Nippon Prologis REIT : Announces Completion of Redevelopment and Acquisition of Prologis Park Iwanuma

April 27, 2022

FOR IMMEDIATE RELEASE

Nippon Prologis REIT Announces Completion of Redevelopment and Acquisition of Prologis Park Iwanuma

Nippon Prologis REIT, Inc. ("NPR") announced today that it will acquire a newly redeveloped building (the "Building") of Prologis Park Iwanuma (the "Property"), of which redevelopment was announced in the press release "Nippon Prologis REIT Announces Execution of Construction Agreement for Redevelopment of Prologis Park Iwanuma 1" dated March 1, 2021 (the "Redevelopment"), and NPR will subsequently enter into a master lease contract with Prologis REIT Master Lease GK (the "Master lessee"), an affiliate of the Prologis Group ("Prologis"), NPR's sponsor.

The Master lessee of the Building is considered a related party as provided in the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, including amendments thereto) (the "Related Parties, etc.") and considered an interested party as set forth in the "Rules Regarding Related-party Transactions" (the "Interested Parties") included in the internal rules of Prologis REIT Management K.K. (the "Asset Manager"), and therefore, the Asset Manager has obtained, in accordance with the Rules Regarding Related Party-Transactions, approval from NPR based on the approval of its board of directors at a meeting held today.

The details are described below.

1. Overview of the Acquisition

Property Number	Property Name	Location	Anticipated Acquisition Date of the Building (Note 2)	Anticipated Acquisition Price of the Building (million yen) (Note 3)	Acquisition Price of the Property (million yen) (Note 4)	Appraisal Value (million yen) (Note 5)	NOI Yield (%) (Note 6)
M-19	Prologis Park Iwanuma	Iwanuma, Miyagi	April 28, 2022	5,934	7,113	8,680	5.7

(Note 1) NPR will change the name of the Property from "Prologis Park Iwanuma 1" to "Prologis Park Iwanuma" upon the completion of the Redevelopment and the acquisition of the Building.

(Note 2) "Anticipated acquisition date of the Building" indicates the anticipated transfer date of the ownership of the

Building stated in the construction agreement with a general contractor, Nishimatsu Construction Co., Ltd. (the

"Construction Agreement").

(Note 3) "Anticipated acquisition price of the Building" is the sum of the construction cost of the Building stated in the

Construction Agreement and the costs of certain fixtures of the Building ordered separately, rounded down to the nearest million yen.

(Note 4) "Acquisition price of the Property" is calculated by adding the acquisition price of the land of the Property (1,179 million yen) to the Anticipated acquisition price of the Building, rounded down to the nearest million yen. (Note 5) "Appraisal value" is the value as of March 31, 2022 in the appraisal report provided by CBRE K.K. (the

"Appraisal Report"). The appraisal value includes the value of the land of the Property.

(Note 6) "NOI yield" is derived by dividing the appraisal NOI in the Appraisal Report by the Acquisition price of the

Property, rounded to the first decimal place.

"Appraisal NOI" is the stabilized net operating income (an amount with operating expenses deducted from operating income) for the direct capitalization analysis contained in the Appraisal Report, which representsincome before deduction of depreciation. NOI is different from net cash flow ("NCF"), calculated as the expected income of a property net of expected capital expenditure, to which hypothetical interests on deposits, etc. are added.

(1)	Date of Construction Agreement:	March 1, 2021
(2)	General Contractor:	Nishimatsu Construction Co., Ltd.
(3)	Funds for Acquisitions:	Cash on hand
(4)	Settlement Method:	NPR paid approximately 10% of the construction cost as the first
installment payment, and will pay the rest of the construction
cost on the Anticipated acquisition date of the Building.

2. Background of the Redevelopment and Specification of the Property

NPR commenced the Redevelopment of the Property on its own balance sheet on March 1, 2021, maintaining its ownership of the land site, while obtaining advice from Prologis to take advantage of Prologis' development expertise and platform.

As a result of the Redevelopment, the Building has been equipped with a slope and driveways that enable trucks to directly access each floor, and the Building is also elevated from the ground level to make the Property more resilient against potential floods in the future. Additionally, the Building has installed "LED luminaire with motion sensors", which detects motion of our customers' workers and/or forklifts and reduces electricity consumption by measuring the minimum need for lighting in spaces with activities. This Smart LED contributes to the reduction of the Property's emissions of GHG and the Property obtains the highest five stars rating of BELS (Building Energy-Efficiency Labeling System) and the evaluation of "ZEB (Net Zero Energy Building) Ready". In total, the Property has been transformed to a more functionable, stringent and eco-friendly modern logistics facility.

3. Description of the Property

M-19 Prologis Park Iwanuma

Property name	Prologis Park Iwanuma
Location	3-2-35, Kuko-Minami, Iwanuma, Miyagi
Class of assets	Real estate trust beneficiary interests (Note 1)
Anticipated acquisition date of the Building	April 28, 2022
Anticipated acquisition price of the Building	5,934 million yen
Acquisition price of the Property	7,113 million yen
Entrustment date of the Building	April 28, 2022
Trustee	Mitsubishi UFJ Trust and Banking Corporation
Trust maturity date	December 3, 2033
Land	Ownership form	Proprietary
Land area	45,704.30 m2
Zoning	Exclusive Industrial zone
BCR/FAR	60% / 200%
Building	Ownership form	Proprietary
Gross floor area	45,460.60 m2
Date of construction	April 15, 2022
Purpose	Warehouse / Office
Structure/No. of stories	S, 2-story building
Property type	Multi-tenant
PML	0.9%
Environmental appraisal	BELS ★★★★★
Engineering Report	Engineering Firm	Earth-Appraisal Co., Ltd.
Report Date	April 4, 2022 / April 26, 2022
Emergency and Short-term Repair and Maintenance Expenses	-
Medium-to-Long term Repair and Maintenance Expenses	170,023 thousand yen / 12 years (14,169 thousand yen / year)
Property manager	Prologis K.K.
Master lessee	Prologis REIT Master Lease GK
Type of master lease	Pass-through type
Collateral	None
Appraisal value	8,680 million yen
Real estate appraiser	CBRE K.K.
Description of tenancy Gross number of tenants Type of lease agreement Name of major tenant Annual rent Security deposit Leased area Leasable area Occupancy rate
2
Fixed-term lease agreement
Not disclosed (Note 2), PLUS Logistics Corporation
Not disclosed (Note 2)
Not disclosed (Note 2)
35,440.03 m2
44,243.08 m2
80.1%
Extra description	Immediately after the fire which broke out at the property on April 30, 2020, the environmental survey was conducted to assess the impact of the fire. The survey found the exceedance of n-Hexane extract (animal/vegetable oils), lead, zinc, and dioxins in the retained water in the stormwater inlet on the property. In the latest environmental survey conducted by Earth-Appraisal Co. Ltd., it acknowledges that, whilst the water draining, sludge

and burnt residues have been properly managed and handled during the demolition of the burnt building with no signs of soil contamination, such as oils infiltrating into the soil, odour, or discolouration, it cannot rule out contamination by those substances remained on the site. As a conclusion, however, it is their opinion that the possibility of contamination impacting the use of the site or the health of people on the site is low, since the site is covered with the building, asphalt and concrete and groundwater is not in use.

(Note 1) NPR will entrust the Building as of the anticipated acquisition date and own the Property in the form of the real estate trust beneficiary interests.

(Note 2) Not disclosed as the tenant's consent has not been obtained.

Summary of the appraisal report

Appraisal value	8,680 million yen
Real estate appraiser	CBRE K.K.
Date of appraisal	March 31, 2022

(million yen, unless otherwise indicated)

Direct capitalization method

Detail

Operating revenuesTotal potential revenue

Assessed based on the current vacancy 29 rate of the property, market trends and the competitiveness of the subject propertyOperating expensesRepair costs

7 Based on the planned contract amount

Net operating income

Capital expenditure

Net incomeDiscounted cash flow method

8,680 8,770 515

Assessed based on the current lease terms 545 and its continuity, market rent level, the competitiveness of the subject property

112

32

Assessed based on the planned contracts and the costs for similar buildings Assessed the cost of common area as the 8 costs for the subject property's owner, based on the costs for similar buildings Assessed based on the costs for similar

5

3

Assessed based on the actual tax amount 55 in the past and the assessed construction cost of the building

0 403

2

12 393

Assessed based on the transaction yield for similar properties and the factors specific 4.5% to the subject property, taking into account the uncertainty in cash flow leading up to the stabilized cash flow

8,680

OutlineAssessed by placing importance on the value derived by the DCF methodbuildings and the annual average of repair and renewal costs in the engineering report

Assessed based on the anticipated turnover period of the leasesAssessed based on the actual amount in the past and planned contractsAssessed at a rate of return on investment of 1.0%

Assessed based on the rapair and renewal costs in the engineering report

Assessed based on the nature and the 4.2% attainability of projected cash flow, and its uncertainty.

Assessed based on the transaction yield for 4.6% similar properties, the characteristics of the subject property, and uncertainty of