堅実 に 地道 に 真面目 に. Information of website. From July 1 to December 31, 2018 Semiannual Report for the 13th Fiscal Period.

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1 真面目 に We introduce the characteristics and current status on our website. 地道 に 堅実 に Information of website Shimbashi, Minato-ku, From July 1 to December 31, Semiannual Report for the 13th Fiscal Period 005_ indd すべてのページ 2019/03/28 9:16:06

2 Creating the future with our unique perspective based on our solid style of Japan quality NIPPON VISION Financial Highlights Financial Results 12th period (Jun. ) Results 13th period (Dec. ) Results 14th period (Jun. 2019) Forecast 15th period (Dec. 2019) Forecast Operating revenues 7,225mn 8,458mn 8,983mn 8,579mn Operating income 3,835mn 4,640mn 4,903mn 4,565mn Ordinary income 3,329mn 3,840mn 4,268mn 3,895mn Net income 3,329mn 3,839mn 4,268mn 3,895mn Distributions per unit 8,500 8,536 9,486 8,657 To Our Unitholders Track Record and Forecast of DPU DPU of the 13th period stood at 8,536,exceeding the forecast. First, I would like to express my sincere gratitude for unitholders continued support of NIPPON REIT Investment Corporation ( NRT ). I would like to give a report on our operations and financial performance for the thirteenth fiscal period (ended December ). During the fiscal period under review, NRT raised capital by way of public offering for a third time in July and added 21 properties (around 40.2 billion yen) to its portfolio. Through this capital increase, we further strengthened the growth potential and stability of our portfolio by expanding investments such as residential properties in whilst maintaining a high ratio of medium-sized office properties in, which is one of our features. At the same time, our risk tolerance was further strengthened through the increased diversification of our properties and tenants. NRT s asset size was around billion yen, while its market capitalization exceeded 150 billion yen, and NRT also broadened its unitholder base through its inclusion in a global index. On increasing our capital by way of public offering, we reassessed our investment philosophy and policy and announced our new brand message NIPPON VISION. This is a policy of conducting operations from an independent perspective aimed at creating the potential value of real estate with our unique perspective based on our solid style of Japane quality. In line with this policy, we pursued a number of initiatives including maintaining high occupancy rates, increasing rents, creating new revenue opportunities through engineering management, and reducing costs. We achieved steady growth in distributions, with DPU for the thirteenth fiscal period exceeding our forecast of 8,373 yen by 163 yen, to reach 8,536 yen. Finally, we show our commitment to continue to work with our asset management company Sojitz REIT Advisors K.K. and sponsor companies in order to permanently maintain and improve the value of our portfolio and to maximize unitholder value. We would like to ask you for the support and guidance continued. ( /unit) 9,500 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 7,109 : Actual DPU : Forecast DPU 6,827 7,581 7,519 7,800 8,217 9,211 8,500 8,536 9,486 8,657 5th period 6th period 7th period 8th period 9th period 10th period 11th period 12th period 13th period 14th period (Forecast) 15th period (Forecast) Dec. June Dec. June Dec. June Dec. June Dec. June Dec Growth in NAV per unit ( /unit) 350,000 9,000 Targets Contents To Our Unitholders 01 Financial Highlights 02 Overview of NIPPON REIT 03 Characteristics of middle-sized office 04 External Growth Strategies 06 Internal Growth Strategies 08 Financial management 09 Sustainability Initiatives Executive Officer NIPPON REIT Investment Corporation Financial Section 10 Asset Management Report 44 Balance Sheets 46 Statements of Income and Retained Earnings 47 Statements of Changes in Net Assets 48 Statements of Cash Flows 49 Notes to Financial Statements 68 Independent Auditor s Report 70 Portfolio Summary 72 Portfolio Map 74 List of portfolio as of the end of 13th period 80 Investment Units 81 Unitholder Information 300, , , , , , , , , , , , ,000 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th June Dec. June Dec. June Dec. June Dec. June Dec NAV per unit is calculated by following formula, with figures as of the end of respective period. ((Net Asset + Total Appraisal Value Total Book Value) / Investment Units Issued and Outstanding) DPU 1

3 Overview of NIPPON REIT Portfolio focusing on properties in Growing rental income can be expected by focusing on office properties in where rents are in the upward phase. Retail 3properties 10.1bn Residence 21properties 44.7bn 4.1% 18.0 % 87properties 247.9bn (based on acquisition price) Office 63properties 193.0bn 77.9 % Three Major Metropolitan areas (excluding 23 wards of ) TMM 21.2% 23 wards of (excluding 6 central wards of ) 11.8% Certain Ordinance-Designated and other cities COD 0.9% Greater 84.2% 6 central wards of 66.1% Characteristics of middle-sized office Limited Supply There is few properties newly supplied and the supply-demand balance is tight. Office Supply in 23 Wards of 400, , , ,000 3,000 tsubo or larger and smaller than 10,000 tsubo 10,000 tsubo or larger Total leased area (tsubo) NIPPON REIT invests mainly in middle-sized offices Source: prepared by Asset management company based on data provided from Xymax Real Estate Institute Corporation 2022 Top-level risk diversification among J-REIT Top level risk diversification has little impact on revenue from tenant move-out and leads to stabilization of DPU. Portfolio diversification 87properties 247.9bn (based on acquisition price) Proportion of the 5 largest properties 22.4% Tenant diversification 620tenants 229,235m 2 Proportion of the 5 largest tenants 7.3% Low volatility The rent is stable because it is difficult to decline sharply. Office Rent Trend by Grade in 23 Wards of Average assumed rent ( /tsubo) 60,000 50,000 40,000 30,000 20,000 Grade A Grade A- Grade B Strong demand There are many target tenants of SME. Composition of Offices by Number of Employees in 23 Wards of employees 17.1% 29 or fewer employees 91.5% 1 9 employees 74.4% 10, Source : CBRE K.K Source: prepared by Asset management company based on data provided from Statistics Bureau, MIC Realization of improvement of unitholders value by positive cycle We realize improvement of unitholders value by positive cycle which is virtuous circle with both external growth and internal growth by steadily advancing the internal growth of the acquired properties. value-up potential Properties with a certain number of years passed have growth potential through strategic value-up investment that is not found in newly built properties. Strict discipline capturing opportunities in a timely manner Portfolio by pursuing stability and robustness NIPPON REIT s Positive Cycle External growth cycle Internal growth cycle Tripart Management Office Stocks in 23 Wards of 600,000 Total leased area (tsubo) 500, , , , ,000 0 Large-sized (5,000 tsubo or larger) Small-and medium-sized (between 300 and 5,000 tsubo) Enhance Unitholders Value Enhance Portfolio Quality Age (year) Source: prepared by Asset management company based on data provided from Xymax Real Estate Institute Corporation

4 External Growth Strategies Track record of the external growth Track record of AUM and pipeline, Medium to long term AUM target ( bn) 300 : AUM (based on acquisition price) : Total amount of pipeline Expanded the AUM through acquisition of new properties of approx billion yen with public offering in July Overview of asset replacement implemented in 14th period Acquired assets Asset Replacement Transferred assets IPO th period (Dec. 2014) th period (June 2015) Striving to achieve the medium to long term AUM target 300bn through disciplined external growth Maintain the acquisition target since IPO Target NOI yield (Note) 4.5% (NOI yield after depreciation:4.0%) Well diversified portfolio (portfolio and tenant diversification) th period (Dec. 2015) th period (June 2016) th period (Dec. 2016) Highly concentrated in central (office) (over 60% of properties are located in 6 central wards of ) High growth potential (potential for building rent gap) Flexible replacement depending on the market condition th period (June 2017) th period (Dec. 2017) th period (June ) Implemented plan to enable timely and flexible replacement of properties (calling Tiering ) and revise it every year Realized improvement of portfolio through the asset replacement implemented in 11th period and 14th period (refer to page 5 for details) by result of Tiering Achieved enhancement of portfolio quality and profitability, DPU increase at the same time Pursue external growth through offering which contribute to maximization of Unitholders Value 13th period (Dec. ) (Note) Target NOI Yield refers to the NOI yield based on NIPPON REIT s cash flow projection at the time of the acquisition against acquisition price th period (Forecast) (June 2019) High competitiveness in location (area with growth potential) Targets Stable Mid-sized office (low rent volatility well balanced supply) Kameido i-mark TENSHO OCHANOMIZU BUILDING Improvement in portfolio quality Imazaki Mansion N1 Value-enhancing Strategy / Ensuring growth potential Return to Unitholder 4 5 LAPUTA KUJO Younger building age (enhanced liquidity) Make the portfolio younger with enhanced liquidity, by acquiring 5 properties (average age: 10years) including 2 office properties located in (average age: 5 years) Improvement in profitability Improve the profitability of the portfolio with the Acquired assets, an average appraisal NOI yield after depreciation of which is 3.9% (+0.2% vs. assets to be transferred) Stabilized cash flow Stabilize the cash flow of the portfolio by selling my atria Meieki, the property which will be expropriated Name Place Kameido i-mark Koto ward, Wald Park Minamioi 5 properties 7.7Bn Average appraisal NOI yield (1) : 4.6% Average appraisal NOI yield after depreciation (2) : 3.9% Average building age : 10 years Acquired assets TENSHO OCHANOMIZU BUILDING Chiyoda ward, Wald Park Minamioi Shinagawa ward, Imazaki Mansion N1 Higashiosaka, Osaka LAPUTA KUJO Osaka, Osaka FORECAST Iidabashi my atria Meieki 2 properties 7.2Bn Average appraisal NOI yield (1) : 4.5% Average appraisal NOI yield (2) : 3.7% after depreciation Average building age : 34 years Name Place Transferred assets FORECAST Iidabashi Chiyoda ward, my atria Meieki Nagoya, Aichi Type Office Office Residence Residence Residence Type Office Residence Completion ( age) Acquisition price Appraisal value Appraisal NOI yield (after depreciation) Sep.2010 (8years) Nov. (0years) Stock-based redevelopment scheme Sell the office property located in one of the 6 central wards of (FORECAST Iidabashi) in order to enhance its value in collaboration with a general constructor, and be positioned to take advantage of its potential for external growth by securing the right of first negotiation NIPPON REIT Feb.2005 (13years) Opportunity for redevelopment / Asset acquisition Right of first negotiation after value enhancement Overview of transferred asset and acquired assets Mar.1999 (19years) SHIMIZU CORPORATION Mar.1998 (20years) Completion ( age) Nov.1978 (40years) Mar.2006 (12years) 2,580mn 1,800mn 715mn 1,180mn 1,480mn Transfer price 5,490mn 1,782mn 2,650mn 1,820mn 735mn 1,210mn 1,501mn 4.7%(3.6%) 3.9%(3.3%) 4.2%(3.8%) 5.3%(4.7%) 4.8%(4.3%) Return based on realized gains Achieve unitholder returns funded from unrealized gains that come from sales of the 2 properties of 492mm: DPU of 1,106 Plan to review repair expenses for the 14 th period, along with the gains on sales DPU Forecast for 14 th and 15 th Periods Gains on sales etc. 9,486 Normalized 1,106 14th Period (before replacement) Book value (as of the end of Feb. 2019) Appraisal NOI yield (after depreciation) 8,556 8,622 8,380 14th Period (after replacement) 5,392mn 15th Period 1,226mn 4.2%(3.8%) 5.7%(3.4%)

5 Internal Growth Strategies Occupancy Rate Trend As a result of our flexible and proactive leasing activities, as well as the enhanced tenant satisfaction and building competitiveness stemming from our Engineering Management, we have been maintaining high occupancy rate. Outline of Engineering Management We maintain and improve permanent asset value by Engineering Management that combines planned capital investment and strategic value- enhancing investment. Occupancy rate tend and forecast 100% Total Office Residence Retail 99.1% 1. Planned capital investment Repair, renewal and maintenance of facilities necessary for maintenance and improvement of long-term asset value 2. Strategic value- enhancing investment Investment leading to improvement of profitability and maximized cost-effectiveness from the following four points of view 95% Profitability enhancement Measures to increase rents / raise income, etc. Improvement of tenant satisfaction Minimization of tenant vacancy risk Shorten leasing periods Cost reduction Reduction of management cost through energy conservation, etc. Environmental consideration Installation of high energy efficiency equipment etc. 90% June 2015 Dec June 2016 Dec th period 8th period 9th period 10th period Rent increase (decrease) upon tenant replacement (office) (.000/month) 5,000 4,000 3,000 2,000 1,000 0 (1,000) (2,000) (3,000) (4,000) (5,000) Total rent increase Total rent decrease Rent change ratio * 2,737 (1.8%) (3,637) 9th period (Dec. 2016) 1, % (1,068) 10th period (June 2017) 3, % 11th period (Dec. 2017) 4, % 13.2% 12th period (June ) 3,909 (465) (504) (522) 13th period (Dec. ) * Rent increase ratio is calculated in each period as bellow, rounded to the first decimal place. ((total rent increase after rent renewal - total rent before rent renewal )/ total rent before rent renewal) (%) (5) (10) (15) June th period Total 99.5% 99.1% 98.9%(Forecast) Office 99.8% 99.4% 99.7%(Forecast) Residence 98.5% 98.3% 97.6%(Forecast) Retail 97.5% 98.4% 93.7%(Forecast) Dec June 12th period Dec. 13th period June th period (Forecast) Status of rent increase (decrease) upon contract renewals (office /monthly rent) Total rent increase Total rent decrease Rent increase ratio * (,000/month) (%) 6, ,000 6,396 5,500 5,874 5,494 5,000 4,500 4,000 3,500 3,834 3, ,000 2,500 2,000 1,500 1, (500) (1,000) 7.5% 9th period (Dec. 2016) 6.9% (635) 10th period (June 2017) 5.9% 11th period (Dec. 2017) 6.8% 12th period (June ) 5.8% 13th period (Dec ) * Rent increase ratio is calculated in each period as below, rounded to the first decimal place. (total rent increase after rent renewal - total rent before rent renewal )/ total rent before rent renewal) 0 Examples of Engineering Management (Strategic value-enhancing investment) We are working to improve tenant satisfaction as well as to maintain and enhance profitability and competitiveness of the portfolio. Through the Engineering Management, we aim to further increase asset value by pursuing economic efficiencies such as reducing costs of works. FORECAST Shinjuku SOUTH CO2 reduction achieved by replacing air conditioners of whole building and LED lightings installed Replaced air conditioners of whole building and installed LED lightings through a year construction period Realized considerable energy saving to plan reduction of costs and improvement of tenants satisfaction Set up new storage room on the basement floor Converted backyard on the basement floor into new storage room 1.21mn p.a. revenue increase to be expected Residence Nihombashi Hakozaki Lease-up by renovation of the whole building Lease-up of all residences realized at earliest by strategic renovation of the whole building. Achieved 100% of occupancy rate as of Sep. with earlier accomplishment. The NOI improvement record of approx. 245mn/p.a. from 7th period to 13th period through the engineering management 6 7 Before Under Construction After Before Before After After

6 Financial management In order to build a stable financial base over the medium- to long-term, we introduce our basic policy of the financial strategy which is well-balanced fund procurement between borrowing costs and financial stability. During the fiscal period under review, we issued investment corporation bonds for the third time and realized diversification of ways for funding while keeping relevant costs at low level. Going forward, we will continue to promote the stabilization of our financial base, taking into account costs. Financial Highlights As of the end of the 13th period Sustainability Initiatives Sojitz REIT Advisors K.K., an asset management company of NIPPON REIT, has established the Sustainability Policy and practices it with an understanding that taking viewpoint of ESG (Environment, society and Governance) seriously contributes to realization of basic policy of NIPPON REIT such as maximization of unitholders value while focusing on income growth and stability. Certifications Total -bearing debt 1,261billion Loan-to-value ratio 46.9% Average remaining borrowing period 3.62years Fixed- rate ratio 100.0% Long-term debt ratio 100.0% Japan Credit Agency, Ltd. (JCR) Long-term issuer rating (Note) A (Stable) (Note) These ratings do not apply to the units of the Investment Corporation. Moreover, with regard to said units, no credit ratings have been provided or submitted for inspection by credit rating agencies, nor are any credit ratings scheduled to be provided or submitted for inspection as a result of requests from the Investment Corporation. Bank formation 55% Borrowing amount 126.8bn Historical and forecast LTV 11 Banks + Investment Corporation bonds 48.6% Mizuho Bank, Ltd. 13.7% Sumitomo Mitsui Banking Corporation 9.5% Resona Bank, Limited 7.2% Sumitomo Mitsui Trust Bank, Limited 5.5% Shinsei Bank, Limited 4.6% as of Feb Mizuho Trust & Banking Corporation 4.7% Development Bank of Japan Inc. 1.9% Aozora Bank, Ltd. 0.6% The Nomura Trust and Banking Co., Ltd. 0.6% Meiji Yasuda Life Insurance Company 0.4% Investment Corporation bonds 2.8% We received the Green Star recognition, the highest in the four available categories, for the second consecutive year. We have also received 3 stars in GRESB Rating, which is evaluated in 5 grades depending on the relative ranking of the overall GRESB Score. GRESB is a benchmark developed by a group of leading European pension funds. Green Lease initiatives Green Lease structure case Maintenance costs10% Effects of cost reduction for tenant 30% FORECAST Ichigaya Comprehensive Assessment System for Built Environment Efficiency (CASBEE) is a method for evaluating and rating the environmental performance of buildings and the built environment. It is a comprehensive assessment of the quality of a building, evaluating features such as interior comfort and scenic aesthetics, in consideration of environment practices that include using materials and equipment that save energy or achieve smaller environmental loads. Contribution to the local community 50% LTV Control Range (Note) (45%~50%) Electricity costs 90% Electricity cost -60% reduction expected Green Lease fee by tenant 30% Electricity costs 40% allocated LED Light repair expense 45% La Verite AKASAKA Before introduction of Green Lease After introduction of Green Lease To install LED light and some ecological equipments with 40% 6th June 7th Dec. 8th June 9th Dec. 10th June 11th Dec. 12th June 13th Dec. 14th June 15th Dec. government subsidy, We make efforts to reduce energy. And, making a contract with each tenant for Green Lease, we earn part of incomes that are performed by reduction of utility costs. Sojitz REIT Advisors K.K., an asset management company of NIPPON REIT, participates in the Project of donation with books providing books that have been read by executives and employees and donated the purchase price (Note) The LTV control range refers to the LTV level that the Investment Corporation is scheduled to maintain going forward and that is 8 within the range of the LTV level under current policy (45%-55%), as described in item 17 of this document. 9

7 Asset Management Report Asset Management Report 1. Summary of Asset Management (1) Historical Operating Results Period 9th fiscal period 10th fiscal period 11th fiscal period 12th fiscal period 13th fiscal period From July 1, 2016 to December 31, 2016 From January 1, 2017 to June 30, 2017 From July 1, 2017 to December 31, 2017 From January 1, to June 30, From July 1, to December 31, (Reference Information) Period 9th fiscal period 10th fiscal period 11th fiscal period 12th fiscal period 13th fiscal period From July 1, 2016 to December 31, 2016 From January 1, 2017 to June 30, 2017 From July 1, 2017 to December 31, 2017 From January 1, to June 30, From July 1, to December 31, Number of investment properties Operating revenues 6,836 6,947 7,553 7,225 8,458 Total leasable area (m 2 ) 255, , , , , Of which, rental revenues and other revenues related to property leasing (6,804) (6,906) (7,142) (7,177) (8,458) Number of tenants ,242 1,239 1,878 Operating expenses Of which, property-related expenses 3,309 3,250 3,438 3,389 3,818 (2,606) (2,530) (2,679) (2,664) (3,039) Occupancy rate at the end of the period Depreciation during the period (%) Operating income 3,527 3,696 4,115 3,835 4,640 Capital expenditures during the period , ,420 Ordinary income Net income Total assets (a) 3,055 3,218 3,608 3,329 3,840 3,054 3,218 3,607 3,329 3, , , , , ,146 Rental NOI (Net Operating Income) FFO (Funds From Operations) per unit Interest-bearing debt (e) 4,952 5,111 5,215 5,292 6,335 (Yen) 9,726 10,091 10,170 10,489 10, , , , , ,170 Period-on-period changes (%) (0.2) (0.0) (1.8) (0.1) (16.7) Net assets (b) 112, , , , ,378 Period-on-period changes (%) (0.1) (0.1) (0.3) ( 0.3) (15.7) Unitholders equity Number of investment units Issued and outstanding (c) 109, , , , ,515 (Unit) 391, , , , ,930 Net assets per unit (b) / (c) (Yen) 286, , , , ,774 Total distributions (d) 3,055 3,219 3,608 3,329 3,840 Distributions per unit (d) / (c) (Yen) 7,800 8,217 9,211 8,500 8,536 Of which, earnings distributions per unit Of which, distributions per unit in excess of earnings per unit Ordinary income to total assets ratio (Yen) (7,800) (8,217) (9,211) (8,500) (8,536) (Yen) (-) (-) (-) (-) (-) (%) Annualized (%) (2.7) (2.9) (3.1) (2.9) (3.0) Return on equity (%) Annualized (%) (5.4) (5.8) (6.3) (6.0) (6.3) Equity ratio (b) / (a) (%) Period-on-period changes (%) ( 0.1) (0.1) ( 0.7) ( 0.2) ( 0.4) Interest-bearing debt to total assets ratio (e) / (a) (%) Number of operating days (Days) NIPPON REIT s fiscal periods cover every six months from January 1 to June 30 and from July 1 to December 31 of each year. Operating revenues, etc., do not include consumption taxes. The following denotes the calculation methods for the indicators used by NIPPON REIT. It should be noted that calculations on an annual basis are calculated using the number of business days for each period. Ordinary income to total assets ratio Ordinary income/average total assets 100 Average total assets = (Total assets at beginning of period + total assets at end of period) 2 Return on equity Net income / average net assets 100 Average net assets = (Net assets at beginning of period + net assets at end of period) 2 Payout ratio Distribution per investment unit (excluding cash distributions in excess of earnings per unit) net income per investment unit 100 Payout ratio of the 13th fiscal period was calculated using the following formula, as new investment units have been issued: Total amount of distribution (excluding cash distributions in excess of earnings) net income 100 Rental NOI (Net Operating Income) Income from property leasing for the fiscal period under review (rental revenues rental expenses) + depreciation + loss on retirement of noncurrent assets FFO (Funds From Operations) per unit (Net income + depreciation + loss on retirement of non-current assets + deferred asset amortization gain / loss on sales of real estate) total investment units issued and outstanding Furthermore, gain on exchange of real estate properties of the 11th fiscal period is calculated as gain (loss) on sales of real estate properties. (Note 5) This denotes the total number of tenants (excluding those for warehouses, billboards, and parking lots) in leasing contracts for each building acquired at the end of the period. It should be noted that in the event a pass-through master lease contract is entered into for said assets, the total number of end-tenants is used in the calculation (excluding those for warehouses, billboards, and parking lots). Monetary figures are truncated, while percentages are rounded. Payout ratio (%)

8 (2) Overview of the Fiscal Period under Review A. Brief History of NIPPON REIT NIPPON REIT was established on September 8, 2010, by Polaris Investment Advisers K.K. (now Sojitz REIT Advisors K.K. [hereafter referred to as the Asset Management Company ]) as the founder under the Act on Investment Trusts and Investment Corporations (the Investment Trusts Act ). Registration with the Kanto Local Finance Bureau was completed on October 26, 2010 (registration number 72, filed with the Director of the Kanto Local Finance Bureau). NIPPON REIT issued new investment units through a public offering (144,200 units) with April 23, 2014, as the payment date and was listed on the J-REIT section of the Stock Exchange (securities code: 3296) on April 24, Furthermore, NIPPON REIT issued investment units through public offerings in February 2015, July 2015, and July, and third-party allotments in March 2015, July 2015, and July, and the total number of investment units issued and outstanding as of the end of the fiscal period under review (December 31, ) is 449,930 units. B. Investment Environment and Management Performance (i) Investment Environment The Japanese economy during the fiscal period under review (the fiscal period ended December ) saw a decrease by 0.6% (an annual decrease by 2.5%) in the real GDP growth rate (second preliminary figures) for the second quarter compared to the same period of the previous year, due to a depressed private consumption and external demand affected by restriction in supply and deteriorating consumer sentiment caused by a series of natural disasters such as the earthquake in Hokkaido and torrential rain. The effect of the natural disasters was temporary and restriction in supply and deteriorating consumer sentiment are expected to settle down. Private consumption and exports are picking up, as business investment and Industrial production increases moderately. Consumer prices have been increasing moderately as well, while corporate profits and firms judgment on current business conditions and the employment situation are improving steadily. With regard to future prospects, a continuous and gradual recovery is expected, supported by the effects of the policies implemented by the Japanese government, while employment and income environment is improving. A certain level of attention, however, should be paid to the effects of trade frictions on economy, the uncertainty in overseas economies and the effects of fluctuations in the financial and capital markets. In the office properties leasing market, the vacancy rate as of the end of December in s five central wards (Chiyoda, Chuo, Minato, Shinjuku and Shibuya wards) announced by Miki Shoji Co., Ltd., was 1.88%, down1.24% from the same month last year. Moreover, the average rent in the same area as of the end of December was 20,887 yen per tsubo, up 8.94% from the same month last year. Such smallscale upward trends are ongoing. In terms of the residential properties leasing market, the situation remains generally stable for both occupancy rate and rent level, and this is expected to continue due to the well-balanced supply and demand. The background is that the population of Japan has been concentrating in three major metropolitan areas, in spite of a limited supply of residential properties for lease in the same area. The retail properties leasing market saw a 1.4% year-on-year increase in retail sales according to figures announced by the Ministry of Economy, Trade and Industry in November, showing gradual recovering trends mainly in retail business such as fuel retailing, car dealing, medicinal supplies and cosmetics, food and beverage retailing. On the other hand, decreasing trends were showing mainly in machinery-equipment, textiles, apparel including woven fabrics, apparel, accessories and notions. Sales at department stores and GMS decreased by a 2.2% year-on-year basis. As for short-term prospects, private consumption is expected to move toward recovery, supported by the improving environment in both the employment market and income growth. With regard to the real estate transaction market, expected yields remain at a low level and transaction prices stay high, reflecting that appetite for acquisition of properties by domestic investors such as J-REIT, private REIT, real estate companies and overseas investors is still high while the favorable funding environment continues. (ii) Management Performance a. External Growth NIPPON REIT owned 66 properties (with a total acquisition price of 207,795 million yen) and silent partnership equity (investment amount 740 million yen, 16 real estate-backed properties) as of the end of the fiscal period ended June. During the fiscal period under review (fiscal period ended December ) NIPPON REIT acquired the following 21 properties (with a total acquisition price of 40,202 million yen) using funds raised through a public offering in July : Transaction Property number Property name Acquisition price Acquisition A-58 Towa Kandanishikicho 960 Acquisition A-59 Yusen Higashi-Nihombashi Ekimae 1,152 Acquisition A-60 Hiroo ON 2,392 Acquisition A-61 TK Gotanda 4,130 Acquisition A-62 Gotanda Sakura 1,460 Acquisition A-63 Esprit Kameido 1,265 Acquisition A-64 Alte Higobashi 1,453 Acquisition A-65 DIA Meieki 1,167 Acquisition B-10 Residence Hiroo 2,590 Acquisition B-11 Residence Nihombashi Hakozaki 1,300 Acquisition B-12 Primegate Iidabashi 5,200 Acquisition B-13 Residence Edogawabashi 1,230 Acquisition B-14 Merveille Senzoku 740 Acquisition B-15 Field Avenue 3,110 Acquisition B-16 Domeal Kitaakabane 785 Acquisition B-17 Dormy Kitaakabane 986 Acquisition B-18 Splendid Shin-Osaka III 2,428 Acquisition B-19 ZEPHYROS Minami-horie 1,608 Acquisition B-20 Charmant Fuji Osakajominami 905 Acquisition B-21 Piacere Fuminosato 571 Acquisition C-3 BECOME SAKAE 4,770 Acquisition date July 3, Total 40,202 The acquisition prices represent the amount of consideration stated in the purchase agreements of real estate and the trust beneficiary s in real estate. The acquisition price does not include the expenses related to the acquisition (includes the amount NIPPON REIT paid as a consideration for the succession of the status of the buyer) and consumption taxes. Furthermore, acquisition prices of less than one million yen are omitted. The type of asset for No. A-62 is real estate and the others are trust beneficiary s in real estate. Although part of the building (1F to 4F) named S&S is listed as an office/retail store, the real estate is presented as Primegate Iidabashi, which includes the office area. The same shall apply hereinafter. This property includes a separate building, which is structurally independent from the main building, and these two buildings are counted as one property. The same shall apply hereinafter. As a result, the portfolio as of the end of the fiscal period under review consisted of 63 office properties (Note 12 13

9 1) (with a total acquisition price of 193,086 million yen), 21 residential properties (with a total acquisition price of 44,728 million yen) and 3 retail properties (with a total acquisition price of 10,183 million yen), totaling 87 properties (with a total acquisition price of 247,998 million yen) with a total leased area of 303, m 2 and a 99.1% average occupancy rate. Office properties are office buildings whose primary usage is offices. The same shall apply hereinafter. Residential properties are rental houses whose primary usage is residence (including dormitories, company houses and serviced apartments, all or major portion of which are leased by operators). The same shall apply hereinafter. Retail properties are properties primarily leased to commercial tenants (such as retailers, restaurants, service providers and amusement facilities). The same shall apply hereinafter. b. Internal Growth NIPPON REIT emphasizes asset management that maintains and increases the portfolio s asset value and actively reaches out to new and existing tenants for the prosperous future opportunities while strengthening relations with existing tenants, implementing measures that boost the competitiveness of properties in light of tenant needs and the features of each property. Through such tireless efforts, the portfolio occupancy rate had been maintained at a high level of 99.1% as of the end of the fiscal period under review. C. Procurement of Funds (i) Issuance of New Investment Units In order to obtain funds to acquire new properties, NIPPON REIT issued 55,400 units of new investment units through a public offering and raised funds amounting to 16,409 million yen on July 2,. In connection with the public offering, NIPPON REIT issued 2,770 units of new investment units through a third-party allotment and raised funds amounting to 820 million yen on July 24,. As a result, the balance of unitholders capital and the number of investment units issued and outstanding as of December 31,, were 126,515 million yen and 449,930 units, respectively. (ii) Borrowings and Repayments Borrowings totaling 20,000 million yen were implemented on July 3,, to use as part of funds for acquisition of new properties and their related expenses. In order to prepare funds for payment of loans due on August 20, (total amount 13,400 million yen), borrowings totaling 13,400 million yen were implemented on the same day as the loan due. Issuance of investment corporation bonds totaling 1,500 million yen was implemented on November 30,, and borrowings totaling 1,500 million yen due on August 20, 2019, were repaid early using the raised funds. As a result, the balance of -bearing debt as of December 31,, was 126,170 million yen and the ratio of -bearing debt to total assets (LTV) was 46.9%. (iii) Credit Rating NIPPON REIT s credit rating as of December 31,, is as follows: Credit Rating Agency Rating type Rating outlook Japan Credit Rating Agency, Ltd. Long-term issuer rating: A Stable D. Overview of Business Performance and Distributions As a result of the operations described above, business performance in the fiscal period under review generated operating revenues of 8,458 million yen, operating income of 4,640 million yen, ordinary income of 3,840 million yen and net income of 3,839 million yen. (3) Changes in Number of Total Investment Units Issued and Outstanding Changes in the number of investment units issued and outstanding and total unitholders equity for the past 5 years to the end of the current period are as follows: Number of investment units issued and outstanding (Unit) Total unitholders equity Date Type of issue Note Increase (Decrease) Total Increase (Decrease) Total January 17, 2014 Unit split April 23, 2014 Public offering 144, ,600 35,066 35,166 May 23, 2014 Issuance of new investment units through third-party allotment 7, ,810 1,753 36,919 February 10, 2015 Public offering 145, ,810 46,137 83,057 (Note 5) March 10, 2015 Issuance of new investment units through third-party allotment 7, ,060 2,306 85,364 (Note 6) July 1, 2015 Public offering 84, ,060 22, ,276 (Note 7) July 28, 2015 Issuance of new investment units through third-party allotment 3, ,760 1, ,285 (Note 8) July 2, Public offering 55, ,160 16, ,695 (Note 9) July 24, Issuance of new investment units through third-party allotment 2, , ,515 (Note10) Total unitholders equity is truncated to the nearest million yen. NIPPON REIT implemented a two-for-one split of investment units with an effective date of January 17, In order to obtain funds to acquire new properties, NIPPON REIT issued new investment units through a public offering at the offer price of 252,000 yen (issue price of 243,180 yen) per unit. In connection with the public offering, NIPPON REIT issued new investment units through a third-party allotment at the issue price of 243,180 yen per unit. (Note 5) In order to obtain funds to acquire new properties, NIPPON REIT issued new investment units through a public offering at the offer price of 330,037 yen (issue price of 318,189 yen) per unit (Note 6) In connection with the public offering, NIPPON REIT issued new investment units through a third-party allotment at the issue price of 318,189 yen per unit. (Note 7) In order to obtain funds to acquire new properties, NIPPON REIT issued new investment units through a public offering at the offer price of 282,918 yen (issue price of 272,761 yen) per unit. (Note 8) In connection with the public offering, NIPPON REIT issued new investment units through a third-party allotment at the issue price of 272,761 yen per unit. (Note 9) In order to obtain funds to acquire new properties, NIPPON REIT issued new investment units through a public offering at the offer price of 307,235 yen (issue price of 296,206 yen) per unit. (Note 10) In connection with the public offering, NIPPON REIT issued new investment units through a third-party allotment at the issue price of 296,206 yen per unit. Concerning distributions, NIPPON REIT is set to be eligible for application of the special provisions for taxation on investment corporations (Article of the Special Taxation Measure Act of Japan), ensuring a scope that does not exceed unappropriated retained earnings, and also minimizing unitholders burdens of income tax, etc. For the fiscal period, NIPPON REIT decided to distribute 3,840,602,480 yen, which is the amount equivalent to the maximum integral multiple of the total number of investment units issued and outstanding, 449,930 units. As such, cash distributions per unit were 8,536 yen

10 (Changes in market price of investment securities) The highest and lowest (closing) prices in the J-REIT section of the Stock Exchange, upon which NIPPON REIT s investment securities are listed, are as follows for the period indicated: Period 9th fiscal period 10th fiscal period 11th fiscal period 12th fiscal period 13th fiscal period From July 1, 2016 to December 31, 2016 From January 1, 2017 to June 30, 2017 From July 1, 2017 to December 31, 2017 From January 1, to June 30, From July 1, to December 31, Highest (Yen) 285, , , , ,500 Lowest (Yen) 250, , , , ,500 (4) Distributions Concerning distributions for the period under review, in order to be eligible for application of the special provisions for taxation on investment corporations (Article of the Act on Special Measures Concerning Taxation) and ensure a scope that does not exceed unappropriated retained earnings and that can minimize unitholder burdens of income tax, etc., NIPPON REIT decided to distribute 3,840,602,480 yen, which is the amount equivalent to the maximum integral multiple of the total number of investment units issued and outstanding, 449,930 units. As such, cash distributions per unit were 8,536 yen for the period under review. 9th fiscal period 10th fiscal period 11th fiscal period 12th fiscal period 13th fiscal period Period Unappropriated retained earnings Retained earnings (Retained earnings brought forward) Cash distributions declared thousands) thousands) thousands) From July 1, 2016 to December 31, 2016 From January 1, 2017 to June 30, 2017 From July 1, 2017 to December 31, 2017 From January 1, to June 30, From July 1, to December 31, 3,080,273 3,242,988 3,631,760 3,352,625 3,862,444 24,545 23,896 23,258 22,665 21,842 3,055,728 3,219,091 3,608,501 3,329,960 3,840,602 Distributions per unit (Yen) (7,800) (8,217) (9,211) (8,500) (8,536) Of the above, total earnings distributions thousands) 3,055,728 3,219,091 3,608,501 3,329,960 3,840,602 Earnings distributions per unit (Yen) (7,800) (8,217) (9,211) (8,500) (8,536) Of the above, total capital refunds thousands) Capital refunds per unit (Yen) (-) (-) (-) (-) (-) Of total capital refunds, total distributions from allowance for temporary difference thousands) Distributions from allowance for (Yen) (-) (-) (-) (-) (-) temporary difference per unit Of total capital refunds, total distributions from reduced capital thousands) distributions Distributions from reduced (Yen) (-) (-) (-) (-) (-) capital distributions per unit (Note) Amounts are truncated to the relevant digit. (5) Future Operating Policies and Issues to Be Addressed A. Management Policy With the corporate policy of untiringly pursuing the best of NIPPON REIT s unitholders, NIPPON REIT plans to engage in the following measures to maximize unitholders value through flexible and timely investment, and also seeks the best of unitholders by utilizing the features of diversified assets and focusing on the growth potential and stability of revenues. B. External Growth Strategy In order to diversify various risks by combining assets with different revenue features while considering the future outlook of the macro economy and real estate market in Japan, as well as not missing appropriate investment opportunities, NIPPON REIT will invest in three types of assets deeply rooted in the Japanese society (office, residence, and retail). Furthermore, NIPPON REIT will focus on mid-sized office properties located in central areas of, which are its main target of investment in consideration of the balance of supply and demand, and will build up a diversified portfolio by also investing in residential properties and retail properties. With the Asset Management Company s own property acquisition network as the base and also utilizing the real estate investment networks of sponsors such as Sojitz Corporation, the main sponsor and sub-sponsor companies of Cushman & Wakefield Asset Management K.K. (hereafter referred to as Cushman ) and Agility Asset Advisers Inc., NIPPON REIT will increase its asset size through property acquisitions centered on negotiation transactions with third parties so as to promote external growth. Furthermore, regarding property acquisitions from third parties, NIPPON REIT will attempt to avoid the loss of opportunities for property acquisitions and aim to maximize growth opportunities by means of temporary ownership and recovery functions provided through the warehousing function of Sojitz Corporation, and temporary ownership functions provided by bridge funds in which the above-mentioned sponsor companies are involved in the formations. C. Internal Growth Strategy NIPPON REIT will manage assets to maintain and increase the competitiveness of the portfolio and of individual properties according to their features based on the unique networks and expertise that the officers and employees of the Asset Management Company have originally nurtured at sponsor companies. Moreover, by entrusting property management operations and building management operations mainly to Sojitz General Property Management Corporation (hereafter referred to as SGPMC ), a subsidiary of the main sponsor of Sojitz Corporation, we will promote the maintenance of the occupancy rate and increase in profitability through the utilization of SGPMC s knowledge based on experience and cost reduction effects via economies of scale. With appropriate processes as a given, SGPMC will also be assigned as the main consignee for renovations and planned repairs in addition to the daily administrative operations. Along with SGPMC s consistent support ranging from building diagnostics to repair-designs, selection of construction companies and construction management based on its knowledge nurtured through large-scale repair consulting and such, NIPPON REIT will aim to practice effective and deliberate repairs in order to maintain and increase the value of assets under management, considering the priority of construction work and optimization of costs, upon sufficient consideration of cost-effectiveness. Furthermore, regarding leasing plans for offices, new asking rent and renewed rent for existing tenants will be set with reference to various data, etc., provided by Cushman, a sub-sponsor, and agile leasing activities will be implemented according as the operational leasing policy stipulated for new potential tenants. D. Financial Strategy NIPPON REIT s basic policy for its financial strategy is to conduct fund procurement in a diversified and wellbalanced manner so as to establish a stable financial foundation over the medium to long term. Regarding the LTV of -bearing debt, the targeted ceiling is set at 60%. NIPPON REIT's LTV as of the end of the fiscal period under review was 46.9% and the current policy is to keep the LTV level between 45% and 55%. With regard to lenders, NIPPON REIT will maintain a strong bank formation that is solidly established on the 16 17

11 syndicated finance group as of the end of the fiscal period under review. (6) Significant Subsequent Events A. Acquisition of Properties NIPPON REIT acquired trust beneficiary s in real estate on January 31 and February 27 and 28, 2019, as described below. Acquisition price Property name Location Acquisition date Seller Wald Park Minamioi Shinagawa ward, January 31, Not disclosed TENSHO OCHANOMIZU Chiyoda ward, February 27, ,800 Not disclosed BUILDING Kameido i-mark Koto ward, February 27, ,580 SHIMIZU CORPORATION LAPUTA KUJO Osaka, Osaka February 28, ,480 Not disclosed Imazaki Mansion N1 Higashiosaka, February 28, ,180 Not disclosed Osaka Total 5 properties 7,755 The acquisition prices represent the amount of consideration stated in the purchase agreements of real estate and the trust beneficiary s in real estate. The acquisition price does not include the expenses related to the acquisition and consumption taxes. Furthermore, acquisition prices of less than one million yen are omitted. This information is not disclosed as the seller s consent to disclosure has not been obtained. B. Transfer of Properties NIPPON REIT transferred trust beneficiary s in real estate on February 26 and 27, 2019, as described below. Property name Location Transfer date Transfer price Book value Seller FORECAST Chiyoda February 27, 5,490 5,396 SHIMIZU Iidabashi ward, 2019 CORPORATION my atria Meieki Nagoya, February 26, 1,782 1,231 Not disclosed Aichi 2019 Total 2 properties 7,272 6,627 The transfer prices represent the amount of consideration stated in the transfer agreements of real estate and the trust beneficiary s in real estate. The transfer price does not include the expenses related to the transfer and consumption taxes. Furthermore, transfer prices of less than one million yen are omitted. The book values represent the balance sheet amount as of December 31,. Furthermore, book values of less than one million yen are omitted. This information is not disclosed as the purchaser s consent to disclosure has not been obtained. C. Borrowing of Funds NIPPON REIT decided on February 18, 2019, to borrow funds of commencement day on February 18, This borrowing was used to acquire LAPUTA KUJO and Imazaki Mansion N1 described in A. Acquisition of Properties and also to cover its related costs. Amount Repayment Lender Interest rate Fix / Floating Repayment method million) due date Interest rate of payment 700 base rate plus Floating July 22, % The first payment date was March 20, 2019, and the subsequent payment dates were and shall be the 20th day of every month (if the date is not a business day, then it shall be the next business day) and the principal date. The base rate applicable to the payable on an payment date shall be the JBA onemonth Japanese Yen TIBOR announced two business days prior to the payment date immediately preceding the respective payment date. In the event that the calculation period is more than one month or less than one month, the base rate corresponding to the calculation period shall be calculated using the method stipulated in the loan agreement. NIPPON REIT can make early of the borrowing, in whole or in part, if it gives prior written notice and other certain terms and conditions are met by the date. 2. Overview of the Investment Corporation (1) Status of Investment Units Period Total number of investment units authorized Total number of investment units issued and outstanding Total unitholders capital (Note) 9th fiscal period 10th fiscal period 11th fiscal period 12th fiscal period 13th fiscal period December 31, 2016 June 30, 2017 December 31, 2017 June 30, December 31, (Unit) 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 (Unit) 391, , , , , , , , , ,515 Number of unitholders 24,814 22,653 19,723 18,897 16,347 (Note) Total unitholders capital is truncated to the nearest million yen. (2) Matters Concerning Investment Units The top 10 unitholders in terms of the percentage of investment units held as of December 31,, are as follows: Percentage of units held to the total Number of investment number of units Name units held issued and (Unit) outstanding (%) (Note) Japan Trustee Services Bank, Ltd. (Trust Account) 100, The Master Trust Bank of Japan, Ltd. (Trust Account) 87, The Nomura Trust and Banking Co., Ltd. (Investment Trust Account) 17, Sojitz Corporation 15, Trust & Custody Service Bank, Ltd. (Securities Investment Trust Account) 13, STATE STREET BANK WEST CLIENT TREATY , SSBTC CLIENT OMNIBUS ACCOUNT 5, DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO 5, JP MORGAN CHASE BANK , STICHTING PENSIOENFONDS METAAL EN TECHNIEK 3, (Note) Total 261, Percentage of units held to the total number of units issued and outstanding is rounded to the second decimal place and may not add up to the total

12 (3) Officers The following table provides information about our executive and supervising officers, and independent auditor during the fiscal period under review: Position Name Major concurrent position Total compensation per title during the 8th fiscal period thousands) Executive Officer Toshio Sugita President & CEO, Sojitz REIT Advisors K.K. - Yasuhiro Shimada Partner, 1,200 Atsumi & Sakai Supervising Officer Hisashi Yahagi Representative council, Toranomon Partners 1,200 Independent Auditor KPMG A ZSA LLC - 33,000 Total compensation for each position in the applicable business period has been truncated to the nearest thousand yen. The fee of the independent auditor includes the audit fee of English financial statements and documentation preparation fee for the comfort letter for the issuance of global public offering in July and issuance of investment corporation bonds in November. Termination of the independent auditor is carried out in accordance with the Investment Trust Act. The Board of Officers of NIPPON REIT determines the refusal of reappointment of an independent auditor, factoring in various circumstances, including the quality of the audits performed and compensation for said audits. In connection with the resignation of Masataka Nogi as a director (full-time) of Sojitz REIT Advisors K.K., NIPPON REIT resolved to cancel the election of substitute executive officer at the meeting of the Board of Officers. Asset Manager Asset Custodian (4) Asset Manager, Asset Custodian, and General Administrative Agent NIPPON REIT s asset manager, asset custodian, and general administrative agent as of December 31,, are as follows: Business Name General Administrative Agent (Transfer agent) General Administrative Agent (Administrative work for organizational operation) General Administrative Agent (Accounting administration) General Administrative Agent (Administrative work for investment corporation bonds) Sojitz REIT Advisors K.K. Mitsubishi UFJ Trust and Banking Corporation Mitsubishi UFJ Trust and Banking Corporation Mitsubishi UFJ Trust and Banking Corporation Mitsubishi UFJ Trust and Banking Corporation 3. Portfolio of the Investment Corporation (1) Composition of Assets Type of assets Real estate Real estate in trust Property type Office properties Area Six central wards of Total amount held 12th fiscal period (June 30, ) Ratio to total assets (%) 13th fiscal period (December 31, ) Total amount held Ratio to total assets (%) - - 1, Real estate Total - - 1, Six central wards of 129, , Three major metropolitan areas Office (Note 5) properties 53, , (excluding six central wards of ) Subtotal 182, , Three major metropolitan areas (Note 5) 19, , (including six central wards of Residential ) properties Certain ordinance-designated 2, , and other cities (Note 6) Subtotal 22, , Retail 5, , properties Real estate in trust Total 210, , Investment securities (Note 7) Deposits and other assets 19, , Total assets (Note 8) 230, , (210,475) (91.2) (251,954) (93.6) Total amount held represents the amount recorded on the balance sheets as of the end of the respective period (for real estate in trust, book value less depreciation) and truncated to the nearest million yen. Ratio to total assets represents the percentage of the amount of respective assets recorded on the balance sheets to total assets. Figures are rounded to one decimal place and may not add up to subtotals or the total. Real estate in trust excludes Construction in progress in trust. Six central wards of refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya, and Shinagawa wards. (Note 5) Three major metropolitan areas refers to the, Osaka, and Nagoya economic areas. economic area refers to the metropolitan area, Kanagawa Prefecture, Chiba Prefecture, and Saitama Prefecture. Osaka economic area refers to Osaka Prefecture, Kyoto Prefecture, and Hyogo Prefecture. Nagoya economic area refers to Aichi Prefecture, Gifu Prefecture, and Mie Prefecture. (Note 6) Certain ordinance-designated and other cities refers to Japanese cities that have been designated as ordinancedesignated cities by order of the Cabinet under the Local Autonomy Law of Japan and that are located outside of the three major metropolitan areas (i.e., Sapporo, Sendai, Niigata, Shizuoka, Hamamatsu, Okayama, Hiroshima, Fukuoka, Kitakyushu, and Kumamoto) and also to prefectural capital cities that are located outside of the three major metropolitan areas. (Note 7) Investment securities represents the equity s in silent partnerships of Godo Kaisha Nicolas Capital 10, Godo Kaisha Nicolas Capital 11, NRT Growth 12 and NRT Growth 13 for the 12th fiscal period. There was no relevant information for the 13th fiscal period. (Note 8) Figures in total assets shown in parentheses represent the portion corresponding to a substantive holding of real estate, etc., in total assets

13 (2) Principal Assets Held The overview of principal assets held by NIPPON REIT as of December 31, (top 10 properties in terms of book value at the end of the period) is as follows: Property name Book value Total leasable area (m 2 ) Total leased area (m 2 ) Occupancy rate (%) Rate to total revenues from property leasing (%) (Note 5) Primary use Omiya Center 15,500 14, , Office FORECAST Shinjuku SOUTH 14,848 13, , Office Tower Court Kitashinagawa 10,898 16, , Residential Shibakoen Sanchome 7,421 7, , Office FORECAST Gotanda WEST 7,232 8, , Office Homat Horizon 6,673 6, , Office FORECAST Shinjuku AVENUE 6,262 4, , Office FORECAST Sakurabashi 6,035 6, , Office FORECAST Takadanobaba 5,940 5, , Office FORECAST Iidabashi 5,396 4, , Office Total 86,211 88, , Book value is truncated to the nearest million yen. Total leasable area is the total area of the relevant building that NIPPON REIT considers leasable based on relevant lease agreements or floor plans. The same shall apply hereafter. Total leased area is the aggregate leased area described in the relevant lease agreements as of the fiscal period end. For properties subject to pass-through master leases, total leased area is the aggregate of the leased areas indicated in the relevant sublease agreements with end-tenants as of the fiscal period end. Occupancy rate is calculated by dividing total leased area by total leasable area as of the fiscal period end, and rounding that figure to the first decimal place. (Note 5) Rate to total revenues from property leasing is rounded to the first decimal place and may not add up to the total. (3) Description of Portfolio The overview of portfolio assets held by NIPPON REIT as of December 31,, is as follows: Property name FORECAST Nishishinjuku Nihombashi Playa FORECAST Yotsuya FORECAST Shinjuku AVENUE FORECAST Ichigaya FORECAST Mita FORECAST Shinjuku SOUTH FORECAST Sakurabashi GreenOak Kayabacho GreenOak Kudan GreenOak Takanawadai Higashi Ikebukuro Center Central Daikanyama Hiroo Reeplex B s Shibakoen Sanchome FORECAST Iidabashi Kudankita 325 FORECAST Uchikanda Itohpia Iwamotocho 2-chome Itohpia Iwamotocho 1-chome Itohpia Iwamotocho ANNEX Pigeon FORECAST Ningyocho Location Form of ownership (Indication of residential address) Nishi-Shinjuku, Shinjuku-ku, Nihonbashi Hamacho, Chuo-ku, Yotsuya, Shinjuku-ku, Shinjuku, Shinjuku-ku, 3-29 Ichigaya Honmuracho, Shinjuku-ku, Mita, Minato-ku, Shinjuku, Shinjuku-ku, Hatchobori, Chuo-ku, Shinkawa, Chuo-ku, Kudankita, Chiyoda-ku, Shirokanedai, Minato-ku, Higashi-Ikebukuro, Toshima-ku, Daikanyamacho, Shibuya-ku, Minamiazabu, Minato-ku, Shibakoen, Minato-ku, Iidabashi, Chiyoda-ku, Kudankita, Chiyoda-ku, Uchikanda, Chiyoda-ku, Iwamotocho, Chiyoda-ku, Iwamotocho, Chiyoda-ku, Iwamotocho, Chiyoda-ku, 4-4 Hisamatsucho, Nihonbashi, Chuo-ku, Ningyocho, Nihonbashi, Chuo-ku, Total leasable area (m 2 ) Appraisal value Book value 1, ,010 2,151 2, ,400 2,030 1, ,860 1,379 4, ,890 6,262 3, ,840 4,565 1, ,300 1,743 13, ,200 14,848 6, ,430 6,035 2, ,350 3,000 2, ,300 2,904 2, ,610 2,214 4, ,970 2,703 1, ,770 3,643 1, ,290 2,869 7, ,680 7,421 4, ,490 5,396 2, ,100 1,942 1, ,310 1,290 3, ,100 2,899 3, ,830 2,704 3, ,430 2,249 3, ,970 2,944 2, ,080 2,141 FORECAST Ningyocho PLACE Ningyocho, Nihombashi, Chuo-ku, 1, ,900 1,655 FORECAST Shin-Tokiwabashi Nihombashi Hongokucho Chuo-ku, 1, ,150 2,

14 Property name Location (Indication of residential address) Form of ownership Total leasable area (m 2 ) Appraisal value Book value Property name Location (Indication of residential address) Form of ownership Total leasable area (m 2 ) Appraisal value Book value Nishi-Shinjuku Sanko Nishi-Shinjuku, Shinjuku-ku, 2, ,370 2,242 Sumitomo Mitsui Bank Koraibashi Fushimicho, Chuo-ku, Osaka, Osaka 5, ,330 3,018 Iidabashi Reeplex B s 1-14 Shin- Ogawamachi, Shinjuku-ku, 1, ,450 1,301 NORE Fushimi Nishiki, Naka-ku, Nagoya, Aichi 3, ,230 2,754 FORECAST Shinagawa Kita-Shinagawa, Shinagawa-ku, 2, ,350 2,397 NORE Meieki Meiekiminami, Nakamura-ku, Nagoya, Aichi 4, ,930 2,459 Nishi-Gotanda 8-chome Nishi- Gotanda, Shinagawa-ku, 2, ,490 2,289 Homat Horizon 5-6-2, Gobancho, Chiyoda-ku, 6, ,130 6,673 Towa Higashi-Gotanda Higashi- Gotanda, Shinagawa-ku, 2, ,240 2,077 Sannomiya First , Isobedori, Chuo-ku, Kobe, Hyogo 3, ,600 1,486 FORECAST Takadanobaba Takada, Toshima-ku, 5, ,640 5,940 Towa Kandanishikicho 3-4-2, Kanda-nishikicho, Chiyoda-ku, 1, , Mejiro NT Mejiro, Toshima-ku, 4, ,600 3,101 Yusen Higashi-Nihombashi Ekimae , Higashi-nihombashi, Chuo-ku, 1, ,230 1,170 Toshin Higashi- Ikebukuro Mitsui Woody Itabashi Honcho ANTEX24 Itohpia Kiyosubashidori East Side I S Minamimorimachi Sunworld Marunouchi Sanchome MK Kojimachi Toranomon Sakura La Verite Akasaka Kanda Ocean Shinto GINZA EAST FORECAST Kayabacho FORECAST Waseda FIRST FORECAST Gotanda WEST Omiya Center Higashi-Ikebukuro, Toshima-ku, Toyo, Koto-ku, 36-1 Shimizucho, Itabashi-ku, Taito, Taito-ku, Taito, Taito-ku, Yanagibashi, Taito-ku, Higashi-Temma, Kita-ku, Osaka, Osaka Kita-Horie, Nishi-ku, Osaka, Osaka Marunouchi, Naka-ku, Nagoya, Aichi Kojimachi, Chiyoda-ku, Toranomon, Minato-ku, Motoakasaka, Minato-ku, Uchikanda, Chiyoda-ku, Tsukiji, Chuo-ku, Shinkawa, Chuo-ku, 1-1 Babashitacho, Shinjuku-ku, Nishi- Gotanda, Shinagawa-ku, Sakuragicho, Omiya-ku, Saitama, Saitama 1, , , ,690 2,688 6, ,450 3,120 2, ,740 1,784 2, ,900 1,657 2, ,560 1,385 4, ,630 2,326 3, ,280 1,289 4, ,980 1,675 1, ,090 1,812 3, ,460 4,288 1, ,250 2,147 1, ,650 1,466 1, ,460 1,357 3, ,090 3,126 4, ,920 4,822 8, ,190 7,232 14, ,000 15,500 Hiroo ON TK Gotanda Gotanda Sakura Esprit Kameido Alte Higobashi DIA Meieki Tower Court Kitashinagawa Sky Hills N11 my atria Meieki my atria Sakae Mac Village Heian Seam Dwell Tsutsui Ciel Yakuin Kanda Reeplex R s Splendid Namba Residence Hiroo Residence Nihombashi Hakozaki Primegate Iidabashi , Hiroo, Shibuya-ku, 8-3-6, Nishi-gotanda, Shinagawa-ku, , Higashi-gotanda, Shinagawa-ku, , Kameido, Koto-ku, , Edobori, Nishi-ku, Osaka, Osaka 3-8-7, Meieki, Nakamura-ku, Nagoya, Aichi Kita-19Shinagawa, Shinagawa-ku, Kita-Juichijo-Nishi, Kita-ku, Sapporo, Hokkaido Meieki, Nakamura-ku, Nagoya, Aichi Sakae, Naka-ku, Nagoya, Aichi Heian, Kita-ku, Nagoya, Aichi Tsutsui, Higashi-ku, Nagoya, Aichi Watanabe-Dori, Chuo-ku, Fukuoka, Fukuoka Kandatacho, Chiyoda-ku, , Inari, Naniwa-ku, Osaka, Osaka , Minami-azabu, Minato-ku, 13-2, Nihombashi, Hakozaki, Chuo-ku, 6-36, Shin-ogawamachi, Shinjuku-ku, 2, ,620 2,422 3, ,300 4,344 Real estate 1, ,590 1,483 2, ,290 1,281 3, ,570 1,473 1, ,240 1,187 16, ,200 10,898 8, ,770 1,537 2, ,540 1,231 3, ,230 1,050 2, , , , ,990 1,756 6, ,790 3,392 1, ,630 2,626 1, ,530 1,437 6, ,290 5,

15 The status of rental business related to properties held by NIPPON REIT is as follows: Property name Residence Edogawabashi Merveille Senzoku Field Avenue Domeal Kitaakabane Dormy Kitaakabane Splendid Shin-Osaka III ZEPHYROS Minami-horie Charmant Fuji Osakajominami Piacere Fuminosato Otakibashi Pacifica Komyoike Act BECOME SAKAE Location (Indication of residential address) 4-22, Suidocho, Shinjuku-ku, , Kitasenzoku, Ota-ku, 6-2-2, Ikegami, Ota-ku, (Annex building: 6-2-1, Ikegami, Ota-ku, ) , Akabane-kita, Kita-ku, , Akabane-kita, Kita-ku, , Higashinakajima, Higashiyodogawa-ku, Osaka, Osaka , Minami-horie, Nishi-ku, Osaka, Osaka 3-3-8, Uchikyuhojimachi, Chuo-ku, Osaka, Osaka , Hannancho, Abeno-ku, Osaka, Osaka Nishi-Shinjuku, Shinjuku-ku, Kamotanidai, Minami-ku, Sakai, Osaka , Sakae, Naka-ku, Nagoya, Aichi Form of ownership Total leasable area (m2) Appraisal value Book value 1, ,260 1, , ,110 3,140 1, , ,002 4, ,480 2,455 2, ,670 1,631 1, , , ,510 3,423 6, ,190 2,081 4, ,840 4,799 Total 306, , ,954 Appraisal value represents the appraisal value as set forth on the relevant appraisal reports as of December 31,, and truncated to the nearest million yen. Book value is the value recorded on the balance sheets as of December 31, (for real estate and real estate in trust, acquisition price [including acquisition-related expenses] less depreciation expenses) and truncated to the nearest million yen. For the concerned property, the name FORECAST Ichigaya is used for the first through seventh floors as a property for office use, and the name of Eponoqu Ichigaya is used for the eighth and ninth floors as a property for residential use. However, the entire property including the residential portion is named FORECAST Ichigaya. Property name Number of tenants (as of the end of period) 12th fiscal period (From January 1, to June 30, ) Occupancy rate (as of the end of period) (%) Revenues related to property leasing (during the period) Rate to total revenues related to property leasing (%) Number of tenants (as of the end of period) 13th fiscal period (From July 1, to December 31, ) Occupancy rate (as of the end of period) (%) Revenues related to property leasing (during the period) Rate to total revenues related to property leasing (%) FORECAST Nishishinjuku Nihombashi Playa FORECAST Yotsuya FORECAST Shinjuku AVENUE FORECAST Ichigaya FORECAST Mita FORECAST Shinjuku SOUTH FORECAST Sakurabashi GreenOak Kayabacho GreenOak Kudan GreenOak Takanawadai Higashi Ikebukuro Center Central Daikanyama Hiroo Reeplex B s Shibakoen Sanchome FORECAST Iidabashi Kudankita FORECAST Uchikanda Itohpia Iwamotocho 2-chome Itohpia Iwamotocho 1-chome Itohpia Iwamotocho ANNEX Pigeon Not disclosed (Note 5) Not disclosed (Note 5) Not disclosed (Note 5) Not disclosed (Note 5) FORECAST Ningyocho FORECAST Ningyocho PLACE FORECAST Shin- Tokiwabashi Nishi-Shinjuku Sanko Iidabashi Reeplex B s FORECAST Shinagawa Nishi-Gotanda 8-chome Towa Higashi-Gotanda FORECAST Takadanobaba Mejiro NT Toshin Higashi- Ikebukuro Mitsui Woody

16 Property name Number of tenants (as of the end of period) 12th fiscal period (From January 1, to June 30, ) Revenues related to Occupancy property rate leasing (as of the end (during the of period) (%) period) Rate to total revenues related to property leasing (%) 13th fiscal period (From July 1, to December 31, ) Revenues related to Occupancy property rate leasing (as of the end (during the Number of tenants (as of the end of period) of period) (%) period) Rate to total revenues related to property leasing (%) Itabashi Honcho ANTEX Itohpia Kiyosubashidori East Side I S Minamimorimachi Sunworld Not disclosed (Note 6) Not disclosed (Note 6) Not disclosed (Note 6) Not disclosed (Note 6) Marunouchi Sanchome MK Kojimachi Toranomon Sakura La Verite Akasaka Kanda Ocean Shinto GINZA EAST FORECAST Kayabacho FORECAST Waseda FIRST FORECAST Gotanda WEST Omiya Center Sumitomo Mitsui Bank Koraibashi NORE Fushimi NORE Meieki Homat Horizon Sannomiya First Towa Kandanishikicho Yusen Higashi-Nihombashi Ekimae Hiroo ON TK Gotanda Gotanda Sakura Esprit Kameido Alte Higobashi DIA Meieki Tower Court Kitashinagawa Sky Hills N my atria Meieki my atria Sakae Mac Village Heian Seam Dwell Tsutsui Ciel Yakuin Property name Number of tenants (as of the end of period) 12th fiscal period (From January 1, to June 30, ) Revenues related to Occupancy property rate leasing (as of the end (during the of period) (%) period) Rate to total revenues related to property leasing (%) 13th fiscal period (From July 1, to December 31, ) Revenues related to Occupancy property rate leasing (as of the end (during the Number of tenants (as of the end of period) of period) (%) period) Rate to total revenues related to property leasing (%) Kanda Reeplex R s Splendid Namba Residence Hiroo Residence Nihombashi Hakozaki Not disclosed (Note 6) Not disclosed (Note 6) Primegate Iidabashi Residence Edogawabashi Merveille Senzoku Field Avenue Domeal Kitaakabane Dormy Kitaakabane Not disclosed (Note 6) Not disclosed (Note 6) Not disclosed (Note 6) Not disclosed (Note 6) Splendid Shin-Osaka III ZEPHYROS Minami-horie Charmant Fuji Osakajominami Piacere Fuminosato Otakibashi Pacifica Komyoike Act BECOME SAKAE Total 1, , , , Number of tenants is the aggregate number of tenants as described in the relevant lease agreements for respective properties as of the end of respective periods, excluding warehouses, signboards, and parking lots. For properties subject to a pass-through master lease, the number of tenants is the total number of end-tenants, except for certain pass-through master leases under which properties are leased en bloc to a sublessee who pays a fixed amount of rent to the master lessee, for which we consider the number of tenants to be one. Occupancy rate is rounded to the first decimal place. Revenues related to property leasing is truncated to the nearest million yen. Rate to total revenues related to property leasing is rounded to the first decimal place, and may not add up to 100%. (Note 5) This information is not disclosed as tenants consent to disclosure has not been obtained. (Note 6) This information is not disclosed as sublessees consent to disclosure has not been obtained. (4) Contract Amount and Market Value for Specific Transactions Category Type Contract amount thousands) Due after 1 year Market value thousands) Off-market transactions 267,902 Interest rate swap 111,100,000 90,200,000 Receive floating / Pay fix Total 111,100,000 90,200, ,902 Contract amount is based on the notional principal. Figures are truncated to the nearest thousand yen. Market value is based on the price indicated by the financial institution managing the transaction. Figures are truncated to the nearest thousand yen. With regard to the Interest rate swap Receive floating / Pay fix transaction for which special treatment is applied in accordance with the Accounting Standards for Financial Instruments, such market value is not included in the balance sheet

17 (5) Other Assets Beneficiary s in trust assets comprised mainly of real estate are presented earlier in this report under (3) Description of Portfolio. Aside from the assets presented in (3) Description of Portfolio, NIPPON REIT has no major investment assets other than those included in its portfolio as of December 31,. (6) Holding of Assets by Country and Region NIPPON REIT does not own assets outside of Japan. Property name Location Purpose Period FORECAST Shinjuku SOUTH Hiroo Reeplex B s Shinjuku Ward, Minato Ward, Electrical equipment repair (stage 2) Ventilation system renewal (stage 3) Elevator renewal From August to August From July to July From October to October Capital expenditures (Note) Capital Expenditure for Properties Held (1) Schedule of Capital Expenditures The following are the main capital expenditures NIPPON REIT plans to implement during the 14th fiscal period accompanying planned renovations and repairs for those properties held. The following scheduled construction amount includes the portion charged to expenses in accounting: Scheduled construction amount (Note) Property name Location Purpose Schedule FORECAST Shinjuku SOUTH Shinjuku Ward, Roof painting repair From January 2019 to June 2019 CENTRAL Shibuya Ward, Major repair and From January 2019 Daikanyama maintenance to June 2019 Basement FORECAST Chiyoda Ward, From January 2019 leasable area Uchikanda to June 2019 expansion Itohpia Chiyoda Ward, Exterior wall From November Iwamotocho repair to June chome Mitsui Woody Koto Ward, Substation From January 2019 renovation to June 2019 Itohpia Ventilation system Taito Ward, From January 2019 Kiyosubashidori and lighting to June 2019 renewal Sunworld Osaka, Mechanical From January 2019 Osaka parking facility to June 2019 maintenance Marunouchi Nagoya, Whole building From January 2019 Sanchome Aichi renewal to June 2019 FORECAST Shinagawa Whole building From January 2019 Gotanda WEST Ward, renewal (No.4) to June 2019 Total heat Homat Horizon Chiyoda Ward, From January 2019 exchanger to June 2019 renewal BECOME SAKAE Nagoya, Renewal work at From January 2019 Aichi 7 th floor to June 2019 (Note) The scheduled construction amount is truncated to the nearest million yen. Total Amount to be paid in the current fiscal period Amount already paid (2) Capital Expenditures during the Period Below are the main capital expenditures that NIPPON REIT used to carry out construction in the fiscal period under review. In the fiscal period ended December 31, (13th period), capital expenditures totaled 1,420 million yen. With the addition of 182 million yen posted as expenses for renovations and repairs, total capital expenditures for construction came to 1,602 million yen. Itohpia Iwamotocho 2-chome Itohpia Iwamotocho ANNEX Pigeon FORECAST Takadanobaba Mitsui Woody Itohpia Kiyosubashidori I S Minamimorimachi FORECAST Gotanda WEST Sumitomo Mitsui Bank Koraibashi NORE Meieki Homat Horizon Sannomiya First Sky Hills N11 Residence Nihombashi Hakozaki Komyoike Act Chiyoda Ward, Chiyoda Ward, Chuo Ward, Toshima Ward, Koto Ward, Taito Ward, Osaka, Osaka Shinagawa Ward, Osaka, Osaka Nagoya, Aichi Chiyoda Ward, Kobe, Hyogo Sapporo, Hokkaido Chuo Ward, Sakai, Osaka Exterior wall repair Exterior wall repair Exterior wall repair Ventilation system renewal Installation of LED lighting Ventilation system renewal for 2 nd floor, installation of LED lighting Elevator renewal Ventilation system renewal Equipment renewal (stage 3) Ventilation system renewal on 3 rd, 5 th, 8 th and 9 th floors Ventilation system renewal Security system renewal Restroom renewal from 1 st to 8 th floors Exterior wall repair Ventilation system renewal Installation of internet system and security system Whole building renewal Fire alarm receiver renewal From June to November From March to August From May to December From September to December From September to December From October to December From November to December From August to December From July to December From August to August From November to December From December to December From April to August From July to December From September to December From November to December From July to August From June to December Other capital expenditures Total 1,420 (Note) Capital expenditures are truncated to the nearest million yen

18 (3) Cash Reserves for Long-Term Repairs and Maintenance Plans Based on a long-term repair and maintenance plan compiled for each property, NIPPON REIT sets aside the following cash reserves from cash flows during the fiscal period in order to provide the payment of funds for major repairs and maintenance, etc., over the medium to long term: thousands) Operating period 9th fiscal period From July 1, 2016 to December 31, th fiscal period From January 1, 2017 to June 30, th fiscal period From July 1, 2017 to December 31, th fiscal period From January 1, to June 30, 13th fiscal period From July1, to December 31, Balance of reserves at the beginning of the period Amount of reserves during the period ,700 Amount of reversal of reserves during the , ,420 period Reserves carried forward (Note) Figures in the above table are truncated to the nearest million yen. 5. Expenses and Liabilities (1) Expenses in Connection with Management of Assets Item 12th fiscal period From January 1, to June 30, 13th fiscal period From July 1, to December 31, thousands) (a) Asset management fees 536, ,187 (b) Asset custody fees 13,014 13,241 (c) Administrative service fees 46,767 47,578 (d) Directors compensation 2,400 2,400 (e) Independent auditors fees 15,000 13,500 (f) Other operating expenses 111, ,996 Total 725, ,903 In addition to the amount shown above for asset management fees, there were management fees related to the acquisition of properties included in the book value of respective properties (12th fiscal period: 1,650 thousand yen, 13th fiscal period: 336,625 thousand yen), and for the transfer of trust beneficiary. Figures in the table above are truncated to the nearest thousand yen. Shortterm debt (2) Debt Financing The status of borrowing per financial institution as of December 31,, is as follows: Classification Lender Balance at Balance at the beginning the end of Average of the period the period Borrowing date rate (%) September 28, , Subtotal 2,600 - January 8, ,700 Mizuho Bank, Ltd Sumitomo Mitsui Banking Corporation Resona Bank, Limited Sumitomo Mitsui Trust Bank, Limited February 12, ,000 1, Shinsei Bank, Limited. 1,000 - Mizuho Trust & Banking Co., Ltd. 1,000 - April 24, ,500 1,500 Sumitomo Mitsui Banking Current Corporation portion of longterm Resona Bank, Limited April 24, 1, , SumitomoMitsuiTrust Bank, debt Limited 1,250 1,250 Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd Aozora Bank, Ltd The Nomura Trust and Banking Co., Ltd , ,070 1, ,300 2,300 Mizuho Bank, Ltd. 1,100 1, Repayment due date August 20, August 20, August 20, April 24, 2019 April 24, 2019 Method of Use (Note3) Note Mizuho Bank, Ltd. - 2,000-2,000 Sumitomo Mitsui Banking - 1,500 Corporation July 2, 0.54 Resona Bank, Limited ,000 Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd Subtotal 21,770 21,970 July 22,

19 Classification Lender Borrowing date Balance at Balance at the beginning the end of Average of the period the period rate (%) Repayment due date Method of Use Note Classification Lender Borrowing date Balance at Balance at the beginning the end of Average of the period the period rate (%) Repayment due date Method of Use Note 2,500-4,000 4,000 Mizuho Bank, Ltd. 2,000 - Mizuho Bank, Ltd. 2,000 2,000 Longterm debt 2,000 - Sumitomo Mitsui Banking Corporation July 2, 1,500 - Resona Bank, Limited ,000 - Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd July 3, - - (Note 5) 2,500 2,500 Mizuho Bank, Ltd ,000 1,000 Resona Bank, Limited February 12, Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd. March 12, ,500 3, ,000 2,000 Mizuho Bank, Ltd. 2,000 2,000 2,000 2,000 Sumitomo Mitsui Banking Corporation July 2, Resona Bank, Limited Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited 1,750 1,750 Mizuho Trust & Banking Co., Ltd. 1,750 1,750 2,000 2, July 22, 2019 August 20, 2019 (Note 5) February 20, 2020 February 20, 2020 July 21, 2020 (Note 5) August 22, 2,000 2,000 Resona Bank, Limited ,000 1,000 Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd ,850 Mizuho Bank, Ltd. - 1,400 Sumitomo Mitsui Banking Corporation Resona Bank, Limited Sumitomo Mitsui Trust Bank, Limited July 3, Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd Aozora Bank, Ltd The Nomura Trust and Banking Co., Ltd February 12, Longterm debt Mizuho Bank, Ltd. 1, , April 24, Sumitomo Mitsui Banking Corporation 2,300 2,300 Resona Bank, Limited ,600 1,600 Mizuho Bank, Ltd Resona Bank, Limited August 21, Sumitomo Mitsui Trust Bank, Limited Development Bank of Japan Inc , August 20, 2021 August 22, 2022 February 20, 2023 April 20, 2023 August 21, 2023 Mizuho Bank, Ltd. 2,000 2,000 April 25, Sumitomo Mitsui Banking 2016 Corporation 2,500 2,500 Sumitomo Mitsui Trust Bank, Limited Development Bank of Japan Inc. 1,000 1, April 20, 2021 Mizuho Bank, Ltd Sumitomo Mitsui Banking Corporation Resona Bank, Limited July 3, Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd August 21,

20 Classification Lender Borrowing date Balance at Balance at the beginning the end of Average of the period the period rate (%) Repayment due date Method of Use Note Classification Lender Borrowing date Balance at Balance at the beginning the end of Average of the period the period rate (%) Repayment due date Method of Use Note 1,900 1,900 1,200 1,200 Longterm debt Mizuho Bank, Ltd. April 24, Resona Bank, Limited Sumitomo Mitsui Banking Corporation April 24, 500 1, ,550 Resona Bank, Limited Sumitomo Mitsui Trust Bank, Limited ,400 1,400 Mizuho Bank, Ltd Resona Bank, Limited August 21, Sumitomo Mitsui Trust Bank, Limited Development Bank of Japan Inc ,050 Sumitomo Mitsui Banking Corporation Resona Bank, Limited July 3, Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd ,950 Mizuho Bank, Ltd Resona Bank, Limited Sumitomo Mitsui Trust Bank, Limited August 20, Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd Mizuho Bank, Ltd. July 3, - 1,000 1,400 1,400 Mizuho Bank, Ltd. April 24, April 22, 2024 April 22, 2024 August 20, 2024 August 20, 2024 August 20, 2024 January 20, 2025 April 21, 2025 (Note3) Longterm debt Mizuho Bank, Ltd Resona Bank, Limited August 21, Sumitomo Mitsui Trust Bank, Limited Development Bank of Japan Inc ,500 Sumitomo Mitsui Banking Corporation Resona Bank, Limited July 3, Sumitomo Mitsui Trust Bank, Limited Development Bank of Japan Inc ,000 Mizuho Bank, Ltd Resona Bank, Limited August 20, Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd Resona Bank, Limited April 24, Sumitomo Mitsui Trust Bank, Limited Meiji Yasuda Life Insurance Company April 24, ,650 Mizuho Bank, Ltd Resona Bank, Limited August 20, Sumitomo Mitsui Trust Bank, Limited Shinsei Bank, Limited Mizuho Trust & Banking Co., Ltd April 24, 1,000 1,000 Mizuho Bank, Ltd Subtotal 79, , August 20, 2025 August 20, 2025 August 20, 2025 April 20, 2026 April 20, 2026 August 20, 2026 April 20, 2028 Resona Bank, Limited Total 104, ,670 April 24, Sumitomo Mitsui Banking Corporation Resona Bank, Limited Sumitomo Mitsui Trust Bank, Limited April 21, 2025 Balance at the beginning of the period and Balance at the end of the period are truncated to the nearest million yen. Average rate is the weighted-average rate during the period, rounded to the second decimal place. Used for acquisition of assets, of loans, and related expenses deemed reasonable Interest rate swap agreement is concluded and the rate is substantively fixed. Therefore, the effect of rate swap is factored into the rate provided. (Note 5) Early was made in full (1,500 million yen) on December 7,

21 (3) Investment Corporation Bonds The status of investment corporation bonds as of December 31,, is as follows: Balance at Balance at the beginning the end of the Interest of the period period rate Name Issuance date Redemption date Redemption (%) method NIPPON REIT 1st unsecured bonds NIPPON REIT 2nd unsecured bonds NIPPON REIT 3rd unsecured bonds April 24, April 24, November 30, 1,000 1, ,000 1, , April 24, 2025 April 24, 2028 November 30, 2028 Total 2,000 3,500 Use as the funds for part of of loans The bond is subject to the pari passu clause among specified investment corporation bonds. (4) Status of Short-Term Investment Corporation Bonds Not applicable (5) Status of Unit Acquisition Rights Not applicable Use Note 6. Status of Purchases and Sales during the 13th Fiscal Period (1) Status of Purchases and Sales of Real Estate, Asset-Backed Securities, Infrastructure Assets, and Infrastructure-Related Assets Acquisition Transfer Property name Date of acquisition Acquisition price (Note) Date of transfer Transfer Book value price Gain or loss on Towa Kandanishikicho July 3, Yusen Higashi-nihombashi Ekimae July 3, 1, Hiroo ON July 3, 2, TK Gotanda July 3, 4, Gotanda Sakura July 3, 1, Esprit Kameido July 3, 1, Alte Higobashi July 3, 1, DIA Meieki July 3, 1, Residence Hiroo July 3, 2, Residence Nihombashi Hakozaki July 3, 1, Primegate Iidabashi July 3, 5, Residence Edogawabashi July 3, 1, Merveille Senzoku July 3, Field Avenue July 3, 3, Domeal Kitaakabane July 3, Dormy Kitaakabane July 3, Splendid Shin-Osaka III July 3, 2, ZEPHYROS Minami-horie July 3, 1, Charmant Fuji Osakajominami July 3, Piacere Fuminosato July 3, BECOME SAKAE July 3, 4, (Note) Total - 40, Acquisition price does not include acquisition-related expenses. Figures have been truncated to the nearest million yen. (2) Transaction of Other Assets Other assets, aside from previously mentioned real estate, asset-backed securities, infrastructure assets, and infrastructure-related assets consist mainly of bank deposits and bank deposits included in the trust asset deposits

22 Acquisition or transfer Acquisition Acquisition (3) Review on Value of Specified Assets A. Real estate Name Towa Kandanishikicho Yusen Higashinihonbashi Ekimae Transaction date July 3, July 3, Acquisition Hiroo ON July 3, Acquisition TK Gotanda July 3, Acquisition Gotanda Sakura Acquisition Esprit Kameido July 3, Acquisition Alte Higobashi July 3, Acquisition DIA Meieki July 3, Acquisition Residence Hiroo July 3, Acquisition Residence Nihombashi Hakozaki Type of asset Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Acquisition price or transfer price Appraisal value (Yen in 960 1,000 1,152 1,210 2,392 2,510 4,130 4,300 July 3, Real estate 1,460 1,500 July 3, Acquisition Primegate Iidabashi July 3, Acquisition Residence Edogawabashi July 3, Acquisition Merveille Senzoku July 3, Acquisition Field Avenue July 3, Acquisition Domeal Kitaakabane July 3, Acquisition Dormy Kitaakabane July 3, Acquisition Splendid Shin-Osaka III July 3, Acquisition Acquisition ZEPHYROS Minamihorie Charmant Fuji Osakajominami July 3, July 3, Acquisition Piacere Fuminosato July 3, Acquisition BECOME SAKAE July 3, Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest Trust Beneficiary Interest 1,265 1,280 1,453 1,560 1,167 1,240 2,590 2,630 1,300 1,300 5,200 5,200 1,230 1, ,110 3, ,428 2,470 1,608 1, ,770 4,800 Appraiser Japan Real Estate Institute Japan Real Estate Institute Japan Real Estate Institute Japan Real Estate Institute Japan Real Estate Institute Japan Real Estate Institute JLL Morii Valuation & Advisory K.K. JLL Morii Valuation & Advisory K.K. DAIWA REAL ESTATE APPRAISAL CO.,LTD. Japan Real Estate Institute Japan Real Estate Institute JLL Morii Valuation & Advisory K.K. JLL Morii Valuation & Advisory K.K. Japan Real Estate Institute Japan Real Estate Institute Japan Real Estate Institute DAIWA REAL ESTATE APPRAISAL CO.,LTD. DAIWA REAL ESTATE APPRAISAL CO.,LTD. DAIWA REAL ESTATE APPRAISAL CO.,LTD. DAIWA REAL ESTATE APPRAISAL CO.,LTD. Japan Real Estate Institute Appraisal date May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, May 1, Acquisition price or transfer price does not include acquisition or transfer-related expenses, property tax, city planning tax and consumption tax, etc. Figures have been truncated to the nearest million yen. The above appraisal was conducted in accordance with the Japanese Real Estate Appraisal Standards, Detailed exposition Chapter 3 Appraisal regarding price of securitized real estate. B. Others Name of the investigator KPMG AZSA LLC Summary of the result and investigation method: Transactions that have been investigated during the applicable period from July 1,, to December 31,, consisted of 3 rate swap transactions. Regarding the rate swap transactions, KPMG AZSA LLC is entrusted with the investigation of comparable prices, name of the counterparty, the agreed figures, the transaction period, and other details regarding the relevant rate swap transactions, as stipulated on Article 201 of the Investment Trust Act and an Agreed-Upon Procedures Reports on such transactions based on Practical Guidelines for Specialized Operations 4460 Practical Guidelines for Agreed-Upon Procedures Pertaining to Investigation into the Value, etc., of Specified Assets of Investment Trusts and Investment Corporations published by the Japanese Institute of Certified Public Accountants were received. Furthermore, the investigation is not part of the financial statement audit, and does not ensure the validity of the price and internal control systems

23 (4) Related Party Transactions A. Status of Transactions Purchase price or Sales price, etc. Classification Purchase price, etc. Sales price, etc. Total 40,202 - Breakdown of transaction status with related party Godo Kaisha NRT Growth 12 13,080 (32.5%) - (-%) Total 13,080 (32.5%) - (-%) B. Amount of Fees Paid Classification Breakdown of transactions with related parties Total amount paid (A) Rate to total amount thousands) paid Amount paid (B) Payment recipient (B/A) (Note 5) thousands) Property management fees 576,734 Sojitz General Property Management Corporation 290, % Other property-related 255,668 Sojitz General Property Management expenses Corporation 30, % Transaction prices does not include acquisition-related expenses, property tax, city planning tax and consumption tax, etc. Figures have been truncated to the nearest million yen. In accordance with the Order for Enforcement of the Investment Trusts Act and Articles 26 and 27 of the Investment Trust Association of Japan s rules related to management reports for investment trusts and investment corporations, related parties are defined as the related parties of the asset management company that have entered into an asset management contract with NIPPON REIT. The above tables include related party transactions as stipulated by Rules on Related Party Transactions of the asset management company in addition to the related party transactions during the fiscal period under review. Total amount paid and Amount paid have been truncated to the nearest thousand yen. (Note 5) Rate to total amount paid has been rounded to the first decimal place. (Note 6) The following are fees paid to the related parties in the fiscal period under review other than those listed above and commission fees. Note that the amount is truncated to the nearest thousand yen. Sojitz General Property Management Corporation Repair work (in addition to repair expenses, this also includes capital expenditures) 497,941 thousand yen (5) Status of Transactions with Asset Management Company Pertaining to Business Operated by the Asset Management Company as a Subsidiary Business Not applicable because the asset management company does not engage in any business as a subsidiary business that is a type-i financial instruments business, type-ii financial instruments business, real estate brokerage, or real estate specified joint enterprise. 8. Other (1) Notice The overview of conclusions and changes, etc., of major contracts approved by meeting of the Board of Officers of NIPPON REIT during the fiscal period under review is as follows: Approval date Subject Description September 28, Signed an amendment to the sponsor support agreement Resolved the conclusion of the amendment to the sponsor support agreement between the asset management company and Cushman & Wakefield Asset Management K.K. on September 28,. October 26, Signed a General administrative Concerning issuance of Investment agreement regarding Investment Corporation Bonds corporation bonds, resolved the conclusion of the following contracts, etc.: A. The underwriting contract for the NIPPON REIT 3rd unsecured bonds among the Investment Corporation, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Mizuho Securities Co. Ltd. and SMBC Nikko Securities Inc. B. The Financial Agency Agreement for the NIPPON REIT 3rd unsecured bonds (2) Other Unless otherwise stated, monetary amounts are truncated and percentages are rounded off to the nearest specified unit in this report. 7. Accounting (1) Status of Assets, Liabilities, Principal, and Profit / Loss Please refer to Balance Sheets, Statements of Income and Retained Earnings, Statements of Change in Net Assets, Notes to Financial Statements, and Note 20. Distribution Information. (2) Changes in Method to Calculate Depreciation Expenses Not applicable (3) Changes in Method to Evaluate Properties and Infrastructure Assets Not applicable (4) Status of Beneficiary Certificates of Investment Trust Established by NIPPON REIT Not applicable (5) Disclosures as a Corporation Holding Real Estate Overseas and Relating to Real Estate Held by a Corporation Holding Real Estate Overseas Not applicable 42 43

24 NIPPON REIT Investment Corporation BALANCE SHEETS As of June 30, and December 31, As of June 30, December 31, thousands) Assets Current Assets: Cash and deposits (Notes 5 and 6) 12,032,033 8,981,536 Cash and deposits in trust (Notes 5 and 6) 6,105,500 5,964,196 Tenant receivables 87,585 88,158 Prepaid expenses 374, ,146 Income taxes refundable 9,865 1,065 Consumption taxes refundable 496,617 Other current assets 14,661 5,842 Less: allowance for doubtful accounts (0) (0) Total Current Assets 18,624,613 15,974,563 Investment Properties (Notes 7 and 8): s 234,960 Land in trust (Note 9) 149,411, ,791,041 s in trust (Note 10) 50,843,163 59,444,603 Structures in trust 171, ,330 Machinery and equipment in trust 345, ,904 Tools, furniture and fixtures in trust 92, ,424 Construction in progress in trust 72,898 5,256 Less: accumulated depreciation (6,205,501) (7,110,510) Leasehold rights 1,251,662 Leasehold rights in trust 15,806,402 16,658,938 Other intangible assets 9,841 5,835 Total Investment Properties, net 210,548, ,959,446 Other Assets: Investment securities (Note 6) 667,069 Lease and guarantee deposits 10,110 10,160 Long-term prepaid expenses 781,528 1,129,373 Deferred investment corporation bond issuance costs 20,320 35,152 Deferred tax assets (Note 18) 0 Others 37,046 38,290 Total Other Assets 1,516,075 1,212,978 Total Assets 230,689, ,146,988 The accompanying notes are an integral part of these financial statements. NIPPON REIT Investment Corporation BALANCE SHEETS As of June 30, and December 31, As of June 30, December 31, thousands) Liabilities Current Liabilities: Short-term debt (Notes 6 and 15) 2,600,000 Long-term debt due within one year (Notes 6 and 15) 21,770,000 21,970,000 Accounts payable 1,251,212 1,539,384 Accrued expenses 217, ,820 Accrued consumption taxes 40,897 Advances received 1,227,838 1,391,630 Other current liabilities 1,246, ,439 Total Current Liabilities 28,354,338 25,737,275 Long-Term Liabilities: Investment corporation bonds (Notes 6 and 16) 2,000,000 3,500,000 Long-term debt (Notes 6 and 15) 79,800, ,700,000 Tenant security deposits 65,153 Tenant security deposits in trust (Note 6) 7,894,084 8,766,512 Deferred tax liabilities (Note 18) 891 Total Long-Term Liabilities 89,694, ,031,666 Total Liabilities 118,049, ,768,941 Net Assets (Notes 14 and 19) Unitholders Equity: Unitholders capital 109,285, ,515,601 Units authorized: 4,000,000 units Units issued and outstanding: 391,760 units as of June 30, and 449,930 units as of December 31, Retained earnings 3,352,625 3,862,444 Total Unitholders Equity 112,637, ,378,046 Valuation and Translation Adjustments: Deferred gains on hedges (Note 6) 1,946 Total Valuation and Translation Adjustments 1,946 Total Net Assets 112,639, ,378,046 Total Liabilities and Net Assets 230,689, ,146,988 The accompanying notes are an integral part of these financial statements

25 NIPPON REIT Investment Corporation STATEMENTS OF INCOME AND RETAINED EARNINGS For the six-month periods ended June 30, and December 31, For the six-month periods ended June 30, December 31, thousands) Operating Revenues: Rental revenues (Note 11) 6,551,743 7,678,447 Other revenues related to property leasing (Note 11) 625, ,485 Dividend income 47,868 Total Operating Revenues 7,225,507 8,458,932 Operating Expenses: Property-related expenses (Note 11) 2,664,876 3,039,219 Asset management fees 536, ,187 Asset custody fees 13,014 13,241 Administrative service fees 46,767 47,578 Directors compensation 2,400 2,400 Independent auditors fees 15,000 13,500 Other operating expenses 111, ,996 Total Operating Expenses 3,389,981 3,818,123 Operating Income 3,835,526 4,640,809 Non-Operating Revenues: Interest income Reversal of distributions payable 1,226 3,662 Interest on refund 8 38 Total Non-Operating Revenues 1,318 3,781 Non-Operating Expenses: Interest expense 278, ,971 Interest on investment corporation bonds 2,269 7,417 Amortization of investment corporation bond issuance costs 614 1,507 Borrowing related expenses 225, ,206 Investment unit issuance expenses 112,068 Others 5 17 Total Non-Operating Expenses 507, ,187 Ordinary Income 3,329,467 3,840,403 Extraordinary Income: Subsidy income (Note 12) 104,414 Total Extraordinary Income 104,414 Extraordinary Losses: Loss on reduction of investment properties (Note 13) 103,833 Total Extraordinary Losses 103,833 Income Before Income Taxes 3,330,048 3,840,403 Income taxes current Income taxes deferred 0 2 Total Income Taxes (Note 18) Net Income 3,329,367 3,839,779 Retained Earnings at Beginning of Period 23,258 22,665 Retained Earnings at End of Period 3,352,625 3,862,444 NIPPON REIT Investment Corporation STATEMENTS OF CHANGES IN NET ASSETS For the six-month periods ended June 30, and December 31, Number of Units (Units) Unitholders Capital Unitholders Equity Retained Earnings Total Unitholders Equity thousands) Valuation and Translation Adjustments Total Deferred Valuation and Gains on Translation Hedges Adjustments Total Net Assets Balance as of December 31, , ,285,298 3,631, ,917,058 7,254 7, ,924,313 Cash distributions declared - - (3,608,501) (3,608,501) - - (3,608,501) Net income - - 3,329,367 3,329, ,329,367 Net changes of items other than unitholders equity (5,308) (5,308) (5,308) Balance as of June 30, 391, ,285,298 3,352, ,637,924 1,946 1, ,639,871 Issuance of investment units 58,170 17,230,303-17,230, ,230,303 Cash distributions declared - - (3,329,960) (3,329,960) - - (3,329,960) Net income - - 3,839,779 3,839, ,839,779 Net changes of items other than unitholders equity (1,946) (1,946) (1,946) Balance as of December 31, 449, ,515,601 3,862, ,378, ,378,046 The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements

26 NIPPON REIT Investment Corporation STATEMENTS OF CASH FLOWS For the six-month periods ended June 30, and December 31, For the six-month periods ended June 30, December 31, thousands) Cash Flows from Operating Activities: Income before income taxes 3,330,048 3,840,403 Depreciation and amortization 776, ,332 Amortization of investment corporation bond issuance costs 614 1,507 Loss on retirement of investment properties 3,277 8,711 Loss on reduction of investment properties 103,833 - Investment unit issuance expenses - 112,068 Interest income (84) (80) Interest expense 280, ,388 Increase in tenant receivables (352) (573) Increase in prepaid expenses (4,338) (62,178) Increase in long-term prepaid expenses (20,624) (347,845) Increase in consumption taxes refundable - (496,617) Decrease in accrued consumption taxes (97,692) (40,897) Increase (decrease) in accounts payable (47,853) 66,208 Increase in accrued expenses 7,634 23,360 Increase in advances received 81, ,791 Interest income received Interest expense paid (293,694) (348,587) Income taxes refunded (paid) (2,993) 8,178 Others, net 739,859 (650,001) Net Cash Provided by Operating Activities 4,856,035 3,540,247 Cash Flows from Investing Activities: Payments for purchases of investment properties other than intangible assets - (234,960) Payments for purchases of investment properties in trust other than intangible assets in trust (1,038,302) (39,769,669) Payments for purchases of intangible assets - (1,251,662) Payments for purchases of intangible assets in trust (9,954) (848,737) Proceeds from tenant security deposits - 66,174 Payments of tenant security deposits - (1,020) Proceeds from tenant security deposits in trust 339,923 1,263,566 Payments of tenant security deposits in trust (348,187) (353,565) Payments of lease and guarantee deposits - (50) Proceeds from withdrawal of investment securities 95, ,278 Payments for purchases of investment securities (194,091) - Other payments (1,244) (1,244) Net Cash Used in Investing Activities (1,156,379) (40,498,889) Cash Flows from Financing Activities: Repayments of short-term debt - (2,600,000) Proceeds from long-term debt 7,500,000 33,400,000 Repayments of long-term debt (9,500,000) (12,300,000) Proceeds from issuance of investment corporation bonds 1,979,064 1,483,660 Proceeds from issuance of investment units - 17,118,234 Distributions paid (3,599,245) (3,335,053) Net Cash Provided by (Used in) Financing Activities (3,620,181) 33,766,841 Net Change in Cash and Cash Equivalents 79,475 (3,191,800) Cash and Cash Equivalents at Beginning of Period 18,058,058 18,137,533 Cash and Cash Equivalents at End of Period (Note 5) 18,137,533 14,945,733 The accompanying notes are an integral part of these financial statements. NIPPON REIT Investment Corporation NOTES TO FINANCIAL STATEMENTS As of and for the six-month periods ended June 30, and December 31, Note 1 Organization and Basis of Presentation Organization NIPPON REIT Investment Corporation (hereinafter referred to as NIPPON REIT ) was established on September 8, 2010 with 100 million in capital (200 units) as an investment corporation under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, including subsequent revisions, hereinafter referred to as the Investment Trust Act ) by the founder (the former Polaris Investment Advisors K.K.; now, Sojitz REIT Advisors K.K.). Commencing on July 1, 2014, the fiscal period has been amended from an annual period to a semi-annual period ending on June 30 and December 31. Prior to this amendment, the annual fiscal period was a 12-month period from July 1 to June 30. NIPPON REIT made this amendment in order to increase the frequency of distributions to its unitholders. NIPPON REIT is an externally managed real estate fund, established as an investment corporation. Sojitz REIT Advisors K.K., as NIPPON REIT s asset management company, is engaged in acquiring, managing, leasing, and renovating office properties, residential properties and commercial properties. Sojitz Corporation, Cushman & Wakefield Asset Management K.K. and Agility Asset Advisers Inc. currently own 67%, 18% and 15%, respectively, of Sojitz REIT Advisors K.K. NIPPON REIT implemented a two-for-one split of investment units on January 17, 2014, issued new investment units through a public offering (144,200 units) on April 23, 2014 and then was listed on the J-REIT section of the Stock Exchange on April 24, Furthermore, NIPPON REIT issued new investment units through a third-party allotment (7,210 units) on May 23, 2014, a public offering (145,000 units) on February 10, 2015, a third-party allotment (7,250 units) on March 10, 2015, a public offering (84,000 units) on July 1, 2015 and a third-party allotment (3,700 units) on July 28, 2015, a public offering (55,400 units) on July 2, and the third-party allotment (2,770 units) on July 24,. As of December 31,, the total number of investment units issued and outstanding was 449,930 units. As of December 31,, NIPPON REIT had ownership or trust beneficiary s in 87 properties with approximately 306, square meters of rentable space and had leased space to 1,878 tenants. The occupancy rate for the properties was approximately 99.1%. Basis of Presentation The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust Act, the Financial Instruments and Exchange Act and their related accounting regulations, and in conformity with accounting principles generally accepted in Japan ( Japanese GAAP ), which are different in certain respects as to application and disclosure requirements from International Financial Reporting Standards or accounting principles generally accepted in the United States of America. The accompanying financial statements have been reformatted and translated into English from the financial statements of NIPPON REIT prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Act. In preparing the accompanying financial statements, relevant notes have been expanded and certain reclassifications have been made from the Japanese GAAP financial statements. Certain supplementary information included in the statutory Japanese GAAP financial statements, but not required for fair presentation, is not presented in the accompanying financial statements. Certain reclassifications have been made to the prior period s financial statements to confirm to the presentation for the current period

27 As permitted by Japanese GAAP, amounts of less than one thousand yen or one million yen have been omitted. Consequently, the totals shown in the accompanying financial statements do not necessarily agree with sums of the individual amounts. Note 2 Summary of Significant Accounting Policies (a) Cash and Cash Equivalents Cash and cash equivalents consist of cash, demand deposits, and short-term investments which are highly liquid, readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of acquisition. (b) Allowance for Doubtful Accounts Allowance for doubtful accounts is provided at the amount considered sufficient to cover probable losses on collection. The amount is determined by estimating an uncollectible amount based on the analysis of certain individual accounts that may not be collectable. (c) Investment Properties Investment properties are recorded at cost, which includes the allocated purchase price and, related costs and expenses for acquisition of the trust beneficiary s in real estate. Investment property balances are depreciated using the straight-line method over the estimated useful lives as follows: s in trust and buildings... Structures in trust... Machinery and equipment in trust... Tools, furniture and fixtures in trust years 2-45 years 10 years 2-15 years Costs related to the renovation, addition and improvement of properties are capitalized. Expenditures for repairs and maintenance which do not add to the value or prolong the useful life of a property are expensed as incurred. (d) Intangible Assets Intangible assets are amortized using the straight-line method. (e) Long-Term Prepaid Expenses Long-term prepaid expenses are amortized using the straight-line method. (f) Investment Units Issuance Costs Issuance costs of investment units are expensed when incurred. (g) Investment Corporation Bond Issuance Costs Investment corporation bond issuance costs are amortized using the straight-line method through to the redemption date. (h) Investment Securities Available-for-sale securities without market prices are stated at cost determined by the moving average method. Equity in a silent partnership is stated at net amount equivalent to the in the relevant partnership. (i) Income Taxes Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets and liabilities using the statutory tax rate. (j) Real Estate Taxes Investment properties are subject to various taxes, such as property taxes and city planning taxes. Owners of the properties are registered by records maintained in each jurisdiction by the local government. The taxes are imposed on the registered record owner as of January 1 of each year, based on an assessment made by the local government. When a property is purchased within the calendar year, the taxes for the corresponding calendar year are imposed on the seller. NIPPON REIT pays the seller the corresponding amount of taxes for the period from the property acquisition date to December 31 of the calendar year and capitalizes these amounts as acquisition costs of the property, rather than expensing them. In subsequent calendar years, such taxes on investment properties are charged as operating expenses in each fiscal period. The following is a summary of capitalized real estate taxes. For the six-month periods ended June 30, December 31, thousands) Capitalized real estate taxes - 75,889 (k) Consumption Taxes Consumption taxes are excluded from transaction amounts. Generally, consumption taxes paid are offset against the balance of consumption taxes withheld. As such, the excess of payments over amounts withheld is included in the current assets while the excess of amounts withheld over payments is included in the current liabilities. Non-deductible consumption taxes related to the acquisition of properties are treated as the cost of the applicable properties. (l) Hedge Accounting NIPPON REIT enters into derivative transactions for the purpose of hedging risks defined in the Articles of Incorporation of NIPPON REIT in accordance with its financial policy. NIPPON REIT uses rate swaps as hedging instruments in order to hedge the risk of rate fluctuations related to borrowings. The deferral method is applied for hedge transactions. For rate swaps which qualify for hedge accounting and meet specific criteria, the special treatment is applied. Under the special treatment, the related differentials paid or received under such swap contracts can be recognized and included in expense or income of the hedged assets or liabilities, and the rate swaps are not required to be measured at fair value separately. NIPPON REIT evaluates hedge effectiveness by comparing the cumulative changes in cash flows of hedging instruments and the hedged items and assessing the ratio between the changes. However, the assessment of hedge effectiveness for rate swaps which meet the special criteria is omitted. (m) Revenue Recognition Revenues from property leasing consist of rental revenues including base rents, common area charges and parking space rental revenues, and other revenues related to property leasing such as utilities charge reimbursements and others. Rental revenues are generally recognized when earned and considered realizable over the life of each lease. Utilities charge reimbursements are recognized when earned and their amounts can be reasonably estimated. (n) Accounting for Trust Beneficiary Interests in Real Estate For trust beneficiary s in real estate owned by NIPPON REIT, all accounts of assets and liabilities within the assets in trust as well as all accounts of revenue generated and expenses incurred from the assets in trust are recognized in the relevant accounts of the balance sheets and, statements of income and retained earnings. (i) The following assets in trust are recognized and presented separately on the balance sheets. Cash and deposits in trust 50 51

28 (ii) (iii) Land in trust, buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, construction in progress in trust and leasehold rights in trust Tenant security deposits in trust Note 6 Financial Instruments (a) Qualitative Information for Financial Instruments Note 3 Change in Presentation Effective from the beginning of the six months period ended December 31,, NIPPON REIT adopted Partial Amendments to Accounting Standards for Tax Effect Accounting (Accounting Standards Board of Japan ( ASBJ ) Statement No. 28, issued on February 16, ), etc. Accordingly, deferred tax assets and deferred tax liabilities are presented in Other Assets and Long-Term Liabilities, respectively on the accompanying balance sheet as of December 31,. As a result of this change, deferred tax liabilities of 891 thousand previously presented in Current Liabilities has been reclassified to Long-Term Liabilities on the accompanying balance sheet as of June 30,. Note 4 New Accounting Standards Issued but not yet Effective Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, issued on March 30, ) Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, issued on March 30, ) (a) Overview The International Accounting Standard Board ( IASB ) and the Financial Accounting Standards Board ( FASB ) jointly developed a comprehensive accounting standard for revenue recognition, and issued Revenue from Contracts with Customers (IFRS No. 15, issued by IASB and Topic 606, issued by FASB) in May Considering the situation that IFRS No. 15 is effective for the fiscal periods beginning on or after January 1, and Topic 606 is effective for the fiscal periods beginning after December 15, 2017, ASBJ developed a comprehensive accounting standard for revenue recognition and issued it together with the implementation guidance. ASBJ s basic policy developing the accounting standard for revenue recognition was to establish accounting standards as a starting point by incorporating the basic principles of IFRS No. 15 from the viewpoint of comparability of financial statements which is one of benefits of maintaining consistency with IFRS No. 15, and to add alternative treatments to the extent that they do not impair comparability in cases where previous practices and others in Japan should be considered. (b) Date of the adoption NIPPON REIT will adopt the accounting standard and implementation guidance from the beginning of the sixmonth period ending December 31, (c) Impact of the adoption of the respective accounting standard NIPPON REIT is currently evaluating the effect of the adoption. Policy for Financial Instrument Transactions NIPPON REIT raises funds mainly through borrowings, issuance of investment corporation bonds and investment units for acquisition of investment properties, capital expenditures, renovations or of bank borrowings. In financing through -bearing debt, NIPPON REIT raises funds with longer term, fixed-rate and well-diversified maturities to secure stable and liquid financing capacity. NIPPON REIT enters into derivative transactions solely for the purpose of hedging rate fluctuation risks arising from borrowings and does not use derivative transactions for speculative purposes. Nature and Extent of Risks Arising from Financial Instruments Proceeds from borrowings and investment corporation bonds are used mainly for acquisition of investment properties, capital expenditures, renovations, operations or of outstanding borrowings. These borrowings and investment corporation bonds are exposed to liquidity risks upon refinance. The floating-rate borrowings are exposed to potential risks of rising rates. Bank deposits are used for investing NIPPON REIT s surplus funds. These bank deposits are exposed to credit risks such as bankruptcy of the depository financial institutions. Risk Management of Financial Instruments Liquidity risk is managed by diversifying lending financial institutions and planning and executing diversified financing methods including financing through capital markets, such as issuance of investment corporation bonds and issuance of investment units. Interest rate volatility risk is managed primarily by increasing the proportion of borrowings under long-term fixed rates. Derivative transactions may be entered into in order to hedge rate fluctuation risk. As of December 31,, NIPPON REIT uses derivative transactions ( rate swaps) as hedging instruments in order to avoid the risk of rate fluctuations and to fix the amount of payments for borrowings with floating rates. NIPPON REIT evaluates hedge effectiveness by comparing the cumulative changes in cash flows of hedging instruments and the hedged items and assessing the ratio between the changes. However, the assessment of hedge effectiveness for rate swaps which meet the special criteria is omitted. Credit risk is managed by diversifying the depository financial institutions. Supplemental Explanation regarding Fair Value of Financial Instruments The fair value of financial instruments is based on their quoted market price. When there is no observable market price available, fair value is based on a price that is reasonably estimated. Since certain assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in a different value. Note 5 Cash and Cash Equivalents Reconciliation between cash and deposits and cash and deposits in trust in the balance sheets and cash and cash equivalents in the statements of cash flows is as follows: As of June 30, December 31, thousands) Cash and deposits 12,032,033 8,981,536 Cash and deposits in trust 6,105,500 5,964,196 Cash and cash equivalents 18,137,533 14,945,

29 (b) Fair Value of Financial Instruments The book values, fair values and differences between them were as follows: As of June 30, As of December 31, thousands) Assets Book value Fair value Difference Book value Fair value Difference Cash and deposits 12,032,033 12,032,033 8,981,536 8,981,536 Cash and deposits in trust 6,105,500 6,105,500 5,964,196 5,964,196 Total 18,137,533 18,137,533 14,945,733 14,945,733 Liabilities Short-term debt 2,600,000 2,600, Long-term debt due within one year 21,770,000 21,770, ,970,000 21,977,143 7,143 Investment corporation bonds 2,000,000 1,997,000 (3,000) 3,500,000 3,494,800 (5,200) Long-term debt 79,800,000 79,566,838 (233,161) 100,700, ,515,130 (184,869) Total 106,170, ,933,842 (236,157) 126,170, ,987,074 (182,925) Derivatives 2,842 (9,366) (12,208) The financial instruments whose fair values are deemed extremely difficult to determine are excluded from the above table. Methods used to estimate the fair value of financial instruments and derivative transactions are as follows: Assets and Liabilities: (1) Cash and deposits, cash and deposits in trust and short-term debt Due to the short maturities, the book value of these assets and liabilities is deemed a reasonable approximation of the fair value; therefore, the book value is used as the fair value equivalent. (2) Long-term debt due within one year and long-term debt For long-term debt with floating rates that reflects market rates within a short period of time, the book value is deemed a reasonable approximation of the fair value and there are no significant changes in NIPPON REIT s credit standing after borrowing; therefore, the book value is used as the fair value equivalent. However, for long-term debt with floating rates hedged by rate swaps applying the special treatment, the fair value is calculated based on the total amount of principal and which are processed as a single unit with the rate swaps discounted at the current rate applicable to similar borrowings. For long-term debt with fixed rates, the fair value is calculated based on the total amount of principal and discounted at the current rate applicable to similar borrowings. (3) Investment corporation bond Calculated based on Reference Statistical Prices for OTC Bond Transactions provided by Japan Securities Dealers Association. Derivative Transactions: There were no derivative transactions to which hedge accounting was not applied as of June 30, and December 31,. Derivative transactions to which hedge accounting was applied were as follows: As of June 30, Hedge Type of Contracted amount Fair value accounting derivative Due after Total method transaction Hedged item one year thousands) Deferral method Interest rate swaps Long-term debt Receive floating/pay fixed 10,800,000 2,842 Special treatment for rate swaps Interest rate swaps Receive floating/pay fixed Long-term debt 97,700,000 87,800,000 (12,208) Total 108,500,000 87,800,000 (9,366) Notes: 1. The amount includes the contract amount ( 18,500,000 thousand) of the rate swap contracts that were entered into on June 29,. The execution date for the borrowing hedged by the rate swap is July 3,. 2. For the rate swaps which were entered into on June 29,, since the occurrence of long-term debt which is processed as a single unit due to applying the special treatment of rate swaps is not recognized as of June 30,, the fair value as of June 30, is presented. As derivatives applying the special treatment of rate swaps other than the rate swaps above are processed as a single unit with long-term debt that is designated as the hedged item, the fair value is included in the fair value of Long-term debt in (b) Fair Value of Financial Instruments above and not included in the above table. 3. The fair value is provided by financial institutions. Hedge accounting method Special treatment for rate swaps Type of derivative transaction Interest rate swaps Receive floating/pay fixed Hedged item Long-term debt As of December 31, Contracted amount Fair value Due after Total one year thousands) 111,100,000 90,200,000 Total 111,100,000 90,200,000 - Notes: 1. Derivatives applying the special treatment of rate swaps are treated as a single unit with long-term debt that is designated as the hedged item. The fair value is included in the fair value of aforementioned (2) Long-term debt due within one year and Long-term debt in (b) Fair Value of Financial Instruments. Financial instruments whose fair values are deemed extremely difficult to determine are as follows: The fair value of tenant security deposits and tenant security deposits in trust is not disclosed because these deposits do not have a readily available market price, and it is difficult to estimate a period as to when these deposits will be returned. Although the tenant agreements stipulate a tenancy period, the historical analysis of actual tenancy periods do not indicate any pattern of tenancy period due to their unique nature as early termination or renewal/re-contract of tenancy agreements is possible, which makes it impracticable to reasonably estimate the future cash flows. The book values of tenant security deposits and tenant security deposits in trust are presented in the following table. As of June 30, December 31, thousands) Book value: Tenant security deposits 65,153 Tenant security deposits in trust 7,894,084 8,766,

30 The fair value of investment securities is not disclosed because these securities do not have available market price, and it is difficult to estimate fair values. The book values of investment securities are presented in the following table. As of June 30, December 31, thousands) Book value: Godo Kaisha Nicolas Capital 10 Subordinated Equity in silent partnership 51,887 Godo Kaisha Nicolas Capital 11 Equity in silent partnership 427,063 Godo Kaisha NRT Growth 12 Subordinated Equity in silent partnership 50,932 Godo Kaisha NRT Growth 13 Equity in silent partnership 137,187 Total 667,069 Notes: 1. The assets under management include trust beneficiary s in real estate of Residence Hiroo, Merveille Senzoku, Splendid Shin-osaka III, Charmant Fuji Osakajominami and Piacere Fuminosato. 2. The assets under management include trust beneficiary s in real estate of Yusen Higashi-Nihonbashi Ekimae, Residence Edogawabashi, ZEPHYROS Minami-horie, Alte Higobashi, DIA Meieki and Hiroo ON. 3. The assets under management included trust beneficiary s in real estate of Primegate Iidabashi, Field Avenue and BECOME SAKAE. 4. The assets under management included trust beneficiary s in real estate of Towa Kandanishikicho and Esprit Kameido. The redemption schedule for monetary claims was as follows: As of June 30, Due within one year Due after one to two years Due after two to three years Due after three to four years thousands) Due after four to five years Due after five years Cash and deposits 12,032,033 Cash and deposits in trust 6,105,500 Total 18,137,533 As of December 31, Due within one year Due after one to two years Due after two to three years Due after three to four years thousands) Due after four to five years Due after five years Cash and deposits 8,981,536 Cash and deposits in trust 5,964,196 Total 14,945,733 The redemption schedule for short-term debt and long-term debt was as follows: Due within one year Due after one to two years Due after two to three years Due after three to four years Due after four to five years Due after five years As of June 30, thousands) Short-term debt 2,600,000 Investment corporation bond 2,000,000 Long-term debt 21,770,000 20,500,000 19,500,000 10,000,000 6,100,000 23,700,000 Total 24,370,000 20,500,000 19,500,000 10,000,000 6,100,000 25,700,000 Due within one year Due after one to two years Due after two to three years Due after three to four years Due after four to five years Due after five years As of December 31, thousands) Short-term debt Investment corporation bond 3,500,000 Long-term debt 21,970,000 20,500,000 18,500,000 7,000,000 16,000,000 38,700,000 Total 21,970,000 20,500,000 18,500,000 7,000,000 16,000,000 42,200,000 Note 7 Investment Properties Investment properties consisted of the following: Acquisition cost As of June 30, As of December 31, thousands) Accumulated depreciation and amortization Book value Acquisition cost Accumulated depreciation and amortization Book value s 234,960 (3,053) 231,906 Land in trust 149,411, ,411, ,791, ,791,041 s in trust 50,843,163 (6,114,724) 44,728,438 59,444,603 (6,987,861) 52,456,741 Structures in trust 171,631 (37,690) 133, ,330 (42,332) 154,998 Machinery and equipment in trust 345,584 (31,722) 313, ,904 (48,292) 309,611 Tools, furniture and fixtures in trust 92,852 (21,364) 71, ,424 (28,970) 93,454 Construction in progress in trust 72,898 72,898 5,256 5,256 Leasehold rights 1,251,662 1,251,662 Leasehold rights in trust 15,806,402 15,806,402 16,658,938 16,658,938 Other intangible assets 9,954 (112) 9,841 6,155 (319) 5,835 Total 216,754,112 (6,205,614) 210,548, ,070,276 (7,110,830) 251,959,

31 Note 8 Fair Value of Investment Properties The book value, net changes in the book value and the fair value of the investment properties including office properties, residential properties and commercial properties were as follows: For the six-month periods ended June 30, December 31, thousands) Book value: Balance at beginning of period 210,445, ,475,599 Change during period 29,655 41,478,591 Balance at end of period 210,475, ,954,190 Fair value 232,226, ,348,000 Notes: 1. The fair value is determined based on appraisal values provided by external real estate appraisers. 2. The book value includes leasehold rights and leasehold rights in trust, but excludes construction in progress in trust. 3. For the six-month period ended June 30,, the increase was primarily due to capital expenditures and the offsetting decrease was due to depreciation. 4. For the six-month period ended December 31,, the increase was primarily due to the acquisition of 21 properties including Primegate Iidabashi ( 40,911,158 thousand) and offsetting decrease was primarily due to depreciation. Note 9 Reduction Entry for Investment Properties Acquired through Exchange The following table shows the amount deducted from the acquisition costs of investment properties acquired through exchange. As of June 30, December 31, thousands) Land in trust 416, ,596 Note 11 Rental Revenues and Expenses Rental revenues and expenses were as follows: For the six-month periods ended June 30, December 31, thousands) Revenues from property leasing: Rental revenues: Base rents 5,340,869 6,340,589 Common area charges 989,568 1,076,546 Parking space rental revenues 221, ,311 Total rental revenues 6,551,743 7,678,447 Other revenues related to property leasing: Utilities charge reimbursements 494, ,936 Others 131, ,549 Total other revenues related to property leasing 625, ,485 Total revenues from property leasing 7,177,639 8,458,932 Property-related expenses: Property management fees 499, ,734 Utility expenses 446, ,322 Insurance expenses 6,992 8,365 Repair expenses 197, ,114 Taxes and dues 515, ,919 Depreciation 776, ,332 Loss on retirement of investment properties 3,277 8,711 Trust fees 23,100 30,050 Other 196, ,668 Total property-related expenses 2,664,876 3,039,219 Income from property leasing 4,512,762 5,419,712 Note 10 Reduction Entry for Investment Properties Acquired due to Government Subsidies Received The following table shows the amount deducted from the acquisition costs of investment properties acquired due to government subsidies received. As of June 30, December 31, thousands) s in trust 201, ,024 Note 12 Subsidy Income Subsidy income of 104,414 thousand for the six-month period ended June 30, represents income received from Subsidies for Cost of Measures to Curb Carbon Dioxide Emissions Fiscal 2017 and Energy Use Rationalization Business Support Program Note 13 Loss on Reduction of Investment Properties Loss on reduction of investment properties represents the amount directly deducted from acquisition costs for the investment properties acquired due to government subsidies received. The details were as follows: For the six-month periods ended June 30, December 31, thousands) in trust 103,833 Note 14 Net Assets NIPPON REIT issues non-par value investment units in accordance with the Investment Trust Act and all of the amounts issued are designated as stated capital. NIPPON REIT maintains at least 50,000 thousand as the minimum net assets as required by the Investment Trust Act

32 Note 15 Short-Term Debt and Long-Term Debt Short-term debt and Long-term debt consisted of the following: As of June 30, December 31, thousands) Short-term debt: 0.25% unsecured loan due 2,600,000 Total short-term debt 2,600,000 Long-term debt: 0.22% unsecured loans due (Notes 2 and 3) 10,800, % unsecured loan due ,070,000 1,070, % unsecured loans due 2019 (Notes 2 and 3) 9,900,000 9,900, % unsecured loans due 2019 (Notes 2 and 3) 11,000,000 11,000, % unsecured loans due ,000,000 6,000, % unsecured loan due ,500,000 3,500, % unsecured loans due 2020 (Notes 2 and 3) 11,000,000 11,000, % unsecured loans due 2021 (Notes 2 and 3) 8,500,000 8,500, % unsecured loans due 2021 (Notes 2 and 3) 10,000,000 10,000, % unsecured loans due 2022 (Notes 2 and 3) 7,000, % unsecured loan due , , % unsecured loans due 2023 (Notes 2 and 3) 5,600,000 5,600, % unsecured loans due 2023 (Notes 2 and 3) 3,900,000 3,900, % unsecured loans due 2023 (Notes 2 and 3) 6,000, % unsecured loans due 2024 (Notes 2 and 3) 3,400,000 3,400, % unsecured loans due 2024 (Notes 2 and 3) 3,200,000 3,200, % unsecured loan due 2024 (Notes 2 and 3) 3,500,000 3,500, % unsecured loans due 2024 (Notes 2 and 3) 2,000, % unsecured loans due 2024 (Notes 2 and 3) 4,350, % unsecured loan due 2025 (Notes 2 and 3) 1,000, % unsecured loans due 2025 (Notes 2 and 3) 2,600,000 2,600, % unsecured loans due 2025 (Notes 2 and 3) 2,000,000 2,000, % unsecured loans due 2025 (Notes 2 and 3) 2,800,000 2,800, % unsecured loans due 2025 (Notes 2 and 3) 2,500, % unsecured loans due 2025 (Notes 2 and 3) 4,200, % unsecured loans due 2026 (Notes 2 and 3) 600, , % unsecured loan due , , % unsecured loans due 2026 (Notes 2 and 3) 4,850, % unsecured loans due 2028 (Notes 2 and 3) 1,200,000 1,200,000 Total long-term debt 101,570, ,670,000 Note 16 Investment Corporation Bonds Investment corporation bonds consisted of the following: As of June 30, December 31, thousands) 1st 0.54% unsecured bonds due ,000,000 1,000,000 2nd 0.70% unsecured bonds due ,000,000 1,000,000 3rd 0.88% unsecured bonds due ,500,000 Total 2,000,000 3,500,000 Note 17 Leases The future minimum rental revenues under existing non-cancelable operating leases were as follows: As of June 30, December 31, thousands) Due within one year 340, ,367 Due after one year 537,595 1,431,026 Total 878,394 2,039,393 Notes: 1. The rates presented are weighted average rates. 2. Funds were used for acquisition of investment properties, of outstanding borrowings and payment of any other associated expenses as deemed reasonable. 3. As rates on these loans are substantively fixed by the rate swaps, the rates after reflecting the effect of the rate swaps are stated

33 Note 18 Income Taxes NIPPON REIT is subject to Japanese corporate income taxes on all of its taxable income. However, NIPPON REIT may deduct the amount distributed to its unitholders from its taxable income when certain requirements, including a requirement to distribute in excess of 90% of distributable profit for the fiscal period, are met under the Special Taxation Measure Act of Japan. If NIPPON REIT does not satisfy all of the requirements as specified in the Act, the entire taxable income of NIPPON REIT will be subject to regular corporate income taxes in Japan. NIPPON REIT has made distribution in excess of 90% of its distributable profit for the six-month periods ended June 30, and December 31, in order to be able to deduct such amount from taxable income. The following table summarizes the significant difference between the statutory tax rate and NIPPON REIT s effective tax rate. For the six-month periods ended June 30, December 31, Statutory tax rate 31.74% 31.51% Deductible cash distributions (31.74) (31.51) Per capita inhabitant taxes Others Effective tax rate 0.02% 0.02% The significant components of deferred tax assets and liabilities were as follows: As of June 30, December 31, thousands) Deferred tax assets: Accrued enterprise tax 3 0 Allowance for doubtful accounts 0 0 Total deferred tax assets 3 0 Deferred tax liabilities: Deferred gains on hedges 895 Total deferred tax liabilities 895 Net deferred tax liabilities (891) 0 Note 19 Per Unit Information Information about earnings per unit and net assets per unit was as follows: For the six-month periods ended June 30, December 31, (Yen) Earnings per unit: Net income per unit 8,498 8,546 Weighted average number of units outstanding (units) 391, ,282 As of June 30, December 31, (Yen) Net assets per unit 287, ,774 The computation of earnings per unit is based on the weighted average number of units outstanding during the period. The computation of net assets per unit is based on the number of units outstanding at each period end as stated on the balance sheets. Note 20 Distribution Information Pursuant to the terms of the distribution policy set forth in Article 35 paragraph (1) item (2) of NIPPON REIT s Articles of Incorporation, the amount of distributions is defined to be in excess of an amount equivalent to 90% of NIPPON REIT s distributable profit as defined in Article of the Special Taxation Measure Act of Japan, but not in excess of an amount of profit set forth in the Articles of Incorporation. Cash distributions are declared by the board of directors after the end of each period. Such distributions are payable to unitholders of record at the end of each period. Information of cash distributions per unit and the board of directors meeting dates when the distributions were proposed and approved were as follows: For the six-month periods ended June 30, December 31, (Yen) Cash distributions per unit 8,500 8,536 Board of directors meeting dates August 16, February 18, 2019 Retained earnings brought forward after the cash distributions were as follows: For the six-month periods ended June 30, December 31, (Yen) Unappropriated retained earnings 3,352,625,792 3,862,444,951 Cash distributions declared 3,329,960,000 3,840,602,480 Retained earnings brought forward 22,665,792 21,842,

34 Note 21 Related-Party Transactions Related-party transactions for the six-month period ended June 30, were as follows: Classification Name Location Directors and their relatives Toshio Sugita Capital stock thousands) Occupation Executive Officer of NIPPON REIT and President, Director & CEO of Sojitz REIT Advisors K.K. Ratio of voting rights Nature of transaction Payment of asset management fees to Sojitz REIT Advisors K.K. Amount of transaction thousands) Account 537,761 Accrued expenses Balance at the end of period thousands) 147,090 Notes: 1. This was executed by Toshio Sugita as a representative director of a third party (Sojitz REIT Advisors K.K.) and terms and conditions of related-party transactions are based on those stipulated in NIPPON REIT s Article of Incorporation for asset management fees. 2. Consumption taxes are not included in transaction amounts and are included in the balance at the end of the period. Related-party transactions for the six-month period ended December 31, were as follows: Classification Name Location Directors and their relatives Toshio Sugita Capital stock thousands) Occupation Executive Officer of NIPPON REIT and President, Director & CEO of Sojitz REIT Advisors K.K. Ratio of voting rights Nature of transaction Payment of asset management fees to Sojitz REIT Advisors K.K. Amount of transaction thousands) Account 902,812 Accrued expenses Balance at the end of period thousands) 171,896 Note 22 Segment Information Segment Information Segment information is omitted as NIPPON REIT has one segment, which is property leasing business. Related Information Information about Products and Services Disclosure of this information is omitted as operating revenues to external customers for a single product/service category account for more than 90% of the operating revenues on the statements of income and retained earnings. Information by Geographic Areas (1) Operating revenues Disclosure of this information is omitted as domestic operating revenues account for more than 90% of total operating revenues. (2) Investment properties Disclosure of this information is omitted as domestic investment properties account for more than 90% of the book value of the total investment properties. Information on Major Tenants Disclosure of this information is omitted as there is no tenant that accounts for 10% or more of the operating revenues recorded in the statements of income and retained earnings. Notes: 1. This was executed by Toshio Sugita as a representative director of a third party (Sojitz REIT Advisors K.K.) and terms and conditions of related-party transactions are based on those stipulated in NIPPON REIT s Article of Incorporation for asset management fees. 2. Consumption taxes are not included in transaction amounts and are included in the balance at the end of the period

35 Note 23 Subsequent Events (a) Acquisition of Properties NIPPON REIT acquired trust beneficiary s in real estate on January 31, February 27 and 28, 2019 as described below. Property name Type of asset Location Acquisition date Acquisition price Wald Park Minamioi Shinagawa s in real estate ward, January 31, TENSHO OCHANOMIZU Chiyoda ward, BUILDING s in real estate February 27, ,800 Kameido i-mark Koto ward, s in real estate February 27, ,580 LAPUTA KUJO s in real estate Osaka, Osaka February 28, ,480 Imazaki Mansion N1 Seller Not disclosed Not disclosed SHIMIZU CORPORATION Not disclosed Higashiosaka, Not disclosed February 28, ,180 Osaka Total 5 properties 7,755 s in real estate (c) Borrowing of Funds NIPPON REIT borrowed funds on February 28, This borrowing was used as a part of funds for acquisition of LAPUTA KUJO and Imazaki Mansion N1 described in (a) Acquisition of Properties and its related costs. Amount Lender Interest rate Interest rate of base rate 700 plus 0.20% Fix / Floating Repayment due date Floating July 22, 2019 Repayment method payment at maturity Notes: 1. The first payment date shall be March 20, 2019, and the subsequent payment dates shall be the 20th day of every month (if the date is not a business day, then it shall be the next business day.) and the principal date. The base rate applicable to the payable on an payment date shall be JBA one-month Japanese Yen TIBOR announced two business days prior to the payment date immediately preceding the respective payment date. In the event that the calculation period is more than one month or less than one month, the base rate corresponding to the calculation period shall be calculated using the method stipulated in the loan agreement. 2. NIPPON REIT can make early of the borrowing, in whole or in part, if certain terms and conditions are met such as prior written notice by the date. Notes: 1. The acquisition prices represent the amount of consideration stated in the purchase agreements of the trust beneficiary s in real estate. The acquisition price does not include the expenses related to the acquisition and consumption taxes. Furthermore, the acquisition price of less than one million yen is omitted. 2. This information is not disclosed as the consent has not been obtained from the seller. (b) Transfer of Properties NIPPON REIT transferred trust beneficiary s in real estate on February 26 and 27, 2019 as described below. Property name FORECAST Iidabashi my atria Meieki Type of asset Trust beneficiary s in real estate Trust beneficiary s in real estate Location Chiyoda ward, Nagoya. Aichi Transfe r date February 27, 2019 February 26, 2019 Transfer price Book value 5,490 5,396 SHIMIZU CORPORATION 1,782 1,231 Not disclosed Purchaser Total 2 properties 7,272 6,627 Notes: 1. The transfer prices represent the amount of consideration stated in the transfer agreements of real estate and the trust beneficiary s in real estate. The transfer price does not include the expenses related to the transfer and consumption taxes. Furthermore, the transfer price of less than one million yen is omitted. 2. The book values represent the balance sheet amount as of December 31,. Furthermore, the book value of less than one million yen is omitted. 3. This information is not disclosed as the consent has not been obtained from the purchaser

36 68 69

37 Portfolio Summary Office Area No. Property Name Location Completion Acquisition Price ( mn) Appraisal Value ( mn) Investment ratio (%) Central A-1 FORECAST Nishishinjuku Shinjuku Ward, Feb ,260 3, Central A-2 Nihombashi Playa Chuo Ward, Feb ,130 2, Central A-3 FORECAST Yotsuya Shinjuku Ward, Jan ,430 1, Central A-4 FORECAST Shinjuku AVENUE Shinjuku Ward, Sep ,500 7, Central A-5 FORECAST Ichigaya Shinjuku Ward, Aug ,800 5, Central A-6 FORECAST Mita Minato Ward, Sep ,800 2, Central A-7 FORECAST Shinjuku SOUTH Shinjuku Ward, Nov ,990 17, Central A-8 FORECAST Sakurabashi Chuo Ward, Apr ,760 6, Central A-9 GreenOak Kayabacho Chuo Ward, Mar ,860 3, Central A-10 GreenOak Kudan Chiyoda Ward, Dec ,780 3, Central A-11 GreenOak Takanawadai Minato Ward, Jan ,260 2, Metropolitan A-13 Higashi Ikebukuro Center Toshima Ward, Nov ,520 2, Central A-14 Central Daikanyama Shibuya Ward, Aug ,510 3, Central A-16 Hiroo Reeplex B s Minato Ward, May ,827 3, Central A-17 Shibakoen Sanchome Minato Ward, Jun ,396 9, Central A-18 FORECAST Iidabashi Chiyoda Ward, Nov ,230 5, Central A-19 Kudankita 325 Chiyoda Ward, Aug ,850 2, Central A-20 FORECAST Uchikanda Chiyoda Ward, Dec ,240 1, Central A-21 Itohpia Iwamotocho 2-chome Chiyoda Ward, Feb ,810 3, Central A-22 Itohpia Iwamotocho 1-chome Chiyoda Ward, Jan ,640 2, Central A-23 Itohpia Iwamotocho ANNEX Chiyoda Ward, Nov ,100 2, Central A-24 Pigeon Chuo Ward, Aug ,837 2, Central A-25 FORECAST Ningyocho Chuo Ward, Nov ,070 2, Central A-26 FORECAST Ningyocho PLACE Chuo Ward, Feb ,650 1, Central A-27 FORECAST Shin-Tokiwabashi Chuo Ward, Aug ,030 2, Central A-28 Nishi-Shinjuku Sanko Shinjuku Ward, Sep ,207 2, Central A-29 Iidabashi Reeplex B s Shinjuku Ward, Jun ,249 1, Central A-30 FORECAST Shinagawa Shinagawa Ward, Feb ,300 2, Central A-31 Nishi-Gotanda 8-chome Shinagawa Ward, Dec ,210 2, Central A-32 Towa Higashi-Gotanda Shinagawa Ward, Sep ,033 2, Metropolitan A-33 FORECAST Takadanobaba Toshima Ward, Jan ,550 5, Metropolitan A-34 Mejiro NT Toshima Ward, Jul ,094 3, Metropolitan A-35 Toshin Higashi-Ikebukuro Toshima Ward, Nov , Metropolitan A-36 Mitsui Woody Koto Ward, Mar ,475 2, Metropolitan A-37 Itabashi Honcho Itabashi Ward, Jan ,146 3, Metropolitan A-38 ANTEX24 Taito Ward, Feb ,691 1, Metropolitan A-39 Itohpia Kiyosubashidori Taito Ward, Mar ,550 1, Metropolitan A-40 East Side Taito Ward, May ,372 1, Metropolitan A-41 I S Minamimorimachi Osaka, Osaka Aug ,258 2, Metropolitan A-42 Sunworld Osaka, Osaka Mar ,200 1, Metropolitan A-43 Marunouchi Sanchome Nagoya, Aichi Jul ,626 1, Central A-44 MK Kojimachi Chiyoda Ward, Mar ,781 2, Central A-45 Toranomon Sakura Minato Ward, Jul ,120 4, Central A-46 La Verite AKASAKA Minato Ward, Dec ,000 2, Central A-47 Kanda Ocean Chiyoda Ward, Jan ,440 1, Central A-48 Shinto GINZA EAST Chuo Ward, Sep ,352 1, Office Residence Retail Area No. Property Name Location Completion Acquisition Price ( mn) Appraisal Value ( mn) (Note) The investment ratio is the acquisition value of each acquired asset, divided by the total acquisition value of assets acquired. The ratio is rounded off to the first decimal place. Investment ratio (%) Central A-49 FORECAST Kayabacho Chuo Ward, Jan ,000 3, Central A-50 FORECAST Waseda FIRST Shinjyuku Ward, Jul ,775 4, Central A-51 FORECAST Gotanda WEST Shinagawa Ward, Sep ,520 7, Metropolitan A-52 Omiya Center Saitama, Saitama Mar ,585 19, Metropolitan A-53 Sumitomo Mitsui Bank Koraibashi Osaka, Osaka Mar ,850 3, Metropolitan A-54 NORE Fushimi Nagoya, Aichi Nov ,840 3, Metropolitan A-55 NORE Meieki Nagoya, Aichi Jan ,520 2, Central A-56 Homat Horizon Chiyoda Ward, Aug ,705 7, Metropolitan A-57 Sannomiya First Kobe, Hyogo Nov ,390 1, Central A-58 Towa Kandanishikicho Chiyoda ward, Aug , Central A-59 Yusen Higashi-Nihombashi Ekimae Chuo ward, Feb ,152 1, Central A-60 Hiroo ON Shibuya ward, Mar ,392 2, Central A-61 TK Gotanda Shinagawa ward, Jun ,130 4, Central A-62 Gotanda Sakura Shinagawa ward, Nov ,460 1, Metropolitan A-63 Esprit Kameido Koto ward, Jun ,265 1, Metropolitan A-64 Alte Higobashi Osaka, Osaka Jun ,453 1, Metropolitan A-65 DIA Meieki Nagoya, Aichi Dec ,167 1, Central B-1 Tower Court Kitashinagawa Shinagawa Ward, Feb ,880 14, ODC, etc. B-2 Sky Hills N11 Sapporo, Hokkaido Mar ,570 1, Metropolitan B-3 my atria Meieki Nagoya, Aichi Mar ,280 1, Metropolitan B-4 my atria Sakae Nagoya, Aichi Mar ,110 1, Metropolitan B-5 Mac Village Heian Nagoya, Aichi Sep Metropolitan B-6 Seam Dwell Tsutsui Nagoya, Aichi Feb ODC, etc. B-7 Ciel Yakuin Fukuoka, Fukuoka Mar Central B-8 Kanda Reeplex R s Chiyoda Ward, Jan ,813 1, Metropolitan B-9 Splendid Namba Osaka, Osaka Jan ,502 3, Central B-10 Residence Hiroo Minato ward, Feb ,590 2, Central B-11 Residence Nihombashi Hakozaki Chuo ward, Mar ,300 1, Central B-12 Primegate Iidabashi Shinjuku ward, Mar ,200 5, Central B-13 Residence Edogawabashi Shinjuku ward, Mar ,230 1, Metropolitan B-14 Merveille Senzoku Ota ward, Sep Metropolitan B-15 Field Avenue Ota ward, Aug Sep ,110 3, Metropolitan B-16 Domeal Kitaakabane Kita ward, Mar Metropolitan B-17 Dormy Kitaakabane Kita ward, Mar Metropolitan B-18 Splendid Shin-Osaka III Osaka, Osaka Feb ,428 2, Metropolitan B-19 ZEPHYROS Minami-horie Osaka, Osaka Mar ,608 1, Metropolitan B-20 Charmant Fuji Osakajominami Osaka, Osaka Apr Metropolitan B-21 Piacere Fuminosato Osaka, Osaka Feb Central C-1 Otakibashi Pacifica Shinjuku Ward, Oct ,350 3, Metropolitan C-2 Komyoike Act Sakai, Osaka Apr ,063 2, Metropolitan C-3 BECOME SAKAE Nagoya, Aichi Aug ,770 4, Total 247, ,

38 72 73 B-7 B-2 A-52 C-2 Setagaya Shinagawa Meguro Shibuya Shinjuku Toshima Nakano Nerima Kita Adachi Itabashi Arakawa Taito Bunkyo Chiyoda Chuo Minato Ota Koto Sumida A-37 A-34 A-33 A-13 A-35 A-39 A-38 A-36 Shinjuku Ikebukuro Ueno Shinagawa Shibuya A-40 A-63 B-16 B-17 B-14 B-15 Akihabara Shinjuku Shinagawa Gotanda Shibuya Ichigaya Iidabashi Shinjuku Shibuya Minato Chiyoda Chuo Shinagawa Meguro Taito Bunkyo Koto C-1 A-1 A-3 A-11 A-28 A-4 A-5 A-29 A-7 A-32 A-18 A-10 A-21 A-22 A-23 A-9 A-8 A-20 A-17 A-2 A-24 A-25 A-26 A-27 A-6 A-30 B-1 A-16 A-14 A-19 A-50 A-47 A-45 A-46 A-49 A-48 A-44 A-56 A-31 A-51 B-8 A-39 A-38 A-40 B-12 B-13 A-59 A-60 A-61 A-62 A-58 B-11 B-10 A-57 Osaka Osaka Shin Osaka Shin Osaka Shin Kobe Shin Kobe B-18 B-19 B-20 B-21 B-9 A-42 A-41 A-53 A-64 Naniwa Abeno Chuo Nishi Kita Higashi yodogawa Shin Osaka Shin Osaka Osaka Osaka B-3 B-4 B-5 A-43 A-54 A-55 B-6 A-65 C-3 Nakamura Naka Kita Higashi Chikusa Showa Nakagawa Nagoya Nishi Chikusa Tsurumai Fushimi Sakae Nagoya Ozone Office Properties Residential Properties Retail Properties Three Major Metropolitan Areas Portfolio Map

39 List of portfolio as of the end of 13th period Office Residence Retail A-1 FORECAST Nishishinjuku A-2 Nihombashi Playa A-3 FORECAST Yotsuya A-4 FORECAST Shinjuku AVENUE A-16 Hiroo Reeplex B s A-17 Shibakoen Sanchome A-18 FORECAST Iidabashi A-19 Kudankita 325 A-6 FORECAST Mita A-7 FORECAST Shinjuku SOUTH A-20 FORECAST Uchikanda A-21 Itohpia Iwamotocho 2-chome A-22 Itohpia Iwamotocho 1-chome A-23 Itohpia Iwamotocho ANNEX A-5 FORECAST Ichigaya A-8 FORECAST Sakurabashi A-9 GreenOak Kayabacho A-24 Pigeon A-25 FORECAST Ningyocho A-26 FORECAST Ningyocho PLACE A-27 FORECAST Shin-Tokiwabashi A-10 GreenOak Kudan A-11 GreenOak Takanawadai A-13 Higashi Ikebukuro Center A-14 Central Daikanyama A-28 Nishi-Shinjuku Sanko A-29 Iidabashi Reeplex B s A-30 FORECAST Shinagawa A-31 Nishi-Gotanda 8-chome 74 75

40 List of portfolio as of the end of 13th period Office Residence Retail A-32 Towa Higashi-Gotanda A-33 FORECAST Takadanobaba A-34 Mejiro NT A-35 Toshin Higashi-Ikebukuro A-48 Shinto GINZA EAST A-49 FORECAST Kayabacho A-36 Mitsui Woody A-37 Itabashi Honcho A-38 ANTEX24 A-39 Itohpia Kiyosubashidori A-50 FORECAST Waseda FIRST A-52 Omiya Center A-51 FORECAST Gotanda WEST A-40 East Side A-41 I S Minamimorimachi A-42 Sunworld A-43 Marunouchi Sanchome A-53 Sumitomo Mitsui Bank Koraibashi A-54 NORE Fushimi A-55 NORE Meieki A-56 Homat Horizon A-44 MK Kojimachi A-45 Toranomon Sakura A-46 La Verite AKASAKA A-47 Kanda Ocean A-57 Sannomiya First A-58 Towa Kandanishikicho A-59 Yusen Higashi-Nihombashi Ekimae A-60 Hiroo ON 76 77

41 List of portfolio as of the end of 13th period Office Residence Retail A-61 TK Gotanda A-62 Gotanda Sakura A-63 Esprit Kameido A-64 Alte Higobashi B-9 Splendid Namba B-10 Residence Hiroo B-11 Residence Nihombashi Hakozaki B-12 Primegate Iidabashi A-65 DIA Meieki B-2 Sky Hills N11 B-13 Residence Edogawabashi B-14 Merveille Senzoku B-15 Field Avenue B-16 Domeal Kitaakabane B-3 my atria Meieki B-1 Tower Court Kitashinagawa B-4 my atria Sakae B-17 Dormy Kitaakabane B-18 Splendid Shin-Osaka III B-19 ZEPHYROS Minami-horie B-20 Charmant Fuji Osakajominami B-5 Mac Village Heian B-6 Seam Dwell Tsutsui B-7 Ciel Yakuin B-8 Kanda Reeplex R s B-21 Piacere Fuminosato C-1 Otakibashi Pacifica C-2 Komyoike Act C-3 BECOME SAKAE 78 79