Supplementary Material Regarding Press Releases Dated May 28, 2024
“Notice Concerning Investment in an Overseas Real Estate Holding Corporation (The Iveyon Boren)” and other initiatives
May 28, 2024

[Speaker]

Toru Abe, President and Representative Director (hereinafter, “Abe”)

Abe: Hello, everyone. I am Abe from Sekisui House Asset Management. Today, I would like to explain a seriesof measures taken including the “Notice Concerning Investment in an Overseas Real Estate Holding
Corporation” announced on May 28, 2024.
I will explain the measures taken in accordance with the supplementary materials. Please refer to page two.
First, I would like to explain the change in our portfolio development policy. In December last year, weannounced a change in our portfolio development policy to increase the investment ratio for residential
properties to approximately 65% over the medium term.
Subsequently, in conjunction with the disposition of the “Garden City Shinagawa Gotenyama” and hotel andoffice building portions of the “Hommachi Garden City” announced on March 19 of this year, we have decided
to utilize the proceeds from the disposition to acquire more residential properties.
Since last year, internal growth of residential properties, mainly due to rising rents, has become more active,
and we believe that by increasing the ratio of residential properties we can achieve both external and internal
growth while creating stable dividends with an eye on growth.
As shown in the “After” column on the right side of the slide, we will increase the ratio of residential properties
to 70% or more. In addition, we will also allow acquisitions of U.S. real estate up to 30% within the residential
portfolio.

1Sekisui House, our sponsor, is expanding its residential business in the U.S. and has accumulated a great dealof experience and achievements in the urban rental housing (multi-family) development business.
By turning our attention to the U.S., we will be able to make the most of Sekisui House Group’s real estatedevelopment and management capabilities, and by incorporating new U.S. residences into our existing coreassets of domestic residences, we will work toward maximizing unitholder value with both “stable growth” inJapan and “proactive growth” in the U.S.

Please refer to page three. This is an overview of the asset replacements that have been implemented so far.
On March 19 of this year, we announced that we will dispose of the office building “Garden City Shinagawa
Gotenyama” in two installments during the 19th and 20th fiscal periods, along with the disposition of thehotel portion of “Hommachi Garden City” during the 19th fiscal period, and the office building portion of“Hommachi Garden City” over two installments during the 20th and 21st fiscal periods. Additionally, regarding“Gotenyama SH Building”, we will dispose 10% of its equity interest at the end of each fiscal period until thefiscal period ending October 2028 (27th fiscal period).
The proceeds from these dispositions will be used to acquire properties, mainly residential properties, andthe total amount of assets acquired to date is 39,650 million JPY for the 11 properties shown in the 19th fiscal
period column on the bottom half of the slide.
The new acquisition announced today is “The Ivey on Boren”, a U.S. property, with a planned acquisition priceof 328 million USD, with a yen conversion at the spot rate as of May 13, 2024 of 155.90 JPY to the dollar,resulting in 51,135 million JPY. Together with 950 million JPY for “Esty Maison Minamigyotoku”, the total priceis 52,085 million JPY.

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The expected dividend yield for “The Ivey on Boren” is 3.7% on a 10-year average.
We intend to continue to acquire residential properties mainly through our sponsor pipeline. In addition,depending on the situation, we will consider partial repayment of borrowings and buybacks in order toimprove DPU.

The next page, page four, shows the investment ratio as of the end of October 2023 (18th fiscal period) incomparison to the investment ratio after the acquisition of new properties announced today.
The ratio of residential properties has increased to 68.4% as a result of the new acquisitions. Additionally, theratio of the our first acquired U.S. property against the entire portfolio will be 9.8%, and the ratio against only
the residential portfolio will be 14.3%.

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On to page five. I would now like to give an overview of the U.S. real estate we have decided to acquire.
As most of you already know, the U.S. economy continues to grow steadily. The nominal GDP has maintained
a high growth rate compared to Japan. Median household income also continues to increase, and housing
rents have been increasing significantly since 2020.
On the other hand, cap rates for real estate transactions have been adjusting since March 2022, triggered bymonetary tightening policies, and as shown in the bottom graph, cap rates for multi-family residential
properties have also increased. Although we could not have been able to acquire the property at the previous
cap rate, we have determined that the current level allows us to consider acquiring the property at a pricelevel that meets our investment criteria, thus allowing us to capture the internal growth of the property inthe future.

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Next is an overview of Seattle, where “The Ivey on Boren” is located.
Seattle’s population, currently around 4.1 million, has grown 12.7% over the past 10 years, far exceeding the5.5% growth rate of the U.S. population as a whole over the same period. The increase in immigrants is also
thought to boost Seattle’s rental demand.
Then there is household income, for which Washington State’s median has consistently outpaced the national
median over the past decade, and the median household income for Seattle alone as of 2022 exceeded 115
thousand USD, indicating that the region has the economic strength to support high rent levels. Average rents
for residentials in Seattle continue to increase, and we expect growth to continue due to strong population
growth and high household incomes.

5Please turn to page seven. This slide shows the location of “The Ivey on Boren”, which we have decided toacquire.
The property is located in the heart of Seattle, Washington. Surrounded by high-rise office buildings andcondominiums, cafes and restaurants, the property is located in the heart of the new downtown area, andthe famous Space Needle is also within sight.
Leading companies headquartered in the area include Amazon and Microsoft, with the majority of researchand product development taking place in the area. The presence of these global tech companies has attracted
many software companies to Seattle and spurred much infrastructure development.

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The following slide shows an overview of the property.
The property is a 44-story high-rise condominium with seven basement floors, completed in October 2022.
There are a total of 406 units, of which 20 are studio-type, 270 are 1 bedroom, 84 are 2 bedrooms, and 32 are
3 bedrooms. As of the end of April, the occupancy rate was 92.4%. The common facilities include 365
automated parking spaces, a gym and pool along with multiple BBQ areas, and a lounge and rooftop terrace
on the top floor overlooking the city.
The property was awarded “High-Rise Residential Development of The Year” in 2023, received LEED Gold forgreen building certification, and acquired fitwel for wellbeing, making this property an outstanding property
in terms of environmental performance.

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Please see the next page for photos of the property’s common areas and exclusive areas.

8Next, we will discuss the investment structure. The following is the investment and management structure.
SHR will make a 100% investment in the SPC that will own the property, but in order to receive dividends
every six months, two SPCs will be established, with their fiscal years staggered by six months, and each SPC
owning 50% of the property.
Property management will be outsourced to Holland Residential, a local Sekisui House partner company that
handles everything from development to current operation and management. In addition, an outsourcing
agreement will be concluded with Sekisui House in the region to provide operational support. Moreover, thecontract guarantees a minimum rent for the first two years to avoid the risk of income fluctuation during theinitial period.

9Please continue to page 11. This page illustrates how the two SPCs will provide dividends to SHR each fiscal
period by staggering their fiscal years by six months.
The SPCs close their books at the end of January and the end of July, and the dividend from the SPC closing at
the end of January is allocated to SHR’s fiscal period ending April of each year, and the dividend from the SPC
closing at the end of July is allocated to SHR’s fiscal period ending October of each year. In addition, we areconsidering hedging foreign exchange for each fiscal period in the future by using foreign exchange reserves.
This is the end of my brief explanation regarding the series of measures taken, including the “NoticeConcerning Investment in an Overseas Real Estate Holding Corporation” announced today.
We will continue to aim to stabilize and grow our long-term EPU and DPU by creating external growth
opportunities and utilizing and controlling LTV, while pursuing internal growth in each of our assets. We would
appreciate your continued support.

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Disclaimer
・The purpose of this document is to provide information and is not intended to solicit investments in orrecommend trading in marketable securities or products.

・Unless stated otherwise, the information provided in this document does not constitute a disclosure
document or asset management report under the Financial Instruments and Exchange Act, the Act on
Investment Trusts and Investment Corporations, public listing regulations of the Tokyo Stock Exchange
or other related laws and regulations.

・This is not a disclosure document or an asset management report.

・

While SHR and SHAM have taken due care in the preparation of this document, there is no guarantee asto the accuracy, adequacy, or completeness of the information, regardless of whether that information
was prepared by SHR or SHAM or received from a third party. The content of this document is subject tochange or eliminated without advance notice.

・Among the information contained in this material, forward-looking statements, whether explicit or not,involve uncertainties of known risks, unknown risks, and other factors, and SHR’s actual performance,
management results, financial conditions, etc., may differ significantly from these.

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