Mori Hills REIT Investment : FINANCIAL REPORT FOR THE THIRTY-FIRST FISCAL PERIOD ENDED JANUARY 31, 2022

For Translation Purposes Only

FINANCIAL REPORT

FOR THE THIRTY-FIRST FISCAL PERIOD ENDED JANUARY 31, 2022

March 17, 2022

Name of issuer:

Stock exchange listing: Securities code: Website:

Representative of the investment corporation: Name of asset manager:

Representative of the asset manager: Contact:

Scheduled date for filing of securities report: Scheduled date for dividends payment: Supplementary materials for financial results: Analyst meeting:

Mori Hills REIT Investment Corporation Tokyo Stock Exchange

3234https://www.mori-hills-reit.co.jp/enHideyuki Isobe, Executive Director

Mori Building Investment Management Co., Ltd. Hideyuki Isobe, President & CEO

Akira Nemoto, General Manager of Financial Department

TEL: [phone] April 27, 2022

April 15, 2022 Otherwise prepared Scheduled

1. PERFORMANCE FOR THE THIRTY-FIRST FISCAL PERIOD ENDED JANUARY 31, 2022 (August 1, 2021 - January 31, 2022)

(1) Business Results

(Percentage change represents a period-on-period comparison)

	Operating Revenue	Operating Income	Ordinary Income	Net Income
	Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen		%
Thirty-First	9,820		(0.2)	6,085		(1.2)	5,514		(1.2)	5,513		(1.2)
Fiscal Period
Thirtieth	9,841		0.2	6,157		(0.3)	5,583		0.1	5,582		0.1
Fiscal Period
	Net Income		Net Income to		Ordinary Income to	Ordinary Income to
	per Unit		Total Net Assets	Total Assets		Operating Revenue
			Yen			%			%			%
Thirty-First			2,877			2.7			1.4			56.2
Fiscal Period
Thirtieth			2,913			2.8			1.4			56.7
Fiscal Period

(2) Dividends

	Dividends	Total	Dividends in	Total
	per Unit	Dividends	Excess of	Dividends in	Dividend	Dividend Ratio
	(excluding	(excluding dividends	Earnings per	Excess of	Payout Ratio	to Net Assets
	dividends in excess	in excess of	Unit	Earnings
	of earnings)	earnings)
	Yen	Millions of yen	Yen	Millions of yen	%	%
Thirty-First	2,927	5,609	－	－	101.7	2.8
Fiscal Period
Thirtieth	2,913	5,582	－	－	99.9	2.8
Fiscal Period

(Note 1) Dividend Payout Ratio is calculated by using the formula below and is rounded down to one decimal place. Dividend Payout Ratio = [Total Dividends (excluding dividends in excess of earnings) ÷ Net Income] × 100

(Note 2) The difference between Dividends per Unit and Net Income per Unit for the Thirty-First fiscal period is due to part of the reserve for reduction entry (95 million yen) having been reversed.

(3) Financial Position

	Total Assets	Net Assets	Net Assets to	Net Assets per Unit
	Total Assets
	Millions of yen	Millions of yen	%	Yen
Thirty-First	411,259	201,657	49.0	105,231
Fiscal Period
Thirtieth	404,953	200,818	49.6	104,793
Fiscal Period

(4) Cash Flows

	Net Cash	Net Cash	Net Cash	Cash and
	Provided by (Used in)	Provided by (Used in)	Provided by (Used in)	Cash Equivalents
	Operating Activities	Investing Activities	Financing Activities	at End of the Period
	Millions of yen	Millions of yen	Millions of yen	Millions of yen
Thirty-First	6,482	(8,079)	606	12,125
Fiscal Period
Thirtieth	7,120	(1,019)	(3,805)	13,116
Fiscal Period

2. FORECAST OF RESULTS FOR THE THIRTY-SECOND FISCAL PERIOD ENDING JULY 31, 2022 (February 1, 2022 - July 31, 2022) AND THE THIRTY-THIRD FISCAL PERIOD ENDING JANUARY 31, 2023 (August 1, 2022 - January 31, 2023)

(Percentage change represents a period-on-period comparison)

Operating Revenue

Operating Income

Ordinary Income

Net Income

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Thirty-Second

11,178

13.8

6,995

15.0

6,448

16.9

6,447

16.9

Fiscal Period

Thirty-Third

11,136

(0.4)

6,921

(1.1)

6,368

(1.2)

6,366

(1.2)

Fiscal Period

Dividends per Unit

Dividends in Excess of Earnings

(excluding dividends in excess of earnings)

per Unit

Yen

Yen

Thirty-Second

3,030

－

Fiscal Period

Thirty-Third

3,040

－

Fiscal Period

(Reference)

Estimated net income per unit = [Estimated net income ÷ Estimated number of units issued and outstanding at the

end of the period]

: ¥3,364

Thirty-Second fiscal period

(Note)

Thirty-Third fiscal period

: ¥3,322

Dividend per unit for the Thirty-Second fiscal period and Thirty-Third fiscal period are calculated based on the

assumption that distributions will be made in the remaining amount after deduction of provision of reserve for

reduction entry from net income.

*OTHER

1. Changes in Accounting Policies, Changes in Accounting Estimates and Corrections of Errors
2. 1. Changes in accounting policies in accordance with amendments to accounting standards, etc.: Yes
   2. Changes in accounting policies other than (a): None
   3. Changes in accounting estimates: None
   4. Corrections of errors: None
3. Number of Units Issued and Outstanding
4. 1. Number of units issued and outstanding at end of the period (including own units)

Thirty-First fiscal period: 1,916,330 units	Thirtieth fiscal period: 1,916,330 units
(b) Number of own units at end of the period
Thirty-First fiscal period:	0 units	Thirtieth fiscal period:	0 units

(Note) For the number of investment units used as the basis for calculating net income per unit, please refer to "Per unit Information" on page 33

• This financial report is not subject to audit procedures by certified public accountants or accounting firms.
• Special note

The forecast of results and other forward-looking statements contained in this document are based on information currently available to and certain assumptions deemed reasonable by Mori Hills REIT Investment Corporation (the "Company"). Accordingly, actual results, etc. may differ materially due to a variety of factors. Furthermore, these forecasts shall not be construed as a guarantee of dividends. For the assumptions underlying the forecasts of results, please refer to "Assumptions of Forecasts of Results for the Thirty-Second Fiscal Period Ending July 31, 2022 (February 1, 2022 - July 31, 2022) and the Thirty-Third Fiscal Period Ending January 31, 2023 (August 1, 2022 - January 31, 2023)" presented on pages 9 to 10.

Mori Hills REIT Investment Corporation (3234)

Financial Report for the Thirty-First Fiscal Period Ended January 31, 2022

• INDEX

1. MANAGEMENT STATUS..........................................................................................................	2
(1)	Management Status...............................................................................................................	2
(a) Overview of the Fiscal Period ....................................................................................................................	2
(b) Outlook for the Next Fiscal Period ............................................................................................................	5
2. FINANCIAL STATEMENTS ....................................................................................................	11
(1)	Balance sheet........................................................................................................................	11
(2)	Statement of income and retained earnings ......................................................................	13
(3)	Statement of changes in net assets ....................................................................................	14
(4)	Statement of cash distributions ..........................................................................................	16
(5)	Statement of cash flows .......................................................................................................	17
(6)	Notes to assumption of going concern ................................................................................	18
(7)	Summary of significant accounting policies.......................................................................	18
(8)	Notes on changes in accounting policies ............................................................................	19
(9)	Notes to Financial Statements............................................................................................	20
(10) Changes in unit issued and outstanding .......................................................................	35
. REFERENCE INFORMATION ...............................................................................................	36

1

Mori Hills REIT Investment Corporation (3234)

Financial Report for the Thirty-First Fiscal Period Ended January 31, 2022

1. MANAGEMENT STATUS

1. Management Status
2. 1. Overview of the Fiscal Period
   1. Brief Background of the Investment Corporation

The Company was incorporated by Mori Building Investment Management Co., Ltd. (the Company's Asset Manager) on February 2, 2006 under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended) (the "Investment Trust Act"), and was listed on the Real Estate Investment Trust Section of Tokyo Stock Exchange, Inc. (the "Tokyo Stock Exchange") on November 30, 2006 (Securities Code: 3234).

In the fiscal period under review (thirty-first fiscal period: August 1, 2021 to January 31, 2022), as of the end of the thirty-first fiscal period, the total number of investment units issued and outstanding was 1,916,330.

b) Investment Environment and Business Performance

(i) Investment Environment

In the thirty-first fiscal period, the Japanese economy showed signs of recovery centered on consumer spending as economic activity resumed after the state of emergency was lifted. However, the Japanese economy started to weaken once more since the end of the year when COVID-19 spread again.

In such an economic environment, the vacancy rate in the rental office market saw a lull in its rise due in part to the fact that floor space reductions have already progressed to a certain level because of the spread of remote work triggered by the pandemic, but rent levels maintained their sluggish conditions given the weak demand for office expansions, reflecting uncertainty about the future. As for the luxury rental housing market, occupancy rates and rent levels remained solid, driven by the ongoing stable demand for quality housing in central Tokyo amid new supply remaining at a certain level. In terms of the real estate trading market, transaction prices continued to be high and the transaction amount continued to stay at a high level backed by the ongoing favorable fund-raising environment and investors inside and outside of Japan showing no change in their investment appetite.

(ii) Business Performance

In the thirty-first fiscal period, the Company strove to maintain and enhance tenant satisfaction through measures such as efficient and systematic operational management and maintenance and repair of properties in its portfolio by better understanding tenant needs. Moreover, the Company maintained and enhanced occupancy rates and rents by proactively launching leasing activities targeting new and existing tenants while foreseeing trends in rental market conditions.

The Company's real estate portfolio, as of the end of the thirty-first fiscal period, was comprised of 11 properties (Note 1) under management with a total leasable area of 181,518.93m2. The Company has already invested 410,780 million yen (based on the acquisition price) into this portfolio. The occupancy rate at the end of the thirty-first fiscal period (Note 2) was 97.4 %.

2