Arealink Co.,Ltd.

Changes in economic conditions, the real estate market, and social conditions, as well as demand trends and legal regulations affecting the storage industry as a whole, may result in a significant decline in demand, lower occupancy rates, and increased rent delinquency. These factors could directly affect the Company's business results and financial condition. As countermeasures, the Company conducts regular monitoring of economic trends and the real estate market, cultivates market insight tailored to area, scale, use, and property characteristics, and strengthens its investment judgment and leasing capabilities.

The acquisition and holding of real estate for "Storage with Land" in the Storage Business, as well as the holding of underlying land for sale as real estate in the Land Rights Development Business, are susceptible to declines in land prices caused by deterioration in the real estate market. If domestic and overseas economic conditions worsen, resulting in reduced investment appetite, a decrease in real estate transactions, tightening of individual loan requirements, or significant rent declines, the Company's business results and financial condition may be affected. As countermeasures, the Company conducts regular monitoring of economic trends and the real estate market, and carefully selects properties by taking into account location conditions and surrounding market rates.

In the event of a natural disaster such as a major earthquake, storm, or flood, the value of real estate operated and managed by the Company could be significantly impaired, and a sharp decline in occupancy rates and restoration and repair costs may arise in affected areas, potentially affecting the Company's business results and financial condition. As countermeasures, the Company conducts property procurement activities based on criteria for locations less susceptible to damage, and has established a system utilizing business continuity flows formulated for each business to ensure the continuation or early recovery of critical operations even in the event of a disaster.

Neither the Storage Business nor the Land Rights Development Business has legal barriers to entry such as patent rights, and since the business models are simple, there is a possibility of intensified competition due to new entrants following the Company's lead. Intensified competition could adversely affect occupancy rates, rent levels, and profitability. As countermeasures, the Company promotes differentiation by improving brand awareness of "Hello Storage" and developing new products and services, thereby working to acquire and retain its customer base.

The number of outdoor container-type rental storage spaces installed is rapidly increasing across the industry as a whole, and the Company has received a notice from the Ministry of Land, Infrastructure, Transport and Tourism stating that building confirmation applications based on the Building Standards Act are required. If further regulatory tightening requires existing installed containers to also comply with building standards, unexpected costs may arise, potentially affecting the Company's business results and financial condition. As countermeasures, the Company is proceeding with the principle of filing building confirmation applications for newly installed containers, conducting safety awareness activities, and strengthening its patrol and maintenance system.