Our primary investment targets are urban retail properties, suburban retail properties and "roadside" stores in Japan.

Our geographic investment focus is on properties located in Tokyo, Osaka and Nagoya, the three largest metropolitan areas in Japan, and other major metropolitan areas in Japan, while seeking to take advantage of investment opportunities throughout Japan that we believe will help us to achieve our investment objective and desired geographic diversity. We believe that a benefit of focusing on retail properties is that attractive investment opportunities may be available in locations throughout major metropolitan areas of Japan.

We have been quite pleased by the way in which we have been able to develop a significant pipeline of attractive acquisition opportunities.

Within our overall portfolio strategy, we look to achieve not only geographic diversity, but also seek to achieve diversity across the retail property spectrum, which includes the general merchandise store sector where we already have a deep presence, the department store sector, the 'category killer' sector, and high-end luxury goods ('High Street') segment, targeting a mix of sectors which we deem most likely to achieve long-term shareholder value.

In a general sense, our management team has employed a proactive approach to sourcing acquisitions, particularly before such assets come onto the market, in achieving attractive acquisition pricing. To date, the Asset Manager's dedicated acquisition team has been able to leverage off the considerable network and depth of relationships throughout the Mitsubishi Corporation organization, in developing its acquisition program. Moreover, the acquisition team has developed a broad networking with a growing brokerage community within Japan, including each of the foreign opportunistic property buyers, and initiated an active calling program with financial institutions, including trust banks and workout departments of major banks.

The Asset Manager achieved real estate assets under management of JPY 400 billion ahead of schedule.

We are confident that we can continue to exhibit strong discipline in our acquisition program in terms of continuing to achieve the 'right' blend of criteria which we deem most desirable and relevant in achieving long-term shareholder value.

Before we acquire a property, the Asset Manager conducts a detailed examination of the property, including investigating the characteristics of tenants, lease agreements, the history of property improvements and repairs, the condition of buildings and environmental matters. The Asset Manager also obtains an independent appraisal of value. In addition, the Asset Manager analyzes domestic economic developments, the condition of the local real estate market, consumer trends and changes in the business environment, and considers factors such as the effect of the property on overall portfolio growth performance and the expected cost of capital and investment return. In particular, the Asset Manager focuses on the following factors:

Retail Trade Area
We believe the market size, demand potential and growth potential of the retail trade area of any prospective acquisition target are important factors in determining whether a property can maintain stable profitability and rent revenue. The Asset Manager analyzes the population, age composition, average income, home owner population and other relevant demographic information relating to the area, and determines the area's characteristics and suitability with respect to the businesses of the present tenants. The Asset Manager also investigates, by using third-party market analysis and other means, the competitiveness of the prospective investment relative to existing and potential competing retail properties.

Lease Agreement
The Asset Manager examines the term, termination provisions, rent modification provisions and other material terms of each lease agreement, and the possibility of restructuring a property's tenant composition and lease terms. The Asset Manager also examines the terms and conditions of tenant leasehold and security deposits.

Building Condition
The Asset Manager examines the structure, estimated earthquake resistance, durability, age and maintenance costs of every building. In conducting this review, the Asset Manager retains third-party experts such as structural engineers, environmental consultants and earthquake engineers.

Related Rights
The Asset Manager examines the ownership rights, leasing rights, surface rights and other rights attached to the prospective investment to determine whether there are any limitations or restrictions as to the ownership or the disposition of the properties.

Properties under development or substantial renovation
From time to time, the Asset Manager may consider acquiring properties that are still under development or that have recently completed substantial renovation or development. The asset manager may do so, for example, in order to acquire a property that it believes is a high quality property at an attractive price before competitors do so or before the price increases. In such cases, information may not be available to the Asset Manager regarding buildings, tenants, property operating history or other important factors, depending on the status of the development or substantial renovation of the property. The earlier the stage of development or substantial renovation, the greater the uncertainty will be with respect to the prospects of the prospective property. In determining whether to purchase properties under, or which have recently completed, development or substantial renovation, the Asset Manager will consider the increased risks or uncertainties with respect to the property, balanced against the benefits to our portfolio of acquiring the property at that time, in accordance with our property acquisition and portfolio management policies. In conjunction with the increased competition in Japan to acquire quality retail properties at attractive prices, we anticipate that the Asset Manager may increasingly consider acquiring properties under, or which have recently completed, development or substantial renovation.

The Asset Manager has set non-binding portfolio composition boundaries as general aspirations with respect to our investment activities. These may change from time to time. As of the date of this offering circular, the Asset Manager had set a broad framework for a portfolio consisting of approximately 60-70% income-type properties, which are properties for which we seek primarily to receive stable cash flow from long-term key tenant leases with fixed rents, and 30-40% growth-type properties. Growth-type properties are properties that offer potential growth in property value and cash flow by linking portions of our rental revenues to the business performance of certain tenants with fixed minimum rents or scheduled minimum rent increases, as well as through active property management to improve tenant quality and occupancy rates. The Asset Manager has set general upper boundaries to achieve a mix in our portfolio of retail property types, including general merchandise stores, department stores, specialty stores and wholesalers, and multi-tenant retail properties in urban and suburban settings. However, at any given time, our actual property portfolio may not reflect these given goals.