It is our sincere hope that this message finds all our unitholders well and prosperous.

We are pleased to announce that ESCON JAPAN REIT Investment Corporation (hereinafter,”ESCON REIT”) has successfully completed its 18th fiscal period (August 1, 2025 to January 31, 2026).

During the fiscal period, the Japanese economy sustained a moderate recovery, supported by steady capital investment, despite uncertainties such as concerns over U.S. trade policies and the transition to a rising interest rate environment. On the employment front, wage increases have continued at a high level, leading to expectations for the establishment of healthy inflation aimed at overcoming deflation. Under these circumstances, with an emphasis on the stability of its earnings foundation, ESCON REIT focused its efforts on strengthening its resistance to inflation as a Phase III measure of its roadmap, which was announced at the financial results briefing for the fiscal period ended January 2025. As part of these efforts, we sought to improve the quality of our portfolio through asset replacement by acquiring ESCON REIT’s first-ever hotel asset, “Nine hours woman Shinjuku.” In addition, regarding the management of existing properties, we pursued rent increases by negotiating with tenants whose current rents deviated from market levels to close those gaps at the time of lease renewal, as well as through the introduction of percentage-based rents. At the same time, we achieved cost reductions through measures to improve utility costs by reviewing electricity rates and energy usage and worked to enhance profitability across the whole of ESCON REIT.
As a result of these efforts, the distribution per unit for the fiscal period under review reached 3,615 yen, exceeding the forecast of 3,510 yen.

Going forward, ESCON REIT will aim to achieve steady growth in assets under management and the maximization of unitholder value through fair and appropriate operations, with the cooperation of its sponsor, ES-CON JAPAN Ltd, and its support company, Chubu Electric Power Co., Inc. and Chuden Real Estate Co., Inc., as well as by maximizing the unique network of its ES-CON ASSET MANAGEMENT Ltd.

We would appreciate the continued support and encouragement from our unitholders and other stakeholders.