Nippon Prologis REIT : SUMMARY OF FINANCIAL RESULTS (REIT) For the 17th Fiscal Period Ended May 31, 2021

Nippon Prologis REIT, Inc. (3283) SUMMARY OF FINANCIAL RESULTS (REIT)

For the 17th Fiscal Period Ended May 31, 2021

SUMMARY OF FINANCIAL RESULTS (REIT)

For the 17th Fiscal Period Ended May 31, 2021

July 15, 2021

Name of Issuer:	Nippon Prologis REIT, Inc. ("NPR")
Stock Exchange Listing:	Tokyo Stock Exchange
Securities Code:	3283
Website:	https://www.prologis-reit.co.jp/en/
Representative	Masahiro Sakashita, Executive Director
Name of Asset Manager:	Prologis REIT Management K.K.
Representative:	Masahiro Sakashita, President and CEO
Inquiries:	Atsushi Toda, Director and Chief Financial Officer
	TEL: [phone]

Scheduled Date of Filing of Securities Report:	Aug. 30, 2021
Scheduled Date for Commencement of Distributions Payments:	Aug. 13, 2021
Supplementary Materials for Financial Results:	Yes	・ No
		・ No
Investors & Analysts Meeting:	Yes

1. Financial Results for the Fiscal Period ended May 31, 2021 (17th Fiscal Period) (Dec. 1, 2020 to May 31, 2021)

									(Values are rounded down to the nearest million yen)
(1) Operating Results					(Percentages indicates percentage change from the previous	period)
	Operating revenues		Operating income		Ordinary income	Net income
Period ended	Millions of yen	%	Millions of yen		%		Millions of yen	%	Millions of yen		%
May 31, 2021	24,554	4.0		11,539		2.7		10,576		1.4	10,611		(23.9)
Nov. 30, 2020	23,610	4.2		11,240		5.9		10,428		7.1	13,937		132.0
	Net income per unit		Return on	Ratio of ordinary income to	Ratio of ordinary income
		unit holders' equity		total assets	to operating revenues
Period ended			Yen				%				%				%
May 31, 2021			4,176				2.5				1.5				43.1
Nov. 30, 2020			5,652				3.5				1.5				44.2
(2) Distributions
		Distributions				Total of
	Distributions				Total of					Ratio of
		per unit	per unit	SCD	distributions	distributions
		(including	(including		Total of SCD	Payout ratio	distributions
		SCD)	(excluding	per unit	SCD)		(excluding				to net assets
		SCD)					SCD)
Period ended		Yen		Yen	Yen	Millions of	yen	Millions of yen	Millions of yen	%			%
May 31, 2021		4,847	4,110	737	12,514	10,611		1,902	100.0			2.4
Nov. 30, 2020		4,860	4,131	729	11,984	10,186		1,797	73.1			2.5

• "SCD" stands for the "Surplus Cash Distributions".

(Note 1) Total of SCD is the return of invested capital, which falls under the distributions through the reduction in unit holders' capital for tax purposes.

(Note 2) The ratios of net asset value attributable to a reduction in unit holders' paid-in capital for the fiscal periods ended May 31, 2021, and Nov. 30, 2020 are both 0.005. The payment of SCD is deemed a return of capital. This calculation methodology is pursuant to Article 23, Paragraph 1, Item 4 of the Act on Special Measures Concerning Taxation.

(Note 3) The payout ratio for the fiscal period ended Nov. 30, 2020 results in 100.0% after considering the reversal of ATA.

Nippon Prologis REIT, Inc. (3283) SUMMARY OF FINANCIAL RESULTS (REIT)

For the 17th Fiscal Period Ended May 31, 2021

(3) Financial Position

	Total assets	Net assets	Ratio of unit holders' equity	Net asset per unit
	to total assets
Period ended	Millions of yen	Millions of yen	%	Yen
May 31, 2021	752,998	440,355	58.5	170,558
Nov. 30, 2020	693,019	404,344	58.3	163,977
(4) Cash Flows
	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	at the end
	operating activities	investing activities	financing activities
	of the fiscal period
Period ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
May 31, 2021	10,388	(61,833)	49,606	32,813
Nov. 30, 2020	24,207	(425)	(15,253)	34,651

2. Earnings Forecasts for the Fiscal Period ending Nov. 30, 2021 (18th Fiscal Period) (from June 1, 2021, to Nov. 30, 2021) and May 31, 2022 (19th Fiscal Period) (from Dec. 1, 2021, to May 31, 2022)

(Percentages indicate change from the previous period)

Distributions

Operating

Distributions

Operating income

Ordinary income

Net income

per unit

per unit

revenues

(including

SCD

(excluding

SCD)

SCD)

Period ending

Millions of yen

%

Millions of y

%

Millions of

%

Millions of

%

Yen

Yen

Yen

en

yen

yen

Nov. 30, 2021

25,466

3.7

11,696

1.4

10,768

1.8

10,907

2.8

4,919

4,225

694

May 31, 2022

25,261

(0.8)

11,416

(2.4)

10,479

(2.7)

10,618

(2.6)

4,811

4,113

698

(Reference)

Forecasted Net income per unit for the fiscal period ending Nov. 30, 2021:

4,224 yen

Forecasted Net income per unit for the fiscal period ending May 31, 2022:

4,112 yen

3. Other

(1) Changes in Accounting Policies, Accounting Estimates or Restatements

(a) Changes in Accounting Policies due to Revisions to Accounting Standards

None

and Other Regulations

(b) Changes in Accounting Policies due to Other Reasons

None

(c) Changes in Accounting Estimates

None

(d) Restatements

None

(2) Number of Investment Units Issued and Outstanding

Number of investment units issued and outstanding at the end of the fiscal period including treasury units:

As of May 31, 2021	2,581,850 units
As of Nov. 30, 2020	2,465,850 units
Number of treasury units at end of period:
As of May 31, 2021	0 units
As of Nov. 30, 2020	0 units

* The Implementation Status of Statutory Audit

Summary of financial results is not inside the scope of audit procedure by certified public accountants or audit corporations.

* Special Note

The forward-looking statements in this material are based on information currently available to us and on certain assumptions that we believe are reasonable. Actual operating performance may differ substantially due to various factors. Furthermore, those statements shall not be deemed a guarantee or any commitment of the amount of future distributions and surplus cash distributions. Please refer to "Assumptions for the forecasts for the fiscal periods ending Nov. 30, 2021 (18th Fiscal Period) and May 31, 2022 (19th Fiscal Period)" on page 6-7 for assumptions regarding forward-looking statements.

Nippon Prologis REIT, Inc. (3283) SUMMARY OF FINANCIAL RESULTS (REIT)

For the 17th Fiscal Period Ended May 31, 2021

Index

1. Results of Operations

1. Results of Operations

1. Overview of the 17th Fiscal Period ended May 31, 2021

	(i) Major Operational Results of NPR...............................................................................................................................................	2
	(ii) Operational Results of the 17th Fiscal Period ended May 31, 2021 .........................................................................................	2
	(iii) Overview of Financing .............................................................................................................................................................	3
	(iv) Overview of Financial Results and Distributions ......................................................................................................................	3
(II) Outlook for Next Fiscal Period
	(i) Future Management Policies and Issues ...................................................................................................................................	4
	(ii) Significant Subsequent Events ..................................................................................................................................................	5
	(iii) Earnings Forecast .....................................................................................................................................................................	5
2. Financial Statements
(1)	Balance Sheet ....................................................................................................................................................................................	8
(2) Statement of Income .....................................................................................................................................................................	10
(3)	Statement of Unit Holders' Equity .................................................................................................................................................	11
(4)	Statement of Cash Distribution .....................................................................................................................................................	13
(5)	Statement of Cash Flows ...............................................................................................................................................................	15
(6) Notes Concerning Going Concerns Assumption ............................................................................................................................	17
(7)	Notes Concerning Significant Accounting Policies .........................................................................................................................	17
(8)	Notes to Financial Statements.........................................................................................................................................................	19
(9) Change in Number of Investment Units Issued and Outstanding....................................................................................................	31
3. Reference Information
(1)	Composition of NPR's Assets ...........................................................................................................................................................	34
(2)	Overview of the Portfolio
(I) Overview of Assets Held
	(acquisition price, book value, appraisal value as of the end of the reporting fiscal period and others) .......................................	35
(II) Overview of Assets Held (property age, occupancy rate and annual rent) ...................................................................................	49
(3)	Capital Expenditures for Owned Properties
(I) Future Plans for Capital Expenditure..............................................................................................................................................	42
(II) Capital Expenditure Incurred for the Reported Fiscal Period........................................................................................................	42
(4)	Information Concerning Major Tenants
(I) Major Tenants
(tenants accounting for more than 10 percent of aggregate leased area).......................................................................................	42
(II) Information Related to Major Properties
(properties accounting for more than 10 percent of aggregate property-related revenue)..............................................................	42
(5)	Overview of Property Leasing and Status of Operating Income......................................................................................................	43

1

Nippon Prologis REIT, Inc. (3283) SUMMARY OF FINANCIAL RESULTS (REIT)

For the 17th Fiscal Period Ended May 31, 2021

1. Results of Operations

(1) Results of Operations

1. Overview of the 17th Fiscal Period ended May 31, 2021

(i) Major Operational Results of NPR

NPR was established on Nov. 7, 2012, based on the Act on Investment Trust and Investment Corporation (investment trust law) and was listed on the REIT Securities Market (J-REIT Market) of the Tokyo Stock Exchange ("TSE") on Feb. 14, 2013 (securities code: 3283).

NPR has strategically focused on investment for Class-A logistics facilities from its inception backed by the Prologis Group's(*1) strong sponsor support, and has increased unit holders' value by maintaining a portfolio that generates stable income. As a result of such investment management, NPR owned 52 properties (aggregate acquisition price(*2) : 758,349 million yen), all of which are Class-A logistics facilities(*3) developed by the Prologis Group, as of the end of the reporting fiscal period(*4) (*5).

(*1) The Prologis Group is a group of Prologis, Inc. and its affiliates, which include ProLogis K.K., a Japanese subsidiary.

(*2) "Acquisition price" does not include national or local consumption taxes or expenses which were incurred in connection with the acquisition of the properties. Figures are rounded down to millions of yen. With respect to Prologis Park Zama 1, the acquisition price is as of the date of the initial acquisition, and does not reflect the partial disposition and acquisition of land on Oct. 3, 2018.

(*3) "Class-A logistics facilities" are our target logistics properties that meet the demands of logistics companies and other end-users with respect to operational efficiency and fulfill certain criteria with respect to size, location, state-of-the-art equipment, convenience and safety.

(*4) Prologis Park Funabashi 5 and the Annex to Prologis Park Funabashi 5 are deemed a single property; the Annex to Prologis Park Funabashi 5 was not developed by the Prologis Group and considered by itself does not qualify as a Class- A logistics facility.

(*5) The aggregate acquisition price and the number of owned properties include Prologis Park Iwanuma 1 (the "PP Iwanuma"). At PP Iwanuma, all tangible assets in trust, excluding land in trust, were burned down by the fire (the "Fire") that occurred during the fiscal period ended May 2020.

(ii) Operational Results of the 17th Fiscal Period ended May 31, 2021

In the Japanese logistics real estate market, we believe that the fundamental demand for Class-A logistics facilities continues to increase as NPR's customers (logistics space users) move from older and smaller buildings to larger/ more advanced facilities. In our view, this shift is a result of the ongoing reconfiguration of Japan's supply chain, triggered by (i) the transition from manufacturing to services, migration of manufacturing to overseas locations, continuous expansion in global trade and economic, industrial and social structural changes inside and outside of Japan, and (ii) the expansion of e-commerce ("EC") and third-party logistics ("3PL") providers.

Meanwhile, due to the current COVID-19 pandemic, the outlook of global macroeconomy is unclear. At the same time, people's lifestyles and consumption behaviors are significantly affected. On the other hand, the growth of E-commerce related consumption has been further accelerated under the environment where people's movement is restricted, which is resulting in the more solid demand for modern logistics facilities. As a result, the vacancy rate of large multi-tenant logistics properties in the greater Tokyo market was continuously low at 1.1% (*1) as of the end of March, 2021. We believe that the impact of spread of COVID-19 on the modern logistics real estate leasing market will likely be relatively limited, and in the long-term, the importance of logistics real estate facilities as fundamental infrastructure that supports our lives will continue to grow.

Under these circumstances, the occupancy rate of NPR's portfolio remained significantly high, at 99.0% as of the end of the reporting fiscal period, backed by the competitive advantages of our portfolio and the strong leasing support from the sponsor, the Prologis Group.

During the reporting fiscal period, with an aim to further enhance its unit holder value, NPR acquired Prologis Park Chiba New town, Prologis Park Chiba 2, and Prologis Park Tsukuba 2 ("Acquisitions in the 17th Fiscal Period") (aggregate acquisition price: 62,200 million yen), all of which are Class-A logistics facilities developed by the Prologis Group at fair value with average NOI yield of 4.5%. This continuous external growth will further enhance portfolio diversification and cashflow stability. Besides, NPR commenced construction work of the redevelopment project of PP Iwanuma (the "Redevelopment Project"). The Redevelopment Project is proceeding as scheduled with the expected completion in April 2022.

(*1) Source: CBRE

2

Nippon Prologis REIT, Inc. (3283) SUMMARY OF FINANCIAL RESULTS (REIT)

For the 17th Fiscal Period Ended May 31, 2021

(iii) Overview of Financing

(a) Issuance of New Investment Units

NPR issued new investment units through its public follow-on offering (110,480 units), with a payment date of Feb. 2, 2021 and through a third-party allotment (5,520 units) with a payment date of Feb. 24, 2021, with an aim to procure funds to be used for the Acquisitions in the 17th Fiscal Period which was conducted on Feb. 8, 2021. As a result of these offerings, NPR successfully raised 37,383 million yen equity capital, and the balance of NPR's unit holders' capital has increased to 429,742 million yen and the total number of units issued and outstanding has increased to 2,581,850 as of the end of the reporting fiscal period.

(b) Borrowings

For the purpose of raising capital for the Acquisitions in the 17th Fiscal Period, NPR borrowed short-term loans of 10,000 million yen and long-term loans of 12,300 million yen on Feb. 8, 2021. Additionally, NPR issued investment corporation bonds as green bonds in the total principal amount of 12,000 million yen on May 31, 2021 for the purpose of repayment of the subject short-term loans in the amount of 10,000 million yen. (The residual proceed amount of the subject investment corporation bonds of 2,000 million yen was applied to the redemption of our 3rd investment corporation bonds on its maturity date of Jun. 15, 2021.) In addition, NPR borrowed long-term loans of 7,300 million yen on Feb. 15, 2021 and 14,000 million yen on Apr. 28, 2021, respectively, for the purpose of repaying existing long-term loans at their maturities. As a result, the ending balance of NPR's interest-bearing debt was 284,500 million yen, out of which bank borrowings accounted for 246,500 million yen and investment corporation bonds accounted for 38,000 million yen as of the end of the reporting fiscal period. NPR's loan-to-value ratio (the ratio of aggregate balance of interest-bearing debt, including bank loans and the outstanding balance of long-term and short-term investment corporation bonds to NPR's total assets, hereinafter "LTV") was 37.8% as of the end of the reporting fiscal period.

(c) Credit Rating

NPR newly obtained a credit rating from Rating and Investment Information, Inc. during the reporting fiscal period. Consequently, NPR's credit ratings as of the end of the reporting fiscal period (May 31, 2021) were as follows:

Rating Agency	Rating Object	Rating	Outlook
Japan Credit Rating Agency, Ltd.	Long-term issuer rating	AA	Stable
Ratings on bonds	AA	-
Rating and Investment	Issuer rating	AA	Stable
Information, Inc.	Ratings on bonds	AA	-

(iv) Overview of Financial Results and Distributions

As a result of activities, including the aforementioned investments and financings, NPR generated operating revenues of 24,554 million yen, operating income of 11,539 million yen and ordinary income of 10,576 million yen. In addition, NPR recorded an extraordinary income of 167 million yen from the profit insurance payment covering PP Iwanuma. On the other hand, NPR recorded an extraordinary loss of 131 million yen due to the demolition work of the building wreckage of PP Iwanuma (the "Demolition Work Expenses"). As a result, NPR generated net income of 10,611 million yen for the reporting fiscal period. The amount of NPR's distributions for the reporting period was 10,611 million yen, being determined to distribute all unappropriated retained earnings for the reporting period, excluding fractions less than 1 yen. Consequently, the distributions per unit (excluding Surplus Cash Distributions ("SCD")) for the reporting fiscal period was 4,110 yen.

In addition, NPR intends to regularly distribute cash in excess of the amount of retained earnings ("Regular Surplus Cash Distributions") in each fiscal period in accordance with a distribution policy set forth in its articles of incorporation of NPR (*1). Furthermore, to maintain the stability of NPR's distributions per unit ("DPU") in the event that DPU is expected to decline to a certain degree as a result of certain events, NPR may make additional distributions as one-time surplus cash distributions ("One-time Surplus Cash Distributions") (*2) in an amount determined by NPR.

For the reporting fiscal period, the total amount of NPR's Regular Surplus Cash Distributions is 1,654 million yen, equivalent to 28.5 percent of NPR's depreciation expense of 5,815 million yen for the reporting fiscal period. NPR will distribute One-time Surplus Cash Distributions of 247 million yen, equivalent to the Demolition Work Expenses and temporary dilution of distributions due to the issuance of new investment units. Consequently, the total amount of SCD per unit for the reporting fiscal period was determined at 737 yen; 641 yen from Regular Surplus Cash Distributions, 96 yen from One-time Surplus Cash Distributions.

(*1) In general, NPR intends to distribute Regular Surplus Cash Distributions on a regular basis in an amount no higher than

3