Tokyu REIT : FP ended Jul. 2023(FP 40) Financial Report

September 14, 2023

1-12-1, Dogenzaka, Shibuya-ku, Tokyo 150-0043, JAPAN

FINANCIAL REPORT

FOR THE FISCAL PERIOD ENDED JULY 2023

TOKYU REIT, Inc. is listed on the Tokyo Stock Exchange with the securities code number 8957. URL: https://www.tokyu-reit.co.jp/eng/

Contact: Tokyu Real Estate Investment Management Inc. (Investment Management Company) Yoshitaka Kimura, Representative Director & President, Chief Executive Officer

Tatsumi Yamagami, Representative Director & Executive Vice President, Chief Financial Officer Tel: [phone]

Planned date of filing Securities Report: October 27, 2023

Planned start of dividend payments: October 17, 2023

Supplementary documents for results: YES

Results briefing (for institutional investor and analysts): YES

This financial report has been prepared in accordance with Japanese accounting standards and Japanese law. Figures have been rounded down to eliminate amounts of less than one million yen.

PERFORMANCE FOR THE FISCAL PERIOD ENDED JULY 2023 (February 1, 2023 - July 31, 2023)

(1) Business Results			Percentage change shows the increase and decrease ratio to the previous period.
		Operating Revenues	Operating Income	Ordinary Income
		(Millions of Yen)	(%)	(Millions of Yen)	(%)	(Millions of Yen)	(%)
Period Ended	8,924	-21.2	4,682	-36.1	4,261	-38.1
July 2023
Period Ended	11,321	30.6	7,331	54.9	6,885	58.6
January 2023
					Return on	Ordinary	Ordinary
				Net Income	Income to
		Net Income	Unitholders'	Income to
		per Unit	Operating
				Equity (ROE)	Total Assets
					Revenues
		(Millions of Yen)	(%)	(Yen)	(%)	(%)	(%)
Period Ended	4,260	-38.1	4,357	3.5	1.8	47.7
July 2023
Period Ended	6,885	58.7	7,042	5.7	3.0	60.8
January 2023
(2) Distributions
				Distribution	Total		Distribution
		Distribution	Total	in Excess of	Distributions	Payout	Ratio to
		per Unit	Distributions	Earnings per	in Excess of	Ratio	Unitholders'
				Unit	Earnings		Equity
		(Yen)	(Millions of Yen)	(Yen)	(Millions of Yen)	(%)	(%)
Period Ended	3,750	3,666	-	-	86.1	3.0
July 2023
Period Ended	4,040	3,949	-	-	57.4	3.3
January 2023

Note: The payout ratio is calculated by the following formula. Payout Ratio=Total Distributions/Net Income×100

Distribution per unit for the fiscal period ended July 2023 is calculated by dividing by the total number of units issued and outstanding the amount obtained after adding ¥58 million of reversal of reserve for reduction entry of replaced property to net income and subtracting ¥652 million of provision of reserve for reduction entry of replaced property from unappropriated retained earnings.

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TOKYU REIT, Inc.

Distribution per unit for the fiscal period ended January 2023 is calculated by dividing by the total number of units issued and outstanding the amount obtained after subtracting ¥2,935 million of provision of reserve for reduction entry of replaced property from unappropriated retained earnings.

(3) Financial Position

	Total Assets	Net Assets	Unitholders' Capital to	Net Assets
	Total Assets	per Unit
	(Millions of Yen)	(Millions of Yen)	(%)	(Yen)
Period Ended	241,453	122,817	50.9	125,631
July 2023
Period Ended	239,993	122,507	51.0	125,314
January 2023
(4) Cash Flows
	Cash Flows from	Cash Flows from	Cash Flows from	Cash and Cash
	Equivalents at the end
	Operating Activities	Investing Activities	Financing Activities
	of Period
	(Millions of Yen)	(Millions of Yen)	(Millions of Yen)	(Millions of Yen)
Period Ended	7,582	-359	-3,948	8,050
July 2023
Period Ended	11,960	-19,906	7,550	4,775
January 2023

FORECAST OF RESULTS FOR THE FISCAL PERIOD ENDING JANUARY 2024 (August 1, 2023 -

January 31, 2024) AND THE FISCAL PERIOD ENDING JULY 2024 (February 1, 2024 - July 31, 2024)

Percentage change shows the increase and decrease ratio to the previous period.

											Distribution
	Operating	Operating	Ordinary		Net		Distribution	in Excess of
	Revenues	Income		Income		Income	per Unit	Earnings
											per Unit
	(Millions	(%)	(Millions	(%)	(Millions	(%)	(Millions	(%)	(Yen)	(Yen)
	of Yen)	of Yen)	of Yen)	of Yen)
Period Ending	9,011	1.0	4,740	1.2	4,303		1.0	4,302	1.0	3,750	-
January 2024
Period Ending	9,352	3.8	4,912	3.6	4,466		3.8	4,465	3.8	3,750	-
July 2024

Reference: Estimated net income per unit for the Fiscal Period Ending January 2024: ¥ 4,401 Estimated net income per unit for the Fiscal Period Ending July 2024: ¥ 4,567

Total number of investment units issued and outstanding for the Period Ending January 2024: 977,600 units

Total number of investment units issued and outstanding for the Period Ending July 2024: 977,600 units

Note:	Distribution per unit for the fiscal period ending January 2024 is assumed to be distributed through reversal of
	part of the reserve for reduction entry of replaced property (¥60 million) after subtracting provision of reserve
	for reduction entry of replaced property (¥696 million) from net income.
	Distribution per unit for the fiscal period ending July 2024 is assumed to be distributed through reversal of part
	of the reserve for reduction entry of replaced property (¥62 million) after subtracting provision of reserve for
	reduction entry of replaced property (¥862 million) from net income.

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TOKYU REIT, Inc.

OTHERS

1. Changes in Account Policies, changes in accounting estimates, and restatement of accounting errors Changes according to revision of account standard: No
   Changes according to another reason: No
   Changes in accounting estimates: No
   Restatement of accounting errors: No
2. Total number of investment units issued and outstanding
   The total number of investment units issued and outstanding is 977,600 units as of July 31, 2023 and 977,600 units as of January 31, 2023.
   No investment unit is held by TOKYU REIT itself as of July 31, 2023 and January 31, 2023.

Note 1: Status of auditing procedure

This summary of financial results is not subject to audit procedures by certified public accountant or audit firm.

Note 2: Forecasts for operating revenues, operating income, ordinary income, net income, distribution per unit and distribution in excess of earnings per unit may differ significantly from actual results due to changes in operating conditions and a variety of factors. Accordingly, TOKYU REIT does not guarantee any distribution amount. Forecasts presented in this document are based on "Assumptions for Forecasts for the Fiscal Period Ending January 2024 and the Fiscal Period Ending July 2024" identified in the separate reference attached.

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TOKYU REIT, Inc.

Assumptions for Forecasts for the Fiscal Period Ending January 2024

and the Fiscal Period Ending July 2024

Forecasts for operating revenues, operating income, ordinary income, net income, distribution per unit and distribution in excess of earnings per unit for the fiscal period ending January 2024 and the fiscal period ending July 2024 are based on the following preconditions and assumptions. If major discrepancies between the following assumptions and initial forecast are found, and if they may cause a certain level of change in forecast figures displayed above, a revised forecast shall be drafted and announced immediately.

	Preconditions and Assumptions
Property portfolio	・Regarding the 31 properties owned by TOKYU REIT as of July 31, 2023, it is assumed that 30%
	quasi-co-ownership interest, and 40% quasi-co-ownership interest in Tokyo Nissan Taito Building will be
	disposed on January 31, 2024, and February 29, 2024, respectively.
Operating	・Revenues from real estate lease business are calculated in consideration of rent level, occupancy rate, etc.
revenues	fluctuation factors in light of recent real estate market conditions, state of negotiations with tenants,
	presence of competitive properties in the area, etc. In addition, there is assumed to be no payment delay
	or nonpayment by tenants.
	・Gain on sale of real estate, etc. of ¥1,297 million in the fiscal period ending January 2024, and gain on sale
	of real estate, etc. of ¥1,729 million in the fiscal period ending July 2024 resulting from the disposition of
	Tokyo Nissan Taito Building are projected.
	・Occupancy Rates as of the end of the fiscal period ending January 2024 and the fiscal period ending July
	2024 are projected to be 99.9% and 99.3%, respectively.
Operating	・Outsourcing expenses for the fiscal period ending January 2024 and the fiscal period ending July 2024 are
expenses	projected to be ¥556 million and ¥535 million, respectively.
	・Repair, maintenance and renovation expenses for the fiscal period ending January 2024 and the fiscal
	period ending July 2024 are projected to be ¥166 million and ¥288 million, respectively. In an aim to
	improve the competitiveness of properties and the satisfaction of tenants under management, etc.,
	constructions scheduled in the future will be implemented with priority. Actual repair, maintenance and
	renovation expenses for each fiscal period may, however, differ significantly from estimated amounts due
	to unforeseen circumstances or emergencies and the others.
	・Property and other taxes, such as fixed property tax and city planning tax, on real estate TOKYU REIT
	possesses, are calculated based on the amount expected to be imposed in each fiscal period (Period
	Ending January 2024: ¥677 million / Period Ending July 2024: ¥755 million).
	Fixed property tax and other taxes paid as part of the purchase prices to the seller upon the property
	acquisition were not recorded as expenses but included in the relevant property acquisition costs.
	・Depreciation and amortization expenses, including associated costs and additional capital expenditure in
	the future, are calculated based on the straight-line method (Period Ending January 2024: ¥947 million /
	Period Ending July 2024: ¥953 million).
	・Expenses from real estate lease business other than those listed above are calculated in consideration of
	fluctuation factors based on results in past fiscal periods.
	・Operating expenses other than expenses from real estate lease business (investment management fees and
	asset custodian fees, etc.) for the fiscal period ending January 2024 and the fiscal period ending July 2024
	are expected to be ¥879 million and ¥870 million, respectively.
Non-operating	・Interest expenses for the fiscal period ending January 2024 and the fiscal period ending July 2024 are
expenses	expected to be ¥407 million and ¥417 million, respectively. Interest expenses include interest expense
	and interest expense on investment corporation bonds.
Interest-Bearing	・The balance of interest-bearing debt as of July 31, 2023, is ¥104,500 million (long-term debt of ¥93,500
Debt	million and investment corporation bonds of ¥11,000 million). As for long-term debt of ¥5,500 million
	due for repayment in the fiscal period ending January 2024, it is assumed that it will be entirely
	refinanced.
	・As for long-term debt of ¥5,000 million due for repayment in the fiscal period ending July 2024, it is
	assumed that it will be entirely refinanced.
	・Balance of interest-bearing debt as of the end of the fiscal period ending January 2024 and the fiscal
	period ending July 2024 are projected to be ¥104,500 million (long-term debt of ¥93,500 million and
	investment corporation bonds of ¥11,000 million).
	・LTVs as of the end of the fiscal period ending January 2024 and the fiscal period ending July 2024 are
	projected to be 43.3% and 43.2%, respectively.
	(LTV: Interest-bearing debt (forecast) / total assets (forecast))

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TOKYU REIT, Inc.

Total number of	・It is assumed that there will be no additional issuance of investment units to the 977,600 units issued and
investment units	outstanding as of September 14, 2023, through the end of the fiscal period ending July 2024.
issued and
outstanding
Distribution per	・Distribution per unit is calculated based on the distribution policy stipulated in the Articles of
unit	Incorporation. Calculations are based on a 100% distribution of retained earnings.
	・Forecasts are based on the assumption that, as for the capital gain projected from the disposition of
	Tokyo Nissan Taito Building, ¥696 million of the ¥1,297 million in capital gains projected, which is to
	be posted in the fiscal period ending January 2024, and ¥862 million of the ¥1,729 million in capital
	gains projected, which is to be posted in the fiscal period ending July 2024, are retained through
	application of the "Special Provisions for Taxation in Cases of Repurchase of Specified Assets" (Article
	65-7 of the Act on Special Measures Concerning Taxation) for provision of reserve for reduction entry
	of replaced property as stipulated in the "Ordinance on Accountings of Investment Corporations."
	・Distribution for the fiscal period ending January 2024 is assumed to be distributed through reversal of
	part of the reserve for reduction entry of replaced property (¥60 million).
	・Distribution for the fiscal period ending July 2024 is assumed to be distributed through reversal of part of
	the reserve for reduction entry of replaced property (¥62 million).
	・It is possible that the distribution per unit could change due to various factors, including changes in assets
	under management, changes in rental revenue accompanying changes in tenants, etc., and unexpected
	maintenance and repairs.
Distribution in	・TOKYU REIT does not currently anticipate distribution in excess of earnings per unit.
excess of earnings
per unit
Other	・Forecasts are based on the assumption that any major revisions to regulatory requirements, accounting
	standards and taxation will not impact forecast figures.
	・Forecasts are based on the assumption that there will be no major unforeseen changes to economic trends
	and in real estate and other markets.

This notice may contain forward-looking statements, such as current plans, strategies, and future performance. These forward-looking statements are based on judgments obtained from currently available information. Please be advised that, for a variety of reasons, actual results may differ materially from those discussed in the forward-looking statements. Events that might affect actual results include, but are not limited to, fluctuations of the real estate market in Japan, general conditions of the Japanese economy, competitive pressures and relevant regulations.

This notice is a translation of the original document in Japanese and is prepared solely for the convenience of non-Japanese speakers. There is no assurance as to the accuracy of the English translation. The original Japanese notice shall prevail in the event of any discrepancies between the translation and the Japanese original.

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