Supplementary Explanation Materials Regarding the Revision of Operating Status and Dividend Forecast for the Fiscal Year Ending June 2026 and the Operating Status and Dividend Forecast for the Fiscal Year Ending December 2026

Overview of Revisions to Operating Status and Dividend Forecast

This document is supplementary explanatory material based on the notice dated February 18, 2026, titled "Revision of Operating Status and Dividend Forecast for the Fiscal Year Ending June 2026 and Operating Status and Dividend Forecast for the Fiscal Year Ending December 2026." The forecasted EPU for the 29th period (Fiscal Year Ending December 2026) is 2,040 yen, anticipating 2.3% growth compared to the actual 1,994 yen for the 27th period (Fiscal Year Ending December 2025). The lower DPU target for the 28th period (Fiscal Year Ending June 2026) and the 29th period is set at 2,250 yen, aiming to maintain a stable dividend level. Through this initiative, which includes asset replacement, acquisition of mezzanine loan receivables, capital increase, and new borrowings, the portfolio’s quality improvement and internal growth are promoted to achieve sustainable EPU growth.

Key Points on Asset Operation and Financial Condition

After this initiative, the total asset LTV stands at 48.1%, down from 48.2% at the end of the 27th period, maintaining a healthy financial position. Review of internal reserve allocation is expected to increase distribution returns from capital gains in the 28th period, contributing to dividend stabilization. Although there are cost increases such as dilution effects from capital increases and additional repair and leasing expenses, the earnings base is strengthened via increased amortized NOI from asset replacements and qualitative improvements of the portfolio. The strategy is to further accelerate internal growth through acquisition of relatively new properties and strategic value-up investments in the future.