 % 10,195 10,500 304 5.4 % 328 13.4 %
RSC-6 AEON MALL Ogaki Ogaki City, Gifu November 2013 64,246.26 4,950 2.5 % 4,603 5,160 556 6.9 % 179 9.2 %
RSC-7 AEON MALL Suzuka Suzuka City, Mie November 2013 125,236.10 9,660 5.0 % 9,419 10,100 680 6.3 % 342 7.5 %
RSC-8 AEON MALL Meiwa Taki County, Mie November 2013 44,193.80 3,290 1.7 % 3,245 3,620 374 6.7 % 135 4.6 %
RSC-9 AEON MALL Kasai-Hojo Kasai City, Hyogo November 2013 48,229.25 7,230 3.7 % 6,930 7,610 679 6.9 % 263 10.7 %
RSC-10 AEON MALL Hiezu Saihaku County, Tottori November 2013 102,045.24 7,780 4.0 % 7,481 8,320 838 6.9 % 289 8.0 %
RSC-11 AEON MALL Kurashiki Kurashiki City, Okayama November 2013 157,274.78 17,890 9.2 % 17,372 18,700 1,327 6.2 % 589 0.5 %
RSC-12 AEON MALL Ayagawa Ayauta County, Kagawa November 2013 113,149.07 8,740 4.5 % 8,290 9,190 899 6.5 % 307 0.6 %
RSC-13 AEON MALL Nogata Nogata City, Fukuoka November 2013 151,969.51 11,250 5.8 % 10,794 12,700 1,905 6.5 % 411 0.1 %
RSC-14 AEON MALL Kumamoto Kamimashiki County, Kumamoto November 2013 101,132.38 14,060 7.2 % 13,606 14,800 1,193 6.2 % 468 6.2 %
RSC-15 AEON MALL KYOTO Kyoto City, Kyoto February 2015 136,468.45 21,470 11.0 % 21,559 21,800 240 5.0 % 574 13.5 %
RSC-16 AEON MALL Sapporo-Hiraoka Sapporo City, Hokkaido February 2015 78,360.81 5,900 3.0 % 5,959 6,230 270 6.3 % 234 3.5 %
RSC-17 AEON MALL Kushiro-Showa Kushiro City, Hokkaido February 2015 51,763.05 1,780 0.9 % 1,827 1,900 72 6.9 % 107 7.0 %
RSC-18 AEON MALL Rifu Miyagi Country, Miyagi February 2015 66,385.29 2,560 1.3 % 2,582 2,720 137 6.5 % 121 6.9 %
RSC-19 AEON MALL Yamagata-Minami Yamagata City, Yamagata February 2015 53,487.94 1,350 0.7 % 1,380 1,440 59 6.7 % 65 6.2 %
RSC-20 AEON MALL Yokkaichi-Kita Yokkaichi City, Mie February 2015 41,417.23 2,210 1.1 % 2,235 2,370 134 6.4 % 117 6.0 %
- 2,110,800.14 193,705 99.7% 188,984 205,662 16,667 - 6,633 -
M-1AEON Taman Universiti Shopping
Centre 7
Johor, Malaysia June 2014 22,870.45658
[ 20 million RM ]0.3 %
697
[ 21 million RM ]
649
[ 20 million RM ]
(48)
[ (1 million) RM ]- 21 0.8 %
- 22,870.45 658 0.3 % 697 649 (48) - 21 -
- 2,133,670.59 194,363 100.0 % 189,681 206,311 16,619 - 6,655 1.2% Total
Property
numberProperty name Location
Acquistion
date
Domestic Subtotal
Overseas Subtotal
RSC-3 Mito City, Ibaraki
Comparison between AEON REIT Investment Unit Price, TSE REIT Index and TOPIX
Trend of Investment Unit Price
20
AEON REIT Investment Unit Price and Trading Volume
Note: The AEON REIT investment unit price, the TSE REIT Index and the TOPIX are compared with the closing price on the AEON REIT’s listing date set at 100.
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
Nov2013
Dec2013
Jan2014
Feb2014
Mar2014
Apr2014
May2014
Jun2014
Jul2014
Aug2014
Sep2014
Oct2014
Nov2014
Dec2014
Jan2015
Feb2015
Mar2015
Apr2015
May2015
Jun2015
Jul2015
Aug2015
(Units)(Yen)Trading Volume (Right axis)
AEON REIT Investment Unit Price (Left axis)
80
90
100
110
120
130
140
150
160
170
Nov2013
Dec2013
Jan2014
Feb2014
Mar2014
Apr2014
May2014
Jun2014
Jul2014
Aug2014
Sep2014
Oct2014
Nov2014
Dec2014
Jan2015
Feb2015
Mar2015
Apr2015
May2015
Jun2015
Jul2015
Aug2015
AEON REIT TSE REIT Index TOPIX
III. Forecasts
Difference in operating revenue
Increase in real estate rent revenue [+15]
Difference in operating expenses
Increase in expenses related to rent
business [+233]
• Decrease in repairs and maintenance
expenses [-63]
• Expense of taxes and dues for acquired
properties in 5th period[+263]
• Increase in depreciation[+31]
• Decrease in Administrative service fee
[-14]
22
Difference in operating revenue
Increase in real estate rent revenue [+225]
Difference in operating expenses
Increase in expenses related to rent
business [+131]
• Increase in repairs and maintenance
expenses [+56]
• Increase in land rent paid[+49]
• Increase in depreciation[+21]
• Increase in Administrative service fee
[+52]
Major Reasons for Difference During
6th Period (vs.5th period)
July. 2015
PeriodJanuary 2016 Period July 2016 Period
5th Period Results6th Period
Forecasts vs. 5th Period
7th Period
Forecasts vs. 6th Period
(A) (B) (B-A) (C) (C-B)
Operating Revenue(millions of
yen) 9,164 9,387 223 9,403 15
Operating Expenses(millions of
yen) 5,658 5,875 216 6,088 212
Expenses Related to
Rent Business
(millions of
yen) 5,168 5,300 131 5,533 233
(Of Which,
Depreciation)
(millions of
yen) 2,659 2,681 21 2,713 31
Operating Income(millions of
yen) 3,505 3,512 6 3,315 △ 196
Ordinary Income(millions of
yen) 2,978 2,965 △ 12 2,771 △ 194
Net Income(millions of
yen) 2,969 2,957 △ 11 2,763 △ 194
Distributions per Unit (yen) 2,724 2,710 △ 14 2,530 △ 180
Number of Investment
Units Issued(units) 1,090,200 1,090,200 - 1,090,200 -
Major Reasons for Difference During
7th Period (vs.6th period)
Forecasts for 6th Fiscal Period Ending January 31, 2016 and 7th Fiscal Period Ending July 31, 2016*
*based on page 6 of the Assumptions for Forecasts of Performance stated in the Financial Report for the Fiscal Period Ended July 31, 2015
Note: The above performance is an estimation determined based on certain assumptions as of September 11, 2015. The actual performance may vary due to changes in the circumstances surrounding
AEON REIT including acquisition or disposition of properties, the trend of real estate market, etc. in the future. Furthermore, this estimation does not guarantee the amount of distributions.
Expansion of Asset Size and Capital Investment Plan
23
Asset Size (based on acquisition price)
Capital Investment Plan
(billions of yen)
(millions of yen)
17 196 182 346 26289 429
798
935
2,242 1,111
2,230 2,245
2,659 2,681 2,713
Jan 2014 Period(2nd Period)
Actual
July 2014 Period(3rd Period)
Actual
Jan 2015 Period(4th Period)
Actual
July 2015 Period(5th Period)
Actual
Jan 2016 Period(6th Period)Scheduled
July 2016 Period(7th Period)Scheduled
Repairs and Maintenance Expences Capital Expenditures
Capital Investment Plan Depreciation
158.3 158.9 158.9194.3
300.0
Jan 2014 Period(2nd Period)
July 2014 Period(3rd Period)
Jan 2015 Period(4th Period)
July 2015 Period(5th Period)
Medium Term
Large-scale renewal of AEON MALL Morioka
24
Renewal of facilities Phase2 renewal
Implementing large-scale renewal in Phase1 (this autumn) and Phase2
(next spring)
46 stores including newly introducing 18 stores will be renewed in Phase1,
and it opens on September 19, 2015.
Together with renewal in Phase1, a total of 110 stores will be renewed in
Phase2.
Implementing renewal of exterior of the SC and restaurants
The first full renewal of exterior and interior of SC since the opening of
SC in August in 2003
Renovating multi-story car park(approximately 6,000㎡) and expanding
sales area as specialty store zone
Implementing renewal in existing mall and planning to renewing
approximately 60 stores
Floor map
IV. AEON REIT’s Investment Strategy
26
Medium- to Long-Term Asset Scale Targets
By realizing a mutually beneficial relationship with our sponsor, we will aim for assets of ¥300 billion in the medium term and ¥500 billion in the long 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 Medium Term Long Term
At time of listing
¥158.3 billion
¥300.0 billion
¥500.0 billion
Note: The figures above are targets made as of the date of these materials and there is a possibility that they may not be realized due to future events or the market environment.
Roadmap for Growth
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.
27
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 263 consolidated subsidiaries and 31 equity-method associates (as of February 28, 2014).
Investment Areas Investment Targets
ASEAN region7, China and other
countries/regions with good
medium- to long-term economic
growth prospects
In principle, retail properties that
are leased in their entirety under
master lease contracts to the Aeon
Group, which manages and
operates the properties
Type
Investment percentage 1
Domestic Overseas
85% or
more
No more than
15%
Reta
il pro
pert
ies, etc
.
Large-scale
retail
property
SRSC
(Super regional shopping center) 2
80% or moreRSC
(Regional shopping center) 3
CSC
(Community shopping center) 4
Other retail
property
NSC
(Neighborhood shopping center) 5
No more than 20%
SM
(Supermarket) 6
Logistics facility No more than 10%
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.
Note 7:
Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar
and Cambodia
Overseas Investment Targets
28
Investment Properties Centered on Large-Scale Retail
Properties and Investment Ratios
A Highly Stable Portfolio Centered on the Aeon Group’s Large-Scale Retail Properties
AEON
REIT
Tenants
Tenants
AEON
Mall
AEON
Retail
AEON Group
Master
Lease
ContractSublease
Contract
20 years8
Fixed-rate
rent
Master
Lease
Contract
Sublease
Contract
Note 8:
The durations of master lease contracts are 20 years, with the exception of AEON Taman
Universiti Shopping Centre, which utilizes a 10 year master lease contract
Rent structure diagram
AEON
Malaysia
AEON Hokkaido
Sponsor Supports from the AEON Group to utilize its collective strength
Utilizing the Aeon Group’s collective strengths,
we expanded the number of companies with which we concluded support agreements
(pipeline support agreements and shopping center management agreements)
to further strengthen external growth
AEON REIT Investment Corporation
AEON Reit Management Co., Ltd.
Stable growth of our portfolio over the medium to long term
Pipeline support agreement Memorandum of
understanding on
investments in properties in
MalaysiaShopping center
management agreement
Pipeline support companies
Shopping center
management support companies
AEON Retail Co., Ltd.
AEON Mall Co., Ltd.
AEON Hokkaido Corporation
AEON KYUSHU CO., LTD.
AEON RYUKYU CO., LTD.
AEON TOWN Co., Ltd.
Overseas support company
AEON CO. (M) BHD.
Utilize the Aeon Group’s collective strengths
Sponsor support agreement
Trademark license agreement
AEON CO., LTD.
Sponsor
Pipeline Support Agreement
Major support terms
Provision of information on properties owned
Grant of preferential negotiating rights on the retail properties operated by the
support companies
Provision of information on the potential sale of properties owned by third parties
Consideration for having a store or other as a tenant in any of AEON REIT’s
properties
Provision of warehousing services (temporary possession of properties to be
acquired)
Advice on investment strategy and property acquisition by the support
companies
Co-ownership (kyōyū or jun kyōyū) of any property with AEON REIT
Cooperation to ensure the sufficiency of human resources
Shopping Center Management Agreement
Operational provision from the Aeon Group
Research on individual properties
Advice on and backup services for the management of individual properties
Activation and redevelopment of individual properties in the medium to long term
29
Hokkaido and Tohoku AEON MALL Around Asahikawa Station Asahikawa City, Hokkaido
●AEON MALL Tomakomai Tomakomai City, Hokkaido●AEON MALL Shimoda Kamikita County, Aomori●AEON MALL Moriokaminami Morioka City, Iwate●AEON MALL Natori Natori City, Miyagi●AEON MALL Akita Akita City, Akita●AEON MALL Tendo Tendo City, Yamagata●Shopping Mall Festa Koriyama City, Fukushima
Major Large-Scale Shopping Centers Developed by the AEON Group
(Including Properties It Plans to Develop)
30
Kanto and Koushinetsu●AEON MALL Tsukuba Tsukuba City, Ibaraki●AEON MALL Shimotsuma Shimotsuuma City, Ibaraki●AEON MALL Sanoshintoshi Sano City, Tochigi●AEON MALL Takasaki Takasaki City, Gunma●AEON MALL Urawamisono Saitama City, Saitama●AEON MALL Hanyu Hanyu City, Saitama●AEON MALL Kasukabe Kasukabe City, Saitama●AEON MALL Yono Saitama City, Saitama●AEON Iruma Iruma City, Saitama●AEON MALL Makuhari New City Chiba City, Chiba●AEON MALL Kisarazu Kisarazu City, Chiba●AEON MALL Tamadaira Woods Hino City, Tokyo●AEON MALL Hinode Nishitama County, Tokyo●AEON Hadano Shopping Center Hadano City, Kanagawa●AEON MALL Nigataminami Nigata City, Nigata●AEON MALL Koufushowa Nakakoma County, Yamanashi●AEON MALL Sakudaira Saku City, Nagano
Kinki ●AEON MALL Kusatsu Kusatsu City, Shiga●AEON MALL Kyoto Katsuragawa Kyoto City・Mukou City, Kyoto●AEON MALL Kyotogojo Kyoto City,Kyoto●AEON MALL Osaka Dome City Osaka City. Osaka●AEON Kireuriwari Osaka City, Osaka●AEON MALL Dainichi Moriguchi City, Osaka
Kyushu and Okinawa ●AEON MALL Fukuokaito Fukuoka City, Fukuoka●AEON MALL Yahatahigashi Kitakyushu City, Fukuoka●AEON MALL Fukutsu Fuktsu City, Fukuoka●AEON MALL Sagayamato Saga City, Saga●AEON Daito Shopping Center Sasebo City, Nagasaki●AEON Yatsushiro Shopping Center Yatsushiro City, Kumamoto●AEON MALL Sankoh Nakatsu City, Oita●AEON MALL Miyazaki Miyazaki City, Miyazaki●AEON MALL Kagoshima Kagoshima City, Kagoshima
AEON MALL Okinawa Rycom Nakagami County, Okinawa
Chugoku and Shikoku ●AEON MALL Tottorikita Tottori City, Tottori●AEON Matsue Shopping Center Matsue City, Shimane●AEON MALL Okayama Okayama City, Okayama●AEON MALL Hiroshima Gion Hiroshima City, Hiroshima●AEON MALL Hiroshima Fuchu Aki County, Hiroshima●AEON Town Houfu Houfu City, Yamaguchi●AEON MALL Takamatsu Takamatsu City, Takamatsu●AEON MALL Niihama Niihama City, Ehime●AEON MALL Kochi Kochi-City, Kochi
AEON MALL Imabarishintoshi Imabari City, Ehime
Tokai and Hokuriku ●AEON MALL Takaoka Takaoka City, Toyama●AEON MALL Tonami Tonami City, Toyama●AEON MALL Kahoku Kahoku City, Ishikawa●AEON MALL Kakamigahara Kakamigahara City, Gifu●AEON MALL Hamamatsuichino Hamamatsu City, Shizuoka●AEON MALL Odaka Nagoya City, Aichi●AEON MALL Nagoya Chaya Nagoya City, Aichi●AEON MALL Fuso Niwa County, Aichi●AEON MALL Toin Inabe County, Mie●AEON MALL Tokoname Tokoname City, Aichi
●AEON MALL Rinkusennan Sennan City, Osaka●AEON MALL Shijonawate Shijonawate City・Neyagawa
City, Osaka●AEON MALL Itamikoya Itami City, Osaka●AEON MALL Kashihara Kashihara City, Nara●AEON MALL Wakayama Wakayama City, Wakayama
AEON MALL Sakaiteppoucho Sakai City, Osaka
Major Shopping Centers developed by the AEON Group
Major Shopping Centers currently under development by the AEON Group
Note:Shown in the chart are created by the Asset Manager based on information provided by AEON CO., LTD. and AEON Mall Co., Ltd.As of July 2015
AEON MALL Around Asahikawa Station
AEON MALL Tonami
AEON MALL Okayama
AEON MALL Okinawa Rycom
AEON MALL Makuhari New City
Policies
LTV 1 Maintain leverage with an LTV of 40–50% range
Extension of debt maturities &
fixing of interest ratesSet loan terms according to the status of cash flows based on tenant lease terms and content
Mix of lenders Achieve appropriate diversification of different lender financial institutions, primarily megabanks
(1) Investment contributing to
an increase in income
(2) Measures aimed at
stabilizing financial
position
(3) Capital strategies that
protect unitholder
interests
a. Appropriation of funds to acquire new properties
b. Investing in revitalization of property to boost
revenue and competitiveness
c. Reduction in the cost of our debt by repayment of
interest-bearing debt
d. Distributions in excess of retained earnings
e. Increased capital efficiency through unit buy-backs
Growth
driven by
efficient
use of
capital
In the large-scale retail properties that we target for investment, the depreciation expense accounts for a large percentage of the property value.
By deploying internal reserves in an amount equal to the depreciation expense, we plan to increase capital efficiency and stabilize cash flow.
Note 1: LTV = Total interest-bearing debt plus tenant leasehold and security deposits (including tenant leasehold and security deposits in trust) / Total assets that AEON REIT holds × 100
31
Strategic Cash Management
Stable Financial Position
Strategic Cash Management and a Stable Financial Position
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 19.77% (as of July 31, 2015)
Co-owned properties 3 (as of July 31, 2015)
32
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.
Notes:
1. NOI refers to total real estate leasing revenue for the relevant fiscal period less real estate leasing
expenses (excluding depreciation and loss on retirement of non-current assets).
2. Above fee structure is as of September 15, 2015.
Framework for Maximizing Unitholder Value
Disapproved
Deliberation and
resolution by the
Investment
Committee*
Approval by
Investment
Corporation
• Balance Sheet for 5th Fiscal Period (as of July 31, 2015)
• Statement of Income for 4th Fiscal Period (ended July 31, 2015)
• Unitholder Information
• Aeon Group Profile
Appendix.
Balance Sheet for 5th Fiscal Period (as of July 31, 2015) (Assets)
34
Assets
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
vs.
Previous Period
(%)
I. Current assets 13,368,514 7.9% 13,054,213 6.4% (314,301) (2.4)%
Cash and deposits 9,663,330 5.7% 6,795,562 3.3%
Cash and deposits in trust 3,386,152 2.0% 4,668,783 2.3%
Prepaid expenses 317,875 0.2% 318,094 0.2%
Deferred tax assets 26 0.0% - -
Income taxes receivable 139 0.0% 493 0.0%
Consumption taxes receivable - - 1,270,899 0.6%
Other 989 0.0% 381 0.0%
II. Non-current assets 156,254,743 92.1% 190,604,782 93.5% 34,350,039 22.0%
Property and equipment 137,334,542 80.9% 166,553,598 81.7%
Land - - 107,708 0.1%
Buildings in trust 85,504,384 50.4% 102,509,551 50.3%
Structures in trust 560,228 0.3% 506,244 0.2%
Land in trust 51,269,929 30.2% 63,430,093 31.1%
Intangible assets 18,045,526 10.6% 23,137,757 11.4%
Leasehold rights in trust 18,045,526 10.6% 23,137,757 11.4%
Investments and other assets 874,674 0.5% 913,427 0.4%
Long-term prepaid expenses 864,674 0.5% 903,427 0.4%
Lease and guarantee deposits 10,000 0.0% 10,000 0.0%
III. Deferred assets 123,517 0.1% 136,231 0.1% 12,714 10.3%
Investment unit issuance expenses 123,517 0.1% 136,231 0.1%
169,746,775 100.0% 203,795,228 100.0% 34,048,453 20.1%
5th PeriodAs of July 31, 2015
Difference
Total assets
4th PeriodAs of January 31, 2015
Balance Sheet for 5th Fiscal Period (as of July 31, 2015)
(Liabilities and Net Assets)
35
Liabilities
Net Assets
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
vs.
Previous Period
(%)
I. Current liabilities 634,066 0.4% 2,865,975 1.4% 2,231,909 352.0%
Operating accounts payable 264,248 0.2% 644,234 0.3%
Short-term loans payable - - 2,000,000 1.0%
Accounts payable - other 134,039 0.1% 187,737 0.1%
Accrued expenses 19,589 0.0% 21,472 0.0%
Income taxes payable 682 0.0% 605 0.0%
Accrued consumption taxes 205,608 0.1% - -
Other 9,899 0.0% 11,925 0.0%
II. Non-current liabilities 70,411,389 41.5% 81,512,139 40.0% 11,100,750 -
Long-term loans payable 63,000,000 37.1% 73,400,000 36.0%
Tenant leasehold and security deposits - - 2,628 0.0%
Tenant leasehold and security deposits in trust 7,411,389 4.4% 8,109,511 4.0%
71,045,456 41.9% 84,378,114 41.4% 13,332,658 18.8%
4th PeriodAs of January 31, 2015
5th PeriodAs of July 31, 2015
Difference
Total liabilities
I. Unitholders’ equity 98,701,319 58.1% 119,417,113 58.6% 20,715,794 21.0%
Unitholders’ capital 96,351,350 56.8% 116,447,057 57.1%
Surplus 2,349,969 1.4% 2,970,056 1.5%
Unappropriated retained earnings (unappropriated loss) 2,349,969 1.4% 2,970,056 1.5%
98,701,319 58.1% 119,417,113 58.6% 20,715,794 21.0%
169,746,775 100.0% 203,795,228 100.0% 34,048,453 20.1%
Total net assets
Total liabilities and net assets
Statement of Income for 5th Fiscal Period (ended July 31, 2015)
36
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
Percentage
(%)
Amount
(thousands of yen)
vs.
Previous Period
(%)
Operating revenue 7,422,632 100.0% 9,164,250 100.0% 1,741,618 23.5%
Rent revenue - real estate 7,422,632 100.0% 9,163,638 100.0%
Gain on sales of real estate properties - - 611 0.0%
Operating expenses 4,612,522 62.1% 5,658,990 61.8% 1,046,468 22.7%
Expenses related to rent business 4,165,832 56.1% 5,168,792 56.4%
Asset management fee 330,683 4.5% 360,189 3.9%
Asset custody fee 6,841 0.1% 10,370 0.1%
Administrative service fees 28,572 0.4% 34,440 0.4%
Directors’ compensations 3,600 0.0% 3,600 0.0%
Taxes and dues 98 0.0% 1,398 0.0%
Other operating expenses 76,894 1.0% 80,198 0.9%
I. Operating income 2,810,110 37.9% 3,505,259 38.2% 695,149 24.7%
Non-operating income 2,917 0.0% 4,758 0.1% 1,841 63.1%
Interest income 2,917 0.0% 2,842 0.0%
Compensation income - - 1,852 0.0%
Other - - 62 0.0%
Non-operating expenses 459,917 6.2% 531,789 5.8% 71,872 15.6%
Interest expenses 301,487 4.1% 345,084 3.8%
Amortization of investment unit issuance expenses 35,290 0.5% 44,891 0.5%
Borrowing related expenses 122,957 1.7% 139,218 1.5%
Other 182 0.0% 2,595 0.0%
II. Ordinary income 2,353,109 31.7% 2,978,228 32.5% 625,119 26.6%
III. Income before income taxes 2,353,109 31.7% 2,978,228 32.5% 625,119 26.6%
Income taxes - current 3,375 0.0% 8,765 0.1%
Income taxes - deferred -17 0.0% 26 0.0%
Total Income taxes 3,357 0.0% 8,791 0.1%
IV. Net income 2,349,751 31.7% 2,969,437 32.4% 619,686 26.4%
Retained earnings (deficit) brought forward 217 0.0% 619 0.0%
V. Unappropriated retained earnings (undisposed loss) 2,349,969 31.7% 2,970,056 32.4% 620,087 26.4%
4th PeriodFrom August 1, 2014
to January 31, 2015
5th PeriodFrom February 1, 2015
to July 31, 2015
Difference
Unitholder Information
37
Number of Unitholders and Number of Investment Units by Unitholder Type
Investment Unit Ownership Ratio
by Unitholder Type
Major Unitholders (As of July 31, 2015)
Unitholder NameNumber of
Units% of Total
1 Japan Trustee Services Bank, Ltd. (trust account) 250,154 22.9%
2 AEON Co., Ltd. 215,555 19.8%
3 The Master Trust Bank of Japan, Ltd. (trust account) 76,035 7.0%
4 NOMURA BANK (LUXEMBOURG) S. A. 75,828 7.0%
5 Trust & Custody Services Bank, Ltd. (securities investment trust account) 40,193 3.7%
6 The Nomura Trust & Banking Co., Ltd. (trust account) 34,275 3.1%
7 Sumitomo Mitsui Trust Bank, Limited 27,150 2.5%
8 Mizuho Bank, Ltd. 20,000 1.8%
9 Century Tokyo Leasing Corporation 20,000 1.8%
10 Daiwa Securities Group Inc. 10,902 1.0%
Total 770,092 70.6%Individuals and others
9.7%
Individuals and others
10.5%
Individuals and others
14.2%
Individuals and others
19.8%
Financial institutions (including financialinstruments firms)
56.5%
Financial institutions (including financialinstruments firms)
54.2%
Financial institutions (including financialinstruments firms)
48.1%
Financial institutions (including financialinstruments firms)
42.6%
Other domestic corporations
24.7%
Other domestic corporations
24.4%
Other domestic corporations
24.6%
Other domestic corporations
25.1%
Foreign corporations
9.1%
Foreign corporations
10.8%
Foreign corporations
13.1%
Foreign corporations
12.5%
July 2015 Period(5th Period)
Jan. 2015 Period(4th Period)
July 2014 Period(3rd Period)
Jan. 2014 Period(2nd Period)
Number of Units Number of Unitholders
4th Period
(January 31, 2015)
5th Period
(July 31, 2015)
4th Period
(January 31, 2015)
5th Period
(July 31, 2015)
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 99,690 10.5% 105,873 9.7% 13,922 96.4% 15,470 96.4%
Financial institutions (including financial
instruments firms)515,373 54.2% 615,460 56.5% 124 0.9% 129 0.8%
Other domestic corporations 232,267 24.4% 269,805 24.7% 286 2.0% 310 1.9%
Foreign corporations 102,670 10.8% 99,062 9.1% 116 0.8% 131 0.8%
Total 950,000 100.0% 950,000 100.0% 14,448 100.0% 16,040 100.0%
38
2,002
Business spanning
13 countries
18,740 stores/locations
Malaysia
29
8
24
18
54
55
1
Japan
541
1,929
357
121
2,151
3,890
3,347
889
171
155
359
1,460
MyanmarKorea
3
Laos
1India
1
Indonesia
Australia
1
Phillipine454
1
2
China45
18
53
42
30
15
42
80
5
Vietnam
2
17
2
4
4
1
Cambodia
1
1
6
2
Thailand
75
219371
6
8
(*)In addition to SC whose name is AEON
MALL, SC whose total floor area is more than
20,000㎡
618
2,030
381
121
4,683
3,932
3,347
919
207
155
698
1,640
9
※1
※2
※3
¥7,078.5bn
Consolidated
Operating
revenue¥1,926.1bnElectronic Money
「WAON」
trading volume
440,000Number of
Group
employees3.56million
AEON Financial
Service
credit card holder
Aeon Group Profile (note)
Business Operations Spanning 13 Countries Synergy from Multiple Businesses
Note: As of February 28, 2015
The Aeon Group has achieved significant success, operating retail properties encompassing
18,740 stores/locations as of February 28, 2015.
Retail
business
Service
business
Financial
services
business
Synergy
creation
General merchandise
stores
Supermarkets
Discount stores
Drugstores/pharmacies
Strategic retail stores
AEON Mall AEON Town
207 malls in Japan and overseas(*)
AEON DELIGHT AEON Fantasy
AEON CardAEON’s
e-money
(WAON)
AEON Bank
Number of
consolidated
subsidiaries: 284
Number of equity-
method associates:
31
Shopping
center
development
business
Total
GMS (general merchandise store)
SM (supermarket)
DS (discount store)
Home center
Convenience store
Specialty store
Drugstore
Other retail store
RSC
NSC
Financial service
Service business
Other business
※1 includes alliance partners
※2 In addition to SC whose name is AEON MALL, SC whose total floor area is
more than 20,000㎡.
※3 SC whose name is AEON Town
The number of stores and office locations, including consolidated subsidiaries and
equity-method associates
39
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 direct inquiries to:
AEON Reit Management Co., Ltd.
Finance and Planning Department
TEL: 03-5283-6360