Premier Investment Corporation

TSE code 8956

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Matters described in the FAQ are applicable to PIC's unitholders who are residents of Japan or Japanese corporations.

Questions about J-REITs

What are the basic structure and basic terms of J-REITs?
For the basic structure and basic terms of J-REITs, please refer to "Let's Learn about J-REITs" (Japanese) on the website of The Investment Trusts Association, Japan.

Let's Learn about J-REITs (Japanese) (external link)
Where can such information as the financial results and investment unit prices of respective J-REITs be obtained?
You can check the information at such sources as:
1) Perusal service for securities reports and other documents (EDINET) operated by the Financial Services Agency
2) Perusal service for timely disclosure information (TDnet) operated by the Tokyo Stock Exchange
3) Japan Company Handbook (Kaisha Shikiho)
4) Stock price section of newspapers, and
5) Websites of respective J-REITs
6) Websites of The Association for Real Estate Securitization(ARES) ''

Characteristics of PIC

What type of J-REIT is Premier Investment Corporation (PIC)?
With the concept of a "REIT that is easy to understand for investors," PIC is a REIT with a compound portfolio. Its primary investment targets are real estate properties that are mainly used as offices or residences and located in the Tokyo Economic Bloc (the 23 wards of Tokyo centering on the 5 Central Wards, other parts of Tokyo and Urban Areas Surrounding Tokyo). PIC's investment targets for management also include real estate properties and other assets that mainly used for offices or residences and located in major regional cities (Sapporo, Sendai, Shizuoka, Nagoya, Osaka, Kyoto, Kobe, Hiroshima, Okayama, Fukuoka and other cities).
By combining the respective characteristics of office buildings and residential properties, PIC aims to secure earnings of the portfolio in a stable manner over the medium to long term.
Why does PIC invest in office buildings?
With regard to office buildings, there are relatively more homogeneous and abundant stocks of properties compared with real estate properties used for other purposes (such as residential properties). As such, office buildings are believed to be superior in terms of market size and liquidity.
As leasing demand for office buildings primarily comes from profit-making companies, office buildings are characteristically more prone to business fluctuations and other economic trends and social conditions. In general, however, they are expected to have relatively higher profitability than real estate properties used for other purposes.
Why does PIC invest in residential properties?
PIC targets to invest in residential properties that are relatively more excellent in terms of design of the external appearance and entrance, etc., specifications (such as floor height and outer walls), floor areas, and unit floor plans, among other factors, and the residential properties that are located near stations and feature high traffic convenience.
There are relatively fewer stock of properties compared to real estate properties used for other purposes (such as office buildings). In particular, residential properties that are competitive with excellent specifications have scarcity value.
As leasing demand for residential properties primarily comes from individuals, residential properties are less prone to economic trends and social conditions compared to the demand for real estate properties used for other purposes (such as office buildings), and have a higher degree of tenant diversification (because of the large number of tenants per property). Accordingly, they allow expectations for stable rental income.
Why have target investment ratios been set at 60% for office buildings and 40% for residential properties?
PIC makes it a basic policy to manage its assets with an aim to "achieve steady growth" and "secure stable earnings."
For its assets to grow, PIC considers that it is essential to build a portfolio primarily comprised of office buildings that are sufficiently available in the real estate market in a secured manner. However, when taking into account the balance between "growth potential" and "stability," it is desirable to set the invest ratio of residential properties somewhat comparable to that of office buildings. Based on this idea, PIC has set the ratios of 60% for office buildings and 40% for residential properties as targets.
Are there any intentions for PIC to invest in real estate other than office buildings and residential properties?
PIC limits its investment targets to office buildings and residential properties, and has no plans to expand the investment targets into real estate mainly used for purposes other than for offices and residences, such as those having retail facilities and hotels as major tenants. However, as the investment targets are real estate properties mainly used as office buildings or residential properties, part of such properties may be used for purposes other than offices or residences.
What exactly is the "Tokyo Economic Bloc" that is the main investment area of PIC?
PIC defines the "Tokyo Economic Bloc" as the following areas collectively.

1) 5 Central Wards of Tokyo
Represents Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards.

2) Other 18 Wards of Tokyo
Represents the remaining 18 wards of the 23 wards of Tokyo excluding the 5 Central Wards

3) Urban Areas Surrounding Tokyo
Represents Tokyo Prefecture excluding the 23 wards of Tokyo, Kanagawa Prefecture (Yokohama City, Kawasaki City and other cities), Saitama Prefecture (Saitama City and other cities) and Chiba Prefecture (Chiba City and other cities)
What characteristics does the Tokyo Economic Bloc have compared with other areas?
When compared with other areas, the Tokyo Economic Bloc mainly has the following characteristics.

1) It is the center of Japan's economy and politics, and has a high degree of concentration of various industries and educational institutions. A diverse economic foundation has been established in the Bloc, centering on Tokyo Prefecture.

2) The Bloc has a stable inflow of population from other areas of Japan for the purposes of being employed and attending schools. Moreover, with progress in internationalization, it is anticipated that the number of foreigners residing for business purposes will increase with greater momentum.

3) As stated above, the Tokyo Economic Bloc is an area with potentially strong demand for office space from corporations, backed by abundant business opportunities. On the other hand, the home ownership ratio is characteristically low in the Bloc, and leasing demand for residential units remains stable in association with the population inflow.

Is there a higher earthquake risk due to the concentration of owned real estate properties in the Tokyo Economic Bloc?
PIC has included the following matters in its acquisition standards for investment real estate properties so that it will acquire properties that exert sufficient earthquake resistance performance.

1) The properties shall achieve standards in line with new earthquake-resistant construction standards or equivalent or higher standards.

2) In principle, the probable maximum loss (PML) value caused by an earthquake should be less than 20%. Reinforcement work for earthquake resistance or other similar measures must be taken for a property with a PML of 20% or more for acquiring the property.
Determination as to whether or not the investment assets should be insured against earthquake damage will be made by comparing the effects of such a disaster with the cost of casualty insurance premiums, using the PML value of the entire portfolio as a basis. If any individual property has a high PML value, taking out an earthquake insurance policy on such individual property will be considered.

Management Policies

How is internal growth achieved?
PIC endeavors to maintain and further develop good relationships of mutual trust with respective tenants. Specifically, PIC follows the following policy in an effort to maximize earnings over the medium to long term from the properties it has acquired.

1) PIC will grasp tenant needs in detail, provide building management services and conduct leasing activities tailored to the characteristics of individual properties. Through these measures, PIC will work to prevent contract cancellations by existing tenants, encourage tenants to expand floor area and secure new tenants in an effort to achieve stable occupancy of its owned properties and increase occupancy rates.

2) Aiming to expand rental income over the medium to long term, PIC will work to set rents proactively and improve other leasing terms and conditions in order to have respective properties exert their own potential to the maximum in accordance with the location characteristics and their facility grades, etc.

3) In terms of facility management of properties, PIC will make and implement repair plans that are optimal for maintaining and preserving the functions of respective buildings, in an attempt to keep and enhance the asset value and competitiveness by continuously making capital investments from a medium- to long-term perspective. Moreover, by conducting repairs in a systematic manner, PIC works to diversify and level off the periods in which management costs are recorded.
How is external growth achieved?
PIC will implement investing activities with an aim to achieve stable cash distributions as well as to maintain and improve the profitability and quality of the portfolio.

1) PIC will endeavor to acquire properties that are highly competitive in terms of location conditions, surrounding environment and specifications, among other factors.

2) PIC will endeavor to find blue-chip properties by making the best use of the brokerage, planning, development and other functions possessed by NTT Urban Development Corporation, the main sponsor, and other sponsor of the asset management company (Premier REIT Advisors Co., Ltd.)

3) PIC will not set any target for the asset size with an absolute deadline, so that it will avoid falling into excessive price competition.

Financial Operations

What is the financial strategy?
PIC will endeavor to procure funds at low cost by selecting fund procurement methods that appear to be most favorable at the time of procurement, comprehensively taking into account the capital market and the financial environment and forecast changes in the economic and social conditions and from the viewpoint of stabilizing the financial structure, breakdown by loan period (long-term and short-term borrowings), breakdown by interest rate (floating and fixed interest rates) and other factors.

1) In order to maintain soundness of its financial base, PIC makes it a basic policy to keep its LTV (Note) at 60% or lower.
(Note) LTV (loan to value) = [interest-bearing liabilities / (interest-bearing liabilities + unitholders' capital)] x 100

2) Fund procurement through additional issuance of investment units shall be determined by considering PIC's financial situation in terms of the LTV stated above, while taking into consideration the dilution of distribution per unit associated with the increase in the number of investment units.

Asset Management Company

Can you tell us about Premier REIT Advisors Co., Ltd. (PRA)?
July 2001 PRA established
May 2002 PIC established
September 2002 PIC listed on the J-REIT securities market of the Tokyo Stock Exchange
May 2010 PRA became a consolidated subsidiary of NTT Urban Development Corporation

・Since the establishment of PIC, PRA has been conducting management of assets owned by PIC as its asset management company, pursuant to the asset management agreement.
・PRA and PIC have maintained and further developed a strong relationship with NTT Urban Development Corporation, the main Sponsor, in terms of human resources and property sourcing.
・PIC conducts asset management that takes advantage of the expertise and experience nourished primarily by NTT Urban Development Corporation, which implements the real estate development and leasing businesses, etc. and serves as the main sponsor of Premier REIT Advisors Co., Ltd., as well as other sponsors comprising Kenedix, Inc., one of Japan's leading real estate asset management companies.
For details of PRA, please visit PRA's website (hyperlinked below).
Premier REIT Advisors Co., Ltd.

Settlement of Accounts and Cash Distributions

What is the schedule for announcement of financial results and payment of cash distributions?
PIC's fiscal period ends twice a year, at the end of April and October each year. Normally, PIC makes announcement of financial results for each fiscal period in June and December, respectively. In addition, distributions shall be made in cash. As a rule, PIC shall make distributions within three months from the settlement of account, to the unitholders or registered pledgees recorded on the final unitholders registry as of the settlement date, in accordance with the number of investment units owned. IR Calendar
What are the requirements for receiving cash distributions?
Unitholders must be recorded on the unitholders registry as of the settlement date of PIC (April 30 and October 31 of each year).
Accordingly, those who have owned the investment units through the final trading day on the Tokyo Stock Exchange for cash distribution eligibility are eligible to receive the cash distributions.
As for the final trading day for cash distribution eligibility, please ask your or neighboring securities company, etc.
How can cash distributions to be paid be received?
1) During the receipt period
Cash distributions can be received by bringing the "Certificate of Cash Distribution Receipt" to the headquarters and branches of Japan Post Bank or post offices (bank agent).

2) After the expiration of the receipt period
In case the receipt period is already expired, please describe the method of receiving the cash distributions on the backside of the Certificate of Cash Distribution Receipt and send it to the Stock Transfer Agency Business Planning Department of Sumitomo Mitsui Trust Bank, Limited, the transfer agent, or receive the proceeds at the headquarters or branches of the bank.

3) In case the transfer account of cash distributions has been designated
Cash distributions are transferred to your designated deposit account in commercial banks or Japan Post Bank.
Can past cash distributions be received at any time?
Pursuant to the provisions in PIC's Articles of Incorporation, PIC shall be excluded from its obligation to pay cash distributions if they are not received even after full three years have passed since the date when the payment started, and such cash distributions will no longer be available for receipt. We advise you to receive cash distributions without delay.
What are the tax treatments for the cash distributions or capital gains received?
For the taxes levied on individual and corporate unitholders, please see the "Tax Treatment" in the "Information for Unitholders" on this website. Information for Unitholders

Investment Units

Where can PIC's investment units be purchased or sold?
Like stocks, you can purchase or sell the investment units at the counter of a securities company or through on-line deals via the Internet. Furthermore, for issuance of new investment units (capital increase), you can purchase them only at the securities companies designated by PIC.
For details of purchasing and selling the investment units, please ask your or neighboring securities company.
What is the minimum number of units that can be purchased?
You can purchase a single unit or more. PIC's investment securities are listed on the Tokyo Stock Exchange, and the investment unit price fluctuates in accordance with the supply and demand balance, like stocks. You can check the latest investment unit price at the Stock Price section on this website.
Are there fees to be paid for the purchase and sale of investment units?
When purchasing or selling the investment units, transaction fees will accrue as designated by respective securities companies, like stocks. Such fees differ by securities companies. For details, please ask your or neighboring securities company.
How can registered addresses, etc. be changed?
For changing the address, name or registered seal, etc., please contact your securities company (financial instruments business operator).
For unitholders who hold the investment securities at hand without using the securities depository system, please contact the following account administrator of special accounts.

■Account Administrator of Special Accounts
Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda Ward, Tokyo

■Mailing Address/Inquiry by Phone
Stock Transfer Agency Business Planning Department
Sumitomo Mitsui Trust Bank, Limited
2-8-4 Izumi, Suginami Ward, Tokyo 168-0063
Phone: 0120-782-031 (toll-free only in Japan)

General Meeting of Unitholders

When are the general meeting of unitholders held?
The general meeting of unitholders of PIC shall be held once every two years as a rule. For the schedule, etc. of the next general meeting of unitholders, please see the General Meetings of Unitholders on this website.
General Meetings of Unitholders

Other Inquiries

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