1.Building a portfolio centered on Lifestyle-focused Assets^(Note1)
that realize pepole's affluent lifestyles

Use of investment assets

• ESCON REIT aims to revitalize local communities and realize people’s affluent lifestyles by investing in lifestyle-focused assets (commercial facilities, residence, and assets aimed at creating a sustainable society^(Note2) )

Investment area

• To capture stable revenues over the long term and to achieve growth, ESCON REIT will focus on investing in lifestyle-focused assets in local communities throughout the five major metropolitan areas^(Note3) in Japan, where consistent growth in population density is forecasted

2.Realizing growth strategy
that leveraging capabilities of the Asset Management Company,
and the support of the ES-CON JAPAN Group and the Chubu Electric Power Group

External growth

• ESCON REIT will acquire properties in order to achieve steady growth in asset size backed by our extensive pipelines by utilizing pipelines with its sponsors, the ES-CON JAPAN Group and the Chubu Electric Power Group, in addition to the asset management company, ES-CON ASSET MANAGEMENT (hereinafter, the "Asset Manager") 's own property information collection channels

Internal growth

• By utilizing the expertise, experience and human networks of the memebers of the Asset Manager, the Asset Manager will strive to increase rent revenue and asset value with the support of the ES-CON JAPAN Group and the Chubu Electric Power Group

3.Safety and stable financial management and
a strong governance system that takes into consideration the maximization of unitholders' interests

Financial management

• For new debt financing, dynamically diversify fixed/variable interest rate structures and repayment dates while making long-term fixed interest rate fundraising the basis to achieve efficient fundraising
• Aim to expand fundraising sources in line with growth in asset size while maintaining a good relationship with existing lenders
• Implement controls at appropriate LTV levels that are mindful of securing fundraising capacity

Governance system

• In addition to the transition to a company with an Audit and Supervisory Committee, the Asset Manager has strengthened its measures against conflicts of interest by formulating selfimposed rules multi-tiered checks in transactions with interested parties. The Asset Manager will continue to maintain and improve its legal compliance and internal control systems.
• For the purpose of strengthening the management of conflicts of interest, ESCON REIT has appointed external persons who have no special interest in ESCON REIT and the ES-CON JAPAN Group as executive director and supervisory directors. ESCON REIT aims to establish a governance structure that takes into consideration the maximization of unitholders' interests.

• “Lifestyle-focused assets” refers to commercial facilities, Residence, and assets aimed at creating a sustainable society^(Note2) that support people's affluent lifestyles for residents of highly convenient urban areas or areas with easy access to major cities by providing everyday goods and services.
• “Assets aimed at creating a sustainable society” refers to assets that contribute to the creation of a sustainable society by solving social issues that affect local communities, such as declining birth rates, aging populations, environmental and energy issues, labor and education issues, and problems wrought by natural disasters, to help build people's affluent lifestyles.
• "Five major metropolitan areas" refer to Hokkaido Region, Tokyo Metropolitan area, Chubu Region, Kinki Region and Kyushu Region. Hokkaido Region includes Hokkaido Prefecture. Tokyo Metropolitan area includes Tokyo, Kanagawa, Saitama, Chiba, Ibaraki, Tochigi, and Gunma Prefectures. Chubu Region includes Aichi, Shizuoka, Mie, Nagano and Gifu Prefectures. Kinki Region includes Osaka, Kyoto, Hyogo, Nara, and Shiga Prefectures. Kyushu Region refers to Fukuoka, Kumamoto, Kagoshima, Miyazaki, Oita, Saga and Nagasaki Prefecture.