We believe that the distinctive "strengths" of our Fund include:
- Strategic Focus on Retail Properties
We are the first J-REIT which exclusively invests in retail properties. This is an asset class focus we have targeted given what we perceive to be strong retail property sector investment attributes.
- Global Asset Management Expertise
Our Fund is managed by a cross-border joint venture comprised of two complementary global leaders: Mitsubishi Corporation, one of Japan's leading enterprises, as well as UBS, one of the largest and most experienced global asset managers.
- Commitment by the Fund's Sponsors
The Fund's sponsors have devoted considerable resources to help ensure the ongoing success of this Fund, including the acquisition of an approximately 9.6% ownership stake at the time of our IPO by Mitsubishi Corporation (currently 4.6%). Moreover, as a further demonstration of the Sponsors' commitment to the Fund and alignment with shareholders' interests, Mitsubishi Corporation acquired an additional 4,500 units, 4,800 units and 3,000 units in connection with our global offerings in March 2003, March 2004 and March 2005, respectively. Moreover, our Asset Manager, MCUBSR, also further expressed its commitment to the Fund and alignment with shareholders' interest through the acquisition of an additional 200 units each in our March 2003 and March 2004 global offerings, 100 units in our March 2005 global offerings, and 100 units in our September 2006 global offerings.
- High-quality Property Portfolio
Most of our properties investments are relatively new, and the portfolio weighted average age is less than 10 years.
- Large and Growing Acquisition Pipeline
We benefit from a large and growing pipeline of retail properties for potential acquisition which meet our rigorous acquisition criteria and are in various stages of review.
- Stable Underlying Tenancies with Long-term Leases
We benefit from long-term and stable rental income from underlying tenancies with generally high creditworthiness.
- Conservative Financial Management
We have, and intend to continue to employ, conservative financial management.
- Attractive Assumable Tenant Deposits
With a retail property focus, we also have an opportunity to capitalize on what are often, particularly with general merchandise stores (grocery-anchored shopping centers), large and long-term low or no-cost tenant deposits as a tool in helping finance certain retail property acquisitions, which serves to lower our Fund's overall cost of capital. This tradition, however, is expected to change over time.
- Value-added Opportunities
We believe it will be possible in certain instances for our Asset Manager to improve the performance of properties through the replacement/upgrading of tenants and, where deemed appropriate, the establishment of sales-based rental provisions (i.e. percentage rent clauses) within tenant lease agreements, where deemed appropriate.
