#1singing CON LON AEON Kireuriwari Shopping Center HELAEON STYLE Kemigawahama AEON REIT Investment Corporation Presentation Material for Investor Meeting For the 9th Fiscal Period Ended July 31, 2017 Securities Code: 3292 http://www.aeon-jreit.co.jp/en/ October 6, 2017 EON イオンリート Asset Manager: AEON Reit Management Co.,Ltd.#2Table of Contents I. Executive Summary II. Overview of Operation in the 9th Fiscal Period Ended July 31, 2017 1. Summary of Financial Results for 9th Fiscal Period 2. Average cap rate of portfolio /EON イオンリート P. 3 V. Operational Status and AEON REIT's Strategy 1. Implementation of Growth Strategies Through Collaboration with AEON Group P. 20 2. Retail Properties That Can Respond to Changes P. 21 P. 5 3. Logistic Properties That Support Retail Properties 4. Performance of Properties in Portfolio P. 22 P. 23-25 P. 6 5. Internal Growth by Investments in Revitalization P. 26-27 6. Capital Investment Plan 7. Current Status & Outlook of AEON MALL Kumamoto P. 28 P. 29 P. 8 8. Approach for Sustainability P. 30 III. Overview of Follow-On Offering in September, 2017 1. Overview of Follow-On Offering in September, 2017 2. Acquisition of JPY160.8bn property at 1 year and 10 months, P. 9 accelerating external growth speed Appendix 1 Portfolio, BS & PL and Financial Status 3. Portfolio Highlights P. 10 4. Portfolio Map P. 11 Appendix 2 Overseas Property 5. Acquisition of Domestic Properties in 10th Fiscal Period P. 12-13 Appendix 3 Basic policy etc. 6. Establishing a Solid Financial Base 7. Disperse repayment dates and Reduce borrowing cost P. 14 P. 15 IV. 業績予想 1. 10th Fiscal Period Ending January 31, 2018 P. 17 2. 11th Fiscal Period Ending July 31, 2018 P. 18 2#3I.Executive Summary Value for unitholders grew steadily due to “expansion of the portfolio size” and “internal growth through investments for revitalization." The medium-term portfolio size target is ¥500 billion. Cash Distribution External Growth 9th fiscal period ended July 31, 2017 ¥2,926 (+¥51 over disclosed forecast) Achieved the medium-term target of ¥300 billion Acquired five properties (¥62.1 billion in total): AEON MALL Itamikoya, AEON MALL Kagoshima, AEON MALL Tsuchiura, AEON MALL Kahoku, and AEON Minami-Osaka RDC /EON イオンリート 10th fiscal period ending Jan. 31, 2018 and thereafter Target stabilized distribution is ¥3,000. 10th period forecast: ¥3,000 (+¥10 over forecast made before capital increase) 11th period forecast: ¥2,855 ◆ Accelerate growth to achieve a portfolio size target of ¥500 billion. Acquire four properties (¥24.5 billion in total): AEON MALL Shimotsuma, AEON Kireuriwari Shopping Center, AEON STYLE Kemigawahama, and Daiei-Ibaraki Process Center Internal Growth Financial Strategy ◆ Enhanced the profitability and competitiveness of properties through investments for revitalization AEON MALL Ota (installation of escalators) Increase in rents: ¥14.56 million/ year AEON Mall Yokkaichi Kita (renovation of the food court) Increase in rents: ¥9.72 million/ year ◆ Strengthened the financial base Feb.-Mar. 2017 Procured ¥37.5 billion through public offering (including third-party allotment) Mar. 2017 Repaid short-term loans before due date to make them long-term, fixed-rate loans End of 9th fiscal period LTV: 46.7% Large-scale floor-space expansion, renovation Floor-space expansion at AEON MALL Kofu Showa (Planned to open on November 23, 2017 after renovation with floor-space expansion; preferential negotiation rights obtained) AEON MALL Kumamoto (Planned to open in 2018 after renovation; preferential negotiation rights planned to obtain) Promote strategic cash management Sep.-Oct 2017 Plan to procure ¥15.1 billion through public offering (including third-party allotment) LTV after public offering: 45.0% (-1.7% from before capital increase) 3#4TOHO CINEMAS Aeon Mall Nogata (daytime) TOHO CINEMAS II. Overview of Operation in the 9th Fiscal Period Ended July 31, 2017 Aeon Mall Nogata (nighttime) KENWALL /EON イオンリート#5Summary of Financial Results for 9th Fiscal Period Ended July 31, 2017 January 2017 July 2017 /EON イオンリート Major Factors of Changes from the Previous Period (Millions of yen) 8th Fiscal 9th Fiscal Period Period VS. Previous 9th Fiscal Period VS. Forecast Result Result Period Announced Forec ast on Mar. 15, 2017 Full-period contribution of revenues from properties acquired in 7th period + 98 Operating Revenues (A) (B) (B-A) (C) |(B-C) Contribution of revenues from properties acquired in 9th period Increase in rents from AEON + 2,358 +116 MALL Kumamoto Operating Revenues (Millions of 11,974 14,642 yen) 2,667 14,632 10 Operating Expenses (Millions of 7,303 9,017 yen) 1,714 9,051 ▲ 33 Expenses Related (Millions of 6,613 8,253 1,639 8,282 ▲ 28 to Rent Business yen) (Of Which, Interim dividends from SPC for AEON MALL SEREMBAN 2 Taxes and dues for properties acquired in 7th period using proceeds from public offering Taxes and dues for properties acquired in 8th period Repairs and maintenance expenses + 98 +81 +259 +131 (Millions of 3,386 Operating Expenses Depreciation) yen) 4,176 790 4,178 ▲ 1 Increase in land rent paid, etc. + 318 Depreciation for properties + 20 Operating Income (Millions of acquired in 8th period 4,671 5,624 953 yen) 5,580 43 Depreciation for properties Ordinary Income (Millions of 3,958 4,773 815 yen) 4,714 59 Extraordinary acquired in 9th period using proceeds from public offering Asset management fees Interest expenses + 778 + 69 + 83 (Millions of 537 537 537 Income yen) Non-Operating Expenses Borrowing related expenses + 32 (Millions of Amortization of investment unit issuance expenses +15 Net Income 3,954 5,306 yen) 1,352 4,709 597 Major Factors of Changes from the Forecast Distributions per (yen) 3,019 2,926 ▲ 93 2,875 51 (Millions of yen) Unit Number of Operating Revenues Investment Units Issued (unit) 1,309,467 1,635,912 326,445 1,635,912 Operating Expenses Non-Operating Expenses Extraordinary Income Income from insurance Taxes and dues Repairs and maintenance expenses Depreciation for properties Asset management fees Interest expenses Gain on reversal of provision for loss on disaster Refund of fixed asset tax +9 ▲ 31 +4 ▲ 1 + 20 ▲ 12 Borrowing related expenses Amortization of investment unit issuance expenses +4 ▲ 4 + 500 +37 5#6Average cap rate of Portfolio Average cap rate in a continuous declining trend Average cap rate of portfolio (Note) /EON イオンリート Average cap rate of portfolio for Trade-Area Population within 10km (Note) (%) 6.3 6.19 6.2 6.1 6.0 55555 5.9 5.8 5.7 (%) 7.00 6.48 6.50 6.00 5.50 5.58 5.00 4.50 5.60 4.00 5.6 5.5 2nd Fiscal Period 3rd Fiscal Period 4th Fiscal Period (January 2014) (July 2014) (January 2015) 5th Fiscal Period (July 2015) (January 2016) 6th Fiscal Period 7th Fiscal Period (July 2016) 8th Fiscal Period 9th Fiscal Period (January 2017) (July 2017) Average cap rate of portfolio of in area-wise (Note) (%) 7.00 6.40 6.50 6.25 6.00 5.50 5.86 5.00 5.33 4.50 4.00 2nd Fiscal Period 3rd Fiscal Period (January 2014) (July 2014) 4th Fiscal Period 5th Fiscal Period (January 2015) (July 2015) 6th Fiscal Period 7th Fiscal Period (January 2016) (July 2016) 8th Fiscal Period 9th Fiscal Period (January 2017) (July 2017) three largest cities ⚫others 6.30 5.26 (July 2016) 2nd Fiscal Period 3rd Fiscal Period 4th Fiscal Period 5th Fiscal Period 6th Fiscal Period 7th Fiscal Period 8th Fiscal Period 9th Fiscal Period (January (July 2014) (July 2015) (July 2017) 2014) (January 2015) 500 thousand or more (January 2016) (January 2017) less than 500 thousand (Note) • Average cap rate is calculated excluding Malaysian properties whose return yield by direct capitalization method is not calculated. ⚫ 7th and 8th fiscal period is calculated excluding AEON MALL Kumamoto. ⚫ "Trade-Area Population within 10km" is calculated excluding Daiei-Kawasaki PC and AEON Minami-Osaka RDC. ⚫ "The three largest cities" indicates the Metropolitan, Chubu and Kinki areas, i.e. Metropolitan area covers Tokyo, Kanagawa, Saitama and Chiba pref., Chubu area covers Aichi, Gifu and Mie pref. and Kinki covers Osaka, Kyoto, Hyogo, Nara and Shiga pref. in each. 6#7dalci Daiei-Ibaraki Process Center the inside the inside II. Overview of Follow-On Offering in September, 2017 /EON イオンリート#8Overview of Follow-On Offering in September, 2017 /EON イオンリート The 4th Follow-On Offering since IPO with total acquisition price: JPY24.5bn of 4 properties with "average appraisal yield 6.3%". Acquisition of JPY160.8bn property at 1 year and 10 months, accelerating external growth speed. Summary of 4th Follow-On Offering Summary of properties acquired recently(scheduled) Offering structure Domestic Offering Issue price The number of newly- issued investment units (including third- party allotment) (scheduled) Total number of investment units issued and outstanding after follow-on offering (including third-party allotment) (scheduled) Property ¥110,662 per unit AEON MALL SHIMOTSUMA (billions of yen) (billions of yen) Location Shopping center type Anticipated acquisition price Appraisal value Appraisal NOI yield Seller Shimotsuma City, Ibaraki Pref. Third RSC 9.5 9.7 6.6% Party 141,435 units (note) AEON Osaka City, Third KIREURIWARI CSC 4.3 4.5 5.7% Osaka Pref. Party SHOPPING CENTER KEMIGAWAHAMA BAYSIDE MALL FERIA 1,777,347 units (tentative name: Chiba City, CSC 3.7 3.8 7.2% Sponsor AEON STYLE KEMIGAWAHAMA) Chiba Pref. Total procured amount (including 15,145 million yen DAIEI-IBARAKI PROCESS CENTER Ibaraki City, Logistics 6.8 7.0 6.0% Osaka Pref. Third Party third-party allotment) (scheduled) Note: As the allotee specified by the Investment Corporation, 29,898 units were sold to AEON CO., LTD. total 24.5 25.2 Average 6.3% 8#9Continuous Steady External Growth aiming at more growth We will continuously aim for new mid-term goal "¥500 bn". 16 properties 158.3 bn yen 17 properties 158.9 bn yen 17 properties 158.9 bn yen 23 properties 194.3 bn yen 23 properties 194.3 bn yen 40 properties 355.1 bn yen 36 properties 330.6 bn yen +245 28 properties 249.2 bn yen 31 properties 268.5 bn yen +621 /EON イオンリート Mid-term 500.0 bn yen External Growth Investments in Revitalization Sustainable Growth Cycle Generation of Cash Flow Improvement of Profitability Portion of top 10 properties Number of prefectures January 31, 2014 (2nd fiscal period) July 31, 2014 (3rd fiscal period) January 31, January 31, July 31, 2015 2015 (4th fiscal period) (5th fiscal period) 2016 (6th fiscal period) July 31, 2016 (7th fiscal period) January 31, 2017 (8th fiscal period) July 31, 2017 (9th fiscal period) After acquisition of new 4 properties aiming at more growth 79% 78% 78% 71% 71% 61% 57% 49% 46% -Further Property Diversification 14 14 14 17 17 20 21 24 24 ΝΟΙ 2.4bn yen 5.4bn yen 5.5bn yen 6.6bn yen 6.8bn yen 7.8bn yen 8.7bn yen 10.4bn yen 11.2bn yen Effective Use of Cash Generated from Our Portfolio Depreciation 1.1bn yen 2.2bn yen 2.2bn yen 2.6bn yen 2.6bn yen 3.1bn yen 3.3bn yen 4.1bn yen 4.4bn yen 2nd Fiscal Period 3rd Fiscal Period 4th Fiscal Period 5th Fiscal Period 6th Fiscal Period 7th Fiscal Period 8th Fiscal Period 9th Fiscal Period 10th Fiscal Period (Forecast) 11th Fiscal Period 1口当たり 分配金 ¥686 ¥2,461 ¥2,473 ¥2,724 ¥2,790 ¥1,450 ¥3,019 ¥2,926 ¥3,000 ¥2,855 Impact of property tax and city planning tax in 11th period Approx. ¥244/unit Forecast at the ¥2,875 ¥2,990 stabilized distribution 1口当たり NAV(注) previous announcement ¥110,456 ¥112,635 ¥115,939 ¥122,057 ¥126,169 ¥123,547 ¥127,912 ¥127,358 (Note) NAV (Net asset value) per unit = (Total unitholders' capital at end of period + Unrealized profit or loss of the whole portfolio at end of period) / Number of total investment units issued at end of period. For the 7th and 8th fiscal period, market valuation of AEON MALL Kumamoto is excluded from the calculation. 9#1040 355.1bn Portfolio Highlights (as of November 30, 2017) Expansion of Asset Size and Diversification of Area in 24 prefectures in Japan and Overseas Summary of Portfolio Number of properties Total acquisition price /EON イオンリート Unrealized Loss and Profit of Portfolio in each fiscal period end 31.3 bn yen (+3.3 bn yen compared to 8th) (bn yen) 35.0 30.0 Portfolio appraisal NOI yield before depreciation 6.4% 25.0 Portfolio appraisal NOI yield after depreciation 3.9% 20.0 Average remaining lease term 17.3 years 15.0 Average building age Total leasable area Occupancy rate 13.7years 10.0 3,410,000m² 5.0 0.0 100% 2nd Fiscal Period 3rd Fiscal Period 4th Fiscal Period 5th Fiscal Period (Jan. 2014) (July 2014) (Jan. 2015) (July 2015) 6th Fiscal Period 7th Fiscal Period 8th Fiscal Period 9th Fiscal Period (Jan. 2016) (July 2016) (Jan. 2017) (July 2017) Portfolio Data By property type ■SRSC: Super regional shopping center 7.9% ■RSC: Regional shopping 79.3% center ■ CSC: Community shopping 4.1% center ■Logistics facility By location (Note) Unrealized loss and profit = Appraisal value in each fiscal period Book value in each fiscal period By investment(top 10 properties) ■ KYOTO ■Hokkaido Tohoku 8.9% ■mori 6.0% 6.0% ■ Kanto 35.5% = KURASHIKI 5.0% • ΙΤΑΜΙΚΟΥΑ Tokai Hokuriku ⚫ 10.8% 4.7% Chubu ■MITOUCHIHARA 4.7% ■ Kinki 22.8% ■YAMATOKORIYAMA 4.1% ■Chugoku Shikoku 9.7% ■ KAWASAKI PC 4.0% ■ KAGOSHIMA 8.7% ■Kyushu. Okinawa 10.6% 3.8% ■ KUMAMOTO 3.7% ■ Malaysia 1.7% ■ CHIBA-NEWTOWN 3.4% Others 54.5% 10#11Portfolio Map (as of November 30th, 2017) 40 properties(domestic38, overseas2) Asset Size 355.1bn yen Tokai, Hokuriku and Chubu SRSC: Super regional shopping center RSC: Regional shopping center CSC: Community shopping center Logistics facility Existing properties acquired by 9th period New properties acquired since 10th period 7 8 20 29 6 23 Kyushu and Okinawa AEON MALL AEON MALL 13 27 Nogata Kagoshima 14 14 AEON MALL Kumamoto 27 13 6 AEON MALL Ogaki 7 AEON MALL Suzuka 8 AEON MALL Meiwa 20 AEON MALL Yokkaichi AEON MALL 23 29 Kofu Showa AEON MALL Kahoku 10 15 11 9 26 3 12 Hokkaido and Tohoku EON イオンリート 16 1 AEON MALL AEON MALL 2 16 17 Morioka Ishinomaki AEON MALL Sapporo-Hiraoka 17 AEON MALL Kushiro-Showa 24 AEON MALL 18 19 Rifu AEON MALL Yamagata-Minami 24 AEON MALL Tomakomai Kanto 2 19 18 AEON Lake Town 2 mori AEON Lake Town kaze AEON MALL 3 4 Mitouchihara AEON MALL Ota Kinki, Chugoku and Shikoku 5 AEON Sagamihara Shopping Center 22 AEON MALL Chiba-New Town (Mall, Cinema and Sports building) AEON Chigasaki-Chuo 1 Shopping Center 25 AEON MALL Oyama 28 AEON MALL Tsuchiura 30 AEON MALL Shimotsuma 2 ASEAN region AEON MALL Malaysia 9 10 AEON MALL Hiezu 11 Kasai-Hojo AEON MALL Kurashiki 26 AEON MALL Itamikoya AEON Kireuriwari 3 Shopping Center M-2 M-1 M-1 AEON Taman Universiti Shopping Centre AEON MALL M-2 12 15 Ayagawa AEON MALL KYOTO 21 AEON MALL 2 AEON MALL Yamatokoriyama AEON MINAMI-OSAKA RDC Daiei-Ibaraki 3 Process Center SEREMBAN 2 25 4 3 30 28 22 2 5 Daiei-Kawasaki Process Center Kemigawahama BAYSIDE MALL FERIA (tentative name: AEON STYLE Kemigawahama) 11#12Assets (to Be) Acquired in 10th Fiscal Period Acquisition of community-based shopping centers close to a station CSC-3 Acquired on September 19, 2017 AEON Kireuriwari Shopping Center CSC-2 Planned to be acquired on November 30, 2017 AEON STYLE Kemigawahama singing. AON Seller Godo Gaisha Double 02 Appraisal NOI yield 5.7% /EON イオンリート Seller Aeon Retail Co., Ltd. Appraisal NOI yield 7.2% Acquisition price Appraisal value ¥4,394 million Date of completion November 21, 2005 ¥4,520 million Parking capacity Location Osaka City, Osaka Pref. 280 vehicles 1,500 bicycles 48,000 people within 1km Acquisition price Appraisal value ¥3,748 million ¥3,830 million Date of completion Parking capacity November 20, 1991 290 vehicles Chiba City, Location Chiba Pref. 38,000 people within 1km Trade-area Ground area 15,982.14m population (Approx.) Gross floor 27,603.46m 155,000 people within 2km 322,000 people within 3km Ground area 6,250.00m Trade-area population (Approx.) 118,000 people within 2km Gross floor 29,947.62m 206,000 people within 3km area area SC with approx. 40 specialty stores with AEON Kireuriwari Ekimae being the anchor store • The property is at a good location: two-minute walk from Kireuriwari station on the Osaka Subway Tanimachi Line, in Hirano-ku, which has the largest population among wards in Osaka City. It has easy access to the center of Osaka City (approx. 25 minutes to Higashi-Umeda station from Kireuriwari station). . With parking capacity of 1,500 vehicles, the shopping center is convenient for daily use by neighborhood people. A net lease where the lessee shall pay repair expenses and capital expenditure. SC is one-minute walk from Kemigawahama station on the JR Keiyo Line. The number of incoming and outgoing passengers at the station is more than 30,000 people per day. AEON STYLE Kemigawahama, the anchor tenant, is planned to be a store based on the G.G concept that will fit in with the characteristics of the area. The property has been operated by Izumiya Co., Ltd. as a daily-use community shopping center (CSC) that has attracted customers. The operation of the property has been stable for a long period. 12#13/EON イオンリート Assets Acquired in 10th Fiscal Period Acquisition of a mall-type retail property and a logistic facility to support mall-type properties Acquired on September 19, 2017 RSC-30 AEON MALL Shimotsuma L-3 Acquired on October 2, 2017 Daiei-Ibaraki Process Center . . • CON EON Seller Godo Gaisha Double 02 Appraisal NOI yield 6.6% dolci Seller Tokyo Century Corporation Appraisal NOI yield 6.0% (iv) 27,930.61m (v) 11,188.59m Acquisition price Appraisal value ¥9,552 million (i) November 17, 1997 Date of completion (ii) Extension on December 19, 2008 ¥9,790 million Parking capacity Acquisition price Appraisal value (i) 9,134.90m ¥6,810 million Gross floor area (ii) 905.18m (iii) 800.00m 3,400 Location Shimotsuma City, Ibaraki Pref. Location Ground area 115,174.82m Gross floor Trade-area population (Approx.) 18,000 people within 3km 42,000 people within 5km ¥7,080 million Ibaraki City, Osaka Pref. Ground area 33,173.94m 58,402.66m area 141,000 people within 10km SC opened in 1997 as a neighborhood SC with GMS as the anchor store. It became a mall-type retail property in 2008. For twenty years, the SC has been well received by customers in the region. The property was renovated for the second time in 2015. It has approx. 100 specialty stores and AEON Shimotsuma as the anchor store. The property is the only shopping mall in an area within 30 minutes by car from the site. It is at a convenient place where National Route 125 and National Route 294 cross. Date of completion (i) (ii) June 14, 1977 (iii) August 31, 1990 (iv) August 3, 1990 (v) March 9, 1992 • The property is placed in Ibaraki City for easy access to three metropolitan in the Kansai area (Osaka, Kyoto, and Kobe). • The property is approx. 4km from Suita exit on the expressway and very close to Settsu Kita exit. It has good access to the Meishin Expressway, Kinki Expressway, and Chugoku Expressway. . The property has responded to the expansion of the home-meal replacement industry. As of May 31, 2017, it supplies goods to more than 100 stores, including The Daiei, Inc. • A net lease where the lessee shall pay repair expenses and capital expenditure. Group companies responsible for product development and food processing are tenants. The property plays a role as a "central kitchen" for the AEON Group, including The Daiei, Inc. 13#14Establishing a Solid Financial Base Work to "extend average remaining maturity" and promote "diversification of financing sources and methods" Plans to make early repayment of ¥1.5 billion in short-term loans, borrowed in September 2017, on December 27, 2017 to shift to long-term loans. In accordance with it, aim to "extend average remaining maturity" of debt Stable Financial Operations End of 8th period (January 31, 2017) End of 9th period (July 31, 2017) After new debt financing (Note 1) (as of September 30, 2017) Credit Rating Japan Credit Rating Agency, Ltd. Long-term issuer rating /EON AA- (Stable) イオンリート LTV (Note2) (including tenants' deposits) 46.4% 46.7% 45.0% Ratio of long-term debt(Note3) 98.7% 99.0% 98.0% Ratio of fixed-rate debt 96.5% 92.9% 91.9% 4.3 year Average remaining maturity 4.7 year 4.4 year Average interest rate 0.84% on debt 0.79% 0.79% Number of lenders 17 19 19 (Note 1) LTV = (Total interest-bearing debt after new debt financing + Tenant leasehold and security deposits) Total assets at end of 9th period (Note 2) LTV is estimated including all units of third party allotment. (Note 3) Of the loans borrowed on October 20, 2016, ¥1.5 billion is classified as current portion of long-term loans payable for accounting purposes but is recorded as short-term loans payable in the above figures. Diversification of Lenders Achieved ■Mizuho Bank 18.7% ■Sumitomo Mitsui Banking 16.2% SUmitomo Mitsui Trust Bank 13.7% ■Bank of Tokyo-Mitsubishi UFJ 11.1% Norinchukin Bank 6.3% Mizuho Trust & Banking 6.4% ■Mitsubishi UFJ Trust and Banking 5.8% ■Resona Bank 2.7% ■ AEON BANK 3.1% ■Development Bank of Japan 3.1% ■Hyakugo Bank 2.5% Hiroshima Bank 2.3% ■Mie Bank ■ 77 Bank 1.1% 1.3% ■Chiba Bank 0.2% ■Nippon Life Insurance 0.7% ■Meiji Yasuda Life Insurance 0.9% The Daisan Bank 0.3% Shinsei Bank 0.9% Investment corporation bonds 2.7% Plans to make early repayment of ¥1.5 billion in short-term loans borrowed in September 2017 to shift to long-term loans on December 27, 2017. 14#15Disperse repayment dates and Reduce borrowing cost Period remaining to maturity and our borrowing cost /EON イオンリート LTV Trend Available capacity to LTV (including deposit) 50% approx. ¥36.3 billion. (After new debt financing) Average period remaining to maturity (year) 50.0% 1.00% T 0.95% 0.95% 0.94% Average of procurement interest rate (%) 0.95% 7.0 year 46.0% 0.92% 6.0 year 0.90% Q.85% 42.0% 5.2 year 0.84% 43.4% 42.8% 46.4% 46.7% 45.0% after public offering 5.0 year 0.79% 5.0 year 41.4% 41.5% 41.0% 40.8% 0.79% 4.5 year 38.0% 4.3 year 0.80% 4.0 year 4.1 year 4.7 year 4.0 year 4.4 year 34.0% 4.3 year 0.70% 3.0 year 30.0% 2nd Fiscal Period 0.60% 2nd Fiscal 3rd Fiscal Period (January 2014) Period (July 2014) 4th Fiscal Period (January 2015) 5th Fiscal Period (July 2015) 6th Fiscal Period (January 2016) 7th Fiscal Period (July 2016) 8th Fiscal Period (January 2017) 2.0 year 9th Fiscal Period (July 2017) After New debt (November 2017) 3rd Fiscal Period (January (July 2014) 2014) 4th Fiscal Period (January 2015) 5th Fiscal Period (July 2015) 9th Fiscal After New. Period debt 6th Fiscal 7th Fiscal 8th Fiscal Period Period Period (January (July 2016) (January (July 2017) (November 2016) 2017) 2017) (Note) This indicates financeable debt amount up to LTV 50%. Diversification of maturity dates (September 30, 2017) The short-term debt 1.5 bn yen in September, 2017 will be repayed early on December 27, 2017 and we will aim to convert our debt to long-term and to disperse repayment dates. New debt financing Existing Borrowings 270 220 156 161 172 Issue date investment corporation bonds (hundred of millions of yen) Ultra-Long-Term Investment Maturity Corporation Bonds Interest rate 20years 1.20% October 19, 2016 117 (15) 42 113 93 91 Credit rating AA-(JCR) 20 10 10 10 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2036 15#16EON ACAEON CINEMA Ac 3階 映画館 Aeon Mall Ayagawa IV. Forecasts of Performances for the 10th Fiscal Period Ending January 31, 2018 and the 11th Fiscal Period Ending July 31, 2018 EON MALL EON 飴 EON イオンリート#17Forecasts of Performances for the 10th Fiscal Period Ending Jan. 31, 2018 * Based on the Assumptions for Forecasts of Performance of Financial Report for the Fiscal Period Ended Ended July 31, 2017 (page 7 to 8) /EON イオンリート Major Factors of Changes from the Previous Period (Millions of yen) July 2017 January 2018 9th Fiscal 9th Fiscal Period Result 10th Fiscal Period Forecast VS. Previous Period Period Forecast Announced Forecast on Feb. 1, Full-period contribution of properties acquired in 9th period Contribution of revenues from + 400 VS. Operating Revenues properties acquired in 10th period using proceeds from public offering + 634 2017 (A) (B) (B-A) (C) (B-C) Period-end dividends from SPC for AEON MALL SEREMBAN 2 Insurance expenses +42 +13 Repairs and maintenance ▲ 18 Operating Revenues (Millions 14,642 15,769 1,127 15,128 641 expenses of yen) Land rent paid for the properties acquired in 9th period +61 Operating (Millions 9,017 9,530 512 9,317 213 Land rent paid for the properties Expenses of yen) Operating Expenses + 52 Expenses (Millions Related to Rent 8,253 8,615 361 8,418 196 of yen) Business acquired in 10th period Depreciation for properties acquired in 9th period Depreciation for properties acquired in 10th period +15 +186 (Of Which, (Millions 4,176 4,420 243 4,224 195 Depreciation) of yen) Asset management fees Borrowing related expenses + 108 +36 Operating Income (Millions 5,624 6,239 614 5,811 428 of yen) Non-Operating Expenses Amortization of investment unit issuance expenses +4 Ordinary Income (Millions of yen) 4,773 5,343 569 4,895 448 Major Factors of Changes from the Forecast (Millions of yen) Exordinary (Millions 537 537 Income of yen) Operating Revenues Contribution of revenues from properties acquired in 10th + 634 (Millions Net Income of yen) 5,306 5,338 32 4,890 448 period using proceeds from public offering Taxes and dues ▲ 31 Distributions per (yen) 2,926 3,000 74 2,990 10 Repairs and maintenance Unit ▲ 34 expenses Number of Land rent paid for the properties Operating Expenses + 52 Investment Units Issued (unit) 1,635,9121,777,347 141,435 1,635,912 141,435 acquired in 10th period Depreciation for properties + 186 acquired in 10th period Asset management fees + 6 Borrowing related expenses, etc ▲ 24 Non-Operating Expenses Amortization of investment unit issuance expenses +4 -17#18Forecasts of Performances for the 11th Fiscal Period Ending July 31, 2018 * Based on the Assumptions for Forecasts of Performance of Financial Report for the Fiscal Period Ended July 31, 2017 (page 7 to 8) /EON イオンリート January 2018 10th Fiscal Period July 2018 Major Factors of Changes from the Previous Period (Millions of yen) 11th Fiscal VS. Period Previous Forecast Forecast Period Operating Revenues (A) (B) (B-A) Operating Revenues (Millions of 15,769 16,132 362 yen) Full-period contribution of properties acquired in 10th period using proceeds from public offering Taxes and dues for properties acquired in 9th period + 353 +321 Operating (Millions of Taxes and dues for properties acquired in 10th period + 111 9,530 10,151 621 Expenses yen) Expenses Related (Millions of 8,615 9,212 597 to Rent Business yen) Operating Expenses (Of Which, (Millions of Repairs and maintenance expenses for properties acquired before Repairs and maintenance expenses for properties acquired in 10th period Land rent paid for the properties acquired in 10th period, etc +59 + 25 + 27 4,420 4,470 50 Depreciation) yen) Depreciation for properties acquired before ▲ 14 Operating Income (Millions of 6,239 5,980 259 yen) Depreciation for properties acquired in 10th period + 64 Asset management fees +6 Ordinary Income (Millions of 5,343 5,083 ▲ 260 yen) Borrowing related expenses, etc +4 Non-Operating Expenses (Millions of Net Income 5,338 5,078 260 yen) Amortization of investment unit issuance expenses 3 Distributions per (yen) 3,000 2,855 Unit ▲ 145 * Distributions per Unit (forecast) of 9th Fiscal Period ended July 31, 2017 was ¥2,710, which was disclosed September 2016. (before public offering on February 2017) Number of Investment Units Issued (unit) 1,777,347 1,777,347 18#19Aeon Mall Itamikoya V. Operational Status and AEON REIT's Strategy Aeon Mall Kagoshima EON イオンリート#20Implementation of Growth Strategies Through Collaboration with AEON Group EON イオンリート AEON REIT will aim to achieve steady portfolio growth over the medium-to-long term by fully utilizing AEON group's comprehensive strengths - Developing, leasing, operating and managing AEON group's various types of retail properties etc. Portfolio formation mainly led by large-scale retail properties ■ AEON Group's large-scale retail properties top-class regional retail properties with competitive advantage. ■Large-scale retail properties can deal with changes by lifestyle and needs of customers and secure position as top-class regional retail related properties with competitive advantage. Numerous specialty stores GMS, Dept. stores (Core tenants) Large-scale retail properties Community facilities Expanding the portfolio to include logistics facilities supporting AEON Group ■ Establishing an efficient group supply chain intensification by strategically locating and operating group logistics facilities. Enhancing relations with Sponsor Group Capitalizing on AEON Group's overseas strategy ■ Acquisition of full-scale overseas properties as J-REIT's first practice ■In Malaysia where AEON Group has more than thirty-year track records, planning to acquire AEON MALL Seremban2, full-scale- mall-type RSC (approx. ¥5.2 billion). Major stores of AEON Group in Malaysia Acquisition of full-scale overseas properties as J- REIT's first practice Entertainment facilities Implementation of new redevelopment strategy cooperating with Sponsor Group Expecting to realize internal growth by establishing WIN-WIN relations ■ Planning renovation through floor-space expansion following to AEON MALL Morioka. ■Internal growth utilizing Sponsor's know-how (abilities of retail properties development & operation). ■Contributing to NOI increase without taking risk to attract tenants in re-development. ■ Implementing drastic renovation for existing building as well, with development for expanded building by AEON Mall Co., Ltd. ■ AEON Mall Co., Ltd. can also enhance expansion strategy for excellent stores without considering land acquisition cost. Acquisition of completed building + Internal growth EON Implementation of Growth Strategies Through Collaboration with AEON Group Development EON MALL ALION Diversification of property acquisition methods mobile property acquisition by obtainment of AEON MALL Kofu Showa Store renovation by investment revitalization and Enhancement of internal growth ■ Enhancing internal growth by rent increase, continuing investment in revitalization contributing to improve values of retail properties and making efforts to maintain and improve competitiveness. ■ Realizing AEON MALL Seremban2 preferential negotiation rights. AEON MALL Oyama ■ Able property mobility to acquire utilizing and available capacity by utilizing various AEON MALL Tomakomai acquisition methods. Property acquisition in the period as AEON REIT'S first practice AEON MALL Morioka AEON Mall Yokkaichi-Kita Action for the 2016 Kumamoto Earthquake and future policies ■ In AEON MALL Kumamoto affected by the earthquake, restoration construction completed at the earliest by cooperating with AEON Mall Co., Ltd. ■ For Sub-Anchor Zone, planning to rebuild after tear-down in order to revive it as property with more competitiveness and safety. 20#21Carefully Selected Investment in Retail Properties That Can Respond to Changes EON イオンリート Retail facilities that can respond to changes in business environment, including the diversification of consumption, falling population and aging, and the expansion of e-commerce Response to changes 1 Strength that only large-scale retail properties have: ever-changing composition of end- tenants in response to customer needs Total sales of specialty stores at AEON MALLS are stable due to the optimization of the composition of tenants Anchor tenants AEON MALL specialty store sales change Specialty store sales (after day of week adjustment) Clothing *sundries 120% Large specialty store Clothing accessories G.G Response to changes 2 /EON STYLE Mall zone for diverse, attractive specialty stores XX I+AV EON Ever-changing anchor tenant GMS: AEON STYLE Break away from the stereotypical GMS in the past and gather attractive specialty stores in accordance with customer needs in the region. A new style of AEON store that proposes lifestyles to customers. Response to changes 3 110% 100% 90% 80% 2010 2011 2012 2013 2014 2015 2016 Anchor tenant Ac ARON CINENDA SPORTS AUTHORITY 未来屋書店 (source) Prepared by the Asset Manager based on result briefing materials of AEON MALL Co., Ltd. FY2010-2016. "Existing malls in each fiscal year are malls that operated in the current fiscal year and the previous year, so the population differs for each year." Cinemas, sports, bookstores, etc. AEON Group's initiatives to combine the brick-and-mortar store and e-commerce Brick-and-mortar stores, small and large, of the AEON Group are connected with e- commerce and respond to a variety of lifestyles and shopping styles of customers in the region. The also tap into customers' needs for e-commerce. Strengthening the deli Respond to a variety of needs for food, such as home-meal replacement and ready-to-eat food. A new type of sales floor where customers can bring goods that they have bought in the store and can drink a small amount of alcohol Space where customers can bring food GGsae A new type of store where enjoyable services and goods are given to customers, primarily those in the G.G generation in the community Wakoutinaneventspace Face-to-face selling that allows customers to eat Creative merchandising Orders are placed on the Web, and goods are delivered to home Online supermarket おうちでイオン イオンネットスーパー • Want goods to be sent from the store usually used in the neighborhood Want to place orders for goods that they have forgotten to buy +VEON Small and large Brick-and- mortar stores EON Goods are bought at a store and are delivered to home Same-day delivery • Want to buy goods after looking at them Want to enjoy shopping Want to buy goods soon その物、本日、ご自宅までお届けします。 イオンの即日便 Goods are too heavy to carry Want to buy goods soon Wide variety of goods + E-commerce おうちでイオン イオンショップ /EON.com Want to buy goods that are not sold at stores Want to buy goods although there are no stores available Want to send gifts 21#22Logistic Properties That Support Retail Properties Logistic Properties Aeon Reit holds type merchandise Process Center (PC) Fresh food Regional Distribution Center (RDC) High rotation products function Fresh food processing center Production and processing of fresh food that can not be processed in each store and supply raw materials for cooking at each store Inventory storage base Mainly as a room temperature facility, responsible for temporary storage and supply of goods frequently replenished at each store Function of Strategic Logistic Properties of Aeon Group Strategic Logistic Properties of Aeon Group Back Yard Function manufacturer/wholesale Efficient storage / delivery network according to product characteristics High rotation Low rotation products (NDC()) products (RDC) XD (note) Large scale intensive sorting (NXD) (Store sorting function, etc.) PC:Process Center (Fresh food) Aeon Reit holds Kanto Region Kansai Region Daiei-Kawasaki Process Center Daiei-Ibaraki Process Center AEON Minami-Osaka RDC • Logistics facilities in the Aeon Group operate over 50 facilities nationwide and play an important role as backyards of each commercial facility in the group • Development of distribution network for each function, realizing efficient distribution of various products • It has not only a delivery function but also a procurement / storage function and manufacturing / processing function according to the characteristics of the product, contributing to the improvement of the value of each commercial facility store store store (note) [NDC] means National Distribution Center, NXD] means National Cross-Dock Center, XD means Cross-Dock Center. /EON イオンリート 22#23Performance of Properties in Portfolio (1) Sales of end tenants almost on the same level but high occupancy rate in actual end tenants. YoY Sales Comparison (Note 1) of End Tenants in 34 Retail Domestic Properties Portfolio 120% /EON イオンリート 110% 103.6% 100.0% 97.9% 99.1% 100.1% 100.6% 101.3% 100% 96.8% 97.2% 97.9% 96.8% 99.5% 100.4% 96.8% 90% 80% Dec 2013- Mar-May Jun-Aug Feb 2014 2014 2014 Sep-Nov Dec 2014- Mar-May Jun-Aug Sep-Nov Dec 2015- Mar-May Jun-Aug 2014 Feb 2015 2015 2015 2015 Feb 2016 2016 2016 Sep-Nov Dec 2016- Mar-May 2016 Feb 2017 2017 Actual End-Tenant Occupancy Rate (Note 2) in 34 Retail Domestic Properties Portfolio 99.5% 100% 99% 98% 97% 96% 99.5% 99.4% 99.5% 99.7% 99.2% 99.4% 99.3% 99.3% 99.3% 99.0% 99.0% 99.2% 95% May 2014 Aug 2014 Nov 2014 Feb 2015 May 2015 Aug 2015 Nov 2015 Feb 2016 May 2016 Aug 2016 Nov 2016 Feb 2017 May 2017 (Notes) 1. The total amount of sales of end tenants of the 34 retail properties portfolio for the four periods of March-May, June-August, September-November and December-February each year as a percentage of sales for the same periods of the previous year. 2. The percentage of total leased area in the 34 domestic retail properties that is actually occupied by end tenants (including area in which end tenants have committed to opening stores). As for Aeon Kireuriwari shopping center, occupancy rates results reflect from May 2016. 3. Year-on-year sales comparisons and the actual occupancy rates shown above are data based on interviews of master lease companies. The percentage of properties with master lease contracts is 100%. 4. Year-on-year sales comparisons and the actual occupancy rates shown above have been rounded to the nearest hundredth of a percent. 23#24/EON イオンリート Performance of Properties in Portfolio (2) Increase in Y-O-Y rent revenues of master lease company demonstrating an adequate rent payment capacity Rent Revenues at Master Lease Companies of 34 Retail Domestic Properties in Portfolio (Note1) (Billions of yen) Rent revenue (billions of yen) Indexed YoY comparison 30 120% 104.8% 104.3% 103.8% 100.7% 101.7% 99.3% 99.7% 100.6% 101.0% 101.7% 101.4% 98.3% 99.5% 96.8% 98.2% 25 100% 20 80% 19.2 21.2 20.4 19.9 19.5 21.0 20.3 20.0 19.7 21.4 20.0 19.3 19.6 21.0 20.3 15 60% 10 40% 5 LO 20% 0 0% Sep-Nov Dec 2013- Mar-May Jun-Aug Sep-Nov Dec 2014- Mar-May Jun-Aug Sep-Nov Dec 2015- Mar-May Jun-Aug Sep-Nov Dec 2016- Mar-May 2013 Feb 2014 2014 2014 2014 Feb 2015 2015 2015 2015 Feb 2016 2016 2016 2016 2017 Feb 2017 Mar. 2014-Feb. 2015 Mar. 2015-Feb. 2016 (12-month period) ¥80.8 billion (YOY) 101.3% (12-month period) ¥81.4 billion (YoY) 100.8% Notes: 1. 2. Revenue such as rent income and income incidental thereto received by the master lease company from end tenants The rent revenue figures above are data based on interviews of master lease companies. 3. The indexed YoY comparison figures above have been rounded to the nearest hundredth of a percent. Mar. 2016-Feb. 2017 (12-month period) ¥79.9 billion (YoY) 98.2% 24#2517 Performance of Properties in Portfolio (3) Sales Trends of individual Domestic Retail Properties 7 /EON イオンリート Average of domestic 34 properties in portfolio 98.5% 2 0 YoY sales index Less than 90% 90% ~95% 95% ~100% 100% ~105% 105% ~110% More than 110% % of total 0.0% 17.6% 55.9% 20.6% 5.9% 0.0% T (Notes) Percentage of properties with 6 0 May Mar Jan Nov 1. Sales of each property for December 2016 - May 2017 are expressed as a percentage of sales for the same period a year earlier (December 2015 May 2016). 2. The year-on-year sales index above presents data based on interviews of master lease companies. 3. The figures in the year-on-year sales index above have been rounded to the nearest hundredh of a percent. As a result, the total amount may not always total 100.0%. sales index of 100% or higher : 26.5% (Reference) Consumer Confidence Index (Households of two or more persons, seasonally adjusted series) July, 2017 43.8 50.0 45.0 40.0 35.0 30.0 25.0 Nov May Mar ויין CY 2011 Nov Mai CY 2012 Mar Jan May ייד NOV Nov Sep das CY 2013 CY 2014 May Mar Jul May Mar Jan Nov Sep CY 2015 CY 2016 (Source) "Consumer Confidence Survey" by Department of Business Statistics, Economic and Social Research Institute, Cabinet Office of Japan (Note) Changed to the postal survey method starting with the survey for April 2013. Until the survey for March 2013, surveys were carried out by the direct-visit and self-completion questionnaires method (with telephone surveys at certain times). Mar CY 2007 יין CY 2008 Nov NOV May Mar Mai Jul May Mar Jan Nov Sep CY 2009 CY 2010 CY 2017 25#26Internal Growth by Investments in Revitalization /EON イオンリート Major cases of floor-space expansion and investments for revitalization under way AEON MALL Kurashiki Large-scale renovation (scheduled to complete in the 10th fiscal period) AEON MALL Kofu Showa Renovation with floor-space expansion (scheduled to complete in the 10th fiscal period) Concluded a Floor-Space Expansion Development Agreement in August 2016 based on the discussion with AEON Mall Co., Ltd. Architectural rendering The floor-space expansion area is framed in red line. Food court refurbishment Refurbishment of children's space Increase in Rent (Note) The above image is an architectural rendering and will not necessarily be identical with the building after it is completed. For the building with expanded floor space, AEON REIT has simply obtained preferential negotiation rights and has not decided on its acquisition. AEON REIT does not guarantee its acquisition in the future, either. The schedule indicated above is valid as of the date of this document, and the actual completion of the building with expanded floor space may be postponed due to delays in construction work and other reasons. Commencement date of rent increase Major revitalization cases with increase in rent to be scheduled Property Revitalization project Effect of revitalization (forecast) Installation of AEON MALL Morioka 10th period Wastewater Treatment Facility AEON MALL Suzuka 10th period Large scale renewal AEON MALL Kurashiki 10th period Large scale renewal Project cost (millions of yen) Rent increase per Property annum (Not1) (millions of yen) Rent increase as a percentage of project cost per annum (%) 100 Oct. 2017 7.6 7.6% 300 Nov. 2017 23 7.7% 132 Jan. 2018 10 7.5% (Note 1) "Projected cost of investments in revitalization" indicates construction cost in order to improve the value of the properties operated. 26#27Internal Growth by Investments in Revitalization Major cases of Investments in Revitalization with increase in rent after Apr. 2015 Effect of revitalization /EON イオンリート Name of property Commencement date of rent increase Contents of revitalization Project cost (JPY mm) Annualized rent increase1 (JPY mm) AEON LakeTown kaze Rent increase as a percentage of project cost Apr. 2015 Large scale renewal 312 21 AEON MALL Hiezu 6.8% Apr. 2015 Large scale renewal 105 8 7.7% AEON MALL Morioka Apr. 2016 Revitalization 790 57 7.3% AEON MALL Ota 9th July 2017 Construction of new Escalator 199 14 7.3% AEON MALL Yokkaichi-kita July 2017 Food court refurbishment 113 9 8.5% ILL Confirm AEON LakeTown kaze All Way ドライスーツ 89 847 megurume AEON MALL Morioka AEON MALL Ota AEON MALL Yokkaichi-kita Cumulative amount of annualized rent increase as a result of investments in revitalization projects (mil yen) 160.0 154.2 115.1 118.0 120.0 80.0 40.0 13.9 50.6 54.7 18.8 0.0 3rd Fiscal Period 4th Fiscal Period 5th Fiscal Period 6th Fiscal Period 7th Fiscal Period 8th Fiscal Period 9th Fiscal Period 27#28Capital Investment Plan /EON Proactively conduct capital investment that should help maintain and enhance the value of retail properties, including investments for revitalization that will result in higher rents イオンリート Repairs and Maintenance Expenses Capital Investment Plan Restoration Work Of Aeon Mall Kumamoto (Capex) Capital Expenditures Depreciation 3,386 3,169 2,659 2,677 2,230 2,245 1,222 798 289 196 July 2014 Period (3rd Period) Actual 238 389 429 346 371 182 218 314 Jan 2015 Period (4th Period) Actual July 2015 Period (5th Period) Actual Jan 2016 Period (6th Period) Actual July 2016 Period (7th Period) Actual Jan 2017 Period (8th Period) Actual (Millions of yen) 5,000 4,420 4,470 4,178 4,500 4,000 $ 3,500 3,000 2,500 2,000 1,500 1,426 1,943 2,048 1,000 500 445 0 Jan 2017 Period (9th Period) Actual July 2018 Period (10th Period) Scheduled July 2018 Period (11th Period) Scheduled 28#29Current Status of AEON MALL Kumamoto and internal reserves Sub-anchor zone was completely torn down recently, will be rebuilt in 2018 (i) Current Status of AEON MALL Kumamoto and utilize earthquake insurance Resumed its operation Development schedule of Sub-Anchor Zone September 25, 2017 Autumn, 2017(scheduled) Reopened on March 24, 2017 as the first AEON STYLE store in Sub- Anchor Zone Kyushu West Mall East Mall Anchor (AEON Kumamoto) AEON STYLE • Will be rebuilt in 2018 Reopened on July 20, 2016 2018(scheduled) Obtainment of building confirmation Start of construction of the Building Completion of the Building /EON イオンリート Utilize earthquake insurance (As of October 2, 2017) Portfolio covered by the earthquake insurance 37 properties in Japan Insurance amount ¥3.0 billion (exemption from responsibility: ¥100 million) For Aeon Mall Kumamoto subject to earthquake insurance when restarting West Mall in March 2017 As of October 2, 2017, all 37 properties in Japan owned AEON REIT are subject to earthquake insurance [Before] Demolition work under construction of AEON MALL Kumamoto 【After) Architectural rendering of Sub-Anchor Zone મહેશ જ 29 (Note) Sub-Anchor Zone is framed in red line. (ii) Accumulating internal reserves for stable performance and dividends in the future (Note) Sub-Anchor Zone is framed in red line. The above image is an architectural rendering and will not necessarily be identical with the building after it is completed. For the building, AEON REIT has simply obtained preferential negotiation rights and has not decided on its acquisition. AEON REIT does not guarantee its acquisition in the future, either. AEON REIT posted approximately ¥537 million in total as extraordinary income in the financial results for the 9th fiscal period ended July 31, 2017 reflecting the gain in the reversal of the provision for loss on disaster and the refund of fixed asset tax. Of the total extraordinary income of approximately ¥537 million, AEON REIT has decided to allocate ¥520 million for dividend reserves. Internal retained Specific application example Unsatisfied requirement of conduit system due to inconsistency of taxation Loss on disposal / loss on sale or loss on impairment ■Decrease in revenue due to currency fluctuations ■Natural disasters and unexpected events resulting from it Dilution of distribution due to issuance of new investment units ■Other temporary cost burdens due to unexpected events#30Approach for Sustainability /EON イオンリート AEON REIT cares and considers over Environmental, Social and Governance - related issues (ESG) in all aspects of work jointly with AEON Group and cooperate with stakeholders to facilitate it. MSCI ESG Index NEW! Included in "MSCI Japan ESG Select Leaders Index" on July 3, 2017 2017 Constituent MSCI MSCI Japan ESG Select Leaders Index Environmental Certification and Evaluation NEW! in Acquisition of "2017★★★★★ “DBJ Green Building” on July 5, 2017 AEON MALL Itamikoya NEW! Acquisition of "Green Star" Rating in "GRESB" in 2017 GRES B 2017 Result in 2017: For the second consecutive year, high evaluation given in both areas "Management & Policy" and "Implementation & Measurement" with regards to activities for environmental consideration and sustainability and acquired "Green Star" Rating. ✓ Acquisition of "Three Stars" in "GRESB Rating" by relative evaluation of total scores at the same time. Global Real Estate Sustainability Benchmark (GRESB) is an annual benchmark established primarily by major European pension. funds groups leading the United Nations supported Principles for Responsible Investment (PRI) in 2009 which measures environmental, social, and governance ("ESG") consideration for actual assets including real estate portfolio and infrastructure etc. As of now, 58 companies of investor members (total assets under management of approx. ¥760 trillion [USD7.6 trillion assuming USD1 JPY100]) have joined and used GRESB evaluation data to select and dialogue with investment targets. GRESB (Real Estate Sector) Evaluation applies to real estate companies and funds, 733 companies in the world have joined in 2016. DBJ Green Building 2017 ဘာ Acquisition of "S rank" in "CASBEE", on March 15, 2017 AEON MALL Yamatokoriyama EON 建築環境総合性能評価認 SMBC Sustainable Building Assessment Loan YR 2013 "Gold Rating", certification level AEON MALL Kasai-Hojo International Council of Shopping Centers (ICSC) YR 2011 Global Sustainability Design Award, Gold AEON LakeTown CASBEE 不動産 2017三 30#31Appendix 1 Portfolio, BS & PL and Financial Status /EON イオンリート#32Portfolio /EON イオンリート Property number Property name Location Acquisition date Total leasable area (m) (millions of yen) Acquisition price of period (millions of yen) Book value at end Appraisal value (Note1) (millions of yen) Unrealized PML profit&loss (Note2) value (Note3) (millions of yen) (%) SRSC-1 AEON LakeTown mori (Note 4) Koshigaya City, Saitama Pref. November 2013 205,711.70 21,190 19,837 23,800 3,963 2.0% Koshigaya City, SRSC-2 AEON Lake Town kaze (Note 4) November 2013 Saitama Pref. 127,183.81 6,730 6,359 7,880 1,521 1.7% RSC-1 AEON MALL Morioka Morioka City, Iwate Pref. November 2013 98,968.59 5,340 5,694 6,720 1,026 11.1% RSC-2 AEON MALL Ishinomaki Ishinomaki City, Miyagi Pref. November 2013 60,682.20 6,680 6,151 7,080 929 3.9% RSC-3 AEON MALL Mitouchihara (Note 5) Mito City, Ibaraki Pref. November 2013 159,997.49 16,565 15,258 18,112 2,854 0.7% RSC-4 AEON MALL Ota Ota City, Gunma Pref. November 2013 93,165.27 6,860 6,337 8,190 1,853 4.8% AEON Sagamihara Shopping RSC-5 Center Sagamihara City, Kanagawa Pref. November 2013 75,056.62 10,220 10,025 10,900 875 13.4% RSC-6 AEON MALL Ogaki Ogaki City, Gifu Pref. November 2013 64,246.26 4,950 4,152 5,110 958 9.2% RSC-7 AEON MALL Suzuka Suzuka City, Mie Pref. November 2013 125,253.74 9,660 9,272 10,200 928 7.5% RSC-8 AEON MALL Meiwa Taki County, Mie Pref. November 2013 44,193.80 3,290 3,233 3,700 467 4.6% RSC-9 AEON MALL Kasai-Hojo Kasai City, Hyogo Pref. November 2013 48,229.25 7,230 6,545 7,690 1,145 10.7% RSC-10 AEON MALL Hiezu RSC-11 AEON MALL Kurashiki RSC-12 AEON MALL Ayagawa RSC-13 AEON MALL Nogata (Note7) Saihaku County, Tottori Pref. Kurashiki City, Okayama Pref. Ayauta County, Kagawa Pref. Nogata City, Fukuoka Pref. November 2013 102,045.24 7,780 7,127 8,440 1,313 8.0% November 2013 157,274.78 17,890 16,647 19,300 2,653 0.5% November 2013 113,149.07 8,740 7,566 9,260 1,694 0.6% November 2013 151,969.51 11,246 10,362 13,000 2,638 0.1% RSC-14 AEON MALL Kumamoto (Note7) RSC-15 AEON MALL KYOTO AEON MALL RSC-16 Kamimashiki County, Kumamoto Pref. Kyoto City, Kyoto Pref. Sapporo City, Hokkaido November 2013 101,132.38 13,148 14,735 12,500 A2,235 6.2% February 2015 136,468.45 21,470 20,829 22,500 1,671 13.5% Sapporo-Hiraoka February 2015 78,360.81 5,900 5,637 6,340 703 3.5% AEON MALL RSC-17 Kushiro City, Hokkaido Kushiro-Showa February 2015 51,763.05 1,780 1,785 1,930 145 7.0% RSC-18 AEON MALL Rifu Miyagi County, Miyagi Pref. February 2015 66,478.91 2,560 2,426 2,770 344 6.9% AEON MALL Yamagata City, Yamagata RSC-19 Yamagata-Minami Pref. February 2015 53,502.94 1,350 1,297 1,470 173 6.2% AEON MALL RSC-20 Yokkaichi City, Mie Pref. February 2015 Yokkaichi-Kita 41,447.33 2,210 2,224 2,610 386 6.0% AEON MALL Yamatokoriyama City, Nara RSC-21 Yamatokoriyama Pref. February 2016 105,230.88 14,500 14,156 14,800 644 12.0% AEON MALL Inzai City, RSC-22 March 2016 Chiba-Newtown Chiba Pref. 107,425.97 12,190 12,092 12,400 308 2.7% Nakakoma County, RSC-23 AEON MALL Kofu Showa Yamanashi Pref. February 2016 66,509.51 8,389 8,236 8,600 364 2.5% RSC-24 AEON MALL Tomakomai Tomakomai City, Hokkaido September 2016 71,308.33 7,840 7,944 8,220 276 2.9% 32#33Portfolio /EON イオンリート Property Property name Location Acquisition date number (m) Total leasable area Acquisition price (millions of yen) Book value at end of period (millions of yen) Appraisal value (Note1) (millions of yen) Unrealized PML profit&loss (Note2) value (Note3) (millions of yen) (%) RSC-25 AEON MALL Oyama Oyama City, Tochigi Pref. August 2016 47,872.33 6,280 6,158 6,430 272 4.5% RSC-26 AEON MALL Itamikoya Itami City, Hyogo Pref. February 2017 122,944.71 16,860 16,931 17,600 669 1.8% RSC-27 AEON MALL Kagoshima Kagoshima City, Kagoshima Pref. February 2017 132,341.35 13,400 13,434 13,900 466 6.1% Tsuchiura City, Ibaraki RSC-28 AEON MALL Tsuchiura Pref. February 2017 86,848.51 12,030 12,031 12,400 369 1.0% Kahoku City, Ishikawa RSC-29 AEON MALL Kahoku Pref. February 2017 70,948.14 9,940 9,880 10,600 720 11.4% Chigasaki City, CSC-1 AEON Chigasaki-Chuo Shopping Center Kanagawa Pref. May 2016 63,158.24 6,410 6,393 6,560 167 14.8% Kawasaki City, L-1 Daiei-Kawasaki Process Center Kanagawa Pref. February 2016 59,265.77 14,280 14,293 15,000 406 3.7% L-2 AEON Minami-Osaka RDC Sakai City, Osaka Pref. February 2017 50,197.06 9,870 9,912 10,300 388 12.5% AEON Taman Universiti M-1 Shopping Centre (Note6) Johor, Malaysia June 2014 22,870.00 M-2 AEON MALL SEREMBAN 2 Negeri Sembilan, Malaysia September 2016 81,135.00 658 (20mil RM) 5,252 (215mil RM) 680 (20mil RM) 554 A126 0.8% (21mil RM) (A733thousandRM) 6,011 (233mil RM) 4.0% Grand total (as of July 31, 2017 with 36 properties) 3,244,337.00 330,690 352,878 Shimotsuma City, RSC-30 AEON MALL Shimotsuma Ibaraki Pref. September 2017 58,402.66 9,552 9,790 CSC-3 AEON Kireuriwari Shopping Center L-3 Daiei-Ibaraki Process Center Osaka City, Osaka Pref. September 2017 Ibaraki City, Osaka Pref. October 2017 27,603.46 4,394 4,520 50,783.58 6,810 7,080 Grand total (as of October 2, 2017 with 39 properties) CSC-2 AEON STYLE Kemigawahama Chiba City, Chiba Pref November 2017 3,381,126.70 29,947.62 351,446 374,268 3,748 3,830 3,411,074.32 355,194 378,098 I 2.7% 9.3% 12.6% 2.6% 1.2% Grand total (as of November 30, 2017 with 40 properties) scheduled (Notes) 1. The valuation date of the Appraisal value is July 2017. average, 2. Unrealized profit (loss) = Appraisal value - Book value at end of period 3. Each property undergoes a seismic risk analysis to forecast the loss rate related to damage from the recurrence of an earthquake during a 475 year period. The number for Domestic Subtotal is not an but rather the PML value for the whole domestic portfolio. 4. Acquisition price, Book value at end of period, Appraisal value and Unrealized profit (loss) describe AEON REIT's pro-rata portion of the quasi-co-ownership interest (jun kyōyū-mochibun) in the trust beneficiary rights (40% for each property). 5. Acquisition price, Book value at end of period, Appraisal value and Unrealized profit (loss) include a real estate portion (adjacent land portion that was additionally acquired on April 28, 2015). 6. Acquisition price, Book value at end of period, Appraisal value and Unrealized profit (loss) describe AEON REIT's portion of the amount equivalent to the rights (18.18%) similar to the co-ownership interest (kyōyū-mochibun) of the trust property for which the rights were transferred from AEON CO. (M) BHD., which holds the whole property. 7. Acquisition price of AEON MALL Nogata and AEON MALL Kumamoto have decreased because of transfer of land and retirement of fixed assets, respectively. 33#34Appraisal Value for the 36 Properties held in 9th fiscal period /EON Total unrealized gains increased up to 31.3bn at the end of 9th fiscal year (July 31, 2017). Property name Appraisal agency Appraisal value (Millions of yen) イオンリート Property number Acquisition price (Millions of yen) SRSC-1 SRSC-2 RSC-1 AEON Lake Town mori (Note1) AEON Lake Town kaze (Note1) AEON MALL Morioka The Tanizawa Sōgō Appraisal Co., Ltd. 21,190 8th Period (January 31, 2017) 23,800 9th Period (July 31, 2017) Difference 23,800 0 8th Period (January 31, 2017) 4.8 Capitalization Rate based on direct capitalization method (%) 9th Period (July 31, 2017) Difference 4.8 0.0 The Tanizawa Sōgō Appraisal Co., Ltd. 6,730 7,880 7,880 0 5.2 5.2 0.0 Japan Real Estate Institute 5,340 6,720 6,720 0 6.6 6.6 0.0 RSC-2 AEON MALL Ishinomaki Japan Real Estate Institute 6,680 7,080 7,080 0 6.2 6.2 0.0 RSC-3 AEON MALL Mitouchihara Japan Real Estate Institute 16,460 18,000 18,000 0 6.0 6.0 0.0 RSC-4 AEON MALL Mitouchihara (Land) AEON MALL Ota Japan Real Estate Institute Japan Real Estate Institute 105 112 112 6,860 7,990 8,190 RSC-5 AEON Sagamihara Shopping Center Japan Real Estate Institute 10,220 10,800 10,900 RSC-6 AEON MALL Ogaki Japan Real Estate Institute 4,950 5,130 5,110 ▲ RSC-7 AEON MALL Suzuka Japan Real Estate Institute 9,660 10,200 10,200 RSC-8 AEON MALL Meiwa The Tanizawa Sōgō Appraisal Co., Ltd. 3,290 3,700 3,700 RSC-9 AEON MALL Kasai-Hojo Japan Real Estate Institute 7,230 7,670 7,690 RSC-10 AEON MALL Hiezu Japan Real Estate Institute 7,780 8,410 8,440 RSC-11 AEON MALL Kurashiki Japan Real Estate Institute 17,890 19,200 19,300 RSC-12 AEON MALL Ayagawa Japan Real Estate Institute 8,740 9,260 9,260 RSC-13 AEON MALL Nogata Japan Real Estate Institute 11,246 13,000 13,000 P88200 28800 0 5.2 6.4 6.4 0.0 5.2 5.2 0.0 6.9 6.9 0.0 6.2 6.4 0.2 6.5 6.5 0.0 6.8 6.8 0.0 6.8 6.8 0.0 6.0 6.0 0.0 6.4 6.4 0.0 6.4 6.4 0.0 RSC-14 RSC-15 AEON MALL Kumamoto AEON MALL KYOTO Japan Real Estate Institute 13,148 12,500 6.0 Japan Real Estate Institute 21,470 22,500 22,500 0 4.8 4.8 0.0 RSC-16 AEON MALL Sapporo-Hiraoka RSC-17 AEON MALL Kushiro-Showa RSC-18 AEON MALL Rifu RSC-19 AEON MALL Yamagata-Minami RSC-20 AEON MALL Yokkaichi-Kita RSC-21 AEON MALL Yamatokoriyama RSC-22 AEON MALL Chiba-Newtown RSC-23 AEON MALL Kofu Showa The Tanizawa Sōgō Appraisal Co., Ltd. 5,900 6,340 6,340 0 6.2 6.2 0.0 The Tanizawa Sōgō Appraisal Co., Ltd. 1,780 1,930 1,930 0 6.8 6.8 0.0 The Tanizawa Sōgō Appraisal Co., Ltd. 2,560 2,770 2,770 0 6.4 6.4 0.0 The Tanizawa Sōgō Appraisal Co., Ltd. 1,350 1,470 1,470 0 6.6 6.6 0.0 The Tanizawa Sōgō Appraisal Co., Ltd. 2,210 2,450 2,610 160 6.2 6.2 0.0 Japan Real Estate Institute 14,500 14,800 14,800 0 5.6 5.6 0.0 Japan Real Estate Institute 12,190 12,400 12,400 0 4.9 4.9 0.0 Japan Real Estate Institute 8,389 8,610 8,600 ▲ 10 5.8 5.0 0.0 RSC-24 AEON MALL Tomakomai The Tanizawa Sōgō Appraisal Co., Ltd. 7,840 8,060 8,220 160 5.9 5.9 0.0 RSC-25 AEON MALL Oyama Japan Real Estate Institute 6,280 6,430 6,430 0 6.7 6.7 0.0 RSC-26 AEON MALL Itamikoya Japan Real Estate Institute 16,860 17,600 5.6 RSC-27 AEON MALL Kagoshima The Tanizawa Sōgō Appraisal Co., Ltd. 13,400 13,900 6.0 RSC-28 AEON MALL Tsuchiura Japan Real Estate Institute 12,030 12,040 6.9 RSC-29 AEON MALL Kahoku Japan Real Estate Institute 9,940 10,600 6.9 CSC-1 L-1 AEON Chigasaki-Chuo Shopping Center Daiei-Kawasaki Process Center Japan Real Estate Institute 6,410 6,560 6,560 0 5.0 5.0 0.0 Japan Real Estate Institute 14,280 14,700 15,000 300 5.0 4.9 ▲ 0.1 L-2 AEON Minami-Osaka RDC Japan Real Estate Institute 9,870 10,300 4.9 M-1 AEON Taman Universiti Shopping Centre (Note2) 658 553 554 Japan Real Estate Institute M-2 AEON MALL Seremban 2(Note3) Japan Real Estate Institute (20mil RM) 5,252 Total (215milRM) 330,690 (21.5milRM) 5,995 (233milRM) (21.5milRM) 6,011 (233milRM) 352,878 (Note1) (Note2) (Note3) For AEON Lake Town mori and AEON Lake Town kaze, their appraisal values, price based on direct capitalization method, price based on DCF method, and NOI describe the Investment Corporation's pro-rata portion of the quasi- co-ownership interest (jun kyōyū-mochibun) in the beneficiary rights of real estate in trust (40% for each property). Appraisal value represents the amount equivalent to the Investment Corporation's pro-rata portion of the rights (18.18%) similar to the co-ownership right (kyōyū-mochibun) of the trust property pertaining to the trust of the beneficiary rights of real estate in trust. In addition, the amount in Malaysian Ringgit was converted to Japanese yen based on the exchange rate as of the end of the fiscal period (January 31, 2017; 1RM = ¥25.73, July 31, 2017; 1 RM = ¥25.80; rounded down to the nearest 100th). The amount in Malaysian Ringgit was converted to Japanese yen based on the exchange rate as of the end of the fiscal period (January 31, 2017; 1RM = ¥25.73, July 31, 2017; 1 RM = ¥25.80; rounded down to the nearest 100th). 34#35Balance Sheet for the 9th Fiscal Period (as of July 31, 2017) /EON イオンリート 8th Period As of January 31, 2017 Amount (thousands of yen) Percentage (%) 9th Period As of July 31, 2017 Amount (thousands of yen) Percentage (%) 8th Period As of January 31, 2017 Amount Percentage (thousands of (%) yen) 9th Period As of July 31, 2017 Amount (thousands of yen) Percentage (%) Assets Liabilities I Current assets 14,705,064 5.3% 21,798,587 6.3% I Current liabilities 9,854,525 Cash and deposits 7,976,907 2.9% 12,002,593 3.5% Cash and deposits in trust 6,184,712 2.2% 6,850,168 2.0% Operating accounts payable Current portion of long-term loans payable 740,165 4,200,000 3.5% 0.3% 1.5% 5,908,878 1.7% 1,177,198 0.3% 4,200,000 1.2% Prepaid expenses 534,537 0.2% 512,960 0.1% Accounts payable - other 261,252 0.1% 334,632 0.1% Deferred tax assets Accrued expenses 42,149 0.0% 48,121 0.0% Income taxes receivable 25 0.0% 9 0.0% Income taxes payable 605 0.0% 605 0.0% Consumption taxes 2,421,369 Accrued consumption taxes 183,490 0.1% receivable Other II Non-current assets 8,881 263,423,397 0.0% 11,486 94.6% 322,915,145 0.0% 93.6% Provision for loss on disaster Other 3,755,901 1.3% 670,961 0.2% 148,320 0.1% Property, plant and equipment Land 224,600,904 80.7% 268,759,693 77.9% Buildings in trust 108,463 129,732,482 0.0% 108,463 46.6% 163,353,883 0.0% 47.3% Structures in trust 311,950 0.1% 577,328 0.2% II Non-current liabilities Investment corporation bond Long-term loans payable Tenant leasehold and security deposits 125,049,273 44.9% 156,774,477 56.3% 4,000,000 110,600,000 2,628 1.4% 4,000,000 39.7% 140,300,000 0.0% 1.2% 40.7% 2,628 0.0% Land in trust 92,208,872 33.1% 104,717,380 30.4% Intangible assets 31,616,769 Leasehold rights in trust Investments and other assets 31,616,769 11.4% 46,785,787 11.4% 46,785,787 13.6% Tenant leasehold and security deposits in trust Total liabilities 10,446,645 134,903,799 3.8% 12,471,849 48.5% 162,683,355 3.6% 47.2% 13.6% 7,205,724 2.6% 7,369,664 2.1% Shares of subsidiaries and associates 6,078,453 6,078,453 Net Assets Long-term prepaid 1,116,809 0.4% 1,280,749 0.4% expenses Lease and guarantee deposits 10,460 0.0% 10,460 0.0% I Unitholders' equity Unitholders' capital 143,424,491 142,996,124 51.5% 182,334,301 51.4% 180,552,316 52.8% 52.3% III Deferred assets 199,828 0.1% 303,924 0.1% Deduction from unitholders' capital 0.0% Investment unit issuance 145,067 0.1% 251,602 0.1% expenses Other deduction from unitholders' capital ▲ 3,525,697 ▲ 3,525,697 Investment corporation bonds issuance costs 54,761 Total assets 278,328,290 0.0% 100.0% 345,017,657 52,322 0.0% 100.0% Total deduction from unitholders' capital Unitholders' capital (net) Surplus A 3,525,697 139,470,427 3,954,064 - ▲ 3,525,697 50.1% 177,026,618 1.4% 5,307,682 51.3% 1.5% Unappropriated retained earnings 3,954,064 1.4% 5,307,682 1.5% (undisposed loss) Total net assets Total liabilities and net assets 143,424,491 278,328,290 51.5% 182,334,301 52.8% 100.0% 345,017,657 100.0% 35#36Statement of Income for the 9th Fiscal Period (as of July 31, 2017) Operating revenue Rent revenue - real estate Gain on sales of real estate properties Operating expenses Expenses related to rent business Asset management fee Asset custody fee Administrative service fees Directors' compensations Taxes and dues 8th Period As of January 31, 2017 Amount Percentage (%) (thousands of yen) 11,974,815 11,974,815 9th Period As of July 31, 2017 Amount (thousands of yen) Percentage (%) 100.0% 100.0% 14,642,554 100.0% 14,561,163 99.4% 81,390 7,303,361 61.0% 9,017,702 61.6% 6,613,972 55.2% 8,253,947 56.4% 544,722 4.5% 613,960 4.2% 14,211 0.1% 17,380 0.1% 43,947 0.4% 50,702 0.3% 3,600 0.0% 3,600 0.0% 4,688 0.0% 2,814 0.0% Other operating expenses 78,217 0.7% 75,297 0.5% I Operating income 4,671,454 39.0% 5,624,851 38.4% Non-operating income Interest income 5,086 165 0.0% 0.0% 2,724 0.0% 62 0.0% Refund of unpaid distributions 2,662 0.0% Interest on refund 4,920 Non-operating expenses 717,841 6.0% 853,875 5.8% Interest expenses 462,590 3.9% 546,237 3.7% Interest expenses on investment corporation bonds 14,466 0.1% 17,907 0.1% Amortization of investment unit issuance expenses Investment unit issuance expenses 58,712 0.5% 70,587 0.5% 310 0.0% 4,413 0.0% Amortization of investment corporation bonds issuance costs Other offering costs associated with issuance of investment units Borrowing related expenses Other 2,022 0.0% 2,438 0.0% 334 179,149 1.5% 589 0.0% 211,943 13 1.4% 0.0% II Ordinary income 3,958,699 33.1% 4,773,701 32.6% Extraordinary income 537,819 Gain on reversal of provision for loss on disaster Refund of fixed asset tax 500,263 37,555 IV Profit before income taxes Income taxes - current 3,958,699 4,635 33.1% 0.0% 5,311,520 4,621 36.3% 0.0% Income taxes - deferred Total Income taxes 4,635 V Profit 3,954,064 0.0% 33.0% Retained earnings (deficit) brought forward 4,621 5,306,899 783 0.0% 36.2% 0.0% VI Unappropriated retained earnings 3,954,064 33.0% 5,307,682 36.2% /EON イオンリート 36#37Financial Management /EON イオンリート 5th period (July 31, 2015) 6th period (January 31, 2016) 7th period 8th period 9th period (July 31, 2016) (January 31, 2017) (July 31, 2017) After new debt financing (September 30, 2017) Short-term loans payable ¥2,000million \-million \-million ¥1,500million ¥1,500million ¥3,000million Long-term loans ¥73,400million ¥73,400million ¥98,900million ¥113,300million ¥143,000million ¥143,000million payable Investment Corporation bonds \-million ¥2,000million ¥2,000million ¥4,000million ¥4,000million ¥4,000million Tenant leasehold and ¥8,111million ¥8,111million ¥10,169million ¥10,449million ¥12,474million ¥12,916million security deposits Total debt ¥83,512million ¥83,512million ¥111,069million ¥134,904million ¥162,683million ¥164,624million LTV (including 41.0% 40.8% 42.8% 46.4% 46.7% 45.0% leasehold deposits) LTV (excluding 37.0% 36.9% 38.9% 42.7% 43.0% 41.4% leasehold deposits) Long-term debt ratio 97.3% 100.0% 100.0% 98.7% 99.0% 98.0% Fixed interest rate ratio 84.5% 87.1% 88.4% 96.5% 92.9% 91.9% Average remaining 4.3 year 4.0 year 4.1 year 4.7 year 4.4 year 4.3 year borrowed period Average interest rate 0.94% 0.95% 0.85% 0.84% 0.79% 0.79% on borrowings *1 LTV is estimated including all units of third party allotment. *2 Regarding borrowings dated October 20, 2016, about 1.5 billion yen is accountingly "long-term borrowing within one year", but above figures are booked as "short-term borrowings" 37#38Debt Snapshot (after new debt financing) /EON イオンリート Syndicate of lenders arranged by Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank, Limited Borrowing Amount Borrowing Date Term Maturity Breakup ¥9.0bn October 20, 2016 ¥27.0bn October 22, 2018 November 25, 2013 Long-term ¥63.0bn ¥22.0bn October 20, 2020 ¥5.0bn October 20, 2023 ¥0.7bn October 20, 2017 \1.2bn February 27, 2015 Long-term \12.4bn ¥4.0bn ¥4.5bn October 21, 2019 October 20, 2021 October 21, 2024 Interest rate Floating (base rate 1 +0.25%) Effective fixed rate 2 0.78125% Effective fixed rate 2 1.17250% Effective fixed rate 2 1.76375% Floating (base rate 1 +0.25%) Effective fixed rate 2 0.61910% ¥2.0bn October 20, 2017 February 29, 2016 ¥4.1bn October 21, 2019 \0.6bn October 20, 2021 March 29, 2016 Long-term ¥25.5bn ¥5.8bn October 20, 2022 May 31, 2016 ¥6.6bn October 20, 2025 Existing Borrowings February 29, 2016 \1.0bn October 21, 2027 short-term ¥1.5bn \1.5bn October 20, 2017 ¥3.9bn October 21, 2019 ¥4.8bn October 20, 2022 平成28年10月20日 \1.2bn October 20, 2022 Long-term ¥23.4bn ¥6.7bn October 20, 2023 ¥2.7bn October 20, 2025 ¥4.1bn October 20, 2026 Effective fixed rate 2 0.88915% Effective fixed rate 2 1.40390% Floating (base rate 1 +0.22%) Effective fixed rate 2 0.14750% Effective fixed rate 2 0.35125% Effective fixed rate 2 0.54100% Effective fixed rate 2 0.99100% Effective fixed rate 2 1.40730% Floating (base rate1 +0.22%) Effective fixed rate2 0.23700% Effective fixed rate2 0.48750% Effective fixed rate2 0.55000% Effective fixed rate2 0.61375% Effective fixed rate2 0.87250% Effective fixed rate2 1.00300% ¥6.4bn October 21, 2019 \6.1bn October 20, 2021 ¥5.2bn October 20, 2022 March 28, 2017 Long-term ¥29.7bn \0.2bn October 20, 2022 Floating (base rate 1 +0.22%) Effective fixed rate2 0.43200% Effective fixed rate2 0.52800% Effective fixed rate2 0.63000% ¥6.8bn October 21, 2024 Effective fixed rate2 0.83800% ¥5.0bn New debt financing (Notes) September 19, 2017 short-term \1.5bn \1.5bn October 20, 2026 December 27, 2017 Effective fixed rate2 1.09710% Floating (base rate 1 +0.22%) 1. Refers to the Japanese yen TIBOR released by the Japanese Bankers Association; provided, however, that if there is no corresponding time period, it refers to the interest rate reasonably set by the agent by the straight-line method. 2. While funds are borrowed at floating rates, the interest rates are fixed in effect by entering into interest rate swap agreements to hedge interest rate fluctuation risk. The figures are the interest rates calculated after taking into consideration the effect of interest rate swaps. 38#39Appendix 2 Overseas Property /EON イオンリート#40Promoting Diversification of Revenue Sources by Investing in Malaysia ON Investing in Malaysia where Sponsor Group has a business history of over 30 years. Realized increase in rent linked to CPI for the first time Property Name AEON Taman Universiti Shopping Centre Acquisition price Appraisal value AEON MALL Seremban2 20 million RM 21.5 million RM Completion date Appraisal NOI yield 2002 7.2% 215 million RM 230 million RM 2005 6.30% (after tax: 4.20%) Conducted investment in Malaysia where the Group has a track record The sponsor group has a track record of over 30 years in Malaysia, and possesses know-how about laws, taxation and accounting, etc. on real estate Like in Japan, the AEON Group has established a solid position as a retailer in Malaysia, and can acquire properties after checking if they have suff EON Enriching Your Lifestyle Company Name AEON Co. (M) BHD. Major stores of AEON Group in Malaysia Achieved an increase in rent linked to CPI イオンリート In Malaysia where economic growth is anticipated, expectation for realization of future internal growth by CPI linked rent every 3 years □ Leasing business cost is net lease borne by the lessee to avoid risks Summary of master lease agreement The 10-year agreement commands a fixed rent and cannot be cancelled during the lease period as a rule. The rent is to be adjusted every three years after the conclusion of the lease agreement, in accordance with the fluctuations in the CPI (consumer price index) announced by Malaysia's Department of Statistics. (However, the amount of adjustment shall not exceed 10% of the monthly rent before the adjustment). Leasing business cost is net lease borne by the lessee (Only applied to Seremban2) Actual increase in rent (AEON Taman Universiti Shopping Centre) Appraisal value of Taman Universiti (million RM) 22 Three years have passed since the conclusion of the lease agreement Achieved an increase in rent by 7.35% over current rent linked to CPI Changes in CPI in Malaysia and Japan CPI( Malaysia 21.5 21.5 +7.5% 21 20.5 20 19.5 19 с after rent revision acquisition CPI Japan forecast 145 Acquisition of full-scale overseas properties as J- 135 REIT's first practice 125 Date of establishment September 15, 1984 115 Major 105 O www shareholders and AEON Co., Ltd. 51.0% Ownership ratio 95 AEON MALL Seremban2 85 702 million RM Capital 75 T T T T T T T T T T T (2017/1/31) 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 () IMF World Economic Outlook Database, April 2017 40#41Scheme for acquisition of overseas property EON イオンリート Declaration-of-trust scheme was utilized to acquire overseas real estate as J-REIT's first practice in June 2013. Overseas SPC scheme is utilized to acquire the second overseas real estate as J-REIT's first practice. Declaration-of-Trust Scheme (acquired in June 2014) Overseas SPC Scheme (acquired in September 2016) Japan Malaysia AEON REIT Investment Corporation (beneficiary) Master Lease Agreement AEON CO. (M) BHD. (beneficiary and master lessee) Holding a property 18.18% of total (¥658 million). Rights to hold in common Trust beneficiary interests of trust formed by declaration of trust ON AEON REIT Investment Corporation Holding a 100% stake Japan Master Lease Agreement JAMBATAN MANSEIBASHI (M) Sdn Bhd Malaysia Capital stock, AEON CO. (M) BHD. (master lessee) Holding a property Real estate (exclusive of taxes) 215 million RM* (¥5,252 billion) Other assets approx.24 million RM* (¥ 586 million) etc. approx.239 million RM* (¥5,838 billion) *1RM 24.43JPY (as of September 2016) Store operation M-1 AEON Taman Universiti Shopping Centre Store operation M-2 AEON MALL SEREMBAN 2 41#42Relationship between the Fiscal Year of the Overseas SPC and the Settlement of Accounts of the Investment Corporation (Conceptual Diagram)■ /EON イオンリート The overseas SPC begins contributing to income of the Investment Corporation from the 10th fiscal period (ending January 2018). Although the overseas SPC has full-year accounting terms under the local laws, it is expected to pay interim dividends. AEON REIT Investment Corporation 7th fiscal period 8th fiscal period Acquisition of shares in the overseas SPC Announcement of results for the 7th fiscal period Completed acquisition of shares in the overseas SPC 9th fiscal period Announcement of results for the 8th fiscal period Receipt of interim dividends of the overseas SPC Marking-to-market of properties owned by the overseas SPC on end of 8th period 10th fiscal period Announcement of results for the 9th fiscal period Marking-to-market of properties owned by the overseas SPC on end of 9th period Receipt of dividends of the overseas SPC Conclusion of the sales agreement Overseas SPC Establishm ent of the overseas SPC AON REIT Investment Corporation Fiscal year- end (SPC) Acquisition of property Implementation of interim audit on SPC Payment of interim dividends after the numbers are fixed by audit Implementation of audit on SPC Fiscal year- end (SPC) Payment of dividends after the numbers are fixed by audit Income from the acquisition of property to end of 8th period Income from beginning of 9th Period to end of 9th period. 42#43Currency Hedging Policy for Investment Capital (Overseas SPC Shares) and Dividends Currency hedging for investment capital (when acquiring the Overseas SPC shares) (illustrative drawing) /EON イオンリート Announcement of acquisition price denominated in yen and Malaysian ringgit Conclusion of purchase agreement on shares issued by overseas real estate holding corporation Day A Payment based on capital increase underwriting agreement Day B Acquisition of shares issued by overseas real estate holding corporation EON イオンリート Currency hedging for dividends received from the Overseas SPC (illustrative drawing) End of Xth fiscal period Overseas SPC Conduct audits of the Overseas SPC for the Xth fiscal period Fixing of dividends for the Xth fiscal period End of the fiscal period following the Xth fiscal period Payment of dividends for the Xth fiscal period Receipt of rental income for the Xth fiscal period as dividends denominated in yen Overseas SPC Currency hedging period /EON Currency hedging period Property acquisition Currency hedging policy for investment capital (when acquiring the Overseas SPC shares) Plan to hedge the investment capital (the Overseas SPC shares) by concluding an exchange contract upon acquiring the shares. ✓ Conduct currency hedging for acquiring the shares at the exchange rate of the date when the acquisition is announced, so that there will be no difference between the yen- denominated acquisition price announced upon acquisition and the actual yen- denominated acquisition price When the acquisition is conducted in the fiscal period following the fiscal period in which the announcement is made, currency hedging shall be arranged by the end of the fiscal period in which the announcement is made, not extended into the following fiscal period, as a rule. ⚫ For the investment capital (the Overseas SPC shares), fix the acquisition price at the exchange rate of the day when the agreement is concluded Because the Overseas SPC shares that AEON REIT acquires are recognized as subsidiary shares, revaluation due to exchange rates after fixing the acquisition price shall not be conducted イオンリート Receipt of dividends from the Overseas! SPC for the Xth fiscal period Currency hedging policy for dividends received from the Overseas SPC For dividends received from the Overseas SPC, plan to conduct hedging by concluding an exchange contract as of the end of the fiscal period in order to fix the dividend amount denominated in yen ✓ For share dividends paid by the Overseas SPC, conduct hedging by concluding an exchange contract for the period from the finalization of the dividend amount denominated in ringgit by the Overseas SPC to the receipt of the dividends by AEON REIT Exchange rate assumed for budgeting Assume conservative exchange rates at the time of drawing up budgets in consideration of exchange rate trends ✓ The exchange rate assumed for forecasts for the 10th period (ending January 31, 2018) and the 11th period (ending July 31, 2018) is ¥24.0 (on July 31, 2017: ¥25.837). 43#44Summary of Malaysian Economy FTSE Bursa Malaysia KLCI Index trends Changes in GDP growth rate in Japan & Malaysia real GDP growth rate (Malaysia) real GDP growth rate (Japan) trading volume 900,000,000 800,000,000 7.0% 700,000,000 9.4% 6.8% 5.3% 5.5% 5.3% 4.7% 6.0% 5.0% 4.2% 600,000,000 1.7% 5.6%. 1.7% 3.3% 500,000,000 -2.5% 4.2% 2.2% 1.4% -0.1% -1.1% 1.5% 2.0% 0.3% 1.2% 400,000,000 1.0% 300,000,000 -5.4% 200,000,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 100,000,000 0 2003 trading volume (Source) THE WORLD BANK DataBank, August 2017 Population growth in Malaysia (estimated figures for FY2017 onwards) (Source) Bloomberg Monthly trends of RM / Yen (百万人) 35 30 25 2505 15 10 0 2000 2001 2002 2003 2004 2005 2006 2007 (Source) International Monetary Fund, World Economic Outlook Database (April 2017) T 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E (Yen) 38 36 34 32 30 28 26 24 22 20 /EON イオンリート closing price closing price 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 2005 2007 2009 2011 2013 2015 2017 2000 (Source) Bloomberg 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 44#45Appendix 3 Basic policy etc. /EON イオンリート#46/EON イオンリート Roadmap for Growth Targets of asset size in the medium to long term By realizing a mutually beneficial relationship with our sponsor, we have achieved assets of ¥300 billion in approx. 3 years and continuously aim for ¥500 billion in medium term (Note). Key Measures At time of listing At time of listing ¥158.3 billion Feb. 2017 ¥330.6 billion Medium Term ¥500.0 billion External growth using the AEON Group's pipeline Strategic cash management using internal reserves Expansion of overseas investment and diversification of types and regions of properties Management of leverage with LTV in the 40-50% range (Note) The figures above are targets made as of the date of these materials and there is a possibility that they may not be achieved due to future events or the market environment. 46#47Basic Philosophy and Basic Policy Basic Philosophy /EON イオンリート AEON REIT invests primarily in retail and related properties (Note) that are an integral part of the communities in which they are located. We believe that these properties and facilities form the backbone of the local communities and their retail business infrastructure. Our mission is to contribute to the betterment of individual lives and local communities through investment in retail and related properties. In doing so, we seek to generate stable revenues and achieve the steady growth of our asset portfolio over the medium to long term. (Note) Refers to retail properties, logistics facilities and related facilities. Retail properties refer to facilities containing retail businesses and other merchandising businesses, entertainment and amusement facilities and other facilities that attract customers (including parking lots and equipment and systems for logistics). Logistics facilities refer to warehouses and other storage facilities for distribution and transport of merchandise and other goods. Basic Policy A growth strategy based on a mutually beneficial relationship between AEON REIT and AEON Group (Note) We will aim to maximize value for unitholders by building a mutually beneficial relationship between AEON REIT and the AEON Group. Improve financing capabilities 3 Maximize unitholder value/Improve asset management AEON REIT stability Investment Corporation 2 Expand asset size 1 Acquire retail properties from Aeon Group Sell retail properties to AEON REIT Investment Corporation 4 Invest for growth 1 Aeon Group Increase profits/ Raise the value of Aeon Group (Note) Refers to the group comprising the holding company AEON CO., LTD. and its 296 consolidated subsidiaries and 32 equity-method associates (as of February 28, 2017). 3 2 Operate retail properties 47#48Portfolio Policy Investment Properties Centered on Large-Scale Retail Properties and Investment Ratios Retail properties, etc. Large-scale Type SRSC (Super regional shopping center) (Note2) retail RSC (Regional shopping center) (Note3) property CSC (Community shopping center) (Note4) Other retail NSC (Neighborhood shopping center) (Note5) SM (Supermarket) (Note6) property Logistics facility Investment areas Countries and regions with good economic growth prospects in the medium to long term, like Malaysia of ASEAN region (Note 7) and China (Notes) Calculated based on acquisition price. Investment ratio (Note1) /EON イオンリート Domestic 85% or more Overseas No more than 15% 80% or more No more than 20% No more than 10% Investment targets In principle, retail properties that are leased in their entirety under master lease contracts to the AEON Group, which manages and operates the properties Larger commercial area than regional shopping centers. A super regional-type shopping center having a number of anchor tenants and a shopping mall forming a complex of over 200 specialty stores. A regional-type shopping center having a general merchandise or other similar store as the anchor tenant and a complex of over 50 specialty stores. A retail property having a general merchandise store, a discount store, a large grocery supermarket or another similar store as the anchor tenant, and a complex of approximately 20-50 specialty stores. 1. 2. 3. 4. 5. 6. A grocery supermarket mainly selling high purchase frequency commodities such as food and household goods. 7. Indicates Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. A small-scale retail property serving a small commercial area, having a grocery supermarket or another similar store as the anchor tenant and a complex of approximately 10-30 specialty stores generally selling household goods. 48#49Realization of Growth Strategies through Collaboration with AEON Group /EON イオンリート ●Major Shopping Centers developed by AEON Group ●Major Shopping Centers currently under development by AEON Group Tokai and Hokuriku ●AEON MALL Takaoka ●AEON MALL Tonami Chugoku and Shikoku AEON MALL Tottorikita Tottori-shi, Tottori • AEON Matsue Shopping Center Matsue-shi, Shimane ●AEON MALL Izumo Izumo-shi, Shimane Okayama-shi, Okayama Aki-gun, Hiroshima AEON MALL Okayama ⚫AEON MALL Hiroshima Fuchu ●AEON MALL Hiroshima Gion (Tentative) Seihu-Shinto Project ● AEON Town Houfu ●AEON MALLTokushima AEON MALL Takamatsu ⚫AEON MALL Niihama Hiroshima-shi, Hiroshima. Hiroshima-shi, Hiroshima Hofu-shi, Yamaguchi Tokushima-shi, Tokushima Takamatsu-shi, Kagawa Niihama-shi, Ehime AEON MALL Imabarishintoshi Imabari-shi, Ehime ●AEON MALL Kochi Kochi-shi, Kochi ●AEON MALL Shin-Komatsu ⚫AEON MALL Kakamigahara (tentative name) AEON AEON MALL Toki ⚫ AEON MALL Hamamatsuichino AEON MALL Odaka AEON MALL Nagoya Chaya AEON MALL Fuso AEON MALL Tokoname AEON MALL Nagakute AEON MALL Toin ●AEON MALL Tsu minami Takaoka-shi, Toyama Tonami-shi, Toyama Komatsu-shi, Ishikawa Kakamigahara-shi, Gifu Toki-shi, Gifu Hamamatsu-shi, Shizuoka Nagoya-shi, Aichi Nagoya-shi, Aichi Niwa-gun, Aichi Tokoname-shi, Aichi Nagakute-shi, Aichi Inabe-gun, Mie Tsu-shi, Mie Hokkaido and Tohoku ●AEON MALL Around Asahikawa Station AEON MALL Shimoda ⚫AEON MALL Moriokaminami AEON MALL Natori ●AEON MALL Akita ● AEON MALL Tendo Shopping Mall Festa (tentative name) AEON MALL Iwakionahama Asahikawa-shi, Hokkaido Kamikita-gun, Aomori Morioka-shi, Iwate Natori-shi, Miyagi Akita-shi, Akita Tendo-shi, Yamagata Koriyama-shi, Fukushima Iwaki-shi, Fukushima Kyushu and Okinawa ● AEON MALL Fukuokaito ⚫AEON MALL Fukutsu AEON MALL Yahatahigashi AEON MALL Sagayamato Fukuoka-shi, Fukuoka Fukutsu-shi, Fukuoka Kitakyushu-shi, Fukuoka Saga-shi, Saga AEON Daito Shopping Center Sasebo-shi, Nagasaki ⚫ AEON Yatsushiro Shopping Center Yatsushiro-shi, Kumamoto AEON MALL Sankoh AEON MALL Miyazaki AEON MALL Okinawa Rycom Nakatsu-shi, Oita Miyazaki-shi, Miyazaki Nakagami-gun, Okinawa AEON MALL ShinKomatsu AEON MALL Kobe Minami AEON MALL Tokushima Kinki AEON MALL Kusatsu AEON MALL Kyotogojo ●AEON MALL Kyoto Katsuragawa AEON MALL Rinkusennan ●AEON MALL Dainichi AEON MALL Matsumoto Kanto and Koushinetsu ●AEON MALL Tsukuba ⚫AEON MALL Sanoshintoshi ●AEON MALL Takasaki ●AEON MALL Urawamisono AEON MALL Hanyu AEON MALL Kasukabe AEON MALL Yono ⚫(tentative name) AEON MALL Ageo AEON MALL Makuhari New City AEON MALL Kisarazu ● AEON MALL Tamadairanomori ●AEON MALL Hinode AEON Hadano Shopping Center (tentative name) AEON MALL Hiratsuka (tentative name) AEON MALL Zama AEON MALL Nigataminami AEON MALL Sakudaira (tentative name) AEON MALL Matsumoto Tsukuba-shi, Ibaraki Sano-shi, Tochigi Takasaki-shi, Gunma Saitama-shi, Saitama Hanyu-shi, Saitama Kasukabe-shi, Saitama Saitama-shi, Saitama Ageo-shi, Saitama Chiba-shi, Chiba Kisarazu-shi, Chiba Hino City-shi, Tokyo Nishitama-gun, Tokyo Hadano-shi, Kanagawa Hiratsuka-shi, Kanagawa Zama-shi, Kanagawa Nigata-shi, Nigata Saku-shi, Nagano Matsumoto-shi, Nagano Kusatsu-shi, Shiga Kyoto-shi, Kyoto Kyoto-shi/Mukou-shi, Kyoto Sennan-shi, Osaka Moriguchi Osaka-shi, Osaka Shijonawate-shi/Neyagawa-shi, Osaka Sakai-shi, Osaka • AEON MALL Osaka Dome City AEON MALL Shijonawate AEON MALL Sakaiteppoucho (tentative name) AEON MALL Kobeminami AEON MALL Kashihara AEON MALL Wakayama Kobe-shi, Hyogo Kashihara-shi, Nara Wakayama-shi, Wakayama (Source) Prepared by the Asset Manager based on the information provided by AEON CO., LTD. and AEON Mall Co., Ltd. (as of Sep. 2017). Note: AEON REIT neither owns nor plans to acquire any of these properties as of now. 49#50Strategic Cash Management and a Stable Financial Position Strategic Cash Management /EON イオンリート In the large-scale retail properties that we target for investment, the depreciation expense accounts for a large percentage of the property value. By deploying internal reserves in an amount equal to the depreciation expense, we plan to increase capital efficiency and stabilize cash flow. (1) Investment contributing to an increase in income a. Appropriation of funds to acquire new properties b. Investing in revitalization of property to boost revenues and competitiveness (2) Measures aimed at stabilizing financial position c. Reduction in the cost of our debt by repayment of interest-bearing debt Growth driven by efficient use of capital (3) Capital strategies that protect unitholder interests d. Distributions in excess of earnings e. Increased capital efficiency through unit buy-backs Stable Financial Position LTV (Note) Extension of debt maturities & fixing of interest rates Mix of lenders Policies Maintain leverage with an LTV of 40-50% range Set loan terms according to the status of cash flows based on tenant lease terms and content Achieve appropriate diversification of different lender financial institutions, primarily megabanks (Note) LTV Total remaining interest-bearing debt plus tenant leasehold and security deposits (including tenant leasehold and security deposits in trust) for the assets held by AEON REIT Investment Corporation. 50#51Framework for Maximizing Unitholder Value Transparent Decision-Making Process Dropped or instructions given to modify content Returned Disapproved Drafting of proposal by the responsible department Deliberation and Approval by the Compliance Officer resolution by the Deliberation and resolution by the Investment Committee* Compliance Committee* Dropped or instructions given to modify content STOP STOP /EON イオンリート Approval by Investment Corporation Report to the Asset Manager's board of directors • • * An outside expert must attend the meeting and agree in order for the resolution to pass. Further Aligning the Interests of Unitholders and the AEON Group Ownership of investment units by AEON Group Ownership interest 19.7% (as of July 31, 2017) Co-ownership of properties with AEON Group Co-owned properties 3 (as of July 31, 2017) Introduction of an Asset Management Fee Structure Linked to Distributions per Unit Management Fee Structure Manage ment fee Manage- Manage- ment fee Calculation Method Total assets × 0.3% (maximum rate) × {No. of operating days / 365} DPU before deducting Management fee II × NOI¹× 0.001% ment fee II (maximum rate) Acquisition fee Acquisition price × 0.5% (maximum rate) [Related party transactions: Acquisition price × 0.25% (maximum rate)] Disposition price × 0.5% (maximum rate) Disposition fee [Related party transactions: no disposition fee paid] Introduction of Cumulative Investment Unit Purchase Program We introduced a program on May 1, 2014, that enables the acquisition of AEON REIT's investment units, using the cumulative investment unit purchase program through securities firms, for directors and employees of AEON REIT and the Asset Manager. The program will help to further raise awareness towards enhancing the value of AEON REIT's investment unit price and improving business performance, and provide greater financial motivation in line with the interests of the unitholders. (Note) NOI refers to total real estate leasing revenues for the relevant fiscal period less real estate leasing expenses (excluding depreciation and loss on retirement of non-current assets). 51#52Trend of Investment Unit Price ■ AEON REIT Investment Unit Price and Trading Volume Trading Volume (Right axis) AEON REIT Investment Unit Price (Left axis) /EON イオンリート (Units) 50,000 40,000 30,000 20,000 10,000 0 Sep 2017 Aug 2017 Jul 2017 Jul 2017 Jun 2017 Jun 2017 Jun 2017 Jun 2017 May 2017 May 2017 Apr 2017 Apr 2017 Mar 2017 Mar 2017 Feb 2017 Feb 2017 Jan 2017 Jan 2017 Dec 2016 Dec 2016 Nov 2016 Nov 2016 Oct 2016 TOPIX Oct 2016 Sep 2016 Sep 2016 Aug 2016 Jul 2016 Jun 2016 Aug 2016 Jul 2016 Jun 2016 May 2016 May 2016 Apr 2016 Mar 2016 Feb 2016 Jan 2016 Dec 2015 I Nov 2015 Oct 2015 Sep 2015 Aug 2015 Jul 2015 Jun 2015 May 2015 Apr 2015 Mar 2015 Feb 2015 Jan 2015 Dec 2014 Nov 2014 Oct 2014 Sep 2014 Aug 2014 Jul 2014 Jun 2014 May 2014 Apr 2014 Mar 2014 Feb 2014 Jan 2014 Dec 2013 Nov 2013 ■ Comparison between AEON REIT Investment Unit Price, TSE REIT Index and TOPIX Apr 2016 Mar 2016 TSE REIT Index Feb 2016 Jan 2016 Dec 2015 Nov 2015 Oct 2015 Sep 2015 Aug 2015 Jul 2015 Jun 2015 May 2015 AEON REIT Apr 2015 Mar 2015 Feb 2015 Jan 2015 Dec 2014 Nov 2014 Oct 2014 Sep 2014 Aug 2014 Jul 2014 Jun 2014 May 2014 Apr 2014 Mar 2014 Feb 2014 Jan 2014 Dec 2013 Nov 2013 170 160 150 140 130 120 110 100 06 08 (Yen) 190,000 180,000 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 (Note) The AEON REIT investment unit price, the TSE REIT Index and the TOPIX are compared with the closing price on the AEON REIT's listing date set at 100. Sep 2017 Aug 2017 52#53Unitholder Information Number of Unitholders and Number of Investment Units by Unitholder Type Individuals and others Financial institutions (including financial instruments firms) Other domestic corporations Foreign corporations Total /EON イオンリート Number of Units Number of Unitholders 8th Period (January 31, 2017) 9th Period (July 31, 2017) 8th Period (January 31, 2017) 9th Period (July 31, 2017) Number of Investment Units % of total Number of Investment Units % of total Number of Unitholders % of total Number of Unitholders % of total 129,083 9.9% 155,477 9.5% 18,124 96.7% 21,159 96.7% 737,238 56.3% 839,345 51.3% 138 0.7% 159 0.7% 313,016 23.9% 380,900 23.3% 301 1.6% 351 1.6% 130,130 9.9% 260,190 15.9% 174 0.9% 203 0.9% 1,309,467 100.0% 1,635,912 100.0% 18,737 100.0% 21,872 100.0% Investment Unit Ownership Ratio by Unitholder Type | Major Unitholders (As of July 31, 2017) Unitholder Name July 2015 Period (5th Period) Number of Units % of Total 9.7% 56.5% 24.7% 9.1% 1 AEON Co., Ltd. 322,453 19.7% Jan. 2016 Period (6th Period) 9.9% 56.3% 24.8% 9.0% 3 July 2016 Period (7th Period) 2 Japan Trustee Services Bank, Ltd. (trust account) Trust & Custody Services Bank, Ltd. (securities investment trust account) 269,255 16.5% 145,842 8.9% 9.3% 51.1% 24.0% 15.6% Jan. 2017 Period (8th Period) 5 9.9% 56.3% 23.9% 9.9% 4 The Master Trust Bank of Japan, Ltd. (trust account) The Nomura Trust & Banking Co., Ltd. (trust account) 128,029 7.8% 54,667 3.3% 6 Sumitomo Mitsui Trust Bank, Limited 27,150 1.7% July 2017 Period 9.5% 51.3% 23.3% 15.9% 7 STATE STREET BANK AND TRUST COMPANY 505012 26,510 1.6% (9th Period) 8 NORTHERN TRUST CO. (AVFC) RE HCROO 21,607 1.3% Individuals and others ■Financial institutions (including financial instruments firms) Other domestic corporations Foreign 9 Mizuho Bank, Ltd. 20,000 1.2% corporations 9 Tokyo Century Corporation 20,000 1.2% Total 1,035,513 63.3% 53#54AEON Group Profile (Note) Business Operations across 13 Countries AEON Group across 13 countries Total China 49 22 65 Laos 52 3 Myanmar 43 21 37 165 India 21,113 stores / locations Thailand GMS (General merchandise store) 626 SM (Supermarket) 2,129 ODS (Discount store) 566 HC (Home center) 119 OCVS (Convenience store) 5,261 Malaysia • 32 Specialty store 4,352 Indonesia 5 Drugstore Other retail store 3,980*1 883 ⚫ 23 • 1 49 • 25 • 7 RSC 303*2 64 8 NSC 175*3 ⚫ 78 Financial service 705 1 Service business 2,005 Other business 1 Includes alliance partners. 9 *2 In addition to SC whose name is AEON MALL, SC whose total leased area is more than 20,000m included. 3 SC whose name is AEON Town. The number of stores and office locations, including consolidated subsidiaries and equity-method associates. Philippines 499 • 1 • 26 ■ Synergy from Multiple Businesses Korea • 2,362 Japan 539 1,956 543 Vietnam 119 4 • 2,263 55 4,300 General Merchandise 3,977 Store • 789 • 251 175 Combodia 1 1 -9 • 2 Australia 1 363 1,670 MaValu Consolidated Operating Revenues Number of Group Employees approx. ¥8,200 billion approx. 520,000 employees AEON Financial Service Credit Card Holder Number of Consolidated valid membership (As of March 31, 2017) approx. 38.94 million (Note) As of February 28, 2017 EON BIG EXTRAS Discount Store /EON イオンリート HAC HAC Drugstore/Pharmacy AEON Mall AEON Town 274 malls in Japan and overseas (*) Shopping Supermarket Strategic Retail Store Center Development Business (*) In addition to SC whose name is AEON MALL, SC whose total leased area is more than 20,000m included. Number of Consolidated Subsidiaries: 296 Number of Equity-Method Associates: 32 Retail Business Synergy Creation Financial Services Business Service Business AEON DELIGHT AEON Fantasy AEON Card EON AEON'S Electronic Money "WAON" EURON VISA ZEON AEON Bank 54#55Disclaimer /EON イオンリート Disclaimer ― - These materials contain forward-looking statements with respect to the future business results, plans, and management targets and strategies of AEON REIT Investment Corporation (AEON REIT). These forward-looking statements are based on assumptions made at the present time about future events and the operating environment. There is no guarantee that these assumptions are correct. Various factors could cause actual future results to differ materially from those expressed or implied by the forward-looking statements contained herein. While all reasonable measures have been taken to ensure that the information presented herein is correct, AEON REIT makes no assurance or guarantee as to the accuracy or completeness of that information. The contents of the information may be changed or eliminated without notice. These materials include analyses, judgments and other views based on information currently available to AEON REIT and AEON Reit Management Co., Ltd. As such, actual operating results may differ from these views. Furthermore, there are other views that differ from these, and AEON REIT and AEON Reit Management Co., Ltd. may change these views in the future. These materials are provided for the sole purpose of presenting general information and explaining the management strategies of AEON REIT, and are not intended as a solicitation to purchase AEON REIT's investment units, nor to enter into any other financial instruments transaction agreement. When making investments, investors are advised to use their own judgment and discretion. Disclaimer for Dutch Investors The units of AEON REIT Investment Corporation ("AEON REIT") are being marketed in the Netherlands under Section 1:13b of the Dutch Financial Supervision Act (Wet op het financieel toezicht, or the "Wft"). In accordance with this provision, AEON Reit Management Co., Ltd. (the "AIFM") has notified the Dutch Authority for the Financial Markets of its intention to offer these units in the Netherlands. The units of AEON REIT will not, directly or indirectly, be offered, sold, transferred or delivered in the Netherlands, except to or by individuals or entities that are qualified investors (gekwalificeerde beleggers) within the meaning of Article 1:1 of the Wft, and as a consequence neither the AIFM nor AEON REIT is subject to the license requirement pursuant to the Wft. Consequently, neither the AIFM nor AEON REIT is subject to supervision of the Dutch Central Bank (De Nederlandsche Bank) or the Netherlands Authority for Financial Markets (Autoriteit Financiële Markten). The AIFM is therefore solely subject to limited ongoing regulatory requirements as referred to in Article 42 of the European Alternative Investment Fund Managers Directive (European Directive 2011/61/EU) (the "AIFMD"). Please visit AEON REIT's home page (www.aeon-jreit.co.jp/en) to access its latest annual report referred to in Article 22(1) of the AIFMD or information provided under Article 23 of the AIFMD. Asset Manager: AEON Reit Management Co., Ltd. (Registration of financial instruments business: Kanto Local Finance Bureau, Director-General (Financial Instruments), No. 2668) Contact Information Please contact us if any questions: AEON Reit Management Co., Ltd. Finance and Planning Department TEL: 03-5283-6361