All of us at Mori Hills REIT Investment Corporation ("MHR") wish to extend our deep appreciation to our unitholders for your continuous support of MHR. I am pleased to report on MHR’s performance for the thirty-seventh fiscal period which ended January 31, 2025.

In the thirty-seventh fiscal period, the Japanese economy remained strong due to strong capital investment and increased inbound tourism demand, despite the ongoing impact of price hikes and consumer spending lacking strength.

In such an economic environment, in the rental office market, vacancy rates are improving against the backdrop of steady corporate performance and a favorable employment situation, and rent levels also remained strong. As for the luxury rental housing market, occupancy rates and rent levels remained solid, driven by ongoing stable demand for quality housing in central Tokyo. In terms of the real estate trading market, the transaction amount and transaction prices remained at a high level thanks to the active portfolio asset replacement activity of J-REITs along with the contribution from large transactions with foreign companies.

In the thirty-seventh fiscal period, MHR strove to maintain and enhance tenant satisfaction through measures such as efficient and systematic operational management and maintenance and repair of properties in its portfolio by better understanding tenant needs. Moreover, MHR maintained and enhanced occupancy rates and rents by proactively launching leasing activities targeting new and existing tenants while foreseeing trends in rental market conditions.

MHR’s real estate portfolio, as of the end of the thirty-seventh fiscal period, was comprised of 11 properties under management with a total leasable area of 180,393.26m². MHR has already invested 401,615 million yen (based on the acquisition price) into this portfolio. The occupancy rate at the end of the thirty-seventh fiscal period was 99.3%.

The asset management activities described above resulted in MHR recording in the thirty-seventh fiscal period 11,088 million yen in operating revenue, 6,769 million yen in operating income, 6,164 million yen in ordinary income and 6,163 million yen in net income and 3,080 yen in dividend per unit. MHR disposed of a part of Laforet Harajuku (Land) (disposition price: 2,968 million yen) on November 29, 2024. Of the 1,415 million yen from gain on this disposition, 261 million yen was reserved for reduction entry.

In addition, MHR plans to acquire a part of Toranomon Hills Mori Tower (acquisition price: 7,820 million yen) and to transfer a further part of Laforet Harajuku (Land) (disposition price: 3,073 million yen) on July 1, 2025. These acquisition and transfer are expected to enhance the portfolio size and increase dividends. As a result, dividend per unit of 3,090 yen is forecasted for the thirty-eighth fiscal period ending July 31, 2025.

MHR will continue to seek maximization of unitholder value by maintaining and increasing dividends continuously while retaining stability of earnings through fixed-rent master leases alongside actively pursuing external growth utilizing the property pipeline of the Mori Building Group.

I would like to ask for your continued support.