Frontier Real Estate Investment : Financial Reporting Material

Steadily Growing Dividends While Strengthening the Earnings Structure

Frontier Real Estate Investment Corporation ("FRI") is a REIT specializing in retail facilities and was listed on the Real Estate Investment Trust Market (the J-REIT market) of the Tokyo Stock Exchange in August 2004. Mitsui Fudosan has served as the sponsor of FRI since March 2008, when it replaced the previous sponsor, Japan Tobacco. FRI invests in diverse retail facilities in cities throughout Japan. Since FRI's listing, we have steadily built a solid management track record, aiming to secure stable earnings over the medium to long term.

Contents

2

Highlights

22

Financial Section

4

6

8

To Our Stakeholders / Topics Asset Size and Distributions Portfolio

23 38 57

Management's Discussion and Analysis

Audited Financial Statements

Independent Auditor's Report

10

12

Sustainability Initiatives Corporate Governance

60 61

FRI and the Asset Management Company Investor Information

15

FRI's Investment Policy / Distribution Policy

Disclaimer

All content presented in this semi-annual report is provided solely for informational purposes with regard to Frontier Real Estate Investment Corporation (FRI) and is not intended to serve as an inducement or solicitation to trade in any product offered by FRI. Investment units issued by FRI are subject to price fluctuations due to various factors, including: (1) volatile conditions in the J-REIT market, interest rates and the real estate market; (2) fluctuations in rental revenues from properties; and (3) the occurrence of unexpected losses due to natural disasters. Accordingly, investment in FRI entails the risk of incurring a loss. Investment decisions are made at the investors' discretion and are their responsibility as well as at their own risk. FRI disclaims any responsibility or liability for the consequences of investing in FRI.

Forward-Looking Statements

Except for historical information, matters discussed in this report are forward-looking statements and are based on management's estimates, assumptions, and projections. Forward-looking statements, such as business forecasts, should not be construed as commitments to or guarantees of future performance. They are based on judgments made using information obtained at the time of publication, and thus contain risks and uncertainties.

Please be advised that forward-looking statements provided herein may be subject to change without prior notice. Furthermore, FRI assumes no obligation to update any forward-looking statements in this semi-annual report as a result of new information or future events.

Highlights

37th Period (July 1 to December 31, 2022) Financial Highlights

The distribution per unit for the 37th fiscal period was ¥11,122. During the 37th fiscal period, we promoted initiatives aimed at reinforcing our portfolio of existing properties. To ensure financial soundness, we maintained prudent financial operations through careful LTV control and continued to receive high ratings.

We forecast distributions per unit of ¥10,990 and ¥10,500, respectively, for the 38th and 39th fiscal periods.

Loan-to-value (LTV) ratio

Appraisal-based LTV

44.0%

35.3%

Average interest rate on borrowings

Average remaining maturity of borrowings

0.44%

4.66 years

Net asset value per unit

¥468,555

Ratings

AA- / Stable

Rating and Investment Information, Inc.

Issuer rating

AA / Stable A+ / Stable ; A-1 / Stable

Japan Credit Rating Agency, Ltd.

Long-term issuer rating

S&P Global Ratings Japan Inc. Long-term corporate credit; Short-term corporate credit

For the six month periods ended	June 30, 2022 (36th Period)	December 31, 2022 (37th Period)	June 30, 2023 (38th Period) Forecast*	December 31, 2023 (39th Period) Forecast*
Operating revenue	¥11,523 million	¥11,432 million	¥11,581 million	¥10,953 million
Net income	¥6,022 million	¥6,049 million	¥6,046 million	¥5,542 million
Distribution per unit	¥11,117	¥11,122	¥10,990**	¥10,500***

* Forecasts for the 38th and 39th periods (ending June 30, 2023, and December 31, 2023, respectively) given here are as announced in "Summary of Financial Results for the 37th Fiscal Period," published on February 15, 2023.

**The forecast distribution per unit for the 38th fiscal period (ending June 30, 2023) is calculated based on the assumption that the Investment Corporation will distribute net income less ¥101 million (the difference between the reversal of reserve for reduction entry and the reserve for reduction entry recorded).

***

The forecast distribution per unit for the 39th fiscal period (ending December 31, 2023) is calculated based on the assumption that the Investment Corporation will distribute the sum of net income and an additional ¥142 million arising from the reversal of reserve for reduction entry.

37th Period Portfolio Highlights

Asset size

¥357.6 billion

(Total acquisition price)

Number of properties

39 properties

Appraisal value

¥390.1 billion

Unrealized gain

¥78.9 billion

Occupancy rate

99.9%

Green Building certified

83.4%

(Floor area basis)