United Urban Investment CorporationTSE: 8960

42nd Fiscal Period (Jun. 1, 2024 - Nov. 30, 2024) SemiannualReport

Feb 27, 2025 at 7:34 AM UTC · Issued by United Urban Investment Corporation

Semiannual Report

Forty-second Fiscal Period

From June 1, 2024 to November 30, 2024

42nd

Profile

United Urban Investment Corporation ("United Urban") was incorporated on November 4, 2003, under the Act on Investment Trusts and Investment Corporations of Japan. On December 22, 2003, United Urban was listed on the real estate investment trust ("J-REIT") section of the Tokyo Stock Exchange (Securities Code: 8960), and United Urban has been growing steadily since listing. In addition, through the merger with Nippon Commercial Investment Corporation ("NCI") in December 2010, United Urban considerably expanded the size of assets.

In order to obtain stable earnings over the medium to long term, United Urban intends to form an optimal portfolio that is diversified both in terms of the types of use and areas of location, which is thought to cope with economic and real estate market fluctuations. And United Urban will conduct asset management aiming to both improve revenues and mitigate risk through property management and enhancement of property values based on a bottom- up approach.

Growth of Assets (Note 1)

	Retail Properties		Ofﬁce Buildings		Hotels	Residential Properties	Others
(Billions of yen)													590.4
600												575.5
											548.7
				Merger with NCI				10th anniversary of
500			Split of investment units				listing (Dec. 2013)		493.1	520.0 520.1

		(ﬁrst case for J-REIT) (Dec. 2010)				471.2 474.9
				Issuance of corporate bonds for retail investors

400	Establishment	416.7	422.6	429.0
(Nov. 2003)	387.2

	The tenth
	J-REIT listed

300 on TSE (Dec. 2003)

		220.0
200
100	64.7

0	1st FP	14 th FP	15 th FP	16 th FP	17th FP	18th FP	19 th FP	20th FP	21st FP	22nd FP	23rd FP	24th FP	25th FP	26th FP

	(May/2004)	(Nov/2010) (May/2011) (Nov/2011) (May/2012) (Nov/2012) (May/2013) (Nov/2013) (May/2014) (Nov/2014) (May/2015) (Nov/2015) (May/2016) (Nov/2016)
No. of	14	50	86	90	91	94	97	97	103	108	108	117	118	119
Properties

Notes: 1. The total acquisition prices of properties owned by United Urban at the end of each fiscal period are shown above, and figures are rounded to the units stated.

Unless otherwise indicated, in principle, all figures in this report are rounded down to the nearest unit.
In this document, J-REIT refers to a real-estate investment trust listed on a Japanese stock exchange.

Contents

Key Figures
Financial Highlights
To Our Unitholders
Distinctive Features of United Urban
Acquisitions and Sales of Properties

The shareholder of Marubeni REIT Advisors Co., Ltd. ("MRA"), the asset management company that United Urban entrusts with asset management services, is the general trading company Marubeni Corporation ("Marubeni"). United Urban takes full advantage of the functions and the wide-ranging information network and support provided by Marubeni and its affiliated companies to execute property acquisition and sales, tenant leasing, and to reduce costs, etc. Furthermore, United Urban aims to develop and manage a stable portfolio of properties over the medium to long term.

															20th anniversary of listing (Dec. 2023)

Debt ﬁnancing through green ﬁnance with the ﬁrst joint												688.9 691.8	698.2	703.1
management speciﬁed money trust in Japan (Sep. 2018)						671.4	675.1	676.8	682.3
										661.5	656.4
621.6	610.9	608.6	613.9	626.1	643.8

27th FP 28th FP 29th FP 30th FP 31st FP 32nd FP 33rd FP 34th FP 35th FP 36 th FP 37 th FP 38 th FP 39 th FP 40 th FP 41 st FP 42 nd FP
(May/2017) (Nov/2017) (May/2018) (Nov/2018) (May/2019) (Nov/2019) (May/2020) (Nov/2020) (May/2021) (Nov/2021) (May/2022) (Nov/2022) (May/2023) (Nov/2023) (May/2024) (Nov/2024)
123	116	116	119	120	122	129	130	133	136	136	137	140	141	140	140

10	Investment Unit Information	26	Profile of Asset Management Company
11	Portfolio Properties	27	Performance Report
21	Financial Status	56	Financial Section

ESG Initiatives

Corporate Profile

United Urban Investment Corporation 1

Key Figures (As of November 30, 2024)

Cash Distribution per Unit for the 42nd Fiscal Period

¥3,937

Total Acquisition Price

¥703billion

Occupancy Rate

99.2%

Ratings (As of January 31, 2025)

Long-term issuer rating

JCRAA

Rating outlook: Stable

Number of Properties

140

Loan-to-Value Ratio (LTV) (total assets basis) (Note)

45.0%

Note	LTV (total assets basis) =
Interest-bearing liabilities (including corporate bonds) / Total assets

Total Amount of Retained Earnings (Note)

¥10,320million

Note	Reserve for temporary difference adjustments, reserve
retained for distribution and reserve for reduction entry

2 United Urban Investment Corporation

Financial Highlights

Financial Indicators

(Millions of yen, except per unit information)

	40th Fiscal Period	41st Fiscal Period	42nd Fiscal Period	43rd Fiscal Period	44th Fiscal Period
		June 1, 2023-		December 1, 2023-		June 1, 2024 -		December 1, 2024-		June 1, 2025-
		November 30, 2023		May 31, 2024		November 30, 2024		May 31, 2025		November 30, 2025
								(forecast)		(forecast)
Operating revenues	¥	25,356	¥	25,981	¥	28,209	¥	27,234	¥	26,452

Operating income		11,408		12,215		13,795		13,102		12,298

Ordinary income		10,370		11,170		12,680		11,850		10,778

Net income		10,369		11,169		12,680		11,850		10,778

Total cash distribution		10,445		11,244		12,111		12,250		11,178

Cash distribution per unit (Yen)		3,371		3,629		3,937		4,000		3,650

Total assets		727,227		734,420		730,532		-		-

Total net assets		360,800		361,801		360,075		-		-

Net assets per unit (Yen)		116,440		116,763		117,051		-		-

Cash distribution per unit (Yen)

					3,629	3,937	4,000	3,650
			3,229	3,371
3,100	3,112	3,144

36th FP	37th FP	38th FP	39th FP	40th FP	41st FP	42nd FP	43rd FP	44th FP
(Nov/2021)	(May/2022)	(Nov/2022)	(May/2023)	(Nov/2023)	(May/2024)	(Nov/2024)	(May/2025)	(Nov/2025)
							(forecast)	(forecast)

Cash distribution per unit forecast for the	¥	4,000
43rd Fiscal Period:

(From December 1, 2024 to May 31, 2025)

Cash distribution per unit forecast for the	¥	3,650
44th Fiscal Period:

(From June 1, 2025 to November 30, 2025)

Note: Cash distribution per unit forecast is our current expectations produced as of January 21, 2025, based on certain assumptions. Accordingly, the actual cash distributions per unit may differ from forecasts because of future acquisitions and sales of properties, real estate market trends and changes in other circumstances around United Urban. In addition, the forecasts are not guarantees of payment of any cash distributions by United Urban. For the latest information of forecasts, please refer to United Urban's website.

United Urban Investment Corporation 3

Executive Officer

United Urban Investment Corporation

Junichi Batai (right)

President and Chief Executive Officer Marubeni REIT Advisors Co., Ltd.

Kenmin Asatani (left)

To Our Unitholders

We would like to express our sincere gratitude for your support and patronage of United Urban Investment Corporation ("United Urban").

On January 21, 2025, United Urban announced the financial results for the 42nd fiscal period ended November 30, 2024.

Under our investment policy as a diversified J-REIT, in this fiscal period, United Urban acquired two office buildings (both are additional acquisitions of owned properties) and one hotel (total acquisition price: ¥24,059 million). In addition, we sold one office building (sale price: ¥19,000 million) by comprehensively assessing the real estate sales market and the profitability of our properties, etc. As a result, we improved the profitability of our property portfolio and achieved further qualitative improvement, such as refreshing some older properties. Moreover, in order to improve capital efficiency and return to unitholders, we decided to acquire our own investment units up to ¥5 billion, of which we acquired approximately ¥3.1 billion (22,383 units) during this fiscal period, completing the acquisition of a total of approximately ¥5 billion on December 11, 2024.

The real estate market continued to be affected by the protracted unstable international situation and continuing uncertainty in domestic and international politics and economies. However, demand in the real estate leasing market in Japan remained strong, due to factors including the expansion of corporate capital investment even after the Bank of Japan's additional interest rate increase in July 2024, a recovery in personal spending along with an improving income environment, and the forecast that the number of inbound visitors in 2024 will reach a record high. United Urban took advantage of these opportunities and implemented measures to improve profitability in each type of use and field, then posted operating revenues of ¥28,209 million (an increase of ¥2,227 million over the previous fiscal period) and net income of ¥12,680 million (an increase of ¥1,510 million over the previous fiscal period). As a result, the cash distribution per unit for the 42nd fiscal period reached ¥3,937 (an increase of ¥308 over the previous fiscal period).

In the currently ongoing 43rd fiscal period ending May 31, 2025, United Urban has decided to acquire three properties, comprising two retail properties and one healthcare facility (total acquisition price: ¥5,648 million), and to sell one retail property (sale price: ¥5,400 million), with a focus on improving the quality of our portfolio through asset replacement in order to achieve sustainable growth and improve unitholder value.

Your continuing support and kind attention are highly appreciated.

4 United Urban Investment Corporation

Distinctive Features of United Urban

A J-REIT Pursuing Sustainable Growth by Identifying Real Estate with Intrinsic Value

Real Estate with Intrinsic Value

Real Estate Securing Stable Profitability

over the Medium to Long Term, Regardless of Asset Type/Area

Diversified

Investment

Selective Investment in a Wide Variety of Real Estate

Stabilize profitability through diversified investment

Expand acquisition opportunities by diversifying target assets/ approaches

Analyze external environment including macro economy and market trends, etc.

Investment Criteria

Location

Building	Tenants	Contract Terms
Specifications

Asset Type	Area
		Greater Tokyo, major cities
		and surrounding areas in
		Japan, including government
Retail	Office Buildings	designated cities
Properties

Hotels Residential

Properties

Others

Hands-on

Management

Enhance Property Value

through

Bottom-up Approach

Growth strategy based on a medium- to long-term perspective

Flexible approach for addressing change

Asset management conducted jointly with partner companies

Sustainable Growth

Pursue Sustainable Growth of Investment Corporation

Maximization of Unitholder Value Engagement with Stakeholders Coexistence with the Environment and Society

Diversified Investment

Regardless of specific asset types and locations, United Urban pursues various real estate investment opportunities with superior potential and acquires properties with intrinsic value.

United Urban makes investments in properties deemed to be the most advantageous by carefully eyeing the market conditions for asset types and locations. This enables us to focus on reasonable acquisitions amid fierce investment competition and to continue acquiring properties at the target yield.

Hands-on Management

United Urban takes a bottom-up approach and prioritizes communications with tenants and strategic business partners to maximize the potential of every property. Through strategic investments, including large renewal/ expansion to capitalize on anticipated change in customer needs and market trends, United Urban keeps and raises the value of every property.

By proactive leasing and reducing operating costs, United Urban also aims to increase the profitability of every property.

United Urban Investment Corporation 5

Acquisitions and Sales of Properties

Additional Acquisition during the 42nd Fiscal Period

B50	OSAKA BAY TOWER (Acquisition of 80% quasi co-ownership of the trust beneficiary interest) (Note)	OFFICE BUILDINGS

Within 10 minutes by train to the Umeda area and Honmachi area in the center of Osaka. The property is connected to Bentencho Station, a transport hub between the Osaka Bay area and the center of Osaka.
The location potential is expected to be further improved as the property is close to Yumeshima area where the upcoming 2025 Japan International Exposition ("the Osaka Expo") and the integrated resorts are planned.

Location	Osaka, Osaka

Structure and Scale	SRC/S/RC B3/50F

Completed	September 1993

Acquisition Date	September 2, 2024

Acquisition Price	¥21,096 million

	Line
Maishima Sta.	Yumesaki
(tentative)	JR

Shinsakurajima Sta. (tentative)

Universal Studios Japan

Yumeshima Sta.		Osakako Sta.
(tentative)		Line

		extended)
		Chuo
Cosmosquare Sta.	Metrobe
Osaka	to

(scheduled

Line

Loop

Osaka

Bentencho Sta.

Note: United Urban acquired 10% quasi co-ownership of the trust beneficial interest of a part of compartmentalized ownership in the property on March 20, 2023 (the 39th fiscal period) and March 28, 2024 (the 41st fiscal period), respectively. Through this acquisition, United Urban currently holds 100% quasi co-ownership.

B49	IIDABASHI PLANO (Note)	OFFICE BUILDINGS

A complex consisting of an office building with 17 floors above ground, a residential building with 38 floors above ground, and three retail buildings.
Located a 2- to 3-minute walk from Iidabashi Station (JR Line, the Tokyo Metro Line, and the Toei Subway Line), and 10 minutes to Tokyo Station and 12 minutes to Shinjuku Station from Iidabashi Station by train.

Iidabashi IC	Metropolitan			Korakuen
Entrance	Route	Subway	Line	Garden
5			Koishikawa

	Tooky	Ikebukuro		Oedo

	Yurakucho	ExpresswaLine y	Toei
JCHO
Metro
Tokyo Shinjuku
Medical Center	Line				Tokyo Metro
		Iidabashi IC
				Namboku Line
Toei			Exit
			Sotobori-dori
Oedo Subway
Line
	Iidabashi Sta.			n	o
				Chuo Li	e/S bu Line
				JR

Location	Chiyoda-ku, Tokyo

Structure and Scale	RC B3/38F

Completed	February 2009

Acquisition Date	June 26, 2024

Acquisition Price	¥383 million

Tokyo University

of Science

		Yurakucho	Line	Namboku	Line
	Metro
Tokyo	Tokyo	Metro

The Nippon

Dental

University

Hospital

IIDABASHI PLANO

Mejiro

Tokyodori

Tozai

LineMetro

Note: United Urban acquired the compartmentalized ownership of the 11th to 15th floors of the office building of the property (10.06% co-ownership of the site) on March 31, 2022, and additionally acquired the compartmentalized ownership of a part of the 17th floor of the office building and a part of the second floor of the retail building B connected to the foot of the office building (total of 1.02% co-ownership of the site) on May 12, 2022. Moreover, United Urban acquired the compartmentalized ownership of a part of the fourth floor of the office building and a part of the second floor of the retail building C (total of 0.76% co-ownership of the site) on June 26, 2024.

New Acquisition during the 42nd Fiscal Period

C23 Randor Hotel Hiroshima Prestige

HOTELS

An apartment hotel (a hotel for a long stay with furniture, kitchen, household appliances, etc.) located a 5-minute walk from Hiroshima Station.
Forty-threeguest rooms in total, equipped with furniture and household appliances, and designed for a mid- to long-term stay of groups including foreign tourists and families.

Location	Hiroshima, Hiroshima

Structure and Scale	RC 10F

			Sanyo
		Shinkansen
	Hiroshimai
	Castlele
	Aioi-
Atomic	dori
Hiroshima
Bomb Dome
Railway		Electric
Hiroshima Peace
	Main Line
Memorial Park

JR	Line
	Hiroshima Sta.

Randor Hotel

Hiroshima

Prestige

Matoba-cho Tram Stop

Completed	March 2023

Acquisition Date	June 3, 2024

Acquisition Price	¥2,580 million

Toyoko Inn

Hiroshima Heiwa -odori

Heiwa-	odori		Electric	Line

		Hiroshima	Minami	Hiroshima City
			Contemporary Art
		Railway		Museum of

6 United Urban Investment Corporation

Acquisitions and Sales of Properties

New Acquisition during the 43rd Fiscal Period

A46	MALera Gifu (Acquisition of 5% quasi co-ownership of the trust beneficiary interest)	RETAIL PROPERTIES

Centered on the LOPIA supermarket, tenants for daily life and amusement facilities including a cinema complex provide residents in Gifu Prefecture and neighboring areas with highly convenient living and entertainment.
The commercial sphere of the property is expected to expand with an increase in accessibility owing to the opening of the Itonuki IC on the Tokai-Kanjo Expressway.
Population in neighboring area is to grow backed by the relocation of the Motosu City Hall to an adjacent area of the property.

Location	Motosu, Gifu

Structure and Scale	S 3F (Attached building: RC 1F)

Completed	April 2006

Acquisition Date	January 31, 2025

Acquisition Price	¥1,800 million

Ono-Godo IC

Ogaki Sta.

Yamagata IC

								y
						s	w	a

					s
					re		)
	157			p
	Tokai-KanjoE	tion
				x
			d		c
			ru
		(Un er const
		Itonuki IC						168

Morera-	MALera Gifu
Gifu Sta.
								157
Tarumi	Railway
							Gifu Sta.
				Line
				Main
		JR	Tokaido

A47 Niigata Nishikimachi Shopping Center (Site)

RETAIL PROPERTIES

Located in a residential area adjacent to downtown of Niigata City, the largest among cities situated along the Sea of Japan in Honshu (Japan's main island) (Note); 12 minutes by car from the Niigata station (approx. 5 km).
The site abuts two roads including a major road in the city, ensuring high visibility and accessibility to the location of the property.
Twelve separate buildings surrounding a parking area contain local and national tenants for daily life including a supermarket, drug store, home appliance retailer and others.

Location	Niigata, Niigata

Structure and Scale	-

Niigata Nishikimachi

Shopping Center (Site)

Niigata Port

Shinano	River

	JR
	Shin
	Main
	-
	etsu
Niigata Sta.	Line

	459

Niigata Airport

113

Tsusen
River
113
Niigata Nishikimachi
Shopping Center
(Site)	Junior

	High
	School
4
Tsusen River

Completed	-

Scheduled Acquisition Date	February 28, 2025

Scheduled Acquisition Price	¥2,720 million

Note: The population is 790,000. Source: Niigata City website as of January 21, 2025.

E23 Rehabilitation Home Bonsejour Kita-Matsudo

OTHERS

The home has 66 rooms (all single occupancy) with an average room size of 20.6 m2, providing residents with comfortable living.
With functional training instructors on site, the home offers a rehabilitation and nursing service in addition to nursing care service.
The tenant is a leading operator of eldercare facilities in terms of both the number of properties operated and number of residential units, with extensive experience as an operator and high level of expertise.

Location	Matsudo, Chiba

Structure and Scale	S B1/3F

Completed	September 2016

Scheduled Acquisition Date	March 31, 2025

Scheduled Acquisition Price	¥1,128 million

			.			Park
		Sta
	Kitamatsudo

Joban	Line
				Kaido	Tokaede
			6	Mito
					-
						dori

Park

Rehabilitation Home

Bonsejour Kita-Matsudo

United Urban Investment Corporation 7

Acquisitions and Sales of Properties

Sale of Property in the 42nd Fiscal Period

B7 Kawasaki Toshiba Building

OFFICE BUILDINGS

The tenant who had rented the entire building moved out in June 2024.
Decided to sell the property, considering factors including declining revenue due to tenant departures, the difficulty of finding tenants, and increased costs associated with continuing to own the property, as well as conditions of the real estate investment market.
Proceeds from the sale are used for the additional acquisition of OSAKA BAY TOWER.

Location	Kawasaki, Kanagawa

Completed	April 1987

Acquisition Date	December 20, 2004

Appraisal Value (Note 1)	¥18,500 million

Date of Sale	June 28, 2024

Sale Price	¥19,000 million

Book Value (Note 2)	¥17,667 million

Gain or loss on Sale of Property (Note 3)	+¥969 million

Notes: 1. As of May 31, 2024.

As of the date of sale.
United Urban recorded a gain on sales of real estate properties of ¥969 million due to this sale. However, since it is expected that a certain period of time will be required for the decrease in profit from rental activities resulting from the transfer to be recovered, United Urban has decided to distribute the gain on sales of real estate properties evenly over the three fiscal periods.

Sale of Property in the 43rd Fiscal Period

A2 Joy Park Izumigaoka

RETAIL PROPERTIES

Since acquisition in December 2003, the property has maintained stable operation as a multi-tenant retail property.
Decided to sell the property, considering the possibility of increased future costs, such as renovation costs required to improve profitability and repair costs due to the age of the building.
The proceeds from the sale will be used as investor returns in the form of distributions equivalent to the gain on sales of real estate properties, and will also be used to restore the decreased cash on hand due to the acquisition of MALera Gifu and Niigata Nishikimachi Shopping Center (Site).

Location	Sakai, Osaka

Completed	November 2000

Acquisition Date	December 22, 2003

Appraisal Value (Note 1)	¥4,150 million

Notes: 1.	As of November 30, 2024.
2.	Estimated amount.

Scheduled Date of Sale	March 31, 2025

Scheduled Sale Price	¥5,400 million

Book Value (Note 1)	¥4,768 million

Gain or loss on Sale of Property (Note 2)	+¥565 million

Policies of the Medium-Term Growth Strategy (2025-2027)

Asset Replacement

Sell off assets (Note) on a scale of about 10% between 2025 and 2027

Increase portfolio profit; replace assets to lower

portfolio's building age

Return gains on sale to unitholders

Note: As of the end of 42nd fiscal period: ¥703.1 billion

Property acquisitions

Distribution per unit (annual)

¥8,000+

Sustained Increase

in NAV

Cash Allocation

Acquisition of own investment units

Profit Increase

Increase annual rent revenues by 3-5%

Raise rents at existing properties through hands-on management

Cover cost increases through efficient operations

Early repayment of borrowings

8 United Urban Investment Corporation

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