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Message from the Management

We, ORIX JREIT Inc., together with our asset management company, ORIX Asset Management Corporation, would like to express our sincere gratitude to all of our unitholders for your continued support and patronage.

In the domestic real estate market, expected yields have remained stable at low levels for all asset types, and thus quality properties continue to be scarce. On the other hand, in the real estate rental market, we have observed leasing of newly supplied offices in central Tokyo has been progressing steadily in general and we believe concern for the future has eased.

Under this environment, to further enhance unitholder value, we are pushing ahead with various initiatives, such as improving our portfolio quality by replacing properties, promoting leasing with our direct property management expertise and strengthening financial stability. In February 2019, we have disposed 3 regional non-urban-type retail facilities with concerns due to future competitiveness.

The occupancy rate at the end of the 34th fiscal period ended February 28, 2019 remained at high levels of 99.4%, while we have also been able to achieve internal growth by implementing higher rents through both tenant turnover and rent renewals. In terms of financial aspect, Rating and Investment Information, Inc. (R&I) upgraded our issuer rating to ‘AA-’ from ‘A+’ after evaluating our reduced debt to equity leverage level and our continuous effort in improving the quality and diversification of our portfolio.

As a result of the above, we were able to pay out 3,487 yen distribution per unit, which is an increase of 137 yen over the 3,350 yen that was forecasted during our previous financial announcement.

Furthermore, OJR was included in the MSCI Japan ESG Select Leaders Index in December 2018 as a result of managing our assets with consideration to ESG. OJR sees inclusion in the index as having favorable effects to increase the liquidity of our investment units and further broaden our investor universe. We will proactively continue to contribute toward ESG.

We aim to achieve sustainable growth of unitholder value by continuing to leverage on our strengths as a diversified REIT, utilizing ORIX Synergy and maximizing our operating expertise.

Again, we would like to thank all of our unitholders, and deeply appreciate your continued understanding and support.

Message from the Management

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