Governance

About the Operational System for Investment Corporation/Private Funds
(decision-making on investment management)

Key decisions on property acquisition are made according to the following flow:

(*)	Decision-making on business operations related to a REIT that the REIT Div. oversees will be reported to our board of directors and the board of the investment corporation(*) following the resolution by the Investment Committee and the Internal Control Committee（After decisions made by the Investment Committee and the Internal Control Committee, the Board of Directors is informed of the decisions related to operations in the Fund Division and the Data Center Business Division）. Further, if a resolution needs to be passed at the board of the investment corporation, such as for a transaction with an interested party, it will be reported to our board of directors following the resolution by the Investment Committee and the Internal Control Committee followed by that of the board of the investment corporation.

(*)

Decision-making on business operations related to a REIT that the REIT Div. oversees will be reported to our board of directors and the board of the investment corporation(*) following the resolution by the Investment Committee and the Internal Control Committee（After decisions made by the Investment Committee and the Internal Control Committee, the Board of Directors is informed of the decisions related to operations in the Fund Division and the Data Center Business Division）. Further, if a resolution needs to be passed at the board of the investment corporation, such as for a transaction with an interested party, it will be reported to our board of directors following the resolution by the Investment Committee and the Internal Control Committee followed by that of the board of the investment corporation.

Operational System for Investment Corporation/Private Funds (rules on non-competition)

Summary of Rules on Non-competition
・The investment corporations from which Mitsui & Co. Realty Management undertakes asset management invest in a wide range of properties, including industrial facilities, hotels, commercial facilities, and residential facilities, as well as offices. That is, they are in a competitive relationship with the private funds overseen by Mitsui & Co. Realty Management’s Fund Division. ・We prohibit concurrent holding of the position of General Manager of the REIT Division. alongside General Manager of the Fund Division, as well as concurrent holding of the position of General Manager of the REIT Division. alongside General Manager of the Data Centers Business Division. Moreover, as described above, there is a possibility of competition for the acquisition of investment properties between private REITs and private funds. To avoid this, we grant a priority right to the REIT Division to review information about real estate properties we obtain first (including information that we obtain on potential buyers of real estate or real estate-backed assets with the potential to become an investment target for both our private REITs and funds), and we ensure business operation in accordance with these rules. ・In principle, information that our company obtains about a property will first be reviewed by the REIT Division, which manages private REIT assets. Information on a property that the REIT Division has decided not to pursue will then be reviewed by the Fund Division or Data Centers Business Division. ・By applying these rules in a proper and efficient manner, we aim to prevent the arbitrary distribution of property information and competition between private REITs and private funds, thereby ensuring the integrity of operations.

Summary of Rules on
Non-competition

・The investment corporations from which Mitsui & Co. Realty Management undertakes asset management invest in a wide range of properties, including industrial facilities, hotels, commercial facilities, and residential facilities, as well as offices. That is, they are in a competitive relationship with the private funds overseen by Mitsui & Co. Realty Management’s Fund Division.

・We prohibit concurrent holding of the position of General Manager of the REIT Division. alongside General Manager of the Fund Division, as well as concurrent holding of the position of General Manager of the REIT Division. alongside General Manager of the Data Centers Business Division. Moreover, as described above, there is a possibility of competition for the acquisition of investment properties between private REITs and private funds. To avoid this, we grant a priority right to the REIT Division to review information about real estate properties we obtain first (including information that we obtain on potential buyers of real estate or real estate-backed assets with the potential to become an investment target for both our private REITs and funds), and we ensure business operation in accordance with these rules.

・In principle, information that our company obtains about a property will first be reviewed by the REIT Division, which manages private REIT assets. Information on a property that the REIT Division has decided not to pursue will then be reviewed by the Fund Division or Data Centers Business Division.

・By applying these rules in a proper and efficient manner, we aim to prevent the arbitrary distribution of property information and competition between private REITs and private funds, thereby ensuring the integrity of operations.

Readiness for Compliance

We built the governance system needed for internal control to ensure compliance with laws and regulations and risk management in asset management operations we are entrusted with.

1.System

（1）Board of Directors

The board of directors shall give top managerial priority to thorough compliance with laws and regulations and exercise overall control over the arrangements of the system for compliance. The board of directors shall review annually in principle and as needed the system for compliance and its effect and take necessary remedial action.

（2）Chief Compliance Officer (CCO)

We appoint a Chief Compliance Officer (CCO) who is responsible for compliance.
The CCO shall oversee compliance-related operations, have the command-and-control right over such operations, verify the status of compliance with laws and regulations across all operations, and promptly respond to improvement requests by the internal control unit.

（3）Internal Control Committee

We shall set up the Internal Control Committee that is responsible for verifying compliance and the arrangements and operations of the internal control system. The Internal Control Committee shall be chaired by the President and composed of the Chairperson, COO, General Managers for internal control and business administration, and an outside expert. The Internal Control Committee shall deliberate compliance-related matters, matters passed by the Investment Committee to be discussed by the Internal Control Committee, and other matters outlined in the "internal control committee regulations.”

2.Annual Action Plan

（1）We formulate a compliance program to achieve compliance with laws and regulations as a concrete execution plan.

（2）The CCO shall be responsible for formulating a compliance program and conducting an important review, which shall be resolved by the board of directors.

（3）The CCO shall be responsible for overseeing the progress and achievement of a compliance program and keeping the board of directors informed.

3.Training for Ensuring Compliance

To build a system for ensuring compliance with laws and regulations, it is of vital importance that all officers and employees enhance their awareness of compliance and put corporate ethics into practice. Based on the recognition that putting an educational/training system in place is crucial for accomplishing such, we conduct internal training every month to enhance officers' and employees' awareness and knowledge of compliance, thereby educating them and promoting the practice of corporate ethics.

The main themes for training are as follows:

Money laundering/points to check when transactions are made
Harassment
Information management
Insider trading
Conflicts of interest, etc.
Compliance manuals
Policies against anti-social forces, etc.

4.Internal Regulations

We have the "Compliance Manual" in place as a concrete guide for ensuring compliance with laws and regulations.

5.Legal Check System over Day-to-day Operations

The CCO shall oversee compliance-related operations, have the command-and-control right over such operations, and verify the status of compliance with laws and regulations across all operations, including day-to-day affairs.

Risk Management System

The President who is the internal control administrator, has appointed three executives, i.e., COO, GM for business administration, and GM for internal control, as internal control managers. Furthermore, the GMs for sales (GMs for the REIT , funds and Data Center Business) are appointed to be "in charge of internal control,” and monitor daily operations and report accidents, complaints, or other risk factors to the internal control managers to share information. The GM for business administration (internal control manager) shall exercise overall control over operations associated with risk management and said GM or an internal control manager (CCO) who is delegated based on the risk management regulations shall determine the degree of impact of risks to be managed according to the prescribed risk assessment standards and the possibility of occurrence and take necessary steps. In assessing the degree of impact of potential risks and the possibility of occurrence, the effects of risk management measures that were already taken shall be taken into account.