Japan Prime Realty Investment : Supplementary Material on the Following Press Releases Announced on December 23, 2021

December 23, 2021

Japan Prime Realty Investment Corporation

Yoshihiro Jozaki, Executive Officer

(Security Code: 8955)

Asset Management Company:

Tokyo Realty Investment Management, Inc. Yoshihiro Jozaki, President and CEO Inquiries: Yoshinaga Nomura, Director and CFO (TEL: [phone])

Supplementary Material on the Following Press Releases

Announced on December 23, 2021

"Notice Concerning Acquisition and Sale of Properties (Conclusion of Contracts)"

"Notice Concerning Submission of Shelf Registration Statement for the Issuance of New Investment Units"

"Notice Concerning Revisions to Operating Forecasts for the Fiscal Periods Ending December 31, 2021, and

June 30, 2022, and Operating Forecasts for the Fiscal Period Ending December 31, 2022"

Japan Prime Realty Investment Corporation

Significance of the Initiatives

Japan Prime Realty Investment Corporation

1

Strategic asset replacement and the acquisition of prime properties by utilizing sponsor pipelines

• Acquire "GRAND FRONT OSAKA," "Tokyo Tatemono Higashi Shibuya Bldg." and "Rise Arena Bldg. (additional ownership)" to seek to expand the size and enhance the quality of the portfolio by utilizing the pipelines of Tokyo Tatemono and other sponsors
• Sell "JPR Umeda Loft Bldg." and "Tokyo Tatemono Honmachi Bldg." as part of strategic asset replacement

2

Submission of shelf registration statement for investment units to control LTV level

• Shelf registration statement for issuance of investment units submitted today to the Kanto Local Finance Bureau (planned issue amount: 16 billion yen (maximum amount); planned issue period: 1 year)
• Aim to expand acquisition capacity by controlling LTV level in anticipation of continuous external growth through agile property acquisitions

3

Revision of operating forecasts (return of gain on sale and expansion of internal reserves to enhance stability of distributions)

• Sell "JPR Umeda Loft Bldg." in three phases and return a portion of gain on sale to unitholders
• A portion of gain on sale will be reserved internally, securing stability of distributions. Achieve both returns to unitholders and expansion of internal reserves.
• New forecast distribution per unit

December 2021 period:	7,550 yen (unchanged from previous forecast)
June 2022 period:	7,750 yen (previous forecast: 7,550 yen; comparison with previous forecast: +2.6%)
December 2022 period:	7,750 yen (newly announced this time)

2

Significance of the Initiatives

Japan Prime Realty Investment Corporation

1	Strategic asset replacement and the acquisition of prime properties by utilizing sponsor pipelines

New Acquisition Assets: Total of 39.9 billion yen

Effect of the Asset Replacement

	Rise Arena Bldg.		GRAND FRONT	Tokyo Tatemono	■ Expanded asset size, younger average building age and greater
(additional ownership)	OSAKA	Higashi Shibuya Bldg.	ratio of office properties in Tokyo
	Preferential	Sponsor			Sponsor
	negotiation	pipeline			pipeline			Before the		After the
	right
							Initiatives	Initiatives
						Number of properties	65 properties	66 properties
						Asset size	465.6 billion yen	488.3 billion yen
						Unrealized gains	110.1 billion yen	111.6 billion yen
(Planned)	7.3 billion yen		21.3 billion yen	11.3 billion yen	NOI yield	4.8%		4.8%
Acquisition price
Appraisal value	7.6 billion yen		22.4 billion yen	12.1 billion yen	NOI yield after	3.9%		3.9%
NOI yield						depreciation
4.2%		3.7%	4.4%
NOI yield after	3.6%		3.0%	3.8%	Average building age	24.8 years		23.5 years
depreciation
(Planned)	Oct. 28, 2021		Dec. 24, 2021	Jan. 18, 2022	Ratio of office in Tokyo	68.5%		69.1%
Acquisition Date
						Ratio of office/retail	77.5%/22.5%	81.2%/18.8%
Acquisition of prime	replacement	Expansion of asset size	Replacement Strategy for the Osaka Area
properties
		Asset
Strategic asset			Enhancement of	■ Improve portfolio quality in the Osaka area
replacement			portfolio quality
	Assets to Be Sold		New Acquisition Assets	Assets to Be Sold
		GRAND FRONT OSAKA		JPR Umeda Loft Bldg.
					Tokyo Tatemono
	JPR Umeda Loft Bldg.				Strategic asset	Planned sale price	17.5 billion yen
		Honmachi Bldg.
	Building age:			Building age:			replacement	Building age	31 years
	31 years				51 years
									Walk from nearest	4 minutes
									station
								Asset
								replacement
Planned sale price	17.5 billion yen			3.6 billion yen	Planned			Tokyo Tatemono Honmachi Bldg.
		21.3 billion yen
Appraisal value	14.0 billion yen			3.5 billion yen	acquisition price	Enhancement	Planned sale price	3.6 billion yen
		Building age	8 years	of portfolio	Building age	51 years
Gain (loss) on sale	4.4 billion yen			-0.8 billion yen
		Directly connected to JR Osaka	quality	Walk from nearest
					3 minutes
Buyer	Third party			Tokyo Tatemono	Station			station
	Sale in 3 phases at price	Sale of the property with the	September 2022		CO2 emissions of the Assets
	25% above appraisal value	oldest building age in the portfolio	Plan to switch to 100%		3
						renewable energy		to Be Sold: 1,862 tons/year

Significance of the Initiatives

Japan Prime Realty Investment Corporation

2	Submission of shelf registration statement for
investment units to control LTV level

• Overview of Shelf Registration

3-1	Return of gain on sale and expansion of internal
reserves to enhance stability of distributions

• Change in Gain on Sale, Returns to Unitholders and Internal Reserves

Planned issue

amount

Planned issue

period

Use of funds

16 billion yen (maximum amount)

1 year, starting from January 5, 2022

Plan to use as part of funds for acquisition of specified assets and repayment of borrowings, or part of repayment of borrowings. Provided, however, it may be used for future acquisition of specified assets, repayment of borrowings or cash on hand.

		Dec. '21 period		Jun. '22 period		Dec. '22 period
Gain on sale	0.92 billion yen		1.33 billion yen		1.34 billion yen
Returns to
0.27 billion yen		0.54 billion yen		0.49 billion yen
unitholders
Internal
	0.64 billion yen		0.79 billion yen		0.84 billion yen
reserves

• Change in Balance of Internal Reserves (internal reserves per unit in brackets)

• Change in LTV and Acquisition Capacity

	In the case of acquisition of the	End of Dec. '22 period
	Anticipated Acquisition Assets using	42.9%
	borrowings and cash on hand only
	End of Jun. '21 period		19.1 billion yen
LTV	40.6%		Expansion of
Acquisition			acquisition
capacity	38.9 billion yen		capacity
(maximum LTV of 45%)
			39.9%
	In the case of acquisition of
		47.3 billion yen
	the Anticipated Acquisition
	Assets by issuing investment

units

							4.17 billion yen
					3.32 billion yen		[4,181 yen]
			2.52 billion yen		[3,330 yen]
	1.88 billion yen		[2,533 yen]
	[1,969 yen]
	End of Jun. '21	End of Dec. '21	End of Jun. '22	End of Dec. '22
	period		period		period		period

• State of Internal Reserves at J-REITs(comparison with total assets; excluding mergers)

1.4%
1.2%					Of the total of 48 J-REITs excluding mergers, 18 J-
1.0%
				REITs have internal reserves
0.8%
0.6%
0.4%
0.2%
0.0%
	JPR	Source: Prepared by TRIM based on materials disclosed by J-REITs

Note: The figures on this page for the June 2022 period and later are premised on the Issuance of New Investment Units, but there is no guarantee that the Issuance of New Investment Units will be	4
implemented. For details, please refer to page 8.

Significance of the Initiatives

Japan Prime Realty Investment Corporation

3-2 Revision of operating forecasts

Due to the return of gain on sale, etc., forecast distribution per unit for the June 2022 period will increase by 2.6% compared with the previous forecast

Achieve both stability of distribution per unit and expansion of capacity for external growth through expansion of internal reserves and control of LTV level

◆ Change in Forecast Distribution per Unit	+2.6%
				Adjusted EPU１
	（yen）	Gain on sale, etc.２		7,750	7,750		7,800
	Reversal of internal reserves
7,800
		7,550	7,550	7,550	430	400
7,500			284	280	133
7,200
6,900
6,600			7,266	7,270	7,417	7,320	7,350
6,300
6,000
	Previous forecast Revised forecast	Previous forecast	Revised forecast	New forecast	Medium-term
	(announced '21/8/16) (announced '21/12/23)	(announced '21/8/16)	(announced '21/12/23)	(announced '21/12/23)		target
	Dec. '21 period	Dec. '21 period	Jun. '22 period	Jun. '22 period	Dec. '22 period
	Units issued and	958,250	958,250	958,250 → 998,250	998,250		Assuming issuance of new investment units
	outstanding (units)
							based on the shelf registration
	internal reserves	1,969	2,533	1,552	3,330	4,181		Securing stability of distributions over the
	per unit (yen)
							long term
	LTV
	40.6%	41.8%	40.6%	39.9%	39.9%		Expansion of property acquisition capacity

1. "Adjusted EPU" is (forecast) net income per unit before recording of gain or loss on sale of real estate
2. "Gain on sale, etc." is calculated as gain or loss on sale of real estate, minus the impact on general and administrative expenses associated with the property sale and the amount planned to be internally reserved
3. The figures on this page for the revised forecast for the June 2022 period and the new forecast for the December 2022 period are premised on the Issuance of New Investment Units, but there is no

guarantee that the Issuance of New Investment Units will take place. For details, please refer to page 8

5