Frontier Real Estate Investment : Notice Concerning the Acquisition of Trust Beneficiary Rights to Real Estate Property and Real Estate Properties in Japan

Translation Purpose Only

August 15, 2023

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 Acquisition of Trust Beneficiary Rights to Real Estate Property and Real

Estate Properties in Japan (Mitsui Shopping Park LaLaport IZUMI (18.5% Quasi Co-Ownership Stake)

and Shin-Kawasaki Square)

Frontier Real Estate Investment Corporation (the "Investment Corporation") hereby announces the decision of Mitsui Fudosan Frontier REIT Management Inc., the Investment Corporation's asset management company (the "Asset Management Company"), reached on August 15, 2023, to acquire Mitsui Shopping Park LaLaport IZUMI (18.5% quasi co-ownership stake) and Shin-Kawasaki Square (the acquisition of these assets shall be hereinafter referred to collectively or individually as the "Acquisition," with the assets hereinafter referred to collectively as the "Assets to Be Acquired"), as detailed below. In addition, the seller of Shin-Kawasaki Square is a related party of the Asset Management Company as defined by the latter's internal rules regarding transactions with related parties. Therefore, in accordance with these rules, the Asset Management Company obtained authorization from the Investment Corporation, based on the approval granted by the Investment Corporation's Board of Directors meeting held on August 10, 2023, following the deliberation and resolution of the Compliance Committee on August 9, 2023. The Asset Management Company's Board of Directors then resolved to conclude the contracts associated with the Acquisition at its Board of Directors meeting held today.

1. Details of Assets to Be Acquired

(1)	Property name	Mitsui Shopping Park LaLaport IZUMI		Shin-Kawasaki Square
(18.5% quasi co-ownership stake)
(2)	Type of asset	Trust beneficiary rights to real estate		Real estate
(3)	Planned	¥5,198 million		¥9,400 million
(Land: ¥2,968 million,		(Land: ¥6,627 million,
	acquisition price*1
	Building: ¥2,230 million)		Building: ¥2,773 million)
(4)	Contract date	August 15, 2023
(5)	Planned	October 2, 2023		December 22, 2023
	acquisition date	(Delivery and clearance date)		(Delivery and clearance date)
(6)	Sellers*2	SMFL MIRAI Partners Company,		Mitsui Fudosan Co., Ltd.
Limited
(7)	Presence of broker	None

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(8)	Acquisition	Self-financing and loans (planned)
	financing
(9)	Payment method	Lump sum at the time of delivery

*1 The amount noted here excludes miscellaneous acquisition costs, real property taxes, city planning taxes, consumption taxes, etc.

*2 Please refer to "4. Seller Profile" below.

2. Rationale

The proposed acquisition is in line with the Investment Corporation's "Basic Policy of Asset Management" as stipulated in its Articles of Incorporation. Specifically, the Investment Corporation expects the Acquisition to help expand its asset size while enhancing the diversity of its properties in terms of geographical location and type of tenant. By doing so, the Investment Corporation aims to maintain and improve the quality, profitability and stability of its portfolio. In its decision to acquire this asset, the Asset Management Company also considered, inter alia, the following factors:

Mitsui Shopping Park LaLaport IZUMI (18.5% quasi co-ownership stake)

(1) Evaluation of the Site

The property is located in the new town Tri-Vert Izumi in Izumi City, Osaka, approximately 3km from Izumi- Chuo Station on the Semboku Rapid Railway Line and approximately 500m from the Kishiwada Izumi Interchange on the Hanwa Expressway. The site is suitable for attracting customers from a wide area by car, crossing the Hanwa Expressway north to south and the Osaka Outer Loop Line (National Route 170) east to west. The population of the trade area has 57,000 people within a 3km radius and 184,000 within a 5km radius, but there is sufficient population with approximately 790,000 people within a 30-minute drive time. In particular, Tri-Vert Izumi is a new town to which residents commenced moving in from the 1990s, and there are now many households raising families, which makes it a site suitable for a regional shopping center such as LaLaport.

(2) Features of the Property

The property is a regional shopping center opened in October 2014 and operated by Mitsui Fudosan Co., Ltd., composed of approximately 200 stores owned by various tenants such as Akachan Honpo, Edion, ZARA, Nitori, MUJI, UNIQLO, Round One and LOFT. The site has a total of approximately 3,400 car parking spaces, and is considered a highly competitive property suited to attracting car-driving customers from a wide area.

Shin-Kawasaki Square

(1) Evaluation of the Site

The property is situated in the area where the Type-1 Urban Redevelopment Project of the Kashimada Station Western Area in Kawasaki City, Kanagawa Prefecture has been carried out on a site that is a 3-minute walk from Shin-Kawasaki Station on the JR Yokosuka Line and Shonan-Shinjuku Line and a 4-minute walk from Kashimada Station on the JR Nambu Line. The population of the trade area is sufficient with 17,000 within a 500m radius, 55,000 within a 1km radius and 205,000 within a 2km radius. According to the 2020 National Census, the population has increased dramatically from 2015 to 2020, up 112% within a 500m radius, 109% within a 1km radius and 106% in a 2km radius, and the site is expected to benefit from further increases in the local population.

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(2) Features of the Property

The property is a medium-scale shopping center that opened in March 2015 with a Maruetsu supermarket and Jexer fitness club as core tenants as well as stores that are very convenient for everyday needs including a nursery school, medical clinic and uniform price shop. It is connected by pedestrian deck to JR Shin -Kawasaki Station and JR Kashimada Station, with excellent access to both stations. In addition, residential areas are spreading out in the vicinity of the property such as Park Tower Shin -Kawasaki and Park City Shin-Kawasaki and it is considered a highly competitive property with easy train access and a large local population.

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3. Details of the Assets to Be Acquired

Name of asset	Mitsui Shopping Park LaLaport IZUMI
(18.5% quasi co-ownership stake)
Type of asset	Trust beneficiary rights in real estate property
Trust formation date	March 24, 2020
Trustee		SMBC Trust Bank Ltd.
Trust contract period	March 31, 2030
Location (residence indication)	4-4-7, Ayumino, Izumi City, Osaka Prefecture
			Lot area*	113,617.13 m2 (registered)
			Use	Quasi-industrial area
Land		Plot ratio	200%
			Building to land ratio	60%
			Ownership	Property ownership
			Structure / Number of floors	Steel frame, flat roof construction, five floors above
			ground (registered)
Building		Construction completed	September 30, 2014
	Gross floor area*	151,947.36 m2 (registered)
			Use	Stores and parking lot
			Ownership	Property ownership
Planned acquisition price	¥5,198 million
Appraisal value	¥5,235 million
Appraiser		Japan Real Estate Institute
PML in earthquake	10%
Collateral		None
Lease details
	Lessor	SMBC Trust Bank Ltd.
	Lessee	Mitsui Fudosan Co., Ltd.
	Type of contract	Building lease contract (fixed-term master lease contract)
	Contract term	20 years (until March 23, 2040)
	Annual rent*	¥1,902 million
	Termination during the contract term	Not allowed until March 1, 2026
	Rent revision	None
	Leasehold deposit*	¥951 million
	Security deposit	None
	Number of tenants	1
	Total leasable floor space*	168,552.13 m2
	Total leased floor space*	168,552.13 m2
	Occupancy rate	100% (total leased floor space / total leasable floor space)
				・ The seller, a quasi co-owner who owns quasi co-
				ownership stake in trust beneficiary rights to the
				property, Mitsui Fudosan Co., Ltd. and the trustee
				have exchanged a letter of agreement between the
				quasi co-owners. The Investment Corporation plans
				to conclude an agreement with these parties to
				modify the letter of agreement between the quasi co-
Note		owners and to be added as a party to such letter of
				agreement between the quasi co-owners (the letter of
				agreement between the quasi co-owners following
				such modification is hereinafter referred to as the
				"Letter of Agreement between the Quasi Co-
				Owners"). According to this Letter of Agreement
				between the Quasi Co-Owners, if a quasi co-owner
				wishes to transfer its quasi co-ownership in whole or

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in part, it is to offer the transfer of these assets preferentially to the other quasi co-owners before a third party. If a quasi co-owner wishes to acquire these assets, said quasi co-owner shall negotiate with them preferentially. In addition, with the exception of certain important matters, in the case that decision making is required as the beneficial owners of the property, decisions may be made based on the sole discretion of the entity owning the largest quasi co- ownership stake amongst the quasi co-owners. Furthermore, in the case that the co-ownership stake in the property is returned from the trustee to the beneficiary as actual real estate, it is agreed not to demand partition of the property as a whole in accordance with Article 256 of the Civil Code for five years from the date of such return.

• The Assets to Be Acquired by the Investment Corporation are quasi co-ownership of trust beneficiary rights (18.5% stake), but the information stated concerning lot area of the land, gross floor area, annual rent, leasehold deposit, total leasable floor space and total leased floor space of the building pertain to the whole property (100%).

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