To Our Unitholders

Thanks to your and other stakeholders’ generous support, ITOCHU Advance Logistics Investment Corporation (IAL) was listed on the Real Estate Investment Trust Market of the Tokyo Stock Exchange on September 7, 2018 (stock symbol: R-IAL; securities code: 3493). I first of all would like to extend my deepest gratitude for your continued support.

From the time of the listing to the end of 2018, however, logistics J-REITs were weak in general, with IAL being no exception. In response to such circumstances and in order to prompt the market to reassess IAL’s value, ITOCHU REIT Management Co., Ltd., our asset manager, and ITOCHU Corporation, our sponsor, have collaborated to work out various measures since the start of 2019. While we believe that these measures have received a certain degree of recognition, we remain committed to further enhance our presence in J-REIT market, through a “collaborative growth relationship” with our asset manager and sponsor group.

As for performance, I am pleased to inform you that we could end our first fiscal period (ended January 2019) with increased revenues and profits. As shown in the summary of financial results dated March 14, which can be found in “IR Library” page under “Investor Relations” section of our website, our distributions per unit (DPU) were 1,729 yen, a 71-yen increase from the initial forecast of 1,658 yen. As indicated in the disclosure material on the same date, we also expect DPU growth for the second and third fiscal periods (ending July 2019 and January 2020, respectively) to 2,262 yen and 2,343 yen, respectively, due in part to the additional property acquisition we made from our sponsor on April 1 using borrowed funds and cash on hand. The occupancy rate of our properties remains unchanged at 100% since the time of listing, and our financial results have been trending solidly.

Going forward, the logistics real estate market is expected to see continued strong demand by tenant companies, supported by positive factors such as growing number of online shopping transactions. Together with our asset manager, we will continue to seek maximization of unitholder value by accumulating quality assets, ensuring stable financial and cash management, and strengthening governance with an awareness of our social responsibilities and public missions, and through fully taking advantage of functions of our sponsor group, which has particular strengths in consumer goods such as apparel and food, and has an extensive track record in logistics real estate development.

We respectfully ask for your continued and long-lasting support.
June 2019

Junichi Shoji

Junichi Shoji
Executive Director
ITOCHU Advance Logistics Investment Corporation