Frontier Real Estate Investment : Notice Concerning the Revision of Operating Forecasts for the Fiscal Period Ending June 30, 2024 and the Fiscal Period Ending December 31, 2024

Translation Purpose Only

March 15, 2024

To All Concerned Parties

6-8-7 Ginza, Chuo-ku, Tokyo

Frontier Real Estate Investment Corporation

Takao Iwadou, Executive Director

(Securities Code: 8964)

Asset Management Company:

Mitsui Fudosan Frontier REIT Management Inc.

Shintaro Ono

Chief Executive Officer and Representative Director

Inquiries:

Mitsui Fudosan Frontier REIT Management Inc.

Teruyuki Hayashi

Chief Finance Officer and Director

Tel: [phone]

Notice Concerning the Revision of Operating Forecasts for the Fiscal Period Ending June 30, 2024 and

the Fiscal Period Ending December 31, 2024

Frontier Real Estate Investment Corporation (the "Investment Corporation") hereby announces the revision of operating forecasts previously announced via the "Summary of Financial Results for the 39th Fiscal Period (July 1, 2023 to December 31, 2023)" released February 15, 2024, for the fiscal period ending June 30, 2024 (January 1, 2024 to June 30, 2024) and the fiscal period ending December 31, 2024 (July 1, 2024 to December 31, 2024). Details follow.

1. Revision of Operating Forecasts for the Fiscal Period Ending June 30, 2024 (January 1, 2024 to June 30, 2024) and the Fiscal Period Ending December 31, 2024 (July 1, 2024 to December 31, 2024)

(1) Fiscal Period Ending June 30, 2024 (January 1, 2024 to June 30, 2024)

					Distribution per	Distribution in
					Unit (Excluding
	Operating	Operating	Ordinary		Excess of
	Net Income	distribution in
	Revenue	Income	Income	Earnings per
		excess of
					Unit
					earnings)
Previous	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen	Yen
Forecasts
11,555	6,122	5,771	5,770	10,670	－
(A)
Revised	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen	Yen
Forecasts
12,116	6,671	6,316	6,315	10,850	－
(B)
Difference	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen	Yen
(B - A)	560	548	544	544	180	－
Difference	4.8%	9.0%	9.4%	9.4%	1.7%	－
(%)

1

Translation Purpose Only

(2) Fiscal Period Ending December 31, 2024 (July 1, 2024 to December 31, 2024)

					Distribution per	Distribution in
					Unit (Excluding
	Operating	Operating	Ordinary		Excess of
	Net Income	distribution in
	Revenue	Income	Income	Earnings per
		excess of
					Unit
					earnings)
Previous	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen	Yen
Forecasts
11,511	6,130	5,759	5,758	10,690	－
(A)
Revised	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen	Yen
Forecasts
12,214	6,822	6,446	6,445	10,930	－
(B)
Difference	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen	Yen
(B - A)	702	691	686	686	240	－
Difference	6.1%	11.3%	11.9%	11.9%	2.2%	－
(%)
Notes
1. The expected number of units outstanding as of June 30, 2024:	541,000 units
The expected number of units outstanding as of December 31, 2024:	541,000 units

1. All amounts less than a unit are rounded down.
2. Distribution per unit is rounded down to the nearest 10 yen.
3. The figures above are based on certain pre-conditions and assumptions as of today. Actual figures may differ significantly from forecasts due to future acquisitions and/or sales of properties, real estate market trends and/or changes in the environment surrounding the Investment Corporation. The Investment Corporation does not guarantee the amount of the expected cash distribution per unit in this forecast.

2. Reasons for Announcing the Revision of Operating Forecasts

As announced via "Notice Concerning Sale of Trust Beneficiary Rights to a Real Estate Property in Japan (Queen's Isetan Suginami-Momoi)" and "Notice Concerning Acquisition of Real Estate Properties in Japan (Yaoko Sagamihara Hikarigaoka Store and Yaoko Nishiomiya Store)," both issued as of today, the Investment Corporation decided on the transfer and acquisition of assets. Reflecting this move, the Investment Corporation intends to revise its operating forecasts previously disclosed via the "Summary of Financial Results for the 39th Fiscal Period (July 1, 2023 to December 31, 2023)" released on February 15, 2024 regarding the fiscal periods ending June 30, 2024 and December 31, 2024, due to significant changes in assumptions used in formulating such forecasts.

Frontier Real Estate Investment Corporation website: https://www.frontier-reit.co.jp/en/

2

Translation Purpose Only

Exhibit

Pre-Conditions and Assumptions for Operating Forecasts for the Fiscal Period Ending June 30, 2024

and the Fiscal Period Ending December 31, 2024

	Pre-Conditions & Assumptions
Calculation	・40th fiscal period ending June 30, 2024 (January 1, 2024, to June 30, 2024) (182 days)
・41st fiscal period ending December 31, 2024 (July 1, 2024, to December 31, 2024) (184
Period
days)
	・Among the investment assets owned (totaling 40 properties) as of March 15, 2024, the
	Investment Corporation will divide the trust beneficiary rights of the entire Shinsaibashi
	Square property into land trust beneficiary rights (ground lease rights) and existing building
	trust beneficiary rights as of March 29, 2024, transferring the building beneficiary rights
	while operating only the ground lease rights thereafter; will transfer 44.4% of the quasi-
Investment	shared real estate trust beneficiary rights of Queen's Isetan Suginami-Momoi on May 1,
2024, and 55.6% on July 1, 2024; and acquire Yaoko Sagamihara Hikarigaoka Store on
Assets	May 1, 2024, and Yaoko Nishiomiya Store on July 1, 2024. Moreover, these operating
	forecasts are premised on the absence of any changes in the investment assets due to
	acquisitions of and/or disposals of assets other than those described above until the end
	of the 41st fiscal period (December 31, 2024).
	・Actual numbers may change due to future acquisitions and/or disposals of existing
	properties, if any.
	・The balance of borrowings, etc.* as of March 15, 2024 is ¥128,200 million.
	* Including investment corporation bonds; hereinafter the same shall apply.
	・It is assumed that refinancing and partial self-financing will be executed for the repayment
	of borrowings due by December 31, 2024.
LTV	・The loan to value ratio (LTV*) as of June 30, 2024 and December 31, 2024 are expected
(Loan to Value)	to be approximately 45% and 45%, respectively.

• LTV = (Borrowings, etc. + Security deposits - Unrestricted cash and deposits**) / (Total assets - Unrestricted cash and deposits)
• Unrestricted cash and deposits is calculated by subtracting planned distributions for the next fiscal period and deposits in trust account such as tenant leaseholds, etc. from cash and deposits on the balance sheet of each fiscal period.

	・The above figures are based on the assumption of lease business revenue from the
	investment assets above. Lease business revenue is calculated based on the individual
	lease contracts valid as of February 15, 2024 and estimated fluctuating factors. Lease
Operating	business revenue from Yaoko Sagamihara Hikarigaoka Store and Yaoko Nishiomiya Store
(below, "Assets to Be Acquired") is calculated based on potential lease contracts expected
Revenue
to be effective at the time of the acquisition of such assets in addition to taking into account
	information provided by the current property owners and beneficiaries.
	・Due to the sale of Queen's Isetan Suginami-Momoi, gain on sale of property is expected to
	be ¥ 555 million for the 40th fiscal period and ¥ 696 million for the 41st fiscal period.

3

Translation Purpose Only

	Pre-Conditions & Assumptions
	・Property taxes, city planning taxes, etc. are expected to be ¥1,311 million for the 40th fiscal
	period and ¥1,302 million for the 41st fiscal period. However, should a property be newly
	acquired during any of these fiscal periods and municipal property taxes and other monies
	for settlement occur between the Investment Corporation and the seller, the
	aforementioned monies will be included in its acquisition cost.
	・Repairs and maintenance are expected to be ¥394 million for the 40th fiscal period and
	¥383 million for the 41st fiscal period. However, actual repairs and maintenance may be
Operating	substantially different from the expected amount due to change of outlay date or certain
unanticipated factors.
Expenses
	・Depreciation and amortization are expected to be ¥2,006 million for the 40th fiscal period
	and ¥1,916 million for the 41st fiscal period.
	・Other expenses related to rent business (property management expenses, etc.) are
	calculated based on actual figures and estimated fluctuating factors. Other expenses
	related to rent business associated with Assets to Be Acquired are calculated based on
	potential lease contracts expected to be effective at the time of the acquisition of such
	assets in addition to taking into account information provided by the current property
	owners and beneficiaries.
Non-operating	・It is assumed that non-operating expenses, which include interest charged on borrowings,
security deposits, investment corporation bonds and so on, will be ¥356 million for the 40th
Expenses
fiscal period and ¥376 million for the 41st fiscal period.
	・Cash dividends (distribution per unit) are calculated according to the Investment
	Corporation's distribution policy described in its Articles of Incorporation.
Distribution per	・Distribution per unit for the 40th fiscal period is calculated assuming that ¥440 million (the
difference between the amount set aside for compression reserves and the amount
Unit
withdrawn from compression reserves) will be deducted from net income.
(excluding	・Distribution per unit for the 41st fiscal period is calculated assuming that ¥530 million (the
distributions in
difference between the amount set aside for compression reserves and the amount
excess of
withdrawn from compression reserves) will be deducted from net income.
earnings)
	・Cash distribution per unit may change for a variety of reasons including changes in the
	Investment Corporation's investment assets, changes in leasing revenues due to tenant
	movements, etc., and/or the incidence of unforeseen repairs and maintenance.
Distribution in
Excess of	・The Investment Corporation does not currently anticipate cash distributions in excess of
Earnings per	earnings per unit.
Unit
	・Calculations and operating forecasts are based on the assumption that there will be no
	changes in legislation, taxation, accounting standards, regulations applying to publicly
Others	listed companies, or rules and requirements imposed by the Investment Trusts Association,
Japan, that would impact the aforementioned forecasts.
	・Calculations and operating forecasts are also based on the assumption that there will be
	no material changes in the general economic and real estate market conditions in Japan.

4