25th Fiscal Period(Ended Jul. 2025) Financial Report

September 16, 2025

(February 1, 2025 – July 31, 2025)

Listing: Tokyo Stock Exchange Securities code: 3292

URL: https://www.aeon-jreit.co.jp/en/index.html Representative: Nobuaki Seki, Executive Director

Asset management company: AEON Reit Management Co., Ltd.

Representative: Nobuaki Seki, Representative Director and President

Contact: Taro Nakamura, General Manager of Finance and Planning Department

Phone: +81-3-5283-6360

Scheduled date to file securities report: October 30, 2025 Scheduled date to commence distribution payments: October 20, 2025

Preparation of supplementary material on financial report: Yes

Holding of financial report presentation meeting: Yes (for institutional investors and analysts)

(Amounts rounded down to the nearest million yen)

1. Summary of financial results for the fiscal period ended July 31, 2025 (February 1, 2025 – July 31, 2025)

   1. Operating results (Percentages show changes from the previous period)

      	Operating revenue		Operating	income	Ordinary income		Net income
      Fiscal period ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      July 31, 2025	21,572	1.8	8,192	1.7	7,141	2.4	7,075	3.1
      January 31, 2025	21,190	0.1	8,053	5.0	6,971	4.5	6,860	4.0

      	Net income per unit	Return on equity (ROE)	Ordinary income to total assets	Ordinary income to operating revenue
      Fiscal period ended	Yen	%	%	%
      July 31, 2025	3,365	2.9	1.6	33.1
      January 31, 2025	3,243	2.8	1.5	32.9

   2. Distributions

      	Distribution per unit (excluding distributions in excess of retained earnings)	Total cash distributions (excluding distributions in excess of retained earnings)	Distribution in excess of retained earnings per unit	Total cash distributions in excess of retained earnings	Distribution per unit (including distributions in excess of retained earnings)	Total cash distributions (including distributions in excess of retained earnings)	Payout ratio	Cash distributions to net assets
      Fiscal period ended	Yen	Millions of yen	Yen	Millions of yen	Yen	Millions of yen	%	%
      July 31, 2025	3,366	7,077	48	100	3,414	7,178	100.0	2.9
      January 31, 2025	3,262	6,858	98	206	3,360	7,064	100.0	2.8

      (Note 1) Of the ¥98 of distribution in excess of retained earnings per unit for the fiscal period ended January 31, 2025, allowance for temporary difference adjustments was ¥44 and other distribution in excess of retained earnings was ¥54. The ratio of net asset value attributable to a capital reduction is 0.001.

      (Note 2) All of the ¥48 of distribution in excess of retained earnings per unit for the fiscal period ended July 31, 2025, was allowance for temporary difference adjustments.

      (Note 3) The payout ratio for the fiscal period ended January 31, 2025, is calculated using the following formula:

      Payout ratio = Total cash distributions (excluding distributions in excess of retained earnings) / Net income x 100

   3. Financial position

      	Total assets	Net assets	Equity ratio	Net assets per unit
      As of July 31, 2025 January 31, 2025	Millions of yen 456,177 451,148	Millions of yen 243,819 243,808	% 53.4 54.0	Yen 115,962 115,957

      (Reference) Equity As of January 31, 2025: ¥243,808 million As of July 31, 2025: ¥243,819 million

   4. Cash flows

   	Net cash provided by (used in) operating activities	Net cash provided by (used in) investing activities	Net cash provided by (used in) financing activities	Cash and cash equivalents at end of period
   Fiscal period ended July 31, 2025 January 31, 2025	Millions of yen 13,470 13,084	Millions of yen (9,784) (7,525)	Millions of yen (1,563) (9,802)	Millions of yen 38,506 36,383

2. Forecasts of performance for the fiscal periods ending January 31, 2026 (August 1, 2025 – January 31, 2026) and July 31, 2026 (February 1, 2026 – July 31, 2026)

(Percentages show changes from the previous period)

(Reference) Forecasted net income per unit (Forecasted net income / Forecasted total number of investment units issued and outstanding at end of period)

For the fiscal period ending January 31, 2026 ¥3,099

For the fiscal period ending July 31, 2026 ¥2,703

*Other

1. Changes in accounting policies, changes in accounting estimates, and retrospective restatement

   1. Changes in accounting policies due to revisions to accounting standards and other regulations: None

   2. Changes in accounting policies due to reasons other than a. above: None

   3. Changes in accounting estimates: None

   4. Retrospective restatement: None

2. Total number of investment units issued and outstanding

   1. Total number of investment units issued and outstanding at end of period (including treasury investment units) As of July 31, 2025 2,102,569 units

      As of January 31, 2025 2,102,569 units

   2. Number of treasury investment units at end of period

As of July 31, 2025 0 units

As of January 31, 2025 0 units

(Note) Please refer to “Per Unit Information” on page 33 for the number of investment units used as the basis for calculating net income per unit.

• Status of audit procedures

  This financial report is not subject to audit procedures by public accountants or audit corporations.

• Special notes

Forward-looking statements presented in this financial report, including forecasts of performance, are based on information currently available to AEON REIT and on certain assumptions AEON REIT deems to be reasonable. As such, actual operating and other results may differ materially from these forecasts as a consequence of numerous factors. Furthermore, these forecasts shall not be construed as a guarantee of the distribution amount. Please refer to “Assumptions for Forecasts of Performance for the Fiscal Periods Ending January 2026 (August 1, 2025 – January 31, 2026) and July 2026 (February 1, 2026 – July 31, 2026)” on page 7 for information on assumptions for the forecasts of operating results.

1. Status of Asset Management
   1. Status of Asset Management
      1. Summary of results for the current fiscal period

         1. Overview of AEON REIT

            AEON REIT Investment Corporation (hereinafter, “AEON REIT”) invests primarily in retail and related properties which, as an integral part of the communities in which they are located, form the backbone of communities and their retail business infrastructure. Through said investment, we aim to ensure stable earnings over the medium to long term and achieve steady portfolio growth.

            AEON REIT was established on November 30, 2012, in accordance with the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended; hereinafter, the “Investment Trusts Act”), with AEON Reit Management Co., Ltd. (hereinafter, the “Asset Manager”) serving as the organizer. AEON REIT was listed on the Real Estate Investment Trust Securities Market (J-REIT market) of the Tokyo Stock Exchange (securities code: 3292) on November 22, 2013.

            The real estate held by AEON REIT as of July 31, 2025, totaled 53 properties in Japan and overseas, including AEON MALL SEREMBAN 2 it owns through an overseas real estate holding corporation established in Malaysia (hereinafter, the “Overseas SPC”), with a total acquisition price of ¥480,736 million. Total leasable area is 4,339,016.65 m2 and the occupancy rate of the entire portfolio is 100.0% as of the same date.

         2. Operating environment and performance

            1. Operating environment

               In the fiscal period under review (the 25th fiscal period), the Japanese economy saw real GDP growth rate (first preliminary estimates) for April through June 2025 increase by 0.3% quarter on quarter, recording growth for five consecutive quarters. Despite the strengthening of tariff policies, such as the introduction of “reciprocal tariffs” by the U.S. and an additional 25% tariffs on automobiles, the impact on economic activities was limited, and the export of goods and capital investment remained strong. In Malaysia, the real GDP growth rate for the second quarter of 2025 rose 4.4% year on year. Stable growth continued to be seen as private consumption also remained strong, buoyed by an improvement in the labor market and a low inflation environment, in addition to strong growth in private and public investments.

               In the real estate investment market, market participants remained highly willing to acquire properties, despite the rise in domestic interest rates. Although the market feels overheated differently by asset type and by area, it should become ever more important going forward to discern the profitability of individual properties and timeliness of transactions in consideration of interest trends, etc.

               The J-REIT market remained strong even amid a moderate rise in domestic interest rates, as the Bank of Japan (BOJ) changed its course to raise the policy rate while maintaining the framework of monetary easing. Amid growing interest in the timing of future policy rate hikes, the Tokyo Stock Exchange (TSE) REIT Index stood at 1,859.19 points based on closing price at the end of the fiscal period under review due to the maintenance of the cautious stance by BOJ and the recognition of the steady real estate market conditions including the rise in office rent.

            2. Performance

               In the fiscal period under review, AEON REIT acquired five properties (total acquisition price: ¥8,190 million), namely “PIA CITY Miyashiro (Land),” “KASUMI FOOD SQUARE Hitachikamine (Land),” “KASUMI FOOD SQUARE Mitomigawa (Land),” “KASUMI Chuo Distribution Center (Land)” and “KASUMI Sakura Distribution Center (Land)” by using the funds procured through the new borrowing and its own funds in February 2025. In addition, it disposed of “AEON MALL Yamagata-Minami” (disposition price: ¥1,500 million) in March 2025. Through these property replacements, AEON REIT decentralized and diversified its portfolio as well as increased the asset size to ¥480.7 billion.

               As for internal growth, in order to enhance the facility environment at AEON MALL Narita, AEON REIT conducted construction work to establish a new outdoor terrace by utilizing part of the flat parking lot, leading to an increase in rent. Also, at “AEON MALL Chiba Newtown (mall, and cinema and sports complex),” rent increases were achieved through construction to enhance the image and functionality of the properties.

               As such, in coordination with the tenants (master lessees), AEON REIT is promoting investments aimed at reinforcing competitiveness as well as maintaining and enhancing the functions of its properties.

         3. Financing

            In the fiscal period under review, AEON REIT conducted debt financing of ¥5,500 million on February 28, 2025 to partly fund the acquisition of the five properties acquired in February 2025, namely “PIA CITY Miyashiro (Land),” “KASUMI FOOD SQUARE Hitachikamine (Land),” “KASUMI FOOD SQUARE Mitomigawa (Land),” “KASUMI Chuo Distribution Center (Land)” and “KASUMI Sakura Distribution Center (Land)”, and related expenses.

            As of July 31, 2025, AEON REIT had a balance of interest-bearing debt totaling ¥193,900 million, with the LTV ratio (the ratio of the balance of interest-bearing debt plus tenant leasehold and security deposits and tenant leasehold and security deposits in trust to total assets held by AEON REIT) standing at 45.7%.

            The ratio of long-term interest-bearing debt (the ratio of long-term interest-bearing debt (including the current portion of long-term loans payable) to total interest-bearing debt) was 97.2% as of July 31, 2025. The ratio of fixed-rate debt (the ratio of interest-bearing debt with fixed interest payment (including interest-bearing debt with interest fixed through swaps) to total interest-bearing debt) was 97.2% as of the same date. Together with the abovementioned LTV, these figures indicate that AEON REIT has maintained a sound and conservative financial structure. AEON REIT works to diversify the repayment dates and extend maturities of interest-bearing debt with an aim to further reinforce its financial base.

            Furthermore, as of July 31, 2025, AEON REIT had the following credit rating.

            Credit rating agency	Rating type	Credit rating	Outlook
            Japan Credit Rating Agency, Ltd. (JCR)	Long-term issuer rating	AA	Stable

         4. Initiatives on Sustainability

            AEON REIT is making endeavors for Environment, Social, and Governance (ESG) awareness. It works to reduce environmental burden and coordinate and cooperate with its stakeholders in pursuit of realizing a sustainable society as its corporate social responsibility. With an aim to clarify its policy and structure for addressing ESG issues and promote enhanced disclosure of said endeavors, AEON Reit Management Co., Ltd., which conducts asset management for AEON REIT, identified its materiality (important agendas) and expressed support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in December 2021 and announced KPIs in 2023.

            A variety of initiatives have been recognized by external institutions; AEON REIT obtained “Five Star” in the GRESB (Global Real Estate Sustainability Benchmark) Real Estate Assessment, which grants rating in five stages based on global ranking of total scores, in October 2024, marking the fifth consecutive year with the rating. AEON REIT also received GRESB’s “Green Star” rating for the ninth consecutive year, evaluated as an excellent participant under both the Management Component, which measures the entity’s policy and organizational structure for promoting ESG, and the Performance Component, which measures the environmental performance of the entity’s portfolio properties and joint initiatives with tenants, etc. It also received the highest “A Level” for the fourth consecutive year for the GRESB Public Disclosure, which assess the breadth of ESG disclosure. In May 2025, it received an “A” rating in the MSCI ESG rating for the second consecutive year.

            As for assessment for properties, AEON REIT re-obtained certifications for 7 properties in total (DBJ Green Building Certification for 6 properties and CASBEE Certification for Real Estate for 1 property) in the 25th fiscal period. As of the end of the 25th fiscal period (July 31, 2025), AEON REIT has obtained third-party certifications for 88.0% of its portfolio properties (based on total leasable area), with DBJ Green Building Certification for 31 properties, BELS certification for 1 property, and CASBEE Certification for Real Estate for 4 properties.

            Other than the above, the Asset Manager was certified under the CERTIFIED 2025 Health & Productivity Management Outstanding Organizations Recognition Program (for SMEs) in March 2025, marking the sixth consecutive year with the certification. Both AEON REIT and the Asset Manager will continue to pursue initiatives on ESG issues in a proactive manner.

         5. Results and cash distribution

            As a result of the above operations, AEON REIT posted operating revenue of ¥21,572 million, operating income of ¥8,192 million, ordinary income of ¥7,141 million, and net income of ¥7,075 million for the 25th fiscal period ended July 31, 2025. Furthermore, AEON REIT posted a total of ¥70 million of construction cost pertaining to the damage caused by the Noto Peninsula Earthquake in November 2024 and the 2025 Hyuga-nada Earthquake (including planned amount) as extraordinary loss and a total of ¥6 million in insurance income for the 2025 Hyuga-nada Earthquake as extraordinary income.

            As for cash distribution for the 25th fiscal period, distribution per unit came to ¥3,366, which is the amount that does not exceed ¥7,077 million in unappropriated retained earnings and is the greatest value among integral multiples of 2,102,569, which is the total number of investment units issued and outstanding.

            In addition, considering the impact of the inconsistency between profits for accounting purposes and tax purposes associated with the expenses of amortization of fixed-term leasehold rights for business purposes, etc. (as defined in Article 2, Paragraph 2, Item 30 (a) of the Regulation on Accountings of Investment Corporations (Cabinet Office Ordinance No. 47 of 2006, as amended. Hereinafter, “Regulation on Accounting of Investment Corporation”.)) on cash distribution, AEON REIT plans to make distributions in excess of retained earnings equal to the allowance for temporary difference adjustment (as defined in Article 2, Paragraph 2, Item 30 of the Regulation on Accountings of Investment Corporations). In addition to the above, AEON REIT shall continually distribute cash in excess of earnings for each fiscal period pursuant to the distribution policy stipulated in its Articles of Incorporation (Note 1).

            Based on these policies, AEON REIT will distribute ¥100 million (¥48 per unit) as an allowance for temporary difference adjustment in the 25th fiscal period. For the fiscal period under review, in consideration of the distribution level resulting from the recording of the gain on sale of “AEON MALL Yamagata-Minami,” which was disposed of in March 2025, AEON REIT decided not to make a return of capital to unitholders which falls under the category of distribution with decrease of investment capital under tax laws. As a result, distributions in excess of retained earnings per unit will be ¥48 and distributions per unit will be

            ¥3,414.

            (Note) Taking into account the trends in the economic environment, the real estate market and the rental market, etc., conditions of assets currently held, financial conditions and other factors, AEON REIT plans to continuously make cash distribution in excess of earnings every fiscal period, in an amount deemed appropriate by AEON REIT to maintain the stability of the distribution level, up to 60% of the depreciation for each fiscal period, based on the amount of depreciation recorded for the fiscal period immediately preceding the fiscal period in which the cash distribution in excess of earnings is made, less the amount of capital expenditures for the same period. However, if the implementation of cash distribution in excess of earnings is deemed inappropriate based on the trends in the economic environment, the real estate market and the rental market, etc., conditions of assets currently held, financial conditions and other factors, AEON REIT will not implement cash distribution in excess of earnings. At AEON REIT, cash distribution in excess of retained earnings (return of capital to unitholders) is made when it is determined that there are no obstacles to the operation of AEON REIT after comprehensively taking into account the amount of capital expenditures and repairs and maintenance expenses expected for the fiscal period in which cash distribution in excess of retained earnings (return of capital to unitholders) is made as well as the following fiscal period against the total balance of cash and deposits (including cash and deposits in trust accounts) of AEON REIT as of the end of the fiscal period immediately preceding the fiscal period in which cash distribution in excess of retained earnings (return of capital to unitholders) is made, in consideration of the amount of capital expenditures required for the maintenance and enhancement of competitiveness of the assets currently held by AEON REIT and the financial position of AEON REIT.

      2. Outlook for the next fiscal period

         1. Outlook for overall performance

            Looking ahead, the Japanese and Malaysian economies are expected to continue their gradual recovery due to such factors as rising wages, increased tourism demand from overseas, and fiscal policy. Attention must be paid, however, to changes in market participants’ behavior due to concerns about stagnation in overseas economies and fluctuations in the financial and capital markets in Japan and abroad. In addition, it is necessary to keep a close eye on changes in the political, economic, and geopolitical landscape, including the political operations of various countries, and the situation in the Middle East.

            Under such circumstances, AEON REIT will endeavor to secure stable rental income on a continuous basis by taking advantage of lease agreements with fixed rents that it employs based on master lease agreements with the AEON Group companies, in which entire individual buildings are leased to them as lessees (master lessees).

            On top of this, AEON REIT believes that it is even more necessary to effectively utilize cash on hand in response to changes in the external environment by taking advantage of the capacity to generate cash flows, one of its characteristics, on top of seeking to secure stable earnings over the medium to long term and maintain and enhance its asset value by continuously utilizing the comprehensive strengths of the AEON Group to acquire and manage community infrastructure assets that continue to be supported by local communities.

         2. Future investment policy

            1. Basic policy

               AEON REIT aims to secure stable income as well as maintain and enhance asset value over the medium to long term by endeavoring to sustain and improve rent revenue, conduct adequate management and repairs and maintenance measures, and optimize and streamline management costs.

            2. Investment policy and growth strategy

               The AEON Group has the comprehensive strength to consistently develop and operate large-scale retail properties and other retail properties of various types. In implementing its growth strategy, AEON REIT seeks for growth of its portfolio over the medium to long term by fully utilizing the comprehensive strengths of the AEON Group.

               AEON REIT believes that it can expand its portfolio size, improve the stability of investments, and enhance its financing capabilities by acquiring retail and related properties developed by the AEON Group from the Group, based on sponsor support agreements, pipeline support agreements, and memorandums of understanding on investments in properties in Malaysia. Moreover, by improving financing capabilities, it works to acquire more properties, thereby expanding its portfolio size. From the viewpoint of the AEON Group, selling its retail and related properties to AEON REIT allows the Group to use the obtained funds to execute investments for growth (such as development of new stores). Executing such investment for growth should contribute to increased revenue and higher corporate value of the AEON Group, which in turn supports further growth of AEON REIT. By building a mutually beneficial relationship with the AEON Group that creates a virtuous cycle for both entities, as discussed above, AEON REIT aims to maximize unitholder value.

            3. Financial strategy

               AEON REIT will maintain a strong financial base while working to control the debt ratio in a conservative manner. In conducting financial operations, it has set the upper limit of its LTV ratio at 60% and works to keep the ratio at around 50% as a rule. To mitigate refinance risk and interest rate fluctuation risk, AEON REIT will consider extending loan maturities and fixing interest rates in an effort to ensure appropriate operations.

      3. Significant events after balance sheet date

         Not applicable.

         Assumptions for Forecasts of Performance for the Fiscal Periods EndingJanuary 2026 (August 1, 2025 – January 31, 2026) and July 2026 (February 1, 2026 – July 31, 2026)

         Item	Assumptions
         Accounting period	(184 days from August 1, 2025, to January 31, 2026, the 26th fiscal period) (181 days from February 1, 2026, to July 31, 2026, the 27th fiscal period)
         Portfolio
         Operating revenue	32.00. It is assumed that there is no delinquencies or non-payment of rents by tenants.
         Operating expenses	¥2,368 million for the 27th fiscal period as expenses. ¥2,363 million for the 27th fiscal period as expenses. However, actual repairs and maintenance expenses in each fiscal period may differ substantially from the forecasts, as (i) there is no denying the possibility of repairs and maintenance expenses being incurred urgently due to damages to buildings caused by unforeseeable factors, (ii) generally, incurred expenses differ substantially from one fiscal period to another, and (iii) expenses are not incurred on a regular basis, among other reasons.
         Non-operating expenses
         Borrowings	LTV = Total interest-bearing debt plus tenant leasehold and security deposits (including tenant leasehold and security deposits in trust) / Total assets × 100

         • Fiscal period ending January 31, 2026

         • Fiscal period ending July 31, 2026

         • The number of investment assets is assumed to be 53 (including AEON MALL SEREMBAN 2 that AEON REIT owns through the Overseas SPC) AEON REIT owns as of September 16, 2025.

         • The operating forecast deems that there will be no change (acquisition of new properties, sale of portfolio assets, etc.) in the number of investment assets through the end of the fiscal period ending July 31, 2026 (27th fiscal period).

         • The actual figure may vary due to acquisition of new properties or disposal of owned properties, etc. not assumed above.

         • Rent revenue – real estate from the assets currently held has been calculated by taking into account such factors as the relevant lease agreements effective as of September 16, 2025, and market trends. Dividends from the Overseas SPC have been calculated based on the assumption that dividends will be received during the fiscal periods ending January 31, 2026 (26th fiscal period), and ending July 31, 2026 (27th fiscal period), respectively. Furthermore, the exchange rate of Malaysia is assumed to be Malaysian Ringgit 1 = JPY

         • Operating expenses mainly comprise expenses related to rent business. Those expenses, excluding depreciation expenses, are calculated on the basis of historical data and by reflecting variable factors of expenses for the assets currently held.

         • Generally, fixed asset taxes, city planning taxes and depreciable asset taxes for the acquired properties are prorated based on the period of ownership with the previous owners and settled. The amount equivalent to such settlement is included in the acquisition costs and therefore not recognized as expenses for the fiscal period in which the acquisition takes place. As for fixed asset taxes, city planning taxes and depreciable asset taxes for the assets currently held, AEON REIT assumes to record ¥2,354 million for the 26th fiscal period and

         • For repairs and maintenance expenses for buildings, amounts assumed to be required in each fiscal period is recorded as expenses, based on the medium- to long-term repair and maintenance plan formulated by the asset management company (AEON Reit Management Co., Ltd.). AEON REIT assumes to record ¥1,566 million for the 26th fiscal period and

         • Capital expenditures are assumed to be ¥2,814 million for the 26th fiscal period and ¥3,518 million for the 27th fiscal period.

         • Depreciation of property and equipment is computed by the straight-line method, including related expenses and the above planned amount of capital expenditures, and is assumed to be ¥5,266 million for the 26th fiscal period and ¥5,318 million for the 27th fiscal period.

         • Interest expenses and other borrowing-related expenses are assumed to be ¥1,150 million for the 26th fiscal period and ¥1,200 million for the 27th fiscal period.

         • As of September 16, 2025, AEON REIT has interest-bearing debt totaling ¥193,900 million.

         • It is assumed that AEON REIT will refinance ¥27,700 million in borrowings (repayment date: October 20, 2025) and ¥2,000 million in investment corporation bonds that are due to mature (redemption date: October 10, 2025) that will mature in the fiscal period ending January 31, 2026 (26th fiscal period) in the same amount.

         • LTV ratio is anticipated to be approximately 45% as of the end of the 26th fiscal period (January 31, 2026) and approximately 45% as of the end of the 27th fiscal period (July 31, 2026).

         • LTV is calculated by using the following formula:

         Item	Assumptions
         Investment units
         Distribution per unit (excluding distribution in excess of retained earnings)
         Distribution in excess of retained earnings per unit (allowance for temporary difference adjustments)
         Distribution in excess of retained earnings per unit (distribution with decrease of investment capital under tax laws)
         Others

         • Distribution per unit for the 26th and 27th fiscal periods is calculated based on the assumption that the total number of investment units issued and outstanding will be 2,102,569 units as of September 16, 2025. Furthermore, it is assumed that there will be no issuance of new investment units through the end of the 27th fiscal period, without any change in the number of investment units.

         • Distribution per unit (excluding distribution in excess of retained earnings) has been calculated based on the cash distribution policy prescribed in the Articles of Incorporation of AEON REIT.

         • Fluctuations in rent revenue due to changes in the portfolio and tenants, unforeseeable repairs and maintenance incurred and other various factors may lead to changes in the amount of distribution per unit (excluding distribution in excess of retained earnings).

         • Cash distribution in excess of retained earnings (inconsistency between profits for accounting purposes and tax purposes) for the 26th fiscal period and the 27th fiscal period is estimated as follows.

         • Expenses of amortization of fixed-term leasehold rights and asset retirement obligations of the assets currently held is assumed to be ¥79 million for the 26th fiscal period and ¥79 million for the 27th fiscal period.

         • It is assumed that distribution in excess of retained earnings (allowance for temporary difference adjustments) of ¥38 per unit will be made in the 26th fiscal period and distribution in excess of retained earnings (allowance for temporary difference adjustments) of ¥38 per unit will be made in the 27th fiscal period.

         • Cash distribution in excess of retained earnings (return of capital to unitholders) has been calculated in accordance with the cash distribution policy prescribed in the Articles of Incorporation of AEON REIT and operational guidelines and the implementation policy on cash distribution in excess of retained earnings, which are internal rules of the Asset Manager.

         • In order to enable stable payment of distributions, AEON REIT adopts a policy of continuously making cash distribution in excess of retained earnings (return of capital to unitholders) every fiscal period, in addition to cash distribution based on earnings.

         • Therefore, going forward, AEON REIT plans to continuously make cash distribution in excess of retained earnings (return of capital to unitholders) every fiscal period in an amount that it deems appropriate to maintain the stability of the distribution level based on the amount of depreciation recorded for the fiscal period immediately preceding the fiscal period in which the cash distribution in excess of earnings (return of capital to unitholders) is made, less the amount of capital expenditures for the same period, up to a maximum of 60% of the depreciation for the relevant fiscal period, after taking into account trends in the economic environment, real estate market, rental market, etc., conditions of assets currently held, financial conditions, and other factors.

         • However, regardless of the abovementioned policy, if the implementation of cash distribution in excess of retained earnings (return of capital to unitholders) is deemed inappropriate based on the trends in the economic environment, the real estate market and the rental market, etc., conditions of assets currently held, financial conditions and other factors, AEON REIT may not implement cash distribution in excess of retained earnings (return of capital to unitholders). At AEON REIT, cash distribution in excess of retained earnings (return of capital to unitholders) is made when it is determined that there are no obstacles to the operation of AEON REIT after comprehensively taking into account the amount of capital expenditures and repairs and maintenance expenses expected for the fiscal period in which cash distribution in excess of retained earnings (return of capital to unitholders) is made as well as the following fiscal period against the total balance of cash and deposits (including cash and deposits in trust accounts) of AEON REIT as of the end of the fiscal period immediately preceding the fiscal period in which cash distribution in excess of retained earnings (return of capital to unitholders) is made, in consideration of the amount of capital expenditures required for the maintenance and enhancement of competitiveness of the assets currently held by AEON REIT and the financial position of AEON REIT.

         • It is assumed that distribution in excess of retained earnings (distribution with decrease of investment capital under tax laws) of ¥263 per unit will be made in the 26th fiscal period and distribution in excess of retained earnings (distribution with decrease of investment capital under tax laws) of ¥649 per unit will be made in the 27th fiscal period.

         • It is assumed that no revisions that may impact the abovementioned projections will be made to laws and regulations, tax systems, accounting standards, securities listing regulations and the rules of The Investment Trusts Association, Japan, or others.

         • It is assumed that no unforeseeable significant changes will occur in general economic trends or conditions in the real estate market, etc.

2. Financial Statements
   1. Balance Sheets

Previous fiscal period (As of January 31, 2025)

(Unit: Thousands of yen)

Current fiscal period (As of July 31, 2025)

Assets

Previous fiscal period (As of January 31, 2025)

(Unit: Thousands of yen)

Current fiscal period (As of July 31, 2025)

Liabilities

Current liabilities

Net assets

Unitholders’ capital 243,428,896 243,428,896

Operating expenses

1. Statements of Unitholders’ Equity

   Previous fiscal period (From August 1, 2024, to January 31, 2025)

   (Unit: Thousands of yen)

   	Unitholders’ equity
   	Unitholders’ capital	Deduction from unitholders’ capital			Unitholders’ capital, net
   		Allowance for temporary difference adjustments	Other deduction from unitholders’ capital	Total deduction from unitholders’ capital
   Balance at beginning of current period	243,428,896	-	(3,525,697)	(3,525,697)	239,903,198
   Changes of items during period
   Distribution in excess of retained earnings due to allowance for temporary difference adjustments		(91,329)		(91,329)	(91,329)
   Other distribution in excess of retained earnings			(155,048)	(155,048)	(155,048)
   Reversal of distribution reserve
   Dividends of surplus
   Net income
   Acquisition of treasury investment units
   Cancellation of treasury investment units			(2,708,787)	(2,708,787)	(2,708,787)
   Total changes of items during period	-	(91,329)	(2,863,835)	(2,955,165)	(2,955,165)
   Balance at end of current period	*1 243,428,896	(91,329)	(6,389,533)	(6,480,863)	236,948,033

   	Unitholders’ equity						Total net assets
   	Surplus				Treasury investment units	Total unitholders’ equity
   	Voluntary reserve		Unappropriated retained earnings (undisposed loss)	Total surplus
   	Distribution reserve	Total voluntary reserve
   Balance at beginning of current period	249,222	249,222	6,598,853	6,848,075	-	246,751,274	246,751,274
   Changes of items during period
   Distribution in excess of retained earnings due to allowance for temporary difference adjustments						(91,329)	(91,329)
   Other distribution in excess of retained earnings						(155,048)	(155,048)
   Reversal of distribution reserve	(249,222)	(249,222)	249,222
   Dividends of surplus			(6,847,621)	(6,847,621)		(6,847,621)	(6,847,621)
   Net income			6,860,095	6,860,095		6,860,095	6,860,095
   Acquisition of treasury investment units					(2,708,787)	(2,708,787)	(2,708,787)
   Cancellation of treasury investment units					2,708,787
   Total changes of items during period	(249,222)	(249,222)	261,696	12,474	-	(2,942,691)	(2,942,691)
   Balance at end of current period	-	-	6,860,550	6,860,550	-	243,808,583	243,808,583

   Current fiscal period (From February 1, 2025, to July 31, 2025)

   (Unit: Thousands of yen)

   	Unitholders’ equity
   	Unitholders’ capital	Deduction from unitholders’ capital			Unitholders’ capital, net
   		Allowance for temporary difference adjustments	Other deduction from unitholders’ capital	Total deduction from unitholders’ capital
   Balance at beginning of current period	243,428,896	(91,329)	(6,389,533)	(6,480,863)	236,948,033
   Changes of items during period
   Distribution in excess of retained earnings due to allowance for temporary difference adjustments		(92,513)		(92,513)	(92,513)
   Other distribution in excess of retained earnings			(113,538)	(113,538)	(113,538)
   Dividends of surplus
   Net income
   Total changes of items during period	-	(92,513)	(113,538)	(206,051)	(206,051)
   Balance at end of current period	*1 243,428,896	(183,842)	(6,503,072)	(6,686,914)	236,741,981

   	Unitholders’ equity			Total net assets
   	Surplus		Total unitholders’ equity
   	Unappropriated retained earnings (undisposed loss)	Total surplus
   Balance at beginning of current period	6,860,550	6,860,550	243,808,583	243,808,583
   Changes of items during period
   Distribution in excess of retained earnings due to allowance for temporary difference adjustments			(92,513)	(92,513)
   Other distribution in excess of retained earnings			(113,538)	(113,538)
   Dividends of surplus	(6,858,580)	(6,858,580)	(6,858,580)	(6,858,580)
   Net income	7,075,751	7,075,751	7,075,751	7,075,751
   Total changes of items during period	217,171	217,171	11,119	11,119
   Balance at end of current period	7,077,721	7,077,721	243,819,702	243,819,702

2. Statements of Cash Distributions

(Unit: Yen)

1. Notes on Assumption of Going Concern

   Not applicable.

2. Notes on Significant Accounting Policies

   1. Valuation standard and method for securities	Securities Shares of subsidiaries and associates Shares issued by an overseas real estate holding corporation, as set forth in Article 221-2-1 of the Ordinance for Enforcement of the Act on Investment Trusts and Investment Corporations, are stated utilizing the moving-average cost method.
   2. Method of depreciation of non-current assets	Depreciation of property and equipment is computed by the straight-line method over the following useful lives: Buildings in trust 3 to 51 years Structures in trust 3 to 45 years Tools, furniture and fixtures in trust 3 to 6 years Intangible assets are amortized by the straight-line method. The useful lives of intangible assets are as follows: Leasehold interests in trust 38 to 46 years Long-term prepaid expenses are amortized by the straight-line method.
   3. Accounting method for deferred assets	Investment unit issuance expenses are capitalized and amortized by the straight-line method over three years. Investment corporation bond issuance costs are capitalized and amortized by the straight-line method over the respective terms of the investment corporation bonds.
   4. Standards for recognition of allowances	Provision for loss on disaster Of the restoration work expenses for the assets damaged by the 2024 Hyuga-nada Earthquake and Typhoon Shanshan, the amount that could reasonably be estimated as of the end of the fiscal period ended January 31, 2025, was recorded as provision for loss on disaster. Of the restoration work expenses for the assets damaged by the 2025 Hyuga-nada Earthquake, the amount that could reasonably be estimated as of the end of the fiscal period ended July 31, 2025, was recorded as provision for loss on disaster.
   5. Conversion of assets and liabilities in foreign currency into Japanese yen	Receivables and payables denominated in foreign currencies are translated into yen at the exchange rate in effect at the balance sheet date, and differences arising from the translation are included in the statements of income.

   1. Property and equipment

   2. Intangible assets

   3. Long-term prepaid expenses

   1. Investment unit issuance expenses

   2. Investment corporation bond issuance costs

   6. Recognition of revenue and expenses	The details of main performance obligations concerning revenue generated from contracts between AEON REIT and its customers and the ordinary time to fulfil said performance obligations (ordinary time to recognize revenue) are as follows. For the sale of real estate properties, revenue is recognized when the buyer, who is a customer, obtains control of the real estate property by satisfying the delivery obligations stipulated in the sale and purchase agreement of real estate properties. In the Statements of Income, “Gain on sale of real estate” or “Loss on sale of real estate” is presented as the amount obtained by deducting “Cost of sale of real estate,” which is the book value of real estate properties sold, and “Other sales expenses,” which are expenses directly required in the sale, from “Revenue from sale of real estate,” which are proceeds from sale of real estate properties. AEON REIT recognizes utilities income in accordance with the supply of water, etc. to the lessee who is a customer based on the lease agreement of real estate and details of agreements incidental to it. Of the utilities income, in the case that AEON REIT deems itself to be an agent, the net amount obtained by deducting the amount it pays to other parties from the amount it receives as charges for water, etc. supplied by the said other parties is recognized as revenue. For fixed asset tax, city planning tax, depreciable asset tax, etc., for real properties held, the amount of tax levied corresponding to the calculation period is recorded as expenses related to rent business. The amount equivalent to property-related taxes to be paid by AEON REIT in the first year for acquisition of real properties or trust beneficiary rights in real estate is not recorded as expenses but included in the acquisition costs for the related properties. The amount equivalent to property-related taxes included in the acquisition costs for the related properties was ¥24,555 thousand for the fiscal period ended July 31, 2025, and nil for the fiscal period ended January 31, 2025.
   7. Method of hedge accounting	Special treatment is applied for interest rate swaps. Hedging instruments: Interest rate swap transactions Hedged items: Interest on borrowings AEON REIT conducts derivative transactions for the purpose of hedging risks provided for in the Articles of Incorporation of AEON REIT pursuant to the regulations that stipulate the basic policy of risk management. The assessment of hedge effectiveness is omitted since the interest rate swaps satisfy the requirements for special treatment.
   8. Scope of cash and cash equivalents in the statement of cash flows	Cash and cash equivalents in the statement of cash flows consist of cash on hand, cash in trust, demand deposits, deposits in trust, and highly liquid short-term investments that are readily convertible, bear little risk in price fluctuations, and mature within three months of the date of acquisition.

   1. Standards for revenue recognition

      1. Sale of real estate properties

      2. Utilities income

   2. Property-related taxes

   1. Method of hedge accounting

   2. Hedging instruments and hedged items

   3. Hedging policy

   4. Method of assessing hedge effectiveness

   9. Other significant matters that serve as the basis for preparation of financial statements

   With regard to trust beneficiary rights in real estate, etc., all assets and liabilities as well as all revenue and expense items associated with all trust assets are accounted for under the respective account items of the balance sheets and statements of income. Of the trust assets accounted for under the respective account items, the following items with significance are separately indicated on the balance sheets: National and local consumption taxes are accounted for by the tax-exclusion method.

   1. Accounting policy for trust beneficiary rights in real estate, etc.

      1. Cash and deposits in trust

      2. Buildings in trust, structures in trust, tools, furniture and fixtures in trust, and land in trust

      3. Leasehold interests in trust

      4. Tenant leasehold and security deposits in trust

   2. Accounting policy for non-deductible consumption taxes

3. Notes on Significant Accounting Estimates

   Previous fiscal period (From August 1, 2024, to January 31, 2025) Impairment Losses of Non-Current Assets

   1. Balance of subject assets

      (Unit: Thousands of yen)

      Impairment losses Not applicable

      Property and equipment 332,441,627

      Intangible assets 74,252,435

   2. Information on the nature of significant accounting estimates for identified items

      In accordance with Accounting Standard for Impairment of Fixed Assets, AEON REIT has adopted the accounting treatment to reduce the book value of non-current assets to a recoverable amount when the invested amount is deemed to be unrecoverable due to decline in profitability.

      In adopting the accounting treatment, each property owned by AEON REIT is regarded as a single asset group, and AEON REIT determines whether it is required to recognize impairment losses when indications of impairment for the group are deemed to exist due to continued operating losses, significant declines in the market prices, and significant deterioration of business environment, etc.

      Future cash flow estimates are used to determine whether or not to recognize impairment losses. When it is determined that impairment losses should be recognized, the book value is reduced to the recoverable amount that is based on real estate appraisal value, etc. prepared by third-parties, and the reduced amount is recorded as impairment losses.

      In estimating the future cash flow, such items as rent, vacancy period, occupancy rate, expenses related to rent business, property ownership period, capital expenditures and discount rate for estimating the recoverable amount are determined by comprehensively considering the market trends and transaction cases of similar properties, etc. in reference to information from outside experts, including figures set forth in real estate appraisal.

      The performance and the market price of each property may be affected by the trends in the real estate rental market and real estate transaction market. Accordingly, any change in the assumptions used for the estimates may affect AEON REIT’s assets and profit and loss in the following fiscal period.

      Current fiscal period (From February 1, 2025, to July 31, 2025) Impairment Losses of Non-Current Assets

      1. Balance of subject assets

         (Unit: Thousands of yen)

         Impairment losses Not applicable

         Property and equipment 336,564,677

         Intangible assets 73,745,021

      2. Information on the nature of significant accounting estimates for identified items

      In accordance with Accounting Standard for Impairment of Fixed Assets, AEON REIT has adopted the accounting treatment to reduce the book value of non-current assets to a recoverable amount when the invested amount is deemed to be unrecoverable due to decline in profitability.

      In adopting the accounting treatment, each property owned by AEON REIT is regarded as a single asset group, and AEON REIT determines whether it is required to recognize impairment losses when indications of impairment for the group are deemed to exist due to continued operating losses, significant declines in the market prices, and significant deterioration of business environment, etc.

      Future cash flow estimates are used to determine whether or not to recognize impairment losses. When it is determined that impairment losses should be recognized, the book value is reduced to the recoverable amount that is based on real estate appraisal value, etc. prepared by third-parties, and the reduced amount is recorded as impairment losses.

      In estimating the future cash flow, such items as rent, vacancy period, occupancy rate, expenses related to rent business, property ownership period, capital expenditures and discount rate for estimating the recoverable amount are determined by comprehensively considering the market trends and transaction cases of similar properties, etc. in reference to information from outside experts, including figures set forth in real estate appraisal.

      The performance and the market price of each property may be affected by the trends in the real estate rental market and real estate transaction market. Accordingly, any change in the assumptions used for the estimates may affect AEON REIT’s assets and profit and loss in the following fiscal period.

      (Additional Information)

      Notes to Provision and Reversal of Allowance for Temporary Difference Adjustments

      Previous fiscal period (From August 1, 2024, to January 31, 2025)

      1. Reason for provision, related assets, etc. and amount of provision

         There is an inconsistency between profits for accounting purposes and tax purposes due to the recording of amortization expenses of leasehold rights related to fixed-term leasehold rights for business purposes of AEON MALL Shinkomatsu and four other properties, and ¥92,513 thousand of allowance for temporary difference adjustments has been recorded in the statements of cash distributions with regard to such inconsistency.

      2. Specific method of reversal

      The amount to be treated is scheduled to be reversed at the time of transfer or removal of the relevant assets.

      Current fiscal period (From February 1, 2025, to July 31, 2025)

      1. Reason for provision, related assets, etc. and amount of provision

         There is an inconsistency between profits for accounting purposes and tax purposes due to the recording of amortization expenses of leasehold rights related to fixed-term leasehold rights for business purposes of AEON MALL Shinkomatsu and four other properties, and ¥100,923 thousand of allowance for temporary difference adjustments has been recorded in the statements of cash distributions with regard to such inconsistency.

      2. Specific method of reversal

      The amount to be treated is scheduled to be reversed at the time of transfer or removal of the relevant assets.

4. Notes to Financial Statements Notes to Balance Sheets

   *1 Allowance for temporary difference adjustments

   Previous fiscal period (From August 1, 2024, to January 31, 2025)

   1. Reason for allowance, related assets, etc., and amount of allowance

      (Unit: Thousands of yen)

      Related assets, etc.	Reason for allowance	Initial accrual	Balance at beginning of current period	Allowance for current period	Reversal amount for current period	Balance at end of current period	Reasons for reversal
      Leasehold rights in trust, etc.	Accrual of amortization of leasehold interest expenses	91,329	-	91,329	-	91,329	-

   2. Specific method of reversal

The amount to be treated is scheduled to be reversed at the time of transfer or removal of the relevant assets.

Current fiscal period (From February 1, 2025, to July 31, 2025)

1. Reason for allowance, related assets, etc., and amount of allowance

   (Unit: Thousands of yen)

   Related assets, etc.	Reason for allowance	Initial accrual	Balance at beginning of current period	Allowance for current period	Reversal amount for current period	Balance at end of current period	Reasons for reversal
   Leasehold rights in trust, etc.	Accrual of amortization of leasehold interest expenses	183,842	91,329	92,513	-	183,842	-

2. Specific method of reversal

The amount to be treated is scheduled to be reversed at the time of transfer or removal of the relevant assets.

*2. Cancellation of treasury investment units

Previous fiscal period (As of January 31, 2025)

Current fiscal period (As of July 31, 2025)

Total number of cancelled units 21,383 units 21,383 units

Total amount cancelled 2,708,787 thousand yen 2,708,787 thousand yen

*3. Minimum net assets as provided in Article 67, paragraph 4 of the Act on Investment Trusts and Investment Corporations

*2. Breakdown of gain on sale of real estate properties

Previous fiscal period (From August 1, 2024, to January 31, 2025) Not applicable.

*3. Breakdown of dividends received

Previous fiscal period (From August 1, 2024, to January 31, 2025)

The entire amount of the maximum distributable amount (RM 5,516,926 (¥183,104 thousand) based on the results of the fiscal period ended July 2024 of JAMBATAN MANSEIBASHI (M) Sdn. Bhd. was paid to AEON REIT as dividends (Note 3), which were calculated on the following basis.

Items of statements of income of JAMBATAN MANSEIBASHI (M) Sdn. Bhd. and the basis of calculating dividends (from February 1, 2024, to July 31, 2024)

(Unit: RM (Thousands of yen)

(Note 1) The table above is based on the accounting standards of Malaysia (equivalent to IFRS), although disclosure is not based on the Malaysian standards. (Note 2) For the exchange rate, the period-average exchange rate (RM 1 = JPY 32.66 (rounded down to the second decimal place)) is used.

(Note 3) Maximum distributable amount and dividends are converted to the yen value by using the forward exchange rate on December 3, 2024, of RM 1 = JPY

33.18 (rounded down to the second decimal place).

Current fiscal period (From February 1, 2025, to July 31, 2025)

The entire amount of the maximum distributable amount (RM 5,569,404 (¥185,708 thousand) based on the results of the fiscal period ended January 2025 of JAMBATAN MANSEIBASHI (M) Sdn. Bhd. was paid to AEON REIT as dividends (Note 3), which were calculated on the following basis.

Items of statements of income of JAMBATAN MANSEIBASHI (M) Sdn. Bhd. and the basis of calculating dividends (from August 1, 2024, to January 31, 2025)

(Unit: RM (Thousands of yen)

(Note 1) The table above is based on the accounting standards of Malaysia (equivalent to IFRS), although disclosure is not based on the Malaysian standards. (Note 2) For the exchange rate, the period-average exchange rate (RM 1 = JPY 34.33 (rounded down to the second decimal place)) is used.

(Note 3) Maximum distributable amount and dividends are converted to the yen value by using the forward exchange rate on June 4, 2025, of RM 1 = JPY 33.34

(rounded down to the second decimal place).

*4. Breakdown of extraordinary income

Previous fiscal period (From August 1, 2024, to January 31, 2025)

AEON REIT recorded ¥172,257 thousand in insurance income for the assets damaged by the 2024 Hyuga-nada Earthquake and Typhoon Shanshan.

Current fiscal period (From February 1, 2025, to July 31, 2025)

AEON REIT recorded ¥6,232 thousand in insurance income for the assets damaged by the 2025 Hyuga-nada Earthquake.

*5. Breakdown of extraordinary losses

Previous fiscal period (From August 1, 2024, to January 31, 2025)

1. Loss on disaster

   AEON REIT recorded ¥11,575 thousand in loss on disaster for losses related to assets that were damaged by the 2024 Hyuga-nada Earthquake and Typhoon Shanshan (asset restoration work expenses).

2. Provision for loss on disaster

AEON REIT recorded ¥271,655 thousand in provision for loss on disaster for restoration work expenses that could reasonably be estimated as of the end of the fiscal period ended January 31, 2025, with regard to assets that were damaged by the 2024 Hyuga-nada Earthquake and Typhoon Shanshan.

Current fiscal period (From February 1, 2025, to July 31, 2025)

1. Loss on disaster

   AEON REIT recorded ¥27,619 thousand in loss on disaster for losses related to the assets damaged by the November 2024 Noto Peninsula Earthquake and the 2025 Hyuga-nada Earthquake (asset restoration work expenses).

2. Provision for loss on disaster

AEON REIT recorded ¥43,350 thousand in provision for loss on disaster for restoration work expenses that could reasonably be estimated as of the end of the fiscal period ended July 31, 2025, with regard to the assets damaged by the 2025 Hyuga-nada Earthquake.

*1. Total number of authorized investment units and total number of investment units issued and outstanding

*1. Reconciliation between cash and cash equivalents at end of period and relevant amount on the balance sheets

(Unit: Thousands of yen)

Previous fiscal period (From August 1, 2024,

to January 31, 2025)

Current fiscal period (From February 1, 2025,

to July 31, 2025)

Cash and deposits 26,930,214 29,406,161

Cash and deposits in trust 9,452,886 9,099,956

Cash and cash equivalents 36,383,100 38,506,118

1. Matters regarding financial instruments

   1. Policy for financial instruments

      AEON REIT seeks as its basic policy to execute a stable, flexible and efficient financial strategy, and procures funds by borrowing, issuing investment corporation bonds (including short-term investment corporation bonds; the same shall apply hereafter), or issuing investment units for purposes including portfolio growth through property acquisitions.

      Derivative transactions are carried out only to hedge the risk of fluctuations in interest rates associated with borrowings, exchange rate fluctuation risks associated with operating receivables or obligations in foreign currency, and other risks.

   2. Content and risks of financial instruments and risk management system

      Proceeds from loans payable and investment corporation bonds are used mainly for the purpose of acquiring real estate and trust beneficiary rights in real estate.

      Tenant leasehold and security deposits in trust are deposits provided by tenants under lease agreements.

      Loans payable with floating interest rates are exposed to the risk of fluctuations in interest rates. However, by appropriately managing the debt ratio, etc., it is possible to limit the impact of a rise in market interest rates on the operations of AEON REIT. Furthermore, these risks are managed through derivative transactions (interest rate swaps) as hedging instruments in certain floating-rate loans payable in order to fix interest rate payments and hedge the risk of fluctuations in interest rates. The hedge effectiveness of the interest rate swaps is assessed, by comparing the cumulative changes in the cash flows of the hedging instruments and the hedged items and based on the respective amount of changes; provided, however, that the assessment of hedge effectiveness be omitted for those interest rate swaps that meet the criteria for exceptional treatment.

      Derivative transactions are conducted and managed in accordance with the internal regulations that specify the basic policy for risk management.

      Loans payable, investment corporation bonds and tenant leasehold and security deposits in trust are exposed to liquidity risks. However, AEON REIT manages these risks through preparing monthly financing plans, maintaining liquidity on hand, and other means by the Asset Manager.

      Operating receivables denominated in foreign currencies associated with the acquisition of overseas properties are exposed to the risk of fluctuations in exchange rates. However, since the percentage of these receivables to total assets is low, they are handled under a system in which the Asset Manager monitors the risk and examines the necessity of hedging it with the use of derivative transactions such as forward foreign exchange contract transactions.

      AEON REIT may be engaged in foreign currency denominated transactions in connection with investments in overseas real estate, etc. Such transactions carry the risk of fluctuations in exchange rates, and exchange rate fluctuations may negatively affect AEON REIT’s earnings. If the yen is increasingly appreciated against other currencies, the yen-value of foreign currency denominated transactions that arise in connection with investments in overseas real estate, etc. may be diminished to negatively impact AEON REIT’s net income for the relevant fiscal period.

      Moreover, if there are foreign denominated assets and liabilities in connection with investments in overseas real estate, etc., certain accounts of these assets and liabilities will be converted into yen at the exchange rates prevailing on the closing date for the preparation of financial statements. Due to exchange rate fluctuations, these accounts may negatively affect AEON REIT’s net income.

   3. Supplementary explanations on fair value, etc. of financial instruments

      The fair values of financial instruments include values based on market prices or, for shares, etc. for which there are no market prices available, reasonably calculated values. As certain assumptions are used in calculating these values, if different assumptions, etc., are used, these values could vary.

2. Matters regarding fair value, etc. of financial instruments

   Balance sheet carrying amounts, fair values, and the difference between the two values are as shown below. Stocks, etc. with no market price are not included in the table below (Note 2). Notes on “Cash and deposits” and “Cash and deposits in trust” are omitted as they are cash and short-term settlements and their fair values approximate their carrying amounts. Notes on “Tenant leasehold and security deposits” and “Tenant leasehold and security deposits in trust” are also omitted due to immateriality.

   Previous fiscal period (as of January 31, 2025)

   (Unit: Thousands of yen)

   	Balance sheet carrying amount	Fair value	Difference
   (1) Current portion of investment corporation bonds	2,000,000	1,994,800	(5,200)
   (2) Current portion of long-term loans payable	22,200,000	22,183,189	(16,810)
   (3) Investment corporation bonds	49,000,000	46,676,700	(2,323,300)
   (4) Long-term loans payable	115,200,000	114,052,293	(1,147,706)
   Total liabilities	188,400,000	184,906,982	(3,493,017)
   (5) Derivative transactions	-	-	-

   Current fiscal period (as of July 31, 2025)

   (Unit: Thousands of yen)

   	Balance sheet carrying amount	Fair value	Difference
   (1) Current portion of investment corporation bonds	2,000,000	1,998,600	(1,400)
   (2) Current portion of long-term loans payable	22,200,000	22,186,938	(13,061)
   (3) Investment corporation bonds	49,000,000	46,510,600	(2,489,400)
   (4) Long-term loans payable	115,200,000	113,666,103	(1,533,896)
   Total liabilities	188,400,000	184,362,242	(4,037,757)
   (5) Derivative transactions	-	-	-

   (Note 1) Measurement of fair values of financial instruments

   1. Current portion of investment corporation bonds; (3) Investment corporation bonds;

      The fair value of investment corporation bonds is based on the reference price disclosed by the Japan Securities Dealers Association.

   2. Current portion of long-term loans payable; (4) Long-term loans payable

Because the interest rates of long-term loans payable with floating interest rates are to be revised periodically and thus their fair value is almost the same as the book value, the book value is used as the fair value of these liabilities. The fair value of long-term loans payable carrying fixed interest rates is calculated by discounting the total of principal and interest at the rate assumed when a new, similar loan corresponding to the remaining period is made. The fair value for interest rate swaps, to which special treatment is applied, is included in the fair value of long-term loans payable, a hedged item.

(5) Derivative transactions

Please refer to “Derivative Transactions” described later.

(Note 2) Financial instruments for which there are no market prices

Previous fiscal period (as of January 31, 2025)

(Unit: Thousands of yen)

Current fiscal period (as of July 31, 2025)

Shares of subsidiaries and associates 6,078,453 6,078,453

Shares of subsidiaries and associates are not subject to fair value disclosure pursuant to Paragraph 5 of the Implementation Guidance on Disclosures about Fair Value of Financial Instruments.

(Note 3) Expected amount of repayments of investment corporation bonds and loans payable after balance sheet date

Previous fiscal period (as of January 31, 2025)

(Unit: Thousands of yen)

Current fiscal period (as of July 31, 2025)

(Unit: Thousands of yen)

1. Derivative transactions not applying hedge accounting Previous fiscal period (as of January 31, 2025)

   Not applicable.

   Current fiscal period (as of July 31, 2025) Not applicable.

2. Derivative transactions applying hedge accounting

The following table shows the contracted amount or principal amount equivalent or the like set forth in the contract as of the balance sheet date for each hedge accounting method.

Previous fiscal period (as of January 31, 2025)

(Unit: Thousands of yen)

(Note) Fair value of interest rate swap with the exceptional treatment is included in fair value of “(4) Long-term loans payable” in “Financial Instruments, 2. Matters regarding fair value, etc., of financial instruments” described above, as it is processed as a single unit with the hedged long-term loans payable.

Current fiscal period (as of July 31, 2025)

(Unit: Thousands of yen)

(Note) Fair value of interest rate swap with the exceptional treatment is included in fair value of “(4) Long-term loans payable” in “Financial Instruments, 2. Matters regarding fair value, etc., of financial instruments” described above, as it is processed as a single unit with the hedged long-term loans payable.

1. Significant components of deferred tax assets and liabilities

   (Unit: Thousands of yen)

   	Previous fiscal period	Current fiscal period
   	(as of January 31, 2025)	(as of July 31, 2025)
   Deferred tax assets Asset retirement obligations	177,025	177,750
   Amortization of leasehold interests	167,354	190,108
   Tax loss carried forward (Note)	136,562	-
   Subtotal of deferred tax assets	480,941	367,859
   Valuation reserve	(328,943)	(217,744)
   Total deferred tax assets Deferred tax liabilities	151,998	150,114

   Property and equipment corresponding to the asset retirement obligations

   (151,998) (150,114)

   Total deferred tax liabilities (151,998) (150,114) Net deferred tax assets – -

   (Note) For the tax loss carried forward and the amount of the deferred tax assets by carry-forward period, please refer to “3. Tax loss

   carried forward and amount of deferred tax assets by carry-forward period.”

2. Reconciliation of significant difference between the normal effective statutory tax rate and the actual effective tax rate after application of tax effect accounting

   (Unit: %)

   	Previous fiscal period	Current fiscal period
   	(as of January 31, 2025)	(as of July 31, 2025)
   Normal effective statutory tax rate	31.46	31.46
   (Adjustments) Distributions paid included in deductibles	(31.87)	(31.91)
   Other	0.42	0.46
   Effective tax rate after application of tax effect accounting	0.01	0.01

3. Tax loss carried forward and amount of deferred tax assets by carry-forward period

Previous fiscal period (as of January 31, 2025)

(Unit: Thousands of yen)

(Note) Tax loss carried forward represents the amount multiplied by the effective statutory tax rate. Current fiscal period (as of July 31, 2025)

Not applicable.

Asset retirement obligations recorded on the balance sheets

1. Overview of the asset retirement obligations

   Asset retirement obligations have been recorded as AEON REIT has obligations to restore the sites to their original conditions based on the fixed-term land lease agreements for some of its assets.

2. Calculation method of the amount of the asset retirement obligations

   The amount of the asset retirement obligations is calculated by estimating the expected use period of the relevant assets to be the remaining period of the relevant fixed-term land lease agreements (38 to 46 years) and using the discount rates of 0.797% - 0.906%.

3. Change in the total amount of the asset retirement obligations

(Unit: Thousands of yen)

AEON REIT holds retail properties across various locations in Japan. The balance sheet carrying amounts, changes during the fiscal period, and fair values of these rental properties are as follows. Amounts do not include AEON Mall SEREMBAN 2 owned through the overseas SPC. The profit or loss concerning investment and rental properties is indicated under “Notes to Statements of Income.”

(Unit: Thousands of yen)

(Note 1) The balance sheet carrying amount is the acquisition cost less accumulated depreciation.

(Note 2) Of the changes during the previous fiscal period, the increase is mainly due to capital expenditures at existing properties amounting to ¥1,903,530 thousand, while the decrease is principally attributable to recording depreciation amounting to

¥5,360,727 thousand. Of the changes during the current fiscal period, the increase is mainly due to acquisition of PIA CITY Miyashiro (Land), KASUMI FOOD SQUARE Hitachikamine (Land), KASUMI FOOD SQUARE Mitomigawa (Land), KASUMI Chuo Distribution Center (Land), and KASUMI Sakura Distribution Center (Land) amounting to ¥8,287,702 thousand, and capital expenditures at existing properties amounting to ¥1,716,027 thousand, while the decrease is principally attributable to recording depreciation amounting to ¥5,226,206 thousand and sale of AEON MALL Yamagata-Minami with a sale price of ¥1,161,886 thousand.

(Note 3) The fair value at the end of the fiscal period is the (planned) disposition price if a disposition contract has been concluded, and. for other real estate, the appraisal value or survey price provided by an independent real estate appraiser.