Financing Policy

We will establish and implement an orderly and flexible financing policy designed to achieve an attractive cost of capital, attractive returns and balance sheet stability. We will implement balanced funding measures for the purpose of securing necessary funds for the acquisition of assets, capital expenditures and repairs, debt service, payment of distributions and our general business operations. We will manage cash balances with an emphasis on safety, liquidity and efficiency.

Equity Financing

We may issue additional Units in connection with the acquisition of additional properties. In issuing additional Units, we will consider the ratio of our total indebtedness to our total assets, or the Interest-Bearing Debt Ratio, the acquisition plan concerning the properties as well as the dilutive effect of the Units.

Debt Financing

Our debt financing will be implemented in accordance with the following policies:

1. Interest-Bearing Debt Ratio
   Generally, the maximum value allowed for the Interest-Bearing Debt Ratio will be 60%. However, the Interest-Bearing Debt Ratio may temporarily exceed 60% upon the acquisition of new properties.
2. Policy on Obtaining Loans from Financial Institutions
   We will obtain loans from financial institutions according to the following policies:
   1. We will aim to balance the mix of long-term and short-term debt as well as fixed and floating rate debt in order to reduce interest expenses and interest rate risks. We will also aim to stagger repayment dates and lenders in order to lessen the risks associated with refinancing.
   2. In selecting lenders, we will make decisions based upon financial market conditions, negotiations with several prospective lenders regarding terms and conditions (such as loan periods, interest rates, collateral requirements and fees) and comparing these terms and conditions. Lenders will be limited to qualified institutional investors as provided in Article 2, Paragraph 3, Item 1 of the Financial Instruments and Exchange Law.
   3. Where necessary, we will consider entering into agreements, such as revolving loan agreements and commitment line agreements, for the purpose of obtaining the necessary funds efficiently.
3. Issuance of Corporate Bonds
   We will consider issuing corporate bonds in order to obtain long-term funding and diversify our sources of borrowings.
4. Provision of Collateral
   In order to obtain debt financing, we may agree to pledge some or all of our properties as collateral.
5. Other
   We may invest in interests related to derivative transactions designated by Items 2 of Article 3 of the Law Concerning Investment Trusts and Investment Corporations Enforcement Ordinance, solely in order to hedge against interest rate risks and other risks arising from our obligations. However, even where the obligation that is the subject of the risk hedge is eliminated as a result of repayment of obligations, the corresponding hedge transaction may not be terminated after taking into consideration the costs associated with such termination.