United Urban Investment : Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties

August 29, 2023

Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties

Issuer of Real Estate Investment Trust Units

United Urban Investment Corporation (Securities Code: 8960)

Toshiaki Emon, Executive Officer

Asset Management Company

Japan REIT Advisors Co., Ltd.

Junichi Batai, President and Chief Executive Officer

Inquiries (TEL): 03-5402-3189

1. Basic Information

1. Basic policy concerning compliance

United Urban Investment Corporation (hereinafter referred to as "the Investment Corporation") and Japan REIT Advisors Co., Ltd. (hereinafter referred to as "the Asset Management Company"), a company retained by and assigned with the asset-management of the Investment Corporation, consider the strict compliance with the applicable laws and regulations to be one of the basic principles of sound business management and have set-up the compliance framework mentioned below.

・The Investment Corporation's compliance framework

The Investment Corporation regards strict compliance with the applicable laws and regulations as one of the basic principles, and has conducted its business taking the establishment of the compliance system and the prevention of the conflicts of interest, etc. into great account. An outside lawyer and a certificated public accountant have taken the position of the Supervisory Officers of the Investment Corporation, and supervise the conduct of affairs by Executive Officer.

・The Asset Management Company's compliance framework

1. Outline of the system related to compliance

The Asset Management Company has established the Compliance Committee to ensure legitimate asset management under the thorough and complete compliance with the applicable laws and regulations, internal rules, codes of professional conduct (compliance), etc. by its employees, etc. and has appointed a Chief Compliance Officer (CCO) who is in charge of compliance matters.

1. Checks by the Compliance Committee

1. Involvement in investment decisions, etc.

The Compliance Committee meets promptly after every discussion on investment and asset management relating to the Investment Corporation by the Investment Committee to review the process and content of the discussion from the viewpoint of compliance. If the Compliance Committee determines that there is a compliance issue or question as a result of such review, it shall promptly issue a report on the results of the review to the Board of Directors. Upon the receipt of such report, the Board of Directors shall make a resolution in response to the issue.

(b) Response to violations of laws, regulations, etc.

The Compliance Committee convenes once a month as a general rule to discuss, with respect to asset management for the Investment Corporation and other tasks conducted by the Asset Management Company, the presence of conduct that is or is suspected of being unacceptable from the viewpoint of compliance, and the response to such conduct. The CCO, chairman of the Compliance Committee, can convene and hold a Compliance Committee at any time as necessary. If the Compliance Committee determines that there is a matter involving conduct that is or is suspected of being in conflict with laws, regulations, etc., it shall report such matter to the Board of Directors. Upon the receipt of such report, the Board of Directors shall make a resolution on a response to the matter. However, where the CCO determines that the problems underlying the matter described above are minor, the Compliance Committee may mandate the President and Chief Executive Officer to respond to the matter in place of the Board of Directors.

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(c) Internal audits

The Compliance Committee shall discuss the current status of formulating an internal audit plan for internal audits to be implemented based on Internal Audit Rules and results of internal audits, in addition to regular discussions on the compliance situation with regard to compliance with laws, regulations, etc. described in (b) above. If the Compliance Committee determines that an internal audit plan is not appropriately formulated or that internal audits are not fairly conducted, it shall promptly issue a report on the results of the discussion by the Compliance Committee to the Board of Directors, thereby seeking to ensure the adequacy of internal audits. Based on the above, the Compliance Committee aims to identify violations of laws, regulations, etc. within the Asset Management Company and risks inherent in the business of the Asset Management Company at an early stage, and to prevent violations of laws, regulations, etc.

1. Checks by the Chief Compliance Officer (CCO)

The CCO shall function as the point of contact for inquiries, etc. from outside or inside the Asset Management Company, and shall investigate the presence, etc. of compliance problems regarding the business, etc. of the Asset Management Company on a daily basis. If the CCO finds or foresees a compliance problem in the course of such investigations, he or she has the authority to demand the discontinuation of such conduct. If the CCO exercises such authority, he or she shall report on the background for the exercise of such authority and the response to the matter to the Board of Directors.

In addition to the above, the CCO shall conduct, in conjunction with the General Affairs Dept., training for officers and employees to enhance compliance awareness as appropriate and investigations of the company-wide compliance situation.

1. Checks concerning transactions with interested parties, etc. (Note)

Regarding transactions with interested parties, etc., the Asset Management Company has established rules (including a rule requiring prior consent of the Investment Corporation based on the approval of the Board of Directors in the case of transactions with interested parties, etc. that exceed a certain amount) concerning matters relating to the Act on Investment Trusts and Investment Corporations (hereinafter referred to as "the Investment Trust Act").

In addition to the rules, the Asset Management Company has designated the following persons as those who are related to sponsors (hereinafter referred to as "Sponsor/Stakeholder"): i) interested parties, etc.; ii) shareholders of the Asset Management Company; iii) corporations that dispatch officers or staff to the Asset Management Company; iv) corporations a majority of whose voting rights is held either directly or indirectly by the persons described in ii) and iii); and v) special purpose companies from which the persons described in i) to iv) are charged with the responsibility of managing the assets thereof or in which such persons invest contributions, and has established voluntary rules on transactions with Sponsor/Stakeholder to check such transactions from the viewpoint of compliance.

(Note) "Interested parties, etc." means the related parties of the asset management company (hereinafter referred to as "Interested parties, etc.") with which the Investment Corporation has concluded the asset management agreement, as stipulated in Article 201, Paragraph 1 of the Investment Trust Act and Article 26, Item 27 of the Regulation for Asset Management Reports Concerning Investment Trusts and Investment Corporation by The Investment Trusts Association, Japan.

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1. Compliance-relatedrules

The Asset Management Company has established Compliance Rules and a Compliance Manual. The Compliance Rules, which constitute one of its internal sets of rules, outline and form the basis for the compliance system of the Asset Management Company. The Compliance Manual sets forth the concrete standards for achieving compliance. As an internal set of rules of the Asset Management Company, it is distributed to employees, etc. or made available for their inspection at any time with the aim of enhancing their compliance awareness.

When it becomes necessary to revise internal rules according to the amendment or abolition of laws and regulations or for other reasons, the Compliance Committee shall create a draft revision of these rules and submit it to the Board of Directors for approval. Upon the receipt of such draft revision, the Board of Directors shall review it and adopt a resolution for final approval. In this way, by revising these rules whenever necessary, an appropriate compliance system is maintained in the Asset Management Company.

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(2) The Investment Corporation's Main Unitholders

			As of May 31, 2023
Name	Relationship with the Investment Corporation, the Asset	Number of	Ratio (%)
Management Company or sponsors and the background for	investment
(Note)
	holding units		units held
Custody Bank of Japan, Ltd. (trust account)	There is no special relationship with the Investment	952,718	30.75
Corporation, the Asset Management Company or sponsors.
The Master Trust Bank of Japan, Ltd. (trust account)	There is no special relationship with	the Investment	550,564	17.77
Corporation, the Asset Management Company or sponsors.
The Nomura Trust and Banking Co., Ltd.	There is no special relationship with	the Investment	149,178	4.81
(investment trust account)	Corporation, the Asset Management Company or sponsors.
SMBC Nikko Securities Inc.	There is no special relationship with the Investment	103,774	3.35
Corporation, the Asset Management Company or sponsors.
SSBTC CLIENT OMNIBUS ACCOUNT	There is no special relationship with	the Investment	52,459	1.69
	Corporation, the Asset Management Company or sponsors.
STATE STREET BANK WEST CLIENT - TREATY 505234	There is no special relationship with	the Investment	45,794	1.48
	Corporation, the Asset Management Company or sponsors.
Mizuho Securities Co., Ltd.	There is no special relationship with the Investment	45,379	1.46
Corporation, the Asset Management Company or sponsors.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.	There is no special relationship with the Investment	42,781	1.38
Corporation, the Asset Management Company or sponsors.
STATE STREET BANK AND TRUST COMPANY 505103	There is no special relationship with the Investment	40,490	1.31
Corporation, the Asset Management Company or sponsors.
JP MORGAN CHASE BANK 385770	There is no special relationship with	the Investment	29,972	0.97
Corporation, the Asset Management Company or sponsors.
Total of the top 10 unitholders			2,013,109	64.97

(Note) The respective shares are rounded to the second decimal place.

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